Foshan Electrical and Lighting Co., Ltd.
Semi-Annual Report 2010
Important Notice: The Board of Directors, the Supervisory Committee as well as directors,
supervisors and senior executives of Foshan Electrical and Lighting Co., Ltd. (hereinafter
referred to as the Company) guarantee that there are no significant omissions, fictitious or
misleading statements carried in the Report and will take individual and joint responsibilities
for the truthfulness, accuracy and completeness of the Report.
The semi-annual financial report 2010 has not been audited. This report is prepared both in
Chinese and English. Should there be any difference in interpretation of the two versions, the
Chinese version shall prevail.
Mr. Zhong Xincai, the Vice Chairman of the Board and concurrently General Manager and
person in charge of accounting work, and Ms. Wang Shuqiong, the Manager of the Financial
Department hereby declared that the financial report enclosed in the interim report is true and
complete.
Contents
I. Company Profile………………………………………………………………2
II. Changes in Shares Capital and Particulars about Shares Held by Principal
Shareholders………………………...…………………………………………5
III. Particulars about Directors, Supervisors and Senior Executives……………8
IV. Report of the Board of Directors………………………………………………10
V. Significant Events……………………………………………………………11
VI. Financial Report……………………………………………………………18
VII. Documents Available for Reference………………………….………………742
I. Company Profile
1. Legal name of the Company in Chinese: 佛山电器照明股份有限公司
Abbr.: Foshan Zhaoming
Legal Name of the Company in English: Foshan Electrical and Lighting Co., Ltd
Abbr.: FSL
2. Stock exchange listed with: Shenzhen Stock Exchange
Short form of the stock: Foshan Zhaoming (A share)
Yue Zhaoming (B share)
Stock code: 000541 (A share)
200541 (B share)
3. Registered and office address: No. 64, Fenjiang Road North, Chancheng District, Foshan
City, Guangdong Province
Post Code: 528000
International Website: www.chinafsl.com
E-mail: gzfsligh@pub.foshan.gd.cn
4. Legal representative: Zhong Xincai
5. Secretary of the Board of Directors: Zou Jianping
Address: No. 64, Fenjiang Road North, Chancheng District, Foshan City, Guangdong
Province
Tel: (0757) 82966098, 82810239
Fax: (0757) 82816276
E-mail: gzfsligh@pub.foshan.gd.cn
6. Newspapers designated for information disclosing: China Securities Journal, Securities
Times, Hongkong Ta Kung Pao
Website designated by CSRC: http://www.cninfo.com.cn
Place where the interim report is prepared and placed: Secretariat Office of Board of
Directors, Office Building of the Company
7. Main financial data and indices
Unit: RMB Yuan
At the end of this
report period
At the end of the last
report period
Increase/decrease at the end of this
report period compared with the
period-end of last year (%)
Total assets 2,905,088,487.05 2,995,100,164.41 -3.01%
Owners’ equity attributable to shareholders of the
listed company
2,525,633,732.27 2,660,099,988.21 -5.05%
Share capital 978,563,745.00 978,563,745.00 0.00%
Net assets per share attributable to shareholders of
the listed company (Yuan/share)
2.58 2.72 -5.15%
Report period (From
Jan. to Jun. 2010)
The same period of
last year
Increase/decrease of this report
period year-on-year (%)
Total operating income 824,360,344.65 739,813,039.10 11.43%
Operating profit 100,391,784.74 93,814,743.80 7.01%
Total profit 99,393,710.09 100,400,432.01 -1.00%3
Net profit attributable to shareholders of the listed
company
80,817,767.96 71,180,439.19 13.54%
Net profit attributable to shareholders of the listed
company after deducting non-recurring gains and
losses
77,499,017.69 69,944,469.18 10.80%
Basic earnings per share (Yuan/share) 0.08 0.07 14.29%
Diluted earnings per share (Yuan/share) 0.08 0.07 14.29%
ROE (%) 3.20% 2.83% 0.37%
Net cash flows from operating activities 75,605,698.73 227,650,822.71 -66.79%
Net cash flows per share from operating activities
(Yuan/share)
0.08 0.23 -65.22%
Items and amount of non-recurring gains and losses
Unit: RMB Yuan
Items Amount Annotation (if applicable)
Gains and losses from disposal of non-current assets -44,259.98
Tax return and tax reduction that exceeded mandate of examination
and approval or without formal approval document
0.00
Government subsidies recorded into current gains and losses
(excluding government subsidies with close relationship with the
Company’s business and rationed government grants in line with the
united standard and the state policy)
1,298,249.58
Capital occupied from non-financial enterprise recorded into current
gains and losses
29,902.50
Gains and losses from combination costs and the fair value of the
identifiable net assets when the enterprise merged subsidiaries,
affiliated companies and joint companies
4,698,752.91
Gains and losses from exchange of non-monetary assets 0.00
Gains and losses from entrusted investment or financing 0.00
Provisions for impairment of recorded assets due to the force majeure
factor, such as natural disaster
0.00
Gains and losses from debt restructuring 0.00
Expense of enterprise reorganization, expense of employee allocation
and integration expense, etc.
0.00
Gains and losses exceeding fair value due to trading price lost fair 0.00
Net current gains and losses of subsidiaries due to enterprise
combination under the same control form period-begin till combination
date
0.00
Net gains and losses from contingencies irrespective of routine
business
0.00
Gains and losses from changes in fair value due to transaction financial
assets and liabilities, and investment income from disposal of
transaction financial assets, transaction financial liabilities and
financial assets available for sale, excluding valid hedging related to
178,118.104
routine operation of the Company
Switching back impairment provision of accounts receivable with
separate test on impairment
0.00
Gains and losses from external entrusted loan 0.00
Gains and losses from changes in fair value of investment property
with subsequent measurement after adoption of fair value model
0.00
Impact of one-off adjustment on current gains and losses according to
requirements of laws, statutes concerning tax and accounting
0.00
Income from trusteeship fees 0.00
Other non-operating income and expense except the aforesaid items -2,252,064.25
Other gains and losses accorded with definition of non-current gains
and losses
-6,502.01
Impact on minority interests 0.00
Impact on income tax -583,446.58
Total 3,318,750.27 -
8. Profit data calculated as per the Rules on Compiling Information for Disclosure of
Companies Publicly Offering Shares (No.9) issued by CSRC
ROE (%) EPS (RMB)
Items
Weighted average Basic EPS Diluted EPS
Net profit attributable to common
shareholders of the Company 3.20 0.08 0.08
First half of 2010
Net profit attributable to common
shareholders of the Company after
deducting non-recurring gains and
losses
3.07 0.08 0.08
Difference between PRC GAAP and IFRS
Unit: RMB Yuan
Net profit attributable to shareholders of the listed
company
Owners’ equity attributable to shareholders of the
listed company
Amount in the current
report period
Amount in the previous
period
Closing amount Opening amount
IFRS 80,817,767.96 71,180,439.19 2,525,633,732.27 2,660,099,988.21
PRC GAAP 80,817,767.96 71,180,439.19 2,525,633,732.27 2,660,099,988.21
Sub-items adjusted according to IFRS and total:
Total difference
between IFRS&PRC
GAPP
0.00 0.00 0.00 0.00
Explanation on
difference between
PRC GAAP and IFRS
There is no difference in net profit and net assets as of this report period measured based on
PRC GAAP and IFRS.5
II. Changes in Shares Capital and Particulars about Shares Held by
Principal Shareholders
1. In the report period, the stock structure changed due to the reason that some restricted shares
were released and that changes occurred in senior executives. However, the total shares
remained unchanged.
Before the change Increase/decrease (+, - ) After the change
Amount
Proportion
(%)
New
shares
Bonus
shares
Turning
capital
reserves
into
share
capital
Others Sub-total Amount
Proportion
(%)
I. Shares subject
to trading
moratorium 143,287,826 14.64 -301,054 -301,054 142,986,772 14.61
1. Shares held
by the state
2. Shares held
by state-owned
legal entities
3. Shares held
by other
domestic
investors 4,604,706 0.47 -318,517 -318,517 4,286,189 0.44
Including:
shares held by
domestic
non-state-owned
legal entities 4,291,253 0.44 -5,064 -5,064 4,286,189 0.44
Shares held
by domestic
natural persons 313,453 0.03 -313,453 -313,453 0 0.00
4. Shares held
by foreign
investors 137,400,677 14.04 137,400,677 14.04
Including:
shares held by
foreign legal
entities 131,815,685 13.47
131815685
13.476
Shares held by
foreign natural
persons 5,584,992 0.57 5,584,992 0.57
5. Shares held
by senior
executives 1,282,443 0.13 17,463 17,463 1,299,906 0.13
II. Shares not
subject to
trading
moratorium 835,275,919 85.36 301,054 301,054 835,576,973 85.39
1. RMB
ordinary shares 615,635,911 62.91 305,767 305,767 615,941,678 62.94
2. Domestically
listed foreign
shares 219,640,008 22.45 -4,713 -4,713 219,635,295 22.44
3. Overseas
listed foreign
shares
4. Others
III. Total shares 978,563,745 100 0 0 978,563,745 100.00
2. Statement on the top ten shareholders and the top ten shareholders holding shares not subject
to trading moratorium as of 30 Jun. 2010
Unit: Share
Total number of shareholders 122,674
Particulars about shares held by the top ten shareholders
Name of shareholder
Nature of
shareholder
Shareholding
ratio (%)
Total number
of shares held
Shares subject to
trading moratorium
held
Shares pledged or
frozen
OSRAM Holding Co., Ltd.
Foreign
corporation
13.47% 131,815,685 131,815,685 0
Prosperity Lamps and Components
Ltd.
Foreign
corporation
10.50% 102,751,648 0 0
China Construction Bank-China
Advantage Growth Stock Fund
Funds, wealth
management
products, etc.
3.69% 36,147,934 0 0
DBS VICKERS (HONG KONG)
LTD A/C CLIENTS
Foreign
corporation
1.24% 12,156,881 0 Unknown
Hai Tong Securities (HK) Brokerage
Ltd
Foreign
corporation
1.09% 10,706,390 0 0
Bank of China-E Fund Shenzhen
Stock 100 Transaction Open-ended
Index Fund
Funds, wealth
management
products, etc.
1.03% 10,097,741 0 0
EAST ASIA SECURITIES
COMPANY LIMITED
Foreign
corporation
0.97% 9,527,080 0 Unknown7
Bank of China-First-Trust
Goodquality Life Stock Fund
Funds, wealth
management
products, etc.
0.93% 9,070,000 0 0
China Construction Bank-China
Prosperous Selected Stock Fund
Funds, wealth
management
products, etc.
0.92% 9,040,640 0 Unknown
China Everbright Bank-First-Trust
Leading Strategy Open-ended Fund
Funds, wealth
management
products, etc.
0.87% 8,546,978 0 Unknown
Particulars about shares held by the top ten shareholders not subject to trading moratorium
Name of shareholders
Shares not subject to trading moratorium
held
Type of shares
Prosperity Lamps and Components Ltd. 102,751,648 A-share
China Construction Bank-China Advantage
Growth Stock Fund
36,147,934 A-share
DBS VICKERS (HONG KONG) LTD A/C
CLIENTS
12,156,881 B-share
Hai Tong Securities (HK) Brokerage Ltd 10,706,390 B-share
Bank of China-E Fund Shenzhen Stock 100
Transaction Open-ended Index Fund
10,097,741 A-share
EAST ASIA SECURITIES COMPANY
LIMITED
9,527,080 B-share
Bank of China-First-Trust Goodquality Life Stock
Fund
9,070,000 A-share
China Construction Bank-China Prosperous
Selected Stock Fund
9,040,640 A-share
China Everbright Bank-First-Trust Leading
Strategy Open-ended Fund
8,546,978 A-share
ICBC-Lion Stock Fund 8,058,549 A-share
Explanation on associated
relationship among the
above-mentioned shareholders
or acting-in-concert
Among the top ten shareholders of the Company, there exists association relationship among
OSRAM Holding Company Limited, Prosperity Lamps and Components Limited and Zhuang Jianyi,
but they did not belong to acting-in-concert. The Company was unknown whether there is any
associated relationship among the any other shareholders among the top ten shareholders and among
the top ten shareholders not subject to moratorium, or whether there is any action-in-concert among
them as described by the Administrative Rules on Information Disclosure about Changing of
Shareholding Status.
3. Number of shares held by the top ten shareholders holding shares subject to moratorium and
trading moratorium
Unit: Share
No.
Name of
shareholders subject
to moratorium
Shares subject to
moratorium held
Date of listing for
trade
Additional shares
could list for trade
Trading moratorium8
1
OSRAM Holding
Company Limited
131,815,685
25 Apr. 2011
131,815,685
No listing and transfer may
be taken within 5 years as of
the date when the shares of
the Company held by this
company obtain the trading
right.
2
Foshan Agent of
Agricultural Bank
Trust Company
1,689,188 Uncertain 1,689,188
3
Foshan Jingmei
Chemical Factory
675,675 Uncertain 675,675
4
Foshan Xinghua
Commercial Group
Co., Ltd
337,838 Uncertain 337,838
5
Foshan Southern
Industrial
Development Co.,
337,837 Uncertain 337,837
6
Foshan Hongtu
E-education Centre
168,966 Uncertain 168,966
7
Zhongda Parts
Operation
Department of Liwan
111,488 Uncertain 111,488
8
Foshan Tangtou
Industry & Trade
Company Sales
101,353 Uncertain 101,353
9
Foshan Jin Ge
Mansion
87,973 Uncertain 87,973
10
Foshan Xinji
Industrial Co., Ltd.
67,567 Uncertain 67,567
Not all materials for
application on releasing
trading moratorium were
ready.
III. Particulars about Directors, Supervisors and Senior Executives
1. Change in shares held by directors, supervisors and senior executives
Name Office term
Shares held
at
period-begin
Shares
increased in
the current
period
Shares
decreased in
the current
period
Shares held
at period-end
Of which:
restricted
shares held
Share
options held
at period-end
Reason for
change
Zhuang Jianyi
Chairman of
Board of
Directors
8,263,732 140,400 0 8,404,132 0 0
Purchase for
m market9
Zhong Xincai
Vice Chairman of
the Board, GM
876,206 0 0 876,206 0 0
Liu Xingming Vice GM 351,280 0 0 351,280 0 0
Mr.Joerg
Thaele (Mr.
Tai Le)
Director 0 0 0 0 0 0
Francis
Michael
Piscitelli (Mr.
Pan Dali)
Director 0 0 0 0 0 0
Ye Zaiyou Director 0 0 0 0 0 0
Zhang Haixia
Independent
Director
0 0 0 0 0 0
Dou Linping
Independent
director
0 0 0 0 0 0
Liu Zhenping
Independent
director
0 0 0 0 0 0
Jiao Zhigang
Chairman of
Supervisory
Committee
22,880 0 0 22,880 0 0
Ye
Zhenghong
Supervisor 20,560 0 0 20,560 0 0
Yang Xudong Supervisor 3,900 0 0 3,900 0 0
Chen
Guanbiao
Supervisor 0 0 0 0 0 0
Zhuang Rujia Supervisor 0 0 0 0 0 0
Huang
Guanxiong
Vice GM 127,793 0 0 127,793 0 0
Wei Bin Vice GM 10,400 0 0 10,400 0 0
Zhao Yong Vice GM 8,700 0 0 8,700 0 0
Xie Qing Vice GM 12,200 0 0 12,200 0 0
Zou Jianping
Secretary to
Board of
Directors
0 0 0 0 0 0
Wang
Shuqiong
Financial
Manager
140,013 0 0 140,013 0 0
2. Engagement or dismissal of directors, supervisors and senior executives during the report
period.
During the report period, the 6th Board of Directors was elected at the Shareholders’ General
Meeting. Former independent directors Liang Zhen and Wu Jianhong stepped down from their
posts according to relevant rules after they had been independent directors of the Company for
six consecutive years. Upon nomination by the Board of Directors, Liu Zhenping and Dou
Linping were elected as new independent directors at the Shareholders’ General Meeting.
In the report period, upon nomination by the GM, it was reviewed and approved by the Board10
of Directors to engage Xie Qing as a vice GM of the Company.
IV. Report of the Board of Directors
(I) During the report period, the Company kept a steady development in operation without
significant change in any main financial index.
(II) Operation during the report period
The business scope of the Company remained unchanged during the report period. In
accordance with the market status and the production and operation target for the year 2010,
the Company has strengthened the operation management, controlled the costs, enlarged the
market development force and expanded the production scale. During the report period, the
Company managed to maintain a stable production and operation as a whole. Along with
economic recovery, the export business started to resume. The Company’s sales income in the
first half increased to some degree as compared with the same period of last year. For the
period from Jan. to Jun. 2010, the Company achieved a main business income of RMB
817.6891 million, up by 10.70% year on year; and a net profit attributable to owners of the
parent company of RMB 80.8178 million, up by 13.53% year on year. Incomes from main
businesses grew steadily with a stable gross profit rate.
2. Main businesses classified according to industries and products
Unit: RMB Ten thousand
Main businesses classified according to industries
Industries or products
Operating
income
Operating cost
Gross profit rate
(%)
Year-on-year
increase/decreas
e of operating
income (%)
Year-on-year
increase/decreas
e of operating
cost (%)
Year-on-year
increase/decrease
of gross profit
rate (%)
Lighting appliances and
lamps
81,516.17 62,058.65 23.87% 11.58% 11.75% -0.12%
Main businesses classified according to products
Lighting appliances and
lamps
81,516.17 62,058.65 23.87% 11.58% 11.75% -0.12%
The gross profit ratio as of this report period was 23.87%, an increase of 0.12 percent
compared with the gross profit ratio of 23.99% in the same period of last year, which was
mainly because the Company controlled cost of production and operation in the first half year
of 2010.
3. Main businesses classified according to regions
Unit: RMB Ten thousand
Region Operating income Year-on-year increase/decrease (%)
Domestic 49,266.14 -4.78%
Overseas 32,250.03 51.28%
4. In the report period, the Company’s profit composing and main operations did not change.
5. In the report period, there was no other operating business that greatly influenced the
Company’s net profit except for investment income.11
(III) Investment during the report period
1. Use of raised proceeds
During the report period, the Company had no proceeds raised through share offering or the
application of proceeds raised through previous share offering continued to the report period.
2. Significant investment projects by non-raised proceeds during the report period.
During the report period, the five projects that the Company invested with its self-owned
capital of more than RMB 600 million within three to five years as reviewed and approved by
the Shareholders’ General Meeting, and various projects for new lamps and accessories were
already put into production, and sold together with optical source products of the Company.
V. Significant Events
1. During the report period, the Company implemented dividend distribution plan approved by
the Shareholders’ General Meeting 2009, that is to distribute cash dividends at the rate of RMB
2.20 for every 10 shares.
2. During the report period, there were no significant lawsuit and arbitration events in the
Company.
3. Reviewed and approved by the 22nd Meeting of the 5th Board of Directors, the Company
signed heads of agreement with Hefei GuoXuan Marketing planning Co., Ltd that the
Company was planning to acquire 20% equity of Hefei GuoXuan High-tech Power
Engineering Co Ltd. The Company has engaged accounting firms and finance consulting
company to audit the target and provide finance consulting, which has been reviewed and
approved the 3rd Meeting of the 6th Board of Directors and signed formal agreement on equity
transfer on 13 Jul. 2010.
4. During the report period, associated transactions occurred in the Company:
Associated transactions related to daily operation
Unit: RMB Yuan
Selling products and providing
labor to related parties
Purchasing products and receiving
labor from related parties
Related parties
Transaction
amount
Proportion in
same
transaction
amount
Transaction
amount
Proportion in
same
transaction
amount
Prosperity Lamps and Components Limited 41,415,134.37 5.04% 7,067,131.76 1.50%
Prosperity Electrical (China) Co., Ltd. 1,836,566.01 0.22% 4,616,900.26 0.98%
Hangzhou Times Lighting & Electrical
Appliance Co., Ltd
8,496.00 0.00% 2,880.80 0.00%
Prosperity (Hangzhou) Lighting Electrical Co.,
Ltd.
6,412,469.79 0.78% - -
OSRAM (China) Lighting Ltd. 12,129,639.12 1.48% - -
Foshan (Xinxiang) Electro-optical Machinery
Co., Ltd.
- - 553,435.8 0.12%
Prosperity (Xinxiang) Lighting Machinery Co.,
Ltd.
- - 818,180.00 0.17%
Total 61,802,305.29 7.52% 13,058,528.6 2.78%12
2
The aforesaid transactions were all priced based on the market price, which was fair and just;
The related transactions were necessary for the normal operation of the Company, which was
benefit to the long-term development of the Company.
No related transaction would adversely affect the independence of the Company.
5. The Company never held stocks of other listed companies during the report period.
6. Shares of non-listed financial enterprises and companies planned to list held during the
report period
Unit: RMB Yuan
Full name
Initial
investment
amount
Number of
shares held
(share)
Proportion
in equity of
the
Company
Book value at
period-end
Gains
and
losses
in the
report
period
Changes of
owners’
equity in the
report period
Accounting
subject Resource
Guangdong
Development Bank
Foshan Branch
500,000.00 229,792 5.00% 500,000.00 0.00 0.00 Long-term
equity
Additional
issue
China Everbright
Bank 30,828,816.00 24,176,768 0.29% 30,828,816.00 0.00 0.00 Long-term
equity
Additional
issue
Xiamen City
Commercial Bank 154,969,875.00 65,934,000 9.99% 154,969,875.00 0.00 0.00 Long-term
equity
Additional
issue
Total 186,298,691.00 90,340,560 - 186,298,691.00 0.00 0.00— —
Except for the above said equity of three financial enterprises, the Company did not hold any
equity of other non-listed financial enterprises, securities companies, insurance companies,
trust companies and futures companies in the report period.
7. Significant contract
① In the report period there was no significant trust, contract or lease of assets from other
companies, nor trust, contract and lease of our Company’s assets to any other companies which
occurred or extended to this report period.
② In the report period there was no significant guarantee in the Company occurred or extended
to this report period.
③ In the report period there was no significant trust for financing the cash assets of the
Company occurred or extended to this report period.
8. In the report period, no shareholders of the Company holding more than 5% (including 5%)
of Company’s shares or the Company has made any promise during the report period, or had
any promises made before and extended to this report period, which may possibly influence the
operation achievement and financial status of the Company.
9. The independent directors have issued the special explanations and independent opinions for
the related parities’ funds appropriation and external guarantee provided by the Company: As
examined and verified by the independent directors of the Company regarding the external
guarantee and the controlling shareholders’ and related parties’ funds appropriation, they
believed that the Company neither provided external guarantee, rule-breaking guarantee in first
half year of 2010, nor borrowed or lent funds or appropriated the funds with controlling
shareholder or related parties holding less 50% shares of the Company; meanwhile, there was13
no external guarantee or rule-breaking guarantee occurred in previous years and accumulated
to 30 Jun. 2010, and no borrowing or lending the funds nor appropriation funds with
controlling shareholder and related parties holding less 50% shares of the Company occurred in
previous years and accumulated to 30 Jun. 2010.
10. The Company’s financial report of this period has not been audited.
11. Neither the Company nor its Board of Directors nor any of its directors has received any
check, administrative punishment or notice of criticism circulated by the China Securities
Regulatory Commission, or punishment from other administrative departments or public
condemn from the Stock Exchange during the report period.
12. Reception of investigation, communication and interviews in the report period
Reception
time
Reception place Reception way Visitor Main discussion and materials provided
13 Jan. 2010 The Company
Field
investigation
Golden Eagle Asset
Management Co.
Acquainting production and operation
status of the Company
13 Jan. 2010 The Company
Field
investigation
GF Securities
Acquainting production and operation
status of the Company
13 Jan. 2010 The Company
Field
investigation
New China Assets
Management Co., Ltd
Acquainting production and operation
status of the Company
14 Jan. 2010 The Company
Field
investigation
Everbright Securities
Acquainting production and operation
status of the Company
22 Jan. 2010 The Company
Field
investigation
Swiss Bank
Acquainting production and operation
status of the Company
5 Mar. 2010 The Company
Field
investigation
Guosen Securities
Acquainting production and operation
status of the Company
5 Mar. 2010 The Company
Field
investigation
Rising Securities
Acquainting production and operation
status of the Company
5 Mar. 2010 The Company
Field
investigation
Yinhua Fund Management Co.,
Ltd
Acquainting production and operation
status of the Company
17 Mar. 2010 The Company
Field
investigation
Xiangcai Securities Co., Ltd
Acquainting production and operation
status of the Company
17 Mar. 2010 The Company
Field
investigation
Ping An Asset Management
Co., Ltd
Acquainting production and operation
status of the Company
18 Mar. 2010 The Company
Field
investigation
Citic Securities
Acquainting production and operation
status of the Company
18 Mar. 2010 The Company
Field
investigation
China Southern Fund
Acquainting production and operation
status of the Company
18 Mar. 2010 The Company
Field
investigation
Bosera Funds
Acquainting production and operation
status of the Company
19 Mar. 2010 The Company
Field
investigation
Everbright Securities
Acquainting production and operation
status of the Company
30 Mar. 2010 The Company
Field
investigation
Cinda Securities Co., Ltd
Acquainting production and operation
status of the Company
31 Mar. 2010 The Company
Field
investigation
Shenyin & Wanguo Securities
Acquainting production and operation
status of the Company14
31 Mar. 2010 The Company
Field
investigation
Guotai Asset Management Co.,
Ltd
Acquainting production and operation
status of the Company
31 Mar. 2010 The Company
Field
investigation
Aegon-Industrial Fund
Management Co., Ltd.
Acquainting production and operation
status of the Company
31 Mar. 2010 The Company
Field
investigation
Guoyuan Securities Co., Ltd
Acquainting production and operation
status of the Company
31 Mar. 2010 The Company
Field
investigation
GF Funds
Acquainting production and operation
status of the Company
31 Mar. 2010 The Company
Field
investigation
Rongtong Fund Management
Co., Ltd
Acquainting production and operation
status of the Company
31 Mar. 2010 The Company
Field
investigation
Dacheng Fund
Acquainting production and operation
status of the Company
31 Mar. 2010 The Company
Field
investigation
Zhonghai Fund
Acquainting production and operation
status of the Company
31 Mar. 2010 The Company
Field
investigation
Harvest Fund
Acquainting production and operation
status of the Company
2 Apr. 2010 The Company
Field
investigation
Changsheng Fund
Management Co., Ltd
Acquainting production and operation
status of the Company
2 Apr. 2010 The Company
Field
investigation
China Post Fund
Acquainting production and operation
status of the Company
2 Apr. 2010 The Company
Field
investigation
China Galaxy Securities
Acquainting production and operation
status of the Company
28 Apr. 2010 The Company
Field
investigation
GF Securities
Acquainting production and operation
status of the Company
28 Apr. 2010 The Company
Field
investigation
China Merchants Fund
Acquainting production and operation
status of the Company
28 Apr. 2010 The Company
Field
investigation
China Southern Fund
Acquainting production and operation
status of the Company
29 Apr. 2010 The Company
Field
investigation
Aegon-Industrial Fund
Management Co., Ltd.
Acquainting production and operation
status of the Company
5 May 2010 The Company
Field
investigation
HuaAn Fund
Acquainting production and operation
status of the Company
5 May 2010 The Company
Field
investigation
Dacheng Fund
Acquainting production and operation
status of the Company
6 May 2010 The Company
Field
investigation
ICBC International Holdings
Limited
Acquainting production and operation
status of the Company
14 May 2010 The Company
Field
investigation
China Assets Management Co.,
Ltd
Acquainting production and operation
status of the Company
19 May 2010 The Company
Field
investigation
Yinhua Fund Management Co.,
Ltd
Acquainting production and operation
status of the Company
19 May 2010 The Company
Field
investigation
Essence Securities
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Pacific Investment
Management Company
Acquainting production and operation
status of the Company15
20 May 2010 The Company
Field
investigation
Genertec Investment Managers
Ltd
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Huabao Investment
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Capital Fortune Assets
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Guangdong Xindaxing Co.,
Ltd
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Tianhong Asset Management
Co., Ltd
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Pangu Capital Co., Ltd
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
GF Securities
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
China Universal Asset
Management Co., Ltd.
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Hongying Investment
Company
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Essence Securities
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Zhongshan Securities Assets
Management Department
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Guangdong New Value
Investment Co., Ltd
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
China Post Fund
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
China Everbright Limited
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Primero
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Cinda Fund Management Co.,
Ltd
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Dacheng Fund
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
China International Fund
Management Co., Ltd
Acquainting production and operation
status of the Company
20 May 2010 The Company
Field
investigation
Fullgoal Fund Management
Co., Ltd
Acquainting production and operation
status of the Company
27 May 2010 The Company
Field
investigation
Guojin General Fund Co., Ltd
Acquainting production and operation
status of the Company
1 Jun. 2010 The Company
Field
investigation
Essence Securities
Acquainting production and operation
status of the Company
2 Jun. 2010 The Company
Field
investigation
China Universal Asset
Management Co., Ltd.
Acquainting production and operation
status of the Company16
2 Jun. 2010 The Company
Field
investigation
Dacheng Fund
Acquainting production and operation
status of the Company
3 Jun. 2010 The Company
Field
investigation
Ping An Securities
Acquainting production and operation
status of the Company
3 Jun. 2010 The Company
Field
investigation
Lombarda China Fund
Management Co., Ltd
Acquainting production and operation
status of the Company
7 Jun. 2010 The Company
Field
investigation
Rosefinch Investment Co., Ltd
Acquainting production and operation
status of the Company
23 Jun. 2010 The Company
Field
investigation
Sealand Securities
Acquainting production and operation
status of the Company
23 Jun. 2010 The Company
Field
investigation
Essence Securities
Acquainting production and operation
status of the Company
24 Jun. 2010 The Company
Field
investigation
China Assets Management Co.,
Ltd
Acquainting production and operation
status of the Company
30 Jun. 2010 The Company
Field
investigation
The Southern Metropolis Daily
Reporting on Exclusive Interview of
Special Topic on Foshan Manufacturing
13. Reference for information disclosure of significant events of the Company in the report
period
No. Date Serial No. Contents of Public Notice
1 20 Mar. 2010 2010-001
Public Notice on Resolutions of the 22nd Meeting of the 5th Board of
Directors
2 20 Mar. 2010 2010-002
Public Notice on Intention of Acquiring Equity of Hefei GuoXuan
High-tech Power Engineering Co Ltd
3 20 Apr. 2010 2010-003
Public Notice on Winning the Bidding of Popularization Projects of
High-Efficiency Lighting Products
4 29 Apr. 2010 2010-004 Summary of Annual Report 2009
5 29 Apr. 2010 2010-005 Public Notice on the 23rd Meeting of the 5th Board of Directors
6 29 Apr. 2010 2010-006
Declare of Independent Director Nominator and Declare of Independent
Candidate
7 29 Apr. 2010 2010-007 Public Notice on the 8th Meeting of the 5th Supervisory Committee
8 29 Apr. 2010 2010-008 Notice on Holding the Annual Shareholders’ General Meeting 2009
9 29 Apr. 2010 2010-009 The 1st Quarterly Report 2010
10 25 May 2010 2010-010 Public Notice on Election of Employee Supervisor
11 28 May 2010 2010-011
Public Notice on Resolutions of the Annual Shareholders’ General Meeting
2009
12 28 May 2010 2010-012
Public Notice on Resolutions of the 1st Meeting of the 6th Board of
Directors
13 28 May 2010 2010-013
Public Notice on Resolutions of the 1st Meeting of the 6th Supervisory
Committee
14 17 Jun. 2010 2010-014
Public Notice on Implementation of Dividend Distribution Scheme for
2009
15 19 Jun. 2010 2010-015 Public Notice on Resolutions of the 2nd Meeting of the 6th Board of17
Directors
16 19 Jun. 2010 2010-016 Public Notice on Correction of the Annual Report 2009
17 24 Jun. 2010 2010-017
Suggestive Public Notice on Releasing Shares subject to Trading
Moratorium
18 30 Jun. 2010 2010-018
Public Notice on Progress of Winning the Bidding of Popularization
Projects of High-Efficiency Lighting Products 2010
19 30 Jun. 2010 2010-019
Suggestive Public Notice on Progress of Project of Drive of Lithium
batteries for New Energy Pure Electric Bicycle
20 30 Jun. 2010 2010-020
Public Notice on Opinion from sponsor organ for listed companies on
Execution of Commitment on Share Merger Reform by OSRAM Holding
Co., Ltd-Shareholder of Foshan Electrical and Lighting Co., Ltd
All the above public notices were published on China Securities Journal, Securities Times and
HK Ta Kung Pao as well as http://www.cinfo.com.cn.18
VI. Financial Report（Unaudited）
(I) Accounting Statement
Balance Sheet （Attachment: Table I）
Income Statement （Attachment: Table II）
Cash Flow Statement （Attachment: Table III）
Statement of Provision for Impairment of Assets（Attachment: Table IV）
Statement of Change in Owner’s Equity (Attachment: Table V)
(II) Notes to Accounting Report
I . Company Prof i l e
Company History
Foshan Electrical & 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 and 2008, the Company implemented the plan of
capitalization of capital reserve, after the transfer, the registered capital of the Company has increased to
RMB 978,563,745.00 Yuan. And the registration code for corporate business license is QGYZZ No. 002889.
Legal representative: Mr. Zhong Xincai
Address: No. 64, Fenjiang North Road, Foshan, Guangdong Province
Business Scope of the Company
R&D and production of electro-optical source products, electro-optical source equipment and electro-optical
accessories, electro-optical raw materials, lamps and accessories, electrical engineering material and service
parts of motor vehicle, and sales of such products made by it on both the domestic and overseas markets, and
the relevant engineering consultation service. The main products of the Company include all kinds of
electro-optical source products.19
Basic Structure of the Organ of the Company
Shareholders’ General Meeting is the highest authority organ of the Company, Board of Directors is an
executive organ to carry out the provisions formulated by the Shareholders’ General Meeting, Board of
supervisors is an internal supervision organ of the Company, and the General Manager is responsible for
routine operation and management. Up till the end of the reporting period, the Company owns 8 holding
subsidiaries such as Foshan Chanchang Electric Appliance (Gaoming) Co., Ltd., Foshan Chansheng
Electronic Ballast Co., Ltd., Foshan Taimei Times Lamps and Lanterns Co.， Ltd., Foshan Gaoming Fuwan
Landscape Resort Co., Ltd., Prosperity (Nanjing) Lighting Components Co., Ltd., Foshan Electrical &
Lighting (Xinxiang) Co., Ltd., Foshan Lighting Lamps and Lanterns Co., Ltd. and Foshan Chanchang
Lighting Components Co., Ltd..
Financial Report Approval and Submission
The Financial Report had been approved and authorized for issue by the Board of Directors on 19 Aug.
2010.
I I . St a t ement of Compl i anc e wi th Corpor a t e Ac count ing St anda rds
The financial statements prepared by the Company is in compliance with the requirements of Accounting
Standard for Business Enterprises, which gives a true and fair view of the state of affairs of the Company as
for the financial status and operating results & cash flows.
I I I . Ba s e of Financ i a l St a t ement Pr epa r a t ion
With going-concern assumption as the basis, the Company prepares its financial statement in
light of the actual transactions and matters, as well as the accounting standard for business
enterprise-basic standard promulgated by the Ministry of Finance of PRC in 15 Feb. 2006,
other specific accounting standards, and the relevant provisions of application guide and
interpretation, as well as the following primary accounting policies and accounting estimates.
IV. Ma in a c count ing pol ic i e s , a c count ing e s t ima t e s and pr epa r a t ion me thods of the Company’s
consol ida t ed f inanc i a l s t a t ement
Fiscal Year
A fiscal year is accounted from January 1 to December 31.
Functional Currency
Renminbi is taken as functional currency of the Company.
Accounting Basis and Principle
The accounting basis of the Company is the accrual system; generally by adopting of historical cost as the
accounting principle. And the Company adopts measurement replacement costs, net realizable values,
present values and fair values when the confirmed accounting elements accord with the requirements of the20
accounting standard for business enterprise and can be reliably measured.
Accounting Method for Foreign Currency
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.
Recognition standard of cash and cash equivalents
The term “cash” refers to cash on hand and deposits that are available for payment at any time. The term
“cash equivalents” refers to short-term ( within 3 months from the purchase date) and highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of change in value.
Financial Instruments
Financial Assets Classification, Recognition and Measurement
—— Financial assets shall be classified into the following four categories when they are initially recognized:
tradable financial assets, loans and the account receivables, financial assets available for sale and the
investments which will be held to their maturity, which shall be reappraised at the end of reporting period.
Financial assets, at their initial recognition, shall be measured at fair value. The financial assets initially
recognized by the Company shall be measured at their fair values. The financial assets and the transaction
expenses shall be directly recorded into the profits and losses of the current period; for other categories of
financial assets, the transaction expenses thereof shall be included into the initially recognized amount.
—— Transactional Financial Assets: such financial assets held by the Company for the purpose for selling at
the fair value in the near future, and financial assets formed a part of combination of financial instruments
which are managed by way of short-term profit making in the near future, and derivative financial assets (the
designated derivative instruments which are effective hedging instruments, or derivative instruments to
financial guarantee contracts, and the derivative instruments which are connected with the equity instrument
investment for which there is no quoted price in the active market, whose fair value cannot be reliably
measured, and which shall be settled by delivering the said equity instruments) shall be classified as
transactional financial assets. Subsequent measurement of transaction financial assets shall be measured at
fair value, and the profits and losses arising from the change in the fair value shall be recorded into the
profits and losses of the current period.
—— 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.21
—— 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 the profits and losses arising from the change in the fair value shall be directly recorded into
the owner’s equity, 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. Where the
intention of holding or the ability to hold changes, or the fair value can not be reliably measured any more,
or the term of holding has exceeded "two complete accounting years", which makes it no longer suitable to
measure the available-for-sale financial assets at its fair value, the Company concerned may measure the said
financial assets on the basis of post-amortization cost. And such post-amortization cost at the
re-classification day shall be the carrying amount of the financial assets. The gains or losses that are related
to the said financial assets and that are directly included in the owner’s equity shall be dealt with according
to the following provisions: (1) Where such financial asset has a fixed date of maturity, it shall be amortized
within the remaining period of the said financial asset by adopting the actual interest rate method and be
recorded into the profits and losses of the current period. The gap between the post-amortization cost of the
financial asset and the amount on the maturity date shall also be amortized within the remaining period of
the said financial asset by adopting the actual interest rate method and be recorded into the profits and losses
of the current period. If, during the subsequent accounting period, the financial asset is impaired, the relevant
profits and losses that were included in the owner’s equity shall be transferred out and be recorded into the
current profits and losses. (2) Where such financial asset does not have a fixed date of maturity, it shall
remain in the owner’s equity. Where such financial asset is transferred out when it is impaired or determined
from recognizing during the remaining period of accounting that follows, and shall be recorded into the
profits and losses of the current period.
—— 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.
Where part of the held-to-maturity investment is sold or the re-classified amount thereof is considerably
large, so that the remainder of the said investment is no longer suitable to be classified as a held-to-maturity
investment, the Company shall re-classify the remainder of the said investment as an available-for-sale
financial asset, and shall make subsequent measurement on it according to its fair value on the
re-classification day, and no longer re-classify the said financial asset as held-to-maturity investment in the
current fiscal year and the subsequent two complete accounting years. The gap between the carrying amount
of the said remnant part of the investment at the re-classification day and the fair value shall be computed
into the owner’s equity. And when the said available-for-sale financial asset is impaired or transferred out
when it is terminated from recognition, it shall be recorded into the profits and losses of the current period.
Classification, Recognition and Measurement of Financial Liabilities
—— Financial liabilities shall be classified into the following two categories when they are initially
recognized:(1)the transactional financial liabilities; and (2) other financial liabilities. The financial liabilities
initially recognized by the Company shall be measured at their fair values. For the transactional financial
liabilities, the transaction expenses thereof shall be directly recorded into the profits and losses of the current22
period; for other categories of financial liabilities, the transaction expenses thereof shall be included into the
initially recognized amount.
—— Transactional financial liabilities: such financial liabilities held by the Company for the purpose for
repurchasing at the fair value in the near future, and financial liabilities formed a part of combination of
financial instruments which are managed by way of short-term profit making in the near future, and
derivative financial liabilities (the designated derivative instruments which are effective hedging instruments,
or derivative instruments to financial guarantee contracts, and the derivative instruments which are
connected with the equity instrument investment for which there is no quoted price in the active market,
whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity
instruments) shall be classified as transactional financial liabilities. Subsequent measurement of transaction
financial liabilities shall be measured at fair value, and the profits and losses arising from the change in the
fair value shall be recorded into the profits and losses of the current period.
—— 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.
Conditions for recognizing the termination
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 Company 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 shall terminate the recognition of the existing financial liability, and shall at the
same time recognize the new financial liability. Where the Company makes substantial revisions to some or
all of the contractual stipulations of the existing financial liability, it shall terminated the recognition of the
existing financial liability or part of it, and at the same time recognize the financial liability after revising the
contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Company concerned shall
include into the profits and losses of the current period the gap between the carrying amount 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).
Where the Company repurchases back part of its financial liabilities, it shall distribute, on the repurchase day,
the carrying amount of the whole financial liabilities in light of the comparatively fair value of the part that
continues to be recognized and the part whose recognition has already been terminated. The gap between the
carrying amount which is distributed to the part whose recognition has terminated and the considerations it
has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed)
shall be recorded into the profits and losses of the current period.
Recognition of transfer of financial assets and measurement method
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the
financial asset to the transferee, it shall stop recognizing the financial asset. If it retained nearly all of the
risks and rewards related to the ownership of the financial asset, it shall continue to recognize the entire
financial asset to be transferred and shall recognize the consideration it receives 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, 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 its23
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.
Determination of the Fair Value of Financial Instruments
—— 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.
Impairment test of financial assets and withdrawal method of impairment provision
—— The Company shall carry out an inspection, on the balance sheet day, on the carrying amount of the
financial assets other than those transactional financial assets. Where there is any objective evidence proving
that such financial asset has been impaired, an impairment provision shall be made.
—— 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, the carrying amount of the said financial asset 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 as written down shall be recognized as loss of the impairment of the asset and shall be recorded
into the profits and losses of the current period. An impairment test shall be made on the financial assets with
significant single amounts. With regard to the financial assets with insignificant single amounts, an
impairment test may be carried out by independent or combination. Where, upon independent test, the
financial asset has not been impaired, it shall be included in a combination of financial assets with similar
risk features so as to conduct another impairment test. The financial assets which have suffered from an
impairment loss in any single amount shall not be included in any combination of financial assets with
similar risk features for any impairment test. During the follow-up period, if there is any objective evidence
proving that the value of the said financial asset has been restored, and it is objectively related to the events
that occur after such loss is recognized, the impairment-related losses as originally recognized shall be
reversed and be recorded into the profits and losses of the current period. However, the reversed carrying
amount shall not be any more than the post-amortization costs of the said financial asset on the day of
reverse under the assumption that no provision is made for the impairment. Where any financial asset24
measured on the basis of post-amortization costs is recognized as having loss, the relevant impairment
provision withdrawn shall be written off.
—— Available-for-sale financial assets
Where a available-for-sale financial asset is impaired, even if the recognition of the financial asset has not
been terminated, 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. The accumulative losses that are transferred out shall be the net amount obtained from the initially
obtained costs of the sold financial asset after deducting the principals as taken back, the current fair value
and the impairment-related losses as was recorded into the profits and losses of the current period.
Recognition of Provision for Bad debt of Accounts Receivable and Withdrawal Method
—— Bad debts are recognized based on the following principles:
—— due to debtor’s bankruptcy, uncollectable financial claim after discharge in line with laws;
—— due to the death of the debtor, collection is still not possible;
—— due to the failure of the debtor to fulfill repayment obligations for over thee years, and there is certain
evidence proving that collection is still not possible, after approval by the Board of Directors, the debtor’s
right shall be included into loss on bad debt.
—— Loss on bad debt shall be measured by adopting allowance methods. The provision for bad debts
shall be withdrawn based on the following methods:
—— As at the end of reporting period, where there is any objective evidence proving that such accounts
receivable has been impaired, the carrying amount of the said accounts receivable shall be written down to
the current value of the predicted future cash flow, and the amount as written down shall be recognized as
loss of the impairment of the asset and shall be recorded into the profits and losses of the current period. The
current value of the predicted future cash flow shall be determined according to the capitalization of the
original actual interest rate of the said future cash flow (excluding the loss of future credits not yet occurred),
taking into account the value of the relevant guarantee (but the predicted disposal expenses shall be
deducted). The original actual interest rate is the actual interest rate as determined when the accounts
receivable was initially recognized. Where there is a very small gap between the predicted future cash flow
of a short-term account receivable item and the current value thereof, the predicted future cash flow is not
required to be capitalized when determining the relevant impairment-related losses.
—— As at the end of reporting period, an impairment test shall be made on the accounts receivable with
significant single amounts. If any objective evidence shows that it has been impaired, the impairment-related
losses shall be recognized base on the negative difference between current value of the predicted future cash
flow and carrying value of accounts receivable, and provision for bad debts shall be withdrawn hereof. The
significant amount refers to the sum that the balance of accounts receivable ranks the top five or accounts for
over 10% of balance of accounts receivable.
—— The independent impairment test shall be made on the accounts receivable with insignificant single
amounts that there is objective evidence shows that it has been impaired, the impairment-related losses shall
be recognized, and the provision for bad debts shall be withdrawn. For other receivables with insignificant
single amount, adding accounts receivable that has not been impaired after independent test, the
impairment-related losses shall be recognized based on 6% of closing balance of accounts receivable that are
confirmed on the basis of actual loss ratio of prior year’s accounts receivable, combining current status, and
the provision for bad debts shall be withdrawn.25
Accounting Method of Inventory
Inventory category: raw materials, products in processing, materials for consigned processing, finished
products, semi-manufactured semi-finished products, and low-value consumption goods.
Accounting of inventory: raw materials and finished products shall be measured at actual cost, while
weighted average method shall be adopted when receiving or outgoing.
Inventory system: a perpetual inventory system
Recognition of provision for falling price of inventory and withdrawal:
The Company shall make provision for falling price of inventory on the basis of each item of inventory at
the balance that net realizable value is lower than carrying cost. For finished goods, merchandise inventories,
and available for sale materials which are applied directly for sales of stock inventory, the amount after
deducting the estimated sale expense and relevant taxes from the estimated sell price of the inventory shall
be recognized as the net realizable value. For material inventories which need to be processed, the amount
after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the
estimated sale price of produced finished goods shall be recognized as the net realizable value.
Measurement Method of Long-term Investment
Measurement of long-term equity investment
—— Long-term equity investment for the merger of enterprises
—— 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.
—— 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.
—— The initial cost of a long-term equity investment obtained by making payment in cash shall be the
purchase cost which is actually paid. The initial cost consists of the expenses directly relevant to the
obtainment of the long-term equity investment, taxes and other necessary expenses.
—— The initial 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.
—— The initial cost of a long-term equity investment of an investor shall be the value stipulated in the
investment contract or agreement except the unfair value stipulated in the contract or agreement.
—— The initial 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.
—— The initial cost of a long-term equity investment obtained by recombination of liabilities shall be
recognized at the fair value.
Subsequent measurement of long-term equity investment and recognized method of investment income26
—— The long-term equity investment of the Company that is able to control the invested enterprise and
which of the Company that does not do joint control or does not have significant influences on the invested
entity, and has no offer in the active market and its fair value cannot be reliably measured, it shall be
measured by employing the cost method. The dividends or profits declared to distribute by the invested
entity shall be recognized as the current investment income, but shall be limited to the amount received from
the accumulative net profits that arise after the invested entity has accepted the investment.
—— A long-term equity investment of the Company that does joint control or significant influences over
the invested entity shall be measured by employing the equity method. If the initial cost of a long-term
equity investment is more than the Company's attributable share of the fair value of the invested entity's
identifiable net assets for the investment, the initial cost of the long-term equity investment may not be
adjusted. If the initial cost of a long-term equity investment is less than the Company's attributable share of
the fair value of the invested entity's identifiable net assets for the investment, the difference shall be
included in the current profits and losses and the cost of the long-term equity investment shall be adjusted
simultaneously. The Company shall recognize the net losses of the invested enterprise until the book value
of the long-term equity investment and other long-term rights and interests which substantially form the net
investment made to the invested entity are reduced to zero, unless the investing enterprise has the obligation
to undertake extra losses. The Company shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of
the invested entity after it adjusts the net profits of the invested entity.
Provision for impairment of long-term investment
—— The Company shall conduct inspection to long-term investment item by item at the end of reporting
period. If the market price of long-term investment falls into sustained decline or the invested enterprise’s
operation status grow worse, which will cause that the recoverable amount is lower than carrying value,
moreover, such reduced value will not be restored in predicted future period, then the negative balance
between the recoverable amount and carrying value of long-term investment shall be measured as provision
for impairment of long-term investment. The recoverable amount shall be determined in light of the higher
one of the net amount of the fair value of the long-term equity investment minus the disposal expenses and
the current value of the expected future cash flow of the long-term equity investment. Once any loss of
impairment of the long-term investment is recognized, it shall not be switched back in the future accounting
periods.
Fixed Assets and Depreciation
Recognition of fixed assets: 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 fiscal year and unit price is higher.
Category of fixed assets: housing and building, machinery equipment, transportation vehicle and other.
Measurement of fixed assets and depreciation method: fixed assets shall be measured at actual cost.
Depreciation rate shall be recognized by employing the straight-line method and in accordance with
appraisal economical useful life and predicated net residuals. The appraisal economical useful life and
depreciation rate are listed as below:
Categories Useful life Annual depreciation rate Residuals rate
Housing and Building 3—25 31.67%-4.75% 5%
Machinery equipments 2—8 47.50%-11.88% 5%27
Transportation vehicle 5—10 19%-9.50% 5%
Other 2—8 47.50%-11.88% 5%
Provision for impairment of fixed assets: The Company shall carry out inspection to fixed assets item by
item every year. If the recoverable amount is lower than carrying value due to sustained decline of market
price of fixed assets or technological obsolescence, damage or long-term idle, then the provision for
impairment of fixed assets shall be withdrawn on the basis of the balance hereof. Once any loss of
impairment of the fixed assets is recognized, it shall not be switched back in the future accounting periods.
The recoverable amount shall be determined in light of the higher one of the net amount of the fair value of
the fixed assets minus the disposal expenses and the current value of the expected future cash flow of the
fixed assets. The current value of future cash flow of assets shall be recognized based on the amount after the
predicated future cash flow occurred in the process of continuous services and when the final disposal is
discounted by adopting proper discount rate.
Accounting Measurement of Construction in Progress
Construction in progress shall be measured at actual cost. Constructions in progress shall be carried down to
fixed assets by adopting provisional estimate when bringing to the expected conditions for use. After
completion and settlement procedures, the Company shall adjust the carrying value of fixed assets at the
actual cost. As for interests on borrowings incurred to special-borrowing loans or general borrowing for the
acquisition and construction or production of assets eligible for capitalization and the ancillary expense
incurred to special-borrowing loans, those incurred before a qualified asset under acquisition, construction or
production is ready for the intended use or sale shall be capitalized into capitalized cost, while those incurred
after a qualified asset under acquisition and construction or production is ready for the intended use or sale
shall be included into the profits and losses of the current period.
Provision for impairment of construction in progress: the Company shall carry out overall inspection to the
construction in progress at the end of the reporting period. If the construction in progress has been stopped
for a long time and cannot be continued restarting in the coming three years, and such construction in
progress has already fallen behind, whatever in performance or in technology, resulting in an uncertainty to
economic benefit of the Company, and there is an obvious evidence shows that the construction in progress
has been impaired, then provision for impairment of the construction in progress shall be withdrawn based
on the negative balance between the recoverable amount of single construction in progress and carrying
value. Once any loss of impairment of the construction in progress is recognized, it shall not be switched
back in the future accounting periods.
Measurement of Intangible Assets and Amortization Method
Measurement of intangible assets
—— The cost of outsourcing intangible assets shall be measured at actual expenditures occurred for
reaching the expected use purpose.
—— The research expenditures for its internal research and development projects of the Company shall be
recorded into the profit or loss for the current period. The development expenditures for its internal research
and development projects of the Company may be confirmed as cost of intangible assets when they satisfy
capitalization conditions.
—— The cost invested into intangible assets by investors shall be determined according to the
conventional value in the investment contract or agreement, except for those of unfair value in the contract28
or agreement.
—— The intangible assets received by the Company through accepting debtor’s non-cash assets for
compensation for debts, or by receivables, shall be measured at the fair value of the intangible assets
received.
—— The cost invested into intangible assets by non-monetary transaction shall be determined according to
the fair value of non-monetary assets and relevant payable taxes.
Amortization of intangible assets: Intangible assets with limited service life shall be amortized by the
straight-line method within its estimated service life. If it is unable to forecast the period when the intangible
asset can bring economic benefits to the Company, it shall be regarded as an intangible asset with uncertain
service life. Intangible assets with uncertain service life may not be amortized. The Company’s intangible
assets is mainly land use right, which is amortized averagely by the service life (50 years).
Provision for impairment of intangible assets: the Company shall made overall inspection to the intangible
asset at the end of reporting period. If the intangible assets have already been replaced by other new
technologies, resulting in the Company’s ability to create economic benefits suffering materials adverse
influence, or a sustained decline of market price of intangible assets and impossible to be recover within the
residual amortization years, or certain intangible asset has exceeded the term protected by law but still part
of useful value is remained, or there is an obvious evidence shows that the intangible assets has been
impaired, then provision for impairment of the intangible assets shall be withdrawn based on the balance
between the recoverable amount of single intangible assets and carrying value. Once any loss of impairment
of the intangible assets is recognized, it shall not be switched back in the future accounting periods.
Measurement of Long-term Deferred Expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year (one year
excluded) that have occurred but attributable to the current and future periods. Long-term deferred expense
shall be recoded into book in the light of the actual expenditure, and amortized averagely within benefit
period. In case of no benefit in the future accounting period, the amortized value of such project that fails to
be amortized shall be transferred into the profits and losses of the current period.
Measurement of Capitalization of Borrowing Costs
The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements: (1)
The asset disbursements have already incurred, which shall include the cash, transferred non-cash assets or
interest bearing debts paid for the acquisition and construction or production activities for preparing assets
eligible for capitalization; (2) The borrowing costs has already incurred; and (3) The acquisition and
construction or production activities which are necessary to prepare the asset for its intended use or sale have
already started.
To-be-capitalized amount of interests of borrowing: As for interests of borrowing occurred
special-borrowing loans or general borrowing for the acquisition and construction or production of assets
eligible for capitalization, those incurred before a qualified asset under acquisition, construction or
production is ready for the intended use or sale shall be capitalized based on the following methods:
—— As for special-borrowing loans for the acquisition and construction or production of assets eligible
for capitalization, the to-be-capitalized amount of interests shall be determined in light of the actual cost
incurred of the specially borrowed loan at the present period minus the income of interests earned on the
unused borrowing loans as a deposit in the bank or as a temporary investment.29
—— Where a general borrowing is used for the acquisition and construction or production of assets
eligible for capitalization, the Company shall calculate and determine the to-be-capitalized amount of
interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the
accumulative asset disbursements minus the general borrowing by the capitalization rate of the general
borrowing used. The capitalization rate shall be calculated and determined in light of the weighted average
interest rate of the general borrowing.
Suspension of capitalization: Where the acquisition and construction or production of a qualified asset is
interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs shall be suspended. The borrowing costs incurred during such period shall be recognized as
expenses, and shall be recorded into the profits and losses of the current period, till the acquisition and
construction or production of the asset restarts. If the interruption is a necessary step for making the qualified
asset under acquisition and construction or production ready for the intended use or sale, the capitalization of
the borrowing costs shall continue.
Recognition and Measurement of Estimated liabilities
Recognition of estimated debts: The obligation such as external guaranty, pending litigation or arbitration,
product quality assurance, layoff plan, loss contract, restructuring and disposal of fixed assets, pertinent to a
contingencies shall be recognized as an estimated debts when the following conditions are satisfied
simultaneously: a. That obligation is a current obligation of the enterprise; b. It is likely to cause any
economic benefit to flow out of the enterprise as a result of performance of the obligation; and c. The
amount of the obligation can be measured in a reliable way.
The estimated debts shall be initially measured in accordance with the best estimate of the necessary
expenses for the performance of the current obligation. To determine the best estimate, the Company shall
take into full consideration of the risks, uncertainty, time value of money, and other factors pertinent to the
Contingencies. If the time value of money is of great significance, the best estimate shall be determined after
discounting the relevant future outflow of cash. If there is a sequent range for the necessary expenses and if
all the outcomes within this range are equally likely to occur, the best estimate shall be determined in
accordance with the middle estimate within the range. In other cases, the best estimate shall be conducted in
accordance with the following situations, respectively: (1) If the Contingencies concern a single item, it shall
be determined in the light of the most likely outcome. (2) If the Contingencies concern two or more items,
the best estimate should be calculated and determined in accordance with all possible outcomes and the
relevant probabilities. (3) When all or some of the expenses necessary for the liquidation of an estimated
debts of an enterprise is expected to be compensated by a third party, the compensation should be separately
recognized as an asset only when it is virtually certain that the reimbursement will be obtained. The
Company shall check the book value of the estimated debts on the balance sheet date. The Company shall,
subject to change, make adjustment to carrying value to reflect the current best estimate.
Employee Compensation
The employee compensation refers to all kinds of payments and other relevant expenditures given by the
Company during the accounting period of an employee' providing services to the Company, including:
wages, bonuses, allowances and subsidies for the employees; welfare expenses for the employees; social
insurances such as medical insurance, endowment insurance, unemployment insurance, work injury
insurance, maternity insurance and other, which are paid by the Company to the employee, and housing
accumulation fund. If the Company cancels the labor relationship with any employee prior to the expiration30
of the relevant labor contract or brings forward any compensation proposal for the purpose of encouraging
the employee to accept a layoff (the cancellation of labor relationship or proposal on voluntary layoff will
execute it soon, and The Company is unable to unilaterally withdraw the plan on the cancellation of labor
relationship or the layoff), the Company shall recognize the estimated liabilities incurred hereof, and shall
simultaneously record them into the profit or loss for the current period.
Recognition of revenue
No revenue shall be realized unless the following conditions are met simultaneously: a. The significant risks
and rewards of ownership of the goods or products have been transferred to the buyer by the enterprise; b.
The Company retains neither management right nor effective control over the sold goods or products; c. The
relevant revenue has been received or valid evidence has been obtained, d. relevant cost related to sales of
goods and products can be measured in a reliable way.
Revenue from providing services shall be recognized by adopting the percentage-of-completion method
when following conditions shall be met simultaneously: The amount of revenue can be measured in a
reliable way; The relevant economic benefits are likely to flow into the enterprise; The schedule of
completion under the transaction can be confirmed in a reliable way; and the costs incurred or to be incurred
in the transaction can be measured in a reliable way. If the Company can not measure the result of a
transaction concerning the providing of labor services in a reliable way, and the cost of labor services
incurred is expected to be compensated, the revenue from the providing of labor services shall be recognized
in accordance with the amount of the cost of labor services incurred. If the cost of labor services incurred is
not expected to compensate in full, the revenue shall be recognized in accordance with the amount of the
cost of labor service can be compensated; if all cost of labor services incurred is not expected to compensate
and no revenue from the providing of labor services may be recognized.
The revenue from abalienating of right to use the Company’s assets may be recognized when the following
conditions are met simultaneously: a. the relevant economic benefits are likely to flow to the Company; and
b. the amount of revenues can be measured in a reliable way. The user charge receivable should be measured
and confirmed as operating revenue in accordance with the period and method of charging as stipulated in
the relevant contract or agreement.
Government Subsidies
No government subsidy may be recognized unless the following conditions are met simultaneously: (1) The
Company can meet the conditions for the government subsidies; and (2) The Company can obtain the
government subsidies.
If a government subsidy is a monetary asset, it shall be measured in the light of the received or receivable
amount. If a government subsidy is a non-monetary asset, it shall be measured at its fair value. If its fair
value cannot be obtained in a reliable way, it shall be measured at its nominal amount.
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed
within the useful lives of the relevant assets, and included in the current profits and losses. But the
government subsidies measured at their nominal amounts shall be directly included in the current profits and
losses. The government subsidies pertinent to incomes shall be treated respectively in accordance with the
circumstances as follows: (1) Those subsidies used for compensating the related future expenses or losses of
the enterprise shall be recognized as deferred income and shall included in the current profits and losses
during the period when the relevant expenses are recognized; or (2) Those subsidies used for compensating31
the related expenses or losses incurred to the enterprise shall be directly included in the current profits and
losses.
Accounting Treatment of Income Tax
Income tax shall be measured by adopting balance sheet approach. On the balance sheet day, deferred
income tax assets and relevant deferred income tax income shall be recognized based on the deductible
temporary difference and result calculated at the applicable income tax rate; deferred income tax liabilities
and relevant deferred income tax expense shall be recognized based on taxable temporary difference and
result calculated at the applicable income tax rate.
Method for Profit Distribution
In accordance with the Articles of Association, the Company’s profit shall be distributed in order as follows:
—— Making up losses in the previous year;
—— Appropriating 10% net profit as statutory public reserve, if accumulative appropriated amount
reaches over 50% of registered capital, the Company may no longer appropriate;
—— Appropriating discretionary public reserve after approval by the Shareholders’ General Meeting;
—— Retained profit shall be distributed according to the resolution of the Shareholders’ General Meeting.
Business Combinations
The term "business combinations" refers to a transaction or event bringing together two or more separate
enterprises into one reporting entity. The Company shall recognize assets and liabilities obtained for
business combinations on the combining date and acquisition date. The "combining date" or “acquisition
date” refers to the date on which the combining party actually obtains control on the combined party.
In a business combination under the same control, the assets and liabilities that the combining party obtains
in a business combination shall be measured on the basis of their carrying amount in the combined party on
the combining date. As for the balance between the carrying amount of the net assets obtained by the
combining party and the carrying amount of the consideration paid by it, the additional paid-in capital shall
be adjusted. If the additional paid-in capital is not sufficient to be offset, the retained earnings shall be
adjusted.
In a business combination 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
acquirer in exchange for the control on the acquiree. The positive balance between the combination costs and
the fair value of the identifiable net assets it obtains from the acquiree shall be recognized as business
reputation. The negative balance between the combination costs and the fair value of the identifiable net
assets it obtains from the acquiree shall be recorded into the profits and losses of the current period after the
reexamination.
Preparation methods for consolidated financial statements
The scope of consolidation of consolidated financial statements shall include the Company and all its
subsidiaries. The operating outcomes and financial status of the subsidiaries shall be included in the
consolidated financial statements from start date of the control to end date of the control.
The subsidiaries that the Company obtains due to business combination under the same control shall be
included into the scope of consolidation when preparing the consolidated financial statements of the current32
period, and the beginning balance in the consolidated financial statement and prior comparison sheet shall be
adjusted accordingly.
As for the subsidiaries that the Company obtains due to business combination not under the same control,
their financial statements shall be adjusted based on the fair value of each identifiable asset and liability
determined on the combining date when preparing the consolidated financial statements of the current period.
Such combined subsidiaries shall be included into the scope of consolidation from the combining date.
If the accounting period and accounting policies adopted by a subsidiary are different from those adopted by
the Company, when preparing the consolidated financial statement, necessary adjustments shall be made to
the financial statements of the subsidiary under the accounting period and accounting policies adopted by the
Company. Within the scope of consolidation, all significant transactions between the enterprises, balance
and unrealized profits and losses shall be offset when preparing the consolidated financial statement. As for
the unrealized losses occurred in the internal transaction, if there is a evidence shows that such loss is
impairment loss on relevant assets, it shall not be offset. The equity and profits & losses attributable to
minority shareholders of the subsidiary shall be particularly presented in the item of “shareholder’s equity”
in the consolidated balance sheets and in the item of “net profit” in the consolidated income statement
respectively.
If the deficit attributable to minority shareholders exceeds the share enjoyed by the minority shareholders in
the owner’s equity of the subsidiary, the balance shall be offset against shareholder’s equity of parent
company except that minority shareholders have obligation and capacity to assume. The profit of the
subsidiary to be realized in the following period, which is not belong the owner’s equity until it compensate
the minority shareholders loss assumed by owner’s equity of parent company.
Change in accounting policies and accounting estimates and corrections of prior accounting errors
During the reporting period, there is no change in accounting policies or accounting estimates and no
correction of prior accounting errors.33
V. Ma jor Taxe s
VAT
VAT on sales is calculated based on 17% of sales revenue. VAT is calculated and paid based on the difference
of VAT on sales deducting deductable input VAT. Tax on exports managed by the Company, as approved by
the taxation departments, is paid by adopting the policy of “tax exemption, tax deduction and tax rebate”
since 1January 2002.
Corporate Income Tax
The Company was identified as a high-tech enterprise in December 2008, and won the “Certificate of
High-tech Enterprise” with serial number GR200844000085 after approval by Department of Science and
Technology of Guangdong Province, Department of Finance of Guangdong Province, Guangdong Provincial
Bureau of State Taxation and Guangdong Provincial Bureau of Local Taxation on 16 Dec. 2008. In
accordance with relevant provisions in Corporate Income Tax Law of the People's Republic of China and the
Administration Measures for Identification of High-tech Enterprises promulgated in 2007, the Company paid
the corporate income tax based on a tax rate of 15% within three years since 1 Jan. 2008.
The subsidiaries of the Company, including Foshan Taimei Times Lamps and Lanterns Co., Ltd. and Foshan
Chanchang Electric Appliance (Gaoming) Co., Ltd., are all productive foreign funded enterprises, so that the
said three companies enjoy a preferential CIT policy of “Two plus three” (Exemption of enterprise income
tax for the first two years of making profit, and 50% tax reduction for following three years). Of which, year
2007 is the first profit-making year that Foshan Taimei Times Lamps and Lanterns Co., Ltd. enjoys the said
preferential policy of “Two plus three”, therefore, it should be allowed a 50% reduction of income tax in
2010. Foshan Chanchang Electric Appliance (Gaoming) Co., Ltd. enjoys a preferential CIT policy of “Two
plus three” since 2008, therefore the said company should be allowed a 50% reduction from the enterprise
income tax in 2010.
VI . Subs idi a r i e s cont rol l ed by the Company
The subsidiaries received by the Company through establishment or investment
Name of invested
company
Date of
foundation
Registration
place
Registered
capital
(RMB’0000)
Amount
invested by
the Company
(RMB’0000)
Equity
owned
Legal
representative
Main business
Consolidated
statement
Foshan
Chanchang
Lighting
Components Co.,
Ltd.
1989 Foshan USD180 USD72 40% Zhong Xincai
Manufacturing bromine
tungsten lamp, special
lighting source products and
ancillary devices
Yes
Foshan
Chansheng
Electronic Ballast
Co., Ltd.
2003 Foshan RMB100 RMB75 75% Zhong Xincai
Manufacturing electronic
ballasts, electronic
transformers and electronic
triggers.
Yes34
Foshan
Chanchang
Electric Appliance
(Gaoming) Co.,
Ltd.
2005 Foshan RMB6000 RMB4200 70% Zhong Xincai
Production and operation of
lamps, electric light source
products and accessories,
installation and related
engineering and consulting
business.
Yes
Foshan Taimei
Times Lamps and
Lanterns Co., Ltd. 2005 Foshan RMB50 RMB35 70% Zhong Xincai
Research, development,
production and sales of
lighting, household
appliances and accessories
and other lighting products.
Yes
Foshan Gaoming
Fuwan
Landscape
Resort Co., Ltd.
2006 Foshan RMB480 RMB480 100% Zhong Xincai
Making arrangement (tourist
industry, catering service,
sauna, foot-bathing, games,
retail of beverages, sports on
the water, chess)
Yes
Foshan Lighting
Lamps and
Lanterns Co., Ltd. 2009 Foshan RMB 500 RMB 355 70% Zhong Xincai
R&D and production of
electric light source lamp
products and relevant electric
engineering materials, metal
material and non-metal
material
Yes
Foshan Electrical
& Lighting
(Xinxiang) Co.,
Ltd.
2009 Xinxiang RMB 1000 RMB 500 100% Zhong Xincai
Production and sales of
electric light source
equipment and electric light
source products, sales of
accessories of electric light
source, electric light source
materials, electric
engineering materials,
accessories for motor
vehicles, lamps and
components
Yes
—Foshan Chanchang Lighting Components Co., Ltd. was founded in 1989, and the Company holds 40%
equities of the said company. Under relevant provisions in the agreement signed between the Company and
foreign shareholder of Foshan Chanchang Lighting Components Co., Ltd., the Company owns the real
control right. Therefore, the said company is included into the scope of the consolidated financial statements.
Owing to expiration of the duration of joint venture ended 30 Nov. 2008, the Board of the said subsidiary
company decided to terminate its operation. Relevant liquidation matters are in progress.
— Foshan Chanchang Electric Appliance (Gaoming) Co., Ltd., who is the Sino-foreign joint ventures
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 date of the foundation.35
—Foshan Taimei Times Lamps and Lanterns Co., Ltd., who is the Sino-foreign joint ventures 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 date of foundation.
—Foshan Gaoming Fuwan Landscape Resort Co., Ltd. is limited liability company, which is invested and
established by the Company, obtaining its license for Business Corporation on 23 Nov. 2006. And the
company holds 100% equities of this company. Therefore the said subsidiary was included into the scope of
the consolidated financial statements since date of foundation.
— Foshan Lighting Lamps and Lanterns Co., Ltd. is limited liability company, 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 Hongbao Electrical & Lighting Co., Ltd., Hebei Jinfen Trading Co., Ltd., obtaining its license
for Business Corporation on 27 Mar. 2009. The Company holds 60% equities of this company. Therefore the
said subsidiary was included into the scope of the consolidated financial statements since date of the
foundation. The said company had put into production in May 2009. On 25 Sep. 2009, the equity transfer
agreement was signed between the Company and Foshan Haozhiyuan Trading Co., Ltd., in which Foshan
Haozhiyuan Trading Co., Ltd. transferred 10% equities of Foshan Lighting Lamps and Lanterns Co., Ltd. to
the Company. After transfer, the Company holds 70% equities of Foshan Lighting Lamps and Lanterns Co.,
Ltd..
— Foshan Electrical & Lighting (Xinxiang) Co., Ltd. is limited liability company with the registered capital
of RMB 10 million, which is invested and established by the Company, obtaining its license for Business
Corporation on 17 Apr. 2009. As at 31 Dec. 2009, the Company had invested RMB 5 million in this
company, holding 100% equities of this company. Therefore the said subsidiary was included into the scope
of the consolidated financial statements since date of foundation.
The subsidiary for business combination not under the same control
Name of invested
company
Date of
foundation
Registration
place
Registered
capital
(RMB’0000)
Amount
invested by
the Company
(RMB’0000)
Equity
owned
Legal
representative
Main business
Consolidated
statement
Prosperity
(Nanjing) Lighting
Components Co.,
Ltd.
2002 Nanjing RMB4168.32 RMB7200 100% Zhuang Jianyi
Production of energy-saving
photoelectric source
products, lamps and lanterns,
light source equipments,
illumination engineering;
technological development of
energy-saving and production
of relevant components;
sales of self-production
products
Yes
— In accordance with the equity transfer agreement signed between the Company and Prosperity Lamps and36
Components Ltd on 27 Aug. 2008, Prosperity Lamps and Components Ltd. transferred 100% equities of
Prosperity (Nanjing) Lighting Components Co., Ltd. to the Company. Therefore, Prosperity (Nanjing)
Lighting Components Co., Ltd. became the wholly-owned subsidiary of the Company. The said subsidiary
was included into the scope of the consolidated financial statements since merger date.
—Minority interests and profits and losses of minority shareholders of controlling subsidiaries
Profits and
losses of
minority
shareholders as
of this period
Minority
interests
Amount of minority
interests used for
offsetting against the
profit and loss of
minority shareholders
Balance after deduction of
losses of subsidiaries during
the period exceeding the
proportion of minority
shareholders from equity of
parent company
Foshan Chanchang Lighting
Components Co., Ltd. 101,572.25 16,119,953.03 - -
Foshan Chansheng Electronic Ballast
Co., Ltd. -284,907.31 765,485.42
Foshan Chanchang Electric Appliance
(Gaoming) Co., Ltd. -2,391,819.82 20,921,313.71
Foshan Taimei Times Lamps and
Lanterns Co., Ltd. 1,442,362.71 2,974,689.65
Foshan Lighting Lamps and Lanterns
Co., Ltd
1,649,807.88 3,767,709.71
- -
Total 517,015.71 44,549,151.52 - -
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Funds
Closing balance Opening balance
Items Amount
in foreign
currency
Exchange
rate
Amount
in RMB
Amount in
foreign
currency
Exchange
rate
Amount in RMB
Cash 66,814.58 38,646.25
Bank
deposits 850,278,044.40 1,036,543,619.63
Of which:
RMB 792,316,250.27 1,018,422,651.20
HKD 93.05 0.87239 81.18 93.05 0.8805 81.93
USD
6,786,147.13 6.7909 46,084,046.54 2,638,180.25 6.8282 18,014,022.3837
EURO
14,428.26 8.271 119,336.14 10,907.73 9.7971 106,864.12
Other
currency
funds
137143.26 -
Of which:
RMB 137126.14 -
USD 0 -
Total 879,598,148.06 1,036,582,265.88
—All bank deposits are in the name of the Company or the subsidiaries which are within the scope of
consolidated financial statements.
2. Tradable Financial Assets
Items Closing balance Opening balance
Stock investment
- 121,570.00
Total
- 121,570.00
3. Notes Receivable
Item Closing balance Opening balance
Bank acceptance bill 55,710,598.19 54,093,298.7
Total 55,710,598.19 54,093,298.72
— As at 30 June 2010, there is no undue trade acceptance draft receivable discounted or pledged.
—Closing balance of notes receivable increases by RMB 1,617,299.46 as compared with the opening
balance, an increase of 2.99%.
—There is no amount due from shareholders who hold 5% or more of voting shares of the Company in the
closing balance of notes receivable.
4. Accounts Receivable
Net amount of account receivable as at 30 Jun. 2010 stood at RMB 269,399,731.55, which is classified by
categories as follows:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Item
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Significant
single amounts 42,582,189.90 14.73 2,554,931.39 12.92 84,863,180.23 27.83 5,091,790.81 24.7538
Insignificant
singles amounts
but with
significant credit
risk
2,585,561.77 0.89 2,585,561.77 13.07 2,403,246.60 0.79 2,403,246.60 11.68
Other
insignificant 244,013,269.20
84.38
14,640,796.16
74.01
217,673,684.60 71.38 13,077,842.18 63.57
Total 289,181,020.87 100 19,781,289.32 100.00 304,940,111.43 100.00 20,572,879.59 100.00
— Closing balance of account receivable are analyzed by aging as follows:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Aging
Amount
Proportion
(%)
Amount
Withdrawal
proportion
(%)
Amount
Proportion
(%)
Amount
Withdrawal
proportion
(%)
Within 1
year 284,875,448.40 98.51 17,092,526.90 6 298,256,760.91 97.81 17,912,826.78 6
1-2 years 1,343,809.75 0.46 80,628.59 6 3,171,310.45 1.04 190,278.61 6
2-3 years 376,200.95 0.13 22,572.06 6 673,556.47 0.22 40,413.38 6
Over 3
years 2,585,561.77 0.89 2,585,561.77 100 2,838,483.60 0.93 2,429,360.82 86
Total 289,181,020.87 100 19,781,289.32 304,940,111.43 100.00 20,572,879.59
— Closing balance of accounts receivable decreased by RMB 15,759,090.56 as compared with the opening
balance, a decrease of 5.17%, which was mainly because that the Company enhanced the efforts of
collection during the reporting period, and collected the payment for the previous period.
— The total amount of arrearages of the first five units in the closing balance of accounts receivable is RMB
42,582,189.90, accounting for 17.02% of accounts receivable balance. And relevant details are as follows:
Customer
Relation with the
Company
Amount Account age
Proportion in total
accounts receivable
Customer 1 Related customer 12,889,744.35 Within 1 year 5.15%
Customer 2 Non-related customer 11,353,511.47 Within 1 year 4.54%
Customer 3 Non-related customer 6,180,993.40 Within 1 year 2.47%
Customer 4 Non-related customer 6,091,752.70 Within 1 year 2.44%
Customer 5 Non-related customer 6,066,187.98 Within 1 year 2.43%
Total 42,582,189.90 17.02%
— Bad debt provisions for closing accounts receivable with significant single amounts or insignificant but
being conducted an independent impairment test on:
Customer Book balance Account Amount of Withdrawal Reasons39
age bad debt ratio
Chengdu Shenxing Industrial Co.,
Ltd. 1,312,419.76
Over 3
years
1,312,419.76 100.00
Estimatedly
uncollectible
Guangzhou Yaotong Lighting
Appliances Trading Co., Ltd. 729,453.94
Over 3
years
729,453.94 100.00
Estimatedly
uncollectible
Shanghai Xianyi Lighting
Appliances Co., Ltd.
182,315.17
Over
3 years
182,315.17 100.00
Estimatedly
uncollectible
Jilin Changchun Meijia Shopping
Mall Yongchun Wholesale Haitian
Lamps
184,263.00
Over 3
years
184,263.00 100.00
Estimatedly
uncollectible
Jilin Changchun Haitian Dongda
Commerce&Trade Co., Ltd. 177,109.90
Over 3
years
177,109.90 100.00
Estimatedly
uncollectible
Total 2,585,561.77 2,585,561.77
—There are no such accounts receivable that the Company withdrew bad debt provision for in full or with a
large proportion in previous years but are collected or transferred back in full in the report period.
—See Note IX for details of amount due from shareholders who hold 5% or more of voting shares of the
Company in the closing balance of accounts receivable.
5. Prepayments
Balance of prepayments as at 30 Jun. 2010 stood at RMB 28,816,434.60, which is classified according to
aging as follows:
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 28,433,951.64 98.66 13,620,570.45 87.34
1-2 years 50,000.00 0.18 1,480,386.06 9.49
2-3 years 494,030.00 3.17
Over 3 years 332,482.96 1.16 - -
Total 28,816,434.60 100.00 15,594,986.51 100.00
—Arrears of the top five units in the closing balance of prepayments total RMB 14,484,236.43, accounting
for 50.26% of the prepayment balance. Details are as follows:
Customer
Relationship with the
Company
Amount Account age
Proportion in total
prepayments
Unit 1 Non-related supplier 3,794,240.00 Within 1 year 13.17%40
Unit 2 Non-related supplier 3,143,266.73 Within 1 year 10.91%
Unit 3 Non-related supplier 3,000,000.00 Within 1 year 10.41%
Unit 4 Non-related supplier 2,546,729.70 Within 1 year 8.84%
Unit 5 Non-related supplier 2,000,000.00 Within 1 year 6.94%
Total 14,484,236.43 50.26%
— The balance of prepayments has increased by RMB 13,221,448.09 compared with the period-begin, a
increase of 84.78%, which was mainly because the Company increased prepayments for materials
considering the supply and demand condition of raw materials and the price increase of raw materials.
—There is no amount due from shareholders who hold 5% or more of voting shares of the Company in the
balance of prepayments.
6. Other Receivables
Net amount of other receivables as at 30 Jun. 2010 stands at RMB 2,533,825.70, which is detailed as follows
according to categories:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Item
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Significant single
amounts 804,000.00 19.85 48,240.00 3.18 7,199,375.89 52.35 431,962.55 47.44
Insignificant single
amounts but with
significant credit
risk
244,000.00 6.02 244,000.00 16.09 106,552.50 0.77 106,552.50 11.70
Other insignificant 3,002,628.76 74.13 1,224,563.06 80.73 6,447,294.96 46.88 372,110.23 40.86
Total 4,050,628.76 100.00 1,516,803.06 13,753,223.35 100.00 910,625.28 100.00
—— Closing balance of other receivables are analyzed by aging as follows:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Aging
Amount
Proportion
(%)
Amount
Withdrawal
proportion
(%)
Amount
Proportion
(%)
Amount
Withdrawal
proportion
(%)
Within 1
year 2,695,559.26 66.55 161,733.56 6 7,078,992.81 51.47 410,012.09 6
1-2 years 4,762,515.42 34.63 285,750.93 641
2-3 years 1,111,466.62 8.08 66,688.00 6
Over 3
years 1,355,069.50 33.45 1,355,069.50 100 800,248.50 5.82 148,174.26 19
Total 4,050,628.76 1,516,803.06 13,753,223.35 100.00 910,625.28
—Arrears of the top five units in the closing balance of other receivables total RMB 804,000.00, accounting
for 19.85% of the other receivable balance. Details are as follows:
Name of unit
Relation with the
Company
Amount Account age
Proportion in total
accounts receivable
(%)
Unit 1 Non-related 500,000.00 Within 1 year 12.34%
Unit 2 Non-related 120,000.00 Within 1 year 2.96%
Unit 3 Non-related 73,000.00 Within 1 year 1.80%
Unit 4 Non-related 56,000.00 Within 1 year 1.38%
Unit 5 Non-related 55,000.00 Within 1 year 1.36%
Total 804,000.00 19.85%
— Bad debt provisions for closing other receivables with significant single amounts or insignificant but
being conducted an independent impairment test on:
Customer
Book
balance
Account
age
Amount of
bad debt
Withdrawal
ratio
Reasons
Foshan Chancheng District Yefeng
Hardware & Electric and Plastic Plant
73,000.00
Over 3
years
73,000.00 100.00
Estimatedly
uncollectible
Zhongshan Guzhen Jinzhuanshi
Hardware & Plastic Model Plant
56,000.00
Over 3
years
56,000.00 100.00
Estimatedly
uncollectible
Zhongshan Wanglai Industrial Co., Ltd. 55,000.00
Over 3
years
55,000.00 100.00
Estimatedly
uncollectible
Xuzhou Derui Plastic Co., Ltd. 50,000.00
Over 3
years
50,000.00 100.00
Estimatedly
uncollectible
Foshan Shiwan Dongzhao Special
Ceramics Co., Ltd.
10,000.00
Over 3
years
10,000.00 100.00
Estimatedly
uncollectible
Total 244,000.00 244,000.00
—No other receivables was canceled after verification in the report period.
—The balance of other receivables has decreased by RMB 9,702,594.59 compared with the opening balance,42
a decrease of 70.55%, which was mainly because the Company enhanced the efforts of collection during the
reporting period, and collected the payment for the previous period.
—There is no amount due from shareholders who hold 5% or more of voting shares of the Company in the
balance of other receivables.
7. Inventory
Net inventory as at 30 Jun. 2010 stood at RMB 336,869,415.41, which is detailed as follows according to
types:
Closing balance Opening balance
Item
Book balance
Falling price
reserve
Book value Book balance
Falling price
reserve
Book value
Raw materials 82,412,671.25 82,412,671.25 45,832,042.31 - 45,832,042.31
Goods in
process 11,835,692.48 11,835,692.48 5,337,431.41 - 5,337,431.41
Consigned
materials for
processing
- - -
Finished goods 156,832,977.64 143,155.25 156,689,822.39 112,419,662.88 143,155.25 112,276,507.63
Self-made
half-finished
goods
84,949,655.99 84,949,655.99 70,093,927.94 - 70,093,927.94
Low-value
consumption
goods
981,573.30 981,573.30 700,341.08 - 700,341.08
Total 337,012,570.66 143,155.25 336,869,415.41 234,383,405.62 143,155.25 234,240,250.37
—Provision for falling price of inventory
Decrease in this period
Item
Opening book
balance
Provision for this
period Reversal Writing off Closing book balance
Finished
products 143,155.25 - - - 143,155.25
Total 143,155.25 - - - 143,155.2543
8. Long-term Equity Investment
Net amount of long-term equity investment as at 30 Jun. 2010 stood at RMB 254,124,296.23, which is
detailed as follows according to categories:
Opening balance Closing balance
Item
Amount
Impairment
reserve
Increase in this
period
Decrease in this
period Amount
Impairment
reserve
Stock investment 11,850,000.00 5,850,000.00 - - 11,850,000.00 5,850,000.00
Other equity
investment 251,423,201.04 3,298,904.81 - - 251,423,201.04 3,298,904.81
Total 263,273,201.04 9,148,904.81 - - 263,273,201.04 9,148,904.81
Specific items of long-term equity investments:
—Stock investment
Name of invested
company
Stock
nature
Number of
stock
Proportion in
registered
Invested
Closing market
value
Impairment
reserve
Shenzhen
Zhonghao
(Group) Ltd.
Corporate
shares
650,000
Lower than
5%
5,850,000.00 - 5,850,000.00
Chengdu Hongbo
Industrial Co.,
Ltd.
Corporate
shares
5,000,000 6.94% 6,000,000.00 - -
Total 11,850,000.00 - 5,850,000.00
— A full-amount impairment reserve has been withdrawn for the investment to Shenzhen Zhonghao (Group)
Ltd. for its inability to offset debts with assets.44
—Other equity investment
Invested entity
Accounting
method
Initial
investment cost
Opening
balance
Increase/decrease Closing
balance
Equity-holding
ratio in
invested entity
(%)
Voting
rights
ratio in
invested
entity
(%)
Impairment
reserve
Impairment
reserve for
this period
Cash
bonus
for
this
period
Guangzhou Zhujiang Asset
Management Company Limited
Cost
method
10,000,000.00 10,000,000.00 - 10,000,000.00 15.38% 15.38% - -
Guangdong Development Bank
Foshan Branch
Cost
method
500,000.00 500,000.00 - 500,000.00 Lower than
5%
Lower
than 5%
- -
Foshan Fochen Road
Development Company Limited
Cost
method
- 13,175,627.38 12,175,627.38 7.66% 7.66% - -
China Everbright Bank
Cost
method
30,828,816.00 30,828,816.00 - 30,828,816.00 0.36% 0.29% - -
Shenzhen Liangke Venture
Capital Company Limited
Cost
method
13,718,882.66 13,718,882.66 - 13,718,882.66 18.50% 18.50% - -
Xiamen Commercial Bank
Cost
method
154,969,875.00 154,969,875.00 154,969,875.00 9.99% 9.99% - -
Qinghai FSL Lithium Energy
Exploitation Co., Ltd.
Equity
method
29,230,000.00 29,230,000.00 29,230,000.00 38.00% 38.00% -
--
Total 239,247,573.66 251,423,201.04 251,423,201.04 - -45
9. Fixed Assets and Accumulated Depreciation
Net fixed assets as at 30 Jun. 2010 stood at RMB 640,875,115.15, which is detailed as follows:
Items Opening balance Increase in this period
Decrease in this
period Closing balance
Original value of fixed
assets:
Housing and building 514,624,560.21 10,144,052.80 39,947.00 524,728,666.01
Machinery equipments 1,062,788,645.08 23,025,250.10 1,510,315.97 1,084,303,579.21
Transportation
equipments 14,336,318.24
351,000.00
0.00 14,687,318.24
Other equipment 26,800,911.76 356,028.21 710,595.97 26,446,344.00
Total 1,618,550,435.29 33,876,331.11 2,260,858.94 1,650,165,907.46
Accumulated
depreciation: 0 0 0
Housing and building 230,849,618.88 12,901,908.54 19,066.56 243,732,460.86
Machinery equipments 697,471,108.37 45,531,746.30 1,834,672.48 741,168,182.19
Transportation
equipments 8,977,015.12
496,160.72 0.00
9,473,175.84
Other equipment 11,990,049.95 1,492,162.12 608,887.43 12,873,324.64
Total 949,287,792.32 60,421,977.68 2,462,626.47 1,007,247,143.53
Impairment reserve for
fixed assets 0 0
Machinery equipments 2,043,648.78 2,043,648.78
Net value 667,218,994.19 0 0 640,875,115.15
—Construction in progress with original value of RMB 29,981,041.98 was transferred into fixed assets in
the report period.
—Depreciation amount recorded into operating cost, operating expenses and administrative expenses totaled
RMB 56,507,858.26 in the first half of year 2010.
—Up until 30 Jun. 2010, there had existed no fixed assets temporarily idle, rent in by financial leasing or
held for sale.
—Impairment reserves for fixed assets:
Item of fixed asset
Opening balance
Increase in this period
Writing off in this
period
Closing balance
Machinery equipment 2,043,648.78 - - 2,043,648.78
—The Company had withdrawn in previous years provisions for impairment of fixed assets on some
machinery equipments which failed to meet requirements of production processes and might result in losses.46
10. Construction in Process
Balance of construction in process as at 30 Jun. 2010 stands at RMB 186,837,099.00, which is detailed as follows:
Opening balance Closing balance Item
Book balance Impairment reserve Net book value Book balance Impairment reserve Net book value
Construction in process 184,971,615.68 - 184,971,615.68 186,837,099.00 186,837,099.00
Total 184,971,615.68 - 184,971,615.68 186,837,099.00 186,837,099.00
—Changes in construction in process:
Name of construction project Opening balance Increase in this period
Amount transferred into
fixed assets in this period Other decrease Closing balance Funds source
Fuwan Lighting Industrial Park 50,683,968.87 2,823,677.65 - -
53,507,646.52 Self-owned funds
Furnace 17,176,043.11 502,237.67 - -
17,678,280.78 Self-owned funds
T8 Workshop 18,250,368.50 3,371,365.39 11,151,476.52 -
10,470,257.37 Self-owned funds
Production lines of T8 and
metal-halide lamps 46,595,224.15 4,403,341.41 10,000,000.00 -
40,998,565.56 Self-owned funds
Production line of T5 fluorescent lamp 17,855,157.40 5,399,507.84 63,225.01 -
23,191,440.23 Self-owned funds
Fuwan Hotel and supporting facilities 5,067,530.19 382,320.00 118,000.00 -
5,331,850.19 Self-owned funds
4#, 5# factories in Xinxiang, Henan 6,085,850.80 15,779.70 - -
6,101,630.50 Self-owned funds
Rebuilding of liya line 4,056,888.33 1,037,874.73 - -
5,094,763.06 Self-owned funds
Other 19,200,584.33 13,910,420.91 8,648,340.45 - Self-owned funds47
Name of construction project Opening balance Increase in this period
Amount transferred into
fixed assets in this period Other decrease Closing balance Funds source
24,462,664.79
Total 184,971,615.68 31,846,525.30 29,981,041.98 -
186,837,099.00 Self-owned funds
—None of the items of projects under construction has any interest to be capitalized and exchange gain or loss.
—As at 30 Jun. 2010, the Company did not need to withdraw provision for impairment of projects under construction.
11. Intangible Assets
Type Initial amount Opening balance Increase in 2009
Transfer out in
2009
Amortization in
the reporting
period
Accumulated
amortization Closing balance
Acquisition
mode
Land use right
255,716,349.88 227,980,967.25
1,909,010.28 29,644,392.91 226,071,956.97
assignment and
purchase
Patent right
200,000.00 83,333.10 10,000.02 126,666.92 73,333.08
Input by
investors
Total
255,916,349.88 228,064,300.35 - 1,919,010.30 29,771,059.83 226,145,290.05
— As at 30 Jun. 2010, the Company has no provision for impairment of intangible assets that need to be withdrawn.48
12. Deferred income tax assets
Items Closing balance Opening balance
Deferred income tax assets
Provision for assets impairment 5,098,389.34 5,098,389.34
Depreciation of fixed assets 15,030,143.77 13,730,367.23
Payroll payable 4,050,000.00 4,050,000.00
Total 24,178,533.11 22,878,756.57
— Items of assets/liabilities leading to temporary difference and relevant amount:
Items Closing balance Opening balance
Provision for bad debts of accounts
receivable
19,781,289.32 20,572,879.59
Provision for bad debts of other
receivables
1,516,803.06 910,625.28
Provision for falling price of inventory 143,155.25 143,155.25
Provision for impairment of long-term
investment
9,148,904.81 9,148,904.81
Provision for impairment of fixed assets 2,043,648.78 2,043,648.78
Depreciation of fixed assets 90,724,938.92 91,535,781.60
Payroll payable 27,000,000.00 27,000,000.00
Total 150,358,740.14 151,354,995.31
14. Provision for assets impairment
Increase Decrease
Items
Opening
balance
Other Withdrawn Written
back
Other
Closing
balance
Provision for bad debts
of accounts receivable 20,572,879.59 791,590.27 19,781,289.32
Provision for bad debts
of other receivables 910,625.28 606,177.78 1,516,803.06
Provision for falling
price of inventory 143,155.25 143,155.25
Provision for
impairment of
long-term investment
9,148,904.81 9,148,904.81
Provision for
impairment of fixed
assets
2,043,648.78
2,043,648.78
Total 32,819,213.71 606,177.78 791,590.27 32,633,801.2249
14. Accounts Payable
Items Closing balance Opening balance
Accounts payable 242,647,976.54 140,739,081.85
— Among the closing balance of accounts payable, the amount of RMB 2,322,467.20 is a payment aged
more than 3 years, which is mainly for uncertain matter that some payment for materials need to be paid or
not.
—Among the closing balance, accounts payables from shareholders with more than 5% (including 5%) of
the voting shares of the Company, please refer to Note IX.
15. Advance from customers
Items Closing balance Opening balance
Advance from customers 10,973,709.53 31,482,851.09
— The balance of the advanced from the customers at the end of the period is increased RMB
20,509,141.56 in comparison with that at the beginning of this year, a decrease of 65.14%, which is mainly
because that the Company reduced the settlement means of payments received in advance.
— The closing balance of the advance from the customers is all advances on sales. There was no advance
from customers aged more than 3 years.
— Among the closing balance of the advance from the customers, there was no advance from customers due
from shareholders with more than 5% (including 5%) of the voting shares of the Company.
16. Payroll payable
Items Opening balance Increase Payment Closing balance
Salary, bonus, allowance
and subsidy 1,437,170.60 104,111,210.60 105,494,381.20 54,000.00
Employee welfare 0.00 1,301,475.72 1,301,475.72 0.00
Share incentive fund 46,685,877.53 1,913,887.00 9,894,487.00 38,705,277.53
Labor union fee 0.00 256,314.88 256,314.88 0.00
Social insurance 266,414.99 10,963,782.81 10,977,401.20 252,796.60
Including: Medical
insurance 70,556.86 4,086,135.30 4,103,888.96 52,803.20
Basic endowment
insurance 93,093.21 5,466,012.18 5,457,163.28 101,942.11
Unemployment
insurance 5,242.25 308,060.25 306,565.14 6,737.36
Injury insurance
premium 91,641.72 877,862.98 885,654.95 83,849.75
Pregnancy insurance 5,880.95 225,712.10 224,128.87 7,464.18
Housing fund 1,326.00 256,939.00 247,891.00 10,374.00
Other 0.00 0.00 0.00 0.0050
Items Opening balance Increase Payment Closing balance
Total 48,390,789.12 118,803,610.01 128,171,951.00 39,022,448.13
— There was no payroll payable in arrears in the Company. The balance of “Salary, bonus, allowance and
subsidy” presented in the payroll payable had been paid in Jul. 2010.
17. Taxes payable
As at 30 Jun. 2010, the Company’s balance of taxes payable is RMB 21,950,749.40, the details as below:
Taxes Closing balance Opening balance
Corporate income tax 14,351,799.42 19,133,133.30
VAT -7,997,189.89 -533,339.55
Other 15,596,139.87 3,646,597.08
Total 21,950,749.40 22,246,390.83
18. Other payables
Items Closing balance Opening balance
Other payables 8,967,503.08 36,391,801.59
— Among the closing balance of other payables, the amount of RMB 1,827,469.58 is a payment aged more
than 3 years, which is mainly for paying margin money instead of agents.
— Among the closing balance, there were no other payables due from shareholders with more than 5%
(including 5%) of the voting shares of the Company.
19. Deferred income
Items Closing balance Opening balance
Government grants 10,493,216.58 9,852,274.95
Total 10,493,216.58 9,852,274.95
— In accordance with the relevant provisions of “Accounting Standard for Business Enterprise –
Government Grants”, the government grants related to assets and used for making up relevant costs and
losses in the subsequent periods are recognized as deferred income.
— In accordance with the Circular of National Development and Reform Commission through document
Fa-Gai-Tou-Zi (2008) 3174, “National Development and Reform Commission on 2009 Ten Major Energy
Conservation Projects, Circular Economy and Industrial Pollution Treatment Projects in Key Watersheds and
Investment Plan of New Add Central Budget 2008”, the Company received the financial appropriations of
RMB 10 million exclusively used in the project of electronic energy-saving lamp transformed from
incandescence lamp. In this reporting period, the depreciation amount of RMB 147,725.05 was amortized
into the profits and losses.51
— In accordance with Nan-Fu-Fu [2009] No. 689 document, the Company received a special subsidy fund
of RMB 845,000.00 related to desulfurization project from Nanhai District Government, which was used for
environmental protection. In this reporting period, the depreciation amount of RMB 56,333.32 was
amortized into the profits and losses.
20. Share Capital
Opening balance Increase/decrease in the reporting period Closing balance
Items
Number
Proportion
%
Shares
subject to
trading
moratorium
listed
Other Subtotal Number
Proportion
%
I. Shares subject
to trading
moratorium
1. Shares held by
domestic legal
persons
4,291,253.00 0.57
-5,064.00
-5,064.00
4,286,189.00 0.44
2. Shares held by
foreign legal
persons
131,815,685.00 13.47 - 131,815,685.00 13.47
3. Shares held by
domestic natural
persons
1,595,896.00 0.03
-295,990.00
-295,990.00
1,299,906.00 0.13
5,584,992.00 0.57 5,584,992.00 0.57
Total shares
subject to trading
moratorium
143,287,826.00 14.07
-301,054.00
-301,054.00
142,986,772.00 14.61
II. Shares not
subject to trading
moratorium
-
1. RMB ordinary
shares
615,635,911.00 62.91 305,767.00 305,767.00 615,941,678.00 62.94
2. Domestically
listed foreign
shares
219,640,008.00 23.02
-4,713.00
-4,713.00
219,635,295.00 22.44
Total shares not
subject to trading
moratorium
835,275,919.00 85.93
301,054.00
301,054.00
835,576,973.00 85.39
III. Total shares 978,563,745.00 100 - - 978,563,745.00 100.0052
21. Capital Reserve
Items Opening balance Increase Decrease Closing balance
Share premium 579,517,552.53 579,517,552.53
Provision for equity
investment 4,514.43 4,514.43
Other capital reserve 7,403,887.57 7,403,887.57
Total 586,925,954.53 586,925,954.53
22. Surplus Reserves
Items Opening balance Increase Decrease Closing balance
Statutory surplus
reserves 391,588,178.56 391,588,178.56
Discretionary surplus
reserve 136,886,568.36 136,886,568.36
Total 528,474,746.92 528,474,746.92
23. Retained Profit
Jan.-Jun. 2010 Jan.-Jun. 2009
Items Amount
Withholding
proportion
Amount
Withholding
proportion
Retained profit at the
beginning of reporting
period
566,135,541.76 527,878,059.71
Add: Net profit
attributable to parent
company in the reporting
period
80,817,767.96 71,180,439.19
Less: appropriating
statutory surplus reserves
Dividends distributed for
ordinary shares
215,284,023.90 153,774,302.88
Retained profit at the end
of reporting period
431,669,285.82 445,284,196.02
24. Operating income and operating cost
— Categories of operating income and operating cost are listed as follows:
Current period Last period
Items
Revenue Cost Revenue Cost
Main operation 817,689,117.18 620,284,762.95 738,679,727.79 557,423,427.8853
Other 6,671,227.47 5,185,551.26 1,133,311.31 1,075,172.44
Total 824,360,344.65 625,470,314.21 739,813,039.10 558,498,600.32
—Breakdown of main operation income according to industries:
Current period Last period
Items
Revenue Cost Revenue Cost
Lighting equipments and
lamps
815,161,735.16 620,586,524.15 730,558,806.62 555,308,028.83
Income from hotel 9,198,609.49 4,883,790.06 8,120,921.17 2,115,399.05
Total 824,360,344.65 625,470,314.21 738,679,727.79 557,423,427.88
— Segment information of main operation income from selling products:
Current period Last period
Items
Revenue Cost Revenue Cost
Domestic sales 492,661,401.72 376,195,229.61 517,371,935.32 392,633,561.71
Export sales 322,500,333.44 244,391,294.54 213,186,871.30 162,674,467.12
Total 815,161,735.16 620,586,524.15 730,558,806.62 555,308,028.83
—Top five customers in sales income:
Customer Operating revenue
Proportion in total operating revenue
(%)
Customer 1 41,415,134.37 5.02
Customer 2 32,538,992.43 3.95
Customer 3 21,489,132.32 2.61
Customer 4 21,251,059.12 2.58
Customer 5 16,601,876.70 2.01
Total 133,296,194.94 16.17
25. Taxes and Associate Charges
Types Current period Last period Standard for tax paying
City maintenance and construction tax 4,658,284.63 3,367,512.30 7% of turnover tax
Educational surtax 1,996,407.69 1,458,302.09 7% of turnover tax
Business tax
564,174.87 430,534.39 5% of taxable income
Others
9,486.80 8,025.55 -
Total
7,228,353.99 5,264,374.33
26. Administrative expense
Administrative expense in this period has increased by RMB 9,935,090.43 compared with the last period, an
increase of 21.63%, which was due to expansion of business scale, resulting in increase of labor costs and54
office expenses
27. Financial expense
Types Current period Last period
Interest expense
- -
Less: Interest revenue
5,205,520.58 6,189,956.77
Exchange loss
598,716.80 3,244,483.50
Less: Exchange gain
Others 1,149,477.38 1,072,992.60
Total -3,457,326.40 -1,872,480.67
28. Assets Impairment Losses
29. Investment income
Types Current period Last period
Income from long-term equity investment calculated by cost
method
Investment income obtained through holding tradable
financial assets
178,118.10
Investment income obtained through holding
available-for-sale financial assets
1,420,800.00
Investment income from disposal of tradable financial assets
Total 178,118.10 1,420,800.00
— Investment income in the reporting period has decreased by RMB 1,242,681.90 compared with the last
Types Current period Last period
Loss on bad debts of receivables -185,412.49 1,274,045.07
Loss on falling price of inventories
Loss on impairment of investment
Loss on impairment of fixed assets
Loss on impairment of construction in
progress
Loss on impairment of intangible assets
Other
Total -185,412.49 1,274,045.0755
period, a decrease of 87.46%, which was because that the Company reclaim the bonus from the investment
company in the last period, from which achieved a large income.
30. Non-operating Income
Types Current period Last period
Gains from government grants
1,298,249.58 330,000.00
Of which: Financial subsidies for energy-saving
and emission-reduction 204,058.37
Other subsidies 1,094,191.21 330,000.00
Accounts payable that need not be paid
Net income from disposal of fixed assets
186,413.73 3,660,000.00
Other
46,977.20 7,419,839.09
Total
1,531,640.51 11,409,839.09
31. Non-operating expense
Types Current period Last period
Losses on disposal of fixed assets
230,673.71 4,066,273.96
Donation
1,000,000.00 -
Other
1,299,041.45 757,876.92
Total
2,529,715.16 4,824,150.88
32. Income Tax Expense
Types Current period Last period
Current income tax expense 17,240,377.60 19,697,957.01
Deferred income tax expense 818,548.82 437,132.13
Total 18,058,926.42 20,135,089.14
33. Earnings per Share
Types Current period Last period
Basic earnings per share 0.08 0.07
Diluted earnings per share 0.08 0.07
—The above earnings per share are calculated in accordance with the Rules for the Compilation of
Information Disclosures by the Companies that Offer Securities to the Public No. 9- Calculation and
Disclosure of Net Return of Equity and Earnings per Share (revised in 2010). Please refer to Note XIV for
details of the calculation process.56
34. Other Comprehensive Income
Items Current period Last period
1. Gain/(loss) arising from available-for-sale financial
assets
- -
Less: Effects of income tax generating from
available-for-sale financial assets
- -
Net amount transferred into profit and loss in the current
period that recorded into other comprehensive income in
previous period
- -
Subtotal - -
2. Other - -
Less: Effects of income tax generating from other recorded
into other comprehensive income
- -
Net amount transferred into profit and loss in the
current period that recorded into other comprehensive income
in previous period
- -
Subtotal - -
Total - -
35. Other Cash Received Relating to Operating Activities
Other cash received relating to operating activities is RMB 9,491,739.21 in the first half of 2010, main items
are as below:
Items Amount
Interest income 4,936,852.76
Rent 865,812.43
Governmental grants 1,883,293.00
Other 1,161,076.50
36. Other Cash Paid Relating to Operating Activities
Other cash paid relating to operating activities is RMB 33,859,096.29 in the first half of 2010, main items
are as below:
Items Amount57
Transport charges 17,412,163.45
Advertising and general publicity expense 1,563,647.73
Expense for product promotion 3,929,294.97
Fee for technical service provided by expert 1,119,045.10
Travel charge 1,577,384.05
Testing expense 1,749,502.00
Relief donation 1,000,000.00
37. Supplemental information of cash flow statement
Supplemental information Current period Last period
1. Reconciliation of net profit to net cash flows generated from
ti ti iti
Net profit 81,334,783.67 80,265,342.87
Add: Provision for impairment of assets -185,412.49 1,274,045.07
Depreciation of fixed assets 57,148,508.53 62,055,384.65
Amortization of intangible assets 1,919,010.30 2,311,658.24
Amortization of long-term deferred expense 92,232.00
Losses on disposal of property, plant and equipment, intangible
t d th l t t(i ti)
44,259.98 -6,793,726.04
Losses from variation of fair value -
Financial cost 712,700.32 1,072,992.60
Investment loss (gains: negative) -178,118.10 -1,420,800.00
Credit item of deferred tax (debit item: negative) 818,548.82 -187,037.92
Decrease in inventory (increase: negative) -102,629,165.04 30,677,530.01
Decrease in accounts receivable from operating activities
(i ti )
-2,427,440.30 -54,715,426.68
Increase in payables from operating activities (decrease:
ti )
39,048,023.04 113,018,627.91
Net cash flows generated from operating activities 75,605,698.73 227,650,822.71
2. Net increase in cash and cash equivalents
Closing balance of cash 879,598,148.06 926,365,978.09
Less: opening balance of cash 1,036,582,265.88 927,868,735.28
Closing balance of cash equivalents
Less: Opening balance of cash equivalents58
Supplemental information Current period Last period
Net increase in cash and cash equivalents -156,984,117.82 -1,502,757.19
— Cash and cash equivalents
Items Closing balance Opening balance
I. Cash 879,598,148.06 1,036,582,265.88
Including: Cash on hand 66,814.58 38,646.25
Bank deposit on demand 879,531,333.48 1,036,543,619.63
Other monetary funds on demand -
II. Cash equivalent -
Including: Bond investment due in three months -
III. Closing balance of cash and cash equivalents 879,598,148.06 1,036,582,265.88
VI I I . Not e s to the Financ i a l St a t emen t s of Pa r ent Company
1 Accounts Receivable
Net account receivable as at 30 Jun. 2009 stood at RMB 271,297,772.17, which is detailed as follows
according to varieties:
Closing balance Opening balance
Items Book balance Bad debt provision Book balance Bad debt provision
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Significant single
amounts
51,145,772.32 17.56 3,068,746.34 15.42 110,833,818.24 34.31 6,650,029.09 35.24
Insignificant
single amounts
but with
significant credit
risk
2,585,561.77 0.89 2,585,561.77 12.99 2,403,246.60 0.74 2,403,246.60 12.74
Other insignificant237,468,878.93 81.55 14,248,132.74 71.59 209,844,302.33 64.95 9,814,860.94 52.02
Total 291,200,213.02 100 19,902,440.85 100 323,081,367.17 100.00 18,868,136.63 100.00
— Closing balance of account receivable are analyzed by aging as follows:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Aging
Amount
Proportion
(%)
Amount
Withdrawal
proportion
(%)
Amount
Proportion
(%)
Amount
Withdrawal
proportion
(%)
Within 1 year 286,971,578.76
98.55
17,218,294.73
6.00 316,669,043.76 98.02 16,224,345.42 6%59
1-2 years 1,266,871.54
0.44
76,012.29
6.00 2,946,596.05 0.91 176,795.77 6%
2-3 years 376,200.95
0.13
22,572.06
6.00 627,243.76 0.19 37,634.62 6%
Over 3 years 2,585,561.77
0.89
2,585,561.77
100.00 2,838,483.60 0.88 2,429,360.82 86%
Total 291,200,213.02
100.00
19,902,440.85 323,081,367.17 100.00 18,868,136.63
—— The total amount of arrearages of the first five units in the closing balance of accounts receivable is
RMB 51,145,772.32, accounting for 17.56% of accounts receivable balance. And relevant details are as
follows:
Customer
Relation with the
Company
Amount Account age
Proportion in total
accounts receivable
Customer 1 Related customer 18,275,116.08 Within 1 year 6.28%
Customer 2 Non-related customer 11,353,511.47 Within 1 year 3.90%
Customer 3 Related customer 9,269,963.39 Within 1 year 3.18%
Customer 4 Non-related customer 6,180,993.40 Within 1 year 2.12%
Customer 5 Non-related customer 6,066,187.98 Within 1 year 2.08%
Total 51,145,772.32 17.56%
— Bad debt provisions for closing accounts receivable with significant single amounts or insignificant but
being conducted an independent impairment test on:
Customer
Book balance Amount of bad
debt
Withdrawal
ratio
Reasons
Chengdu Shenxing Industrial Co., Ltd. 1,312,419.76 Over 3 years 100 预计无法收回
Guangzhou Yaotong Lighting Appliances
Trading Co., Ltd.
729,453.94
Over 3 years 100 预计无法收回
Shanghai Xianyi Lighting Appliances Co., Ltd. 182,315.17 Over 3 years 100 预计无法收回
Jilin Changchun Meijia Shopping Mall
Yongchun Wholesale Haitian Lamps
184,263.00
Over 3 years 100 预计无法收回
Jilin Changchun Haitian Dongda
Commerce&Trade Co., Ltd.
177,109.90
Over 3 years 100 预计无法收回
Total 2,585,561.77
—There are no such accounts receivable that the Company withdrew bad debt provision for in full or with a
large proportion in previous years but are collected or transferred back in full in the report period.
—See Note IX for details of amount due from shareholders who hold 5% or more of voting shares of the
Company in the closing balance of accounts receivable.60
2. Other Receivables
Net amount of other receivables as at 30 Jun. 2010 stood at RMB 43,012,405.92, which is detailed as
follows according to categories:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Item
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Amount
Proportion
(%)
Significant single
amounts
42,892,067.40 91.04 2,573,524.04 62.76 39,102,966.86 82.85 305,395.94 35.19
Insignificant single
amounts but with
significant credit
risk
244,000.00 0.51 244,000.00 5.95 106,552.50 0.23 106,552.50 12.28
Other insignificant 3,976,880.74 8.45 1,283,018.17 31.29 7,987,693.70 16.92 455,866.23 52.53
Total 47,112,948.14 100 4,100,542.22 100 47,197,213.06 100 867,814.67 100
—— Closing balance of other receivables are analyzed by aging as follows:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Aging
Amount
Proportion
(%)
Amount
Withdrawal
proportion
(%)
Amount
Proportion
(%)
Amount
Withdrawal
proportion
(%)
Within 1 year 29,655,451.38 10.18 1,779,327.08 6 40,534,202.64 85.88 367,874.69 6
1-2 years 11,683,705.55 4.01 701,022.33 6 4,760,650.42 10.09 285,639.03 6
2-3 years 4,418,721.71 1.52 265,123.30 6 1,102,111.50 2.34 66,126.69 6
Over 3 years 1,355,069.50 0.47 1,355,069.50 100 800,248.50 1.69 148,174.26 19
Total 47,112,948.14 100 4,100,542.22 47,197,213.06 100 867,814.67
—Arrears of the top five units in the closing balance of other receivables total RMB 42,892,067.40,
accounting for 91.04% of the other receivable balance. Details are as follows:
Name of unit
Relation with the
Company
Amount Account age
Proportion in total
accounts receivable
(%)
Unit 1 Related 32,776,450.81 Within 1 year 69.57%
Unit 2 Related 5,129,434.87 Within 1 year 10.89%
Unit 3 Related 3,289,200.12 1-2 years 6.98%
Unit 4 Non-related 1,021,359.00 Within 1 year 2.17%61
Unit 5 Non-related 675,622.60 Within 1 year 1.43%
Total 42,892,067.40 91.04%
— Bad debt provisions for closing other receivables with significant single amounts or insignificant but
being conducted an independent impairment test on:
Customer
Book balance Amount of bad
debt
Withdrawal
ratio
Reasons
Foshan Chancheng District Yefeng Hardware
& Electric and Plastic Plant 73,000.00 73,000.00 100%
Estimatedly
uncollectible
Zhongshan Guzhen Jinzhuanshi Hardware &
Plastic Model Plant 56,000.00 56,000.00 100%
Estimatedly
uncollectible
Zhongshan Wanglai Industrial Co., Ltd.
55,000.00 55,000.00 100%
Estimatedly
uncollectible
Xuzhou Derui Plastic Co., Ltd.
50,000.00 50,000.00 100%
Estimatedly
uncollectible
Foshan Shiwan Dongzhao Special Ceramics
Co., Ltd. 10,000.00 10,000.00 100%
Estimatedly
uncollectible
Total
244,000.00 244,000.00 100%
Estimatedly
uncollectible
—No other receivables was canceled after verification in the report period.
—There is no amount due from shareholders who hold 5% or more of voting shares of the Company in the
balance of other receivables.
3. Long-term Equity Investment
Opening balance Closing balance
Item
Amount
Impairment
reserve
Increase in this
period
Decrease in
this period
Amount
Impairment
reserve
Stock investment 11,850,000.00 5,850,000.00 11,850,000.00 5,850,000.00
Other equity
investment 383,203,590.88 3,298,904.81 383,203,590.88 3,298,904.81
Total 395,053,590.88 9,148,904.81 395,053,590.88 9,148,904.81
—Stock investment62
Name of invested
company
Stock
nature
Number of
stock
Proportion in
registered capital
of invested
company
Invested
amount
Closing
market
value
Impairment
reserve
Shenzhen Zhonghao
(Group) Ltd.
Corporate
shares 650,000
Lower than
5% 5,850,000.00 - 5,850,000.00
Chengdu Hongbo
Industrial Co., Ltd.
Corporate
shares 5,000,000 6.94% 6,000,000.00 - -
Total 11,850,000.00 - 5,850,000.0063
—Other equity investment
Invested entity
Accounting
method
Initial
investment cost
Opening
balance
Increase/decrease Closing
balance
Equity-holding
ratio in
invested entity
(%)
Voting
rights
ratio in
invested
entity
(%)
Impairment
reserve
Impairment
reserve for
this period
Cash
bonus
for
this
period
Guangzhou Zhujiang Asset
Management Company Limited
Cost
method
10,000,000.00 10,000,000.00 10,000,000.00 15.38% 15.38%
Guangdong Development Bank
Foshan Branch
Cost
method
500,000.00 500,000.00 500,000.00 少于5% 少于5%
Foshan Fochen Road
Development Company Limited
Cost
method
12,175,627.38 12,175,627.38 7.66% 7.66%
China Everbright Bank
Cost
method
30,828,816.00 30,828,816.00 30,828,816.00 0.36% 0.29%
Shenzhen Liangke Venture
Capital Company Limited
Cost
method
13,718,882.66 13,718,882.66 13,718,882.66 18.50% 18.50%
Xiamen Commercial Bank
Cost
method
154,969,875.00 154,969,875.00 154,969,875.00 9.99% 9.99%
Foshan Chanchang Lighting
Components Co., Ltd.
Cost
method
3,330,389.84 3,330,389.84 3,330,389.84 40.00% 40.00%
Foshan Chansheng Electronic
Ballast Co., Ltd.
Cost
method
750,000.00 750,000.00 750,000.00 75.00% 75.00%
Foshan Chanchang Electric
Appliance (Gaoming) Co., Ltd.
Cost
method
42,000,000.00 42,000,000.00 42,000,000.00 70.00% 70.00%
Foshan Taimei Times Lamps and
Lanterns Co., Ltd.
Cost
method
350,000.00 350,000.00 350,000.00 70.00% 70.00%
Foshan Gaoming Fuwan Cost 4,800,000.00 4,800,000.00 4,800,000.00 100.00% 100.00%64
Landscape Resort Co., Ltd. method
Prosperity (Nanjing) Lighting
Components Co., Ltd.
Cost
method
72,000,000.00 72,000,000.00 72,000,000.00 100.00% 100.00%
Foshan Electrical & Lighting
(Xinxiang) Co., Ltd.
Cost
method
5,000,000.00 5,000,000.00 5,000,000.00 100.00% 100.00%
Foshan Lighting Lamps and
Lanterns Co., Ltd.
Cost
method
3,550,000.00 3,550,000.00 3,550,000.00 70.00% 70.00%
Qinghai FSL Lithium Energy
Exploitation Co., Ltd.
Equity
method
29,230,000.00 29,230,000.00 29,230,000.00 38.00% 38.00%
Total 375,527,963.50 383,203,590.88 383,203,590.8865
4. Investment income
Types Current period Last period
Income from long-term equity investment calculated
by cost method
4,698,752.91 1,420,800.00
Investment income obtained through holding tradable
financial assets
Investment income obtained through holding
available-for-sale financial assets
Investment income from disposal of tradable financial
assets
178,118.10
Total 4,876,871.01 1,420,800.00
—Investment income has increased by RMB 3,456,071.01 than the last period, up by 243.25%,
which was due to that the Company received the bonus dividend from its subsidiaries in the
reporting period. 1,242,681.90
IX. Re l a t ed Pa r t i e s and Re l a t ed Pa r ty Tr ans a c t ion
Relationship between related parties
—Related parties with controlling relationship with the Company
—— Related parties with controlling relationship with the Company are as follows:
Name Registration place Main business
Relationship
with the
Company
Organization
code
Legal
representative
Foshan Chansheng
Electronic Ballast Co., Ltd.
64 Fenjiang North
Raod, Foshan
Manufacturing electronic ballasts, electronic
transformers and electronic triggers.
Subsidiary 75207544-3 Zhong Xincai
Foshan Chanchang
Electric Appliance
(Gaoming) Co., Ltd.
Cangjiang Industrial
Park, Gaoming
District, Foshan
Production and operation of lamps, electric
light source products and accessories,
installation and related engineering and
consulting business.
Subsidiary 77920377-5 Zhong Xincai
Foshan Taimei Times
Lamps and Lanterns Co.,
Ltd.
Cangjiang Industrial
Park, Gaoming
District, Foshan
Research, development, production and
sales of lighting, household appliances and
accessories and other lighting products.
Subsidiary 78203558-1 Zhong Xincai66
Name Registration place Main business
Relationship
with the
Company
Organization
code
Legal
representative
Foshan Gaoming Fuwan
Landscape Resort Co.,
Ltd.
Side of the Hengjiang
Reservoir, Hefu Road,
Hecheng Street,
Gaoming District,
Foshan
Making arrangement (tourist industry,
catering service, sauna, foot-bathing, games,
retail of beverages, sports on the water,
chess)
Subsidiary 79623406-3 Zhong Xincai
Prosperity (Nanjing)
Lighting Components Co.,
Ltd.
Honglan Town, Lishui
County, Nanjing
Production of energy-saving photoelectric
source products, lamps and lanterns, light
source equipments, illumination engineering;
technological development of energy-saving
and production of relevant components;
sales of self-production products
Subsidiary 74539880-X
Zhuang
Jianyi
Foshan Lighting Lamps
and Lanterns Co., Ltd.
Hefu Road E.,
Cangjiang Industrial
Park, Gaoming
District, Foshan
R&D and production of electric light source
lamp products and relevant electric
engineering materials, metal material and
non-metal material
Subsidiary 68638090-8 Zhong Xincai
Foshan Electrical &
Lighting (Xinxiang) Co.,
Ltd.
428, Office Building,
Management Board,
Henan Xinxiang
Industrial Park
Production and sales of electric light source
equipment and electric light source products,
sales of accessories of electric light source,
electric light source materials, electric
engineering materials, accessories for motor
vehicles, lamps and components
Subsidiary 68818685-0 Zhong Xincai
Foshan Chanchang
Lighting Components Co.,
Ltd.
64 Fenjiang North
Raod, Foshan
Manufacturing bromine tungsten lamp,
special lighting source products and ancillary
devices
affiliated
company
controlled by
the Company
61762135-X Zhong Xincai
—— Registered capital of related parties existing controlling relationship with the Company and
its change
Name Opening balance Increase Decrease Closing balance
Foshan Chanchang Lighting
Components Co., Ltd. USD1,800,000.00 - - USD1,800,000.00
Foshan Chansheng Electronic
Ballast Co., Ltd. RMB1,000,000.00 - - RMB1,000,000.00
Foshan Chanchang Electric
Appliance (Gaoming) Co., Ltd.
RMB60,000,000.0
0
- -
RMB60,000,000.0
067
Foshan Taimei Times Lamps
and Lanterns Co., Ltd. RMB500,000.00 - - RMB500,000.00
Foshan Gaoming Fuwan
Landscape Resort Co., Ltd. RMB4,800,000.00 - - RMB4,800,000.00
Prosperity (Nanjing) Lighting
Components Co., Ltd.
RMB41,683,200.0
0
- -
RMB41,683,200.0
0
Foshan Lighting Lamps and
Lanterns Co., Ltd.
RMB
5,000,000.00
- - RMB 5,000,000.00
Foshan Electrical & Lighting
(Xinxiang) Co., Ltd.
RMB10,000,000.0
0
- -
RMB10,000,000.0
0
—— Shares or equity held by related parties existing controlling relationship with the Company
and its change
Name Opening balance
Propo
rtion
Increase Decrease Closing balance
Propo
rtion
Foshan Chanchang
Lighting Components
Co., Ltd.
USD720,000.00 40% - - USD720,000.00 40%
Foshan Chansheng
Electronic Ballast Co.,
Ltd.
RMB750,000.00 75% - - RMB750,000.00 75%
Foshan Chanchang
Electric Appliance
(Gaoming) Co., Ltd.
RMB42,000,000.0
0
70% - -
RMB42,000,000.
00
70%
Foshan Taimei Times
Lamps and Lanterns
Co., Ltd.
RMB350,000.00 70% - - RMB350,000.00 70%
Foshan Gaoming
Fuwan Landscape
Resort Co., Ltd.
RMB4,800,000.0
0
100% - -
RMB4,800,000.0
0
100%
Prosperity (Nanjing)
Lighting Components
Co., Ltd.
RMB41,683,200.0
0
100% - -
RMB41,683,200.
00
100%
Foshan Lighting Lamps
and Lanterns Co., Ltd. RMB3,500,000.00 70% -
RMB3,500,000.0
0
70%68
Foshan Electrical &
Lighting (Xinxiang) Co.,
Ltd.
RMB5,000,000.00 100% -
RMB5,000,000.0
0
100%
— Related parties without controlling relationship with the Company
Name of related parties Relationship with the Company
Prosperity (Hangzhou) Lighting and
Electrical Co., Ltd.
controlled by the Chairman of the Board of the Company
Hangzhou Times Lighting and
Electrical Co., Ltd.
controlled by the Chairman of the Board of the Company
Prosperity Electrical (China) Co., Ltd. controlled by the Chairman of the Board of the Company
Prosperity Lamps and Components
Ltd.
the shareholder holding over 5% equity of the Company and controlled
by the Chairman of the Board of the Company
Prosperity (Xinxiang) Electro-Optical
Machinery Co., Ltd
controlled by the Chairman of the Board of the Company
Prosperity (Xinxiang) Lighting
Machinery Co., Ltd.
controlled by the Chairman of the Board of the Company
OSRAM (China) Lighting Co., Ltd.
influence on this company from the Chairman of the Board of the
Company
Related transaction
—Purchase of raw materials
This period Last period
Name of enterprises
Amount
Proportion to the
purchase of the
current period
Amount
Proportion to the
purchase of the
current period
Prosperity Electrical (China)
Co., Ltd.
4,354,400.26 1.00%
4,991,750.37
1.83%
Prosperity Lamps and
Components Ltd.
6,263,509.08 1.43%
Hangzhou Times Lighting and
Electrical Co., Ltd.
2,880.80 0.00%
208,501.02
0.08%
Prosperity (Xinxiang)
Electro-Optical Machinery Co.,
Ltd
118,235.80 0.03%
147,000.00
0.05%
Total 10,739,025.94 2.46% 5,347,251.39 1.96%
— Sale of products
Name of enterprises This period Last period69
Amount
Proportion to
the sales of
the current
period
Amount
Proportion to
the sales of
the current
period
Prosperity (Hangzhou) Lighting and
Electrical Co., Ltd.
6,276,461.45 0.77% 7,902,793.30
1.11%
Prosperity Electrical (China) Co., Ltd. 1,831,239.51 0.22% 900,788.18 0.13%
OSRAM (China) Lighting Co., Ltd. 12,129,639.12 1.48% 15,486,190.33 2.17%
Prosperity Lamps and Components
Ltd.
41,373,390.88 5.06% 29,290,109.71
4.11%
Total 61,610,730.96 7.53% 53,579,881.52 7.52%
— Sale of materials
This period Last period
Name of enterprises
Amount
Proportion to
the sales of
the current
period
Amount
Proportion to
the sales of
the current
period
Prosperity Lamps and Components Ltd. 41,743.49 1.25% 545,769.36 1.85%
Prosperity Electrical (China) Co., Ltd. 5,326.50 0.16%
Prosperity (Hangzhou) Lighting and
Electrical Co., Ltd. 136,008.34
4.08%
56,499.27 0.19%
Hangzhou Times Lighting and
Electrical Co., Ltd. 8,496.00
0.25%
OSRAM (China) Lighting Co., Ltd. 3,557.58 0.01%
Total 191,574.33 5.74% 605,826.21 2.05%
— Purchase of fixed assets
This period Last period
Name of enterprises
Amount
Proportion to the
purchase of fixed
assets of the
current period
Amount
Proportion to
the purchase of
fixed assets of
the current
period
Prosperity (Xinxiang)
Electro-Optical Machinery Co., Ltd
435,200.00 1.28% 5,278,914.00 16.70%
Prosperity (Xinxiang) Lighting
Machinery Co., Ltd.
818,180.00 2.41%
Total 1,253,380.00 3.69% 5,278,914.00 16.70%
— Payment of selling commission
The Agreement on Products Sales Commission and Supplementary Agreement were signed70
between the Company and Prosperity Lamps and Components Ltd., in which the Company should
pay product sales commission to Prosperity Lamps and Components Ltd. according to a certain
percentage (between 5% and 10%) of the actual amount of goods purchased from the Company. In
the first half of 2010, the Company paid selling commission RMB 803,622.68 for the second half
of 2009.
— Paying rent
The Tenancy Agreement was singed between the Company and Prosperity Electrical (China) Co.,
Ltd., in which the Company should pay rents of RMB 43,750.00 for warehouse to Prosperity
Electrical (China) Co., Ltd. for every month, totaling rents of RMB 262,500.00in the first half of
2010.
— Balance of accounts receivable and accounts payables of related parties
Related parties Closing balance Opening balance
Accounts receivable
Prosperity (Hangzhou) Lighting and Electrical
Co., Ltd. 6,346,205.30 5,992,248.60
Prosperity Electrical (China) Co., Ltd. 2,453,028.03 506,426.70
OSRAM (China) Lighting Co., Ltd. 2,865,708.17 5,700,938.57
Prosperity Lamps and Components Ltd. 12,889,744.35 12,056,988.59
Accounts payables
Prosperity Lamps and Components Ltd. 3,000,252.56 -
Prosperity (Hangzhou) Lighting and Electrical
Co., Ltd.
- 86,000.00
Prosperity Electrical (China) Co., Ltd. 937,500.00 114,040.00
Advances to suppliers
Prosperity (Xinxiang) Electro-Optical
Machinery Co., Ltd
- 45,000.00
Prosperity (Xinxiang) Lighting Machinery Co.,
Ltd.
859,000.00 20,000.00
Other payables
Prosperity (Hangzhou) Lighting and Electrical
Co., Ltd. 23,433.00 131,250.00
X. Cont ingent Event s
As at 30 Jun. 2010, the Company has no contingent events that need to be disclosed.
XI . Commi tment s
In accordance with the Equipment Purchase and Construction Contract signed by the Company,
the Company shall pay about RMB 2,020,245.30 for relevant projects in the first half of 2010.
XI I . Event s a f t e r Ba l anc e She e t Da t e
Purchasing 20% equities of Hefei GuoXuan High-tech Power Engineering Co., Ltd.
On 14 July 2010, the Company signed the Agreement on Acquiring 20% Equities of Hefei
GuoXuan High-tech Power Engineering Co., Ltd. with Hefei GuoXuan Marketing Planning Co.,71
Ltd., and paid the expense for equity transfer amounting to RMB 160 million to Hefei GuoXuan
Marketing Planning Co., Ltd. on 21 July 2010. The said transfer fees were held by the Bank of
Communications Anhui Branch temporarily during the period of equity change procedure.
XI I I . Suppl ement a ry Informa t ion
1. Extraordinary gains and losses
Item of extraordinary gains and losses are calculated according to related provisions of China
Securities Regulatory Commission, “Interpretation Notice for Information Disclosures by
Companies that Offer Securities to the Public No. 1: Extraordinary Gains and Losses (revised in
2008)”
Items This period Last period
Gains on disposal of non-current assets, including reversal of the
impairment loss
-44,259.98
6,175,726.04
Government grant recognized in profits and losses of the current year,
except for those government subsidies closely related to the
Company’s business, and received at national statutory standard and
amount
1,298,249.58
330,000.00
Gain/loss from change of fair value of transactional assets and
liabilities, and investment gains from disposal of transactional
financial assets and liabilities and available-for-sale financial assets,
other than valid hedging related to the Company’s common
businesses
178,118.10
Included in current profit and loss against the non-financial
enterprises occupation fee funds collected
29,902.50
866,199.10
The investment cost of subsidiaries obtained by the enterprise, joint
ventures and partnership enterprise is less than the revenues generated
from the fair value of identifiable net assets of the unvested units
4,698,752.91
1,420,800.00
Other non-business income and expenditures other than the above
-2,252,064.25
79,891.27
Subtotal
3,908,698.86
8,872,616.41
Less: Influenced amount of income tax (“-” shows decrease)
583,446.58
2,477,786.55
Less: Influenced amount of minor shareholders’ gains and losses
6,502.01
5,158,859.85
Net extraordinary gains and losses attributable to common
shareholders of the Company
3,318,750.27
1,235,970.01
2. Return on Equity and Earnings per Share in the Consolidated Financial Statement
According to the requirements of China Securities Regulatory Commission, “Compilation Rules
for Information Disclosures by the Companies that Offer Securities to the Public No. 9:72
Calculation and Disclosure of Net Return of Equity and Earnings per Share (revised in 2010)”, net
return on equity and earnings per share presented in the consolidated financial statement are
calculated in the reporting period:
Return on equity（％） Earnings per share（RMB Yuan）
Item
Weighted average Basic EPS Diluted EPS
Net profit attributable
to the Company’s
common shareholders
3.20 0.08 0.08
The first half of
2010
Net profit attributable
to the Company’s
common shareholders
after deducting
extraordinary gains
and losses
3.07 0.08 0.08
Net profit attributable
to the Company’s
common shareholders
2.68 0.07 0.07
The first half of
2009
Net profit attributable
to the Company’s
common shareholders
after deducting
extraordinary gains
and losses
2.63 0.07 0.07
Formulas for computing various indexes are as follows:
(1) Weighted average ROE =P0/（E0＋NP÷2＋Ei×Mi÷M0– Ej×Mj÷M0±Ek×Mk÷M0）
Of which: P0 refers to Net profit attributable to common shareholders of the Company or net
profit attributable to common shareholders of the Company after deducting non-recurring gains
and losses; NP refers net profit attributable to common shareholders of the Company; E0 refers to
opening net assets attributable to common shareholders of the Company; Ei refers to additional net
assets attributable to common shareholders of the Company due to new share issuance or turning
debts into shares in the report period; Ej refers to reduced net assets attributable to common
shareholders of the Company due to buy-back business or cash dividends in the report period; M0
refers to the number of months during the report period; Mi refers to the number of months from
the next month when net assets increased to the end of the report period; Mj refers to the number
of months from the next month when net assets decreased to the end of the report period; Ek refers
to change of increase/decrease of net assets due to other transaction events; Mk refers to the
number of months from the next month when other net assets changed the end of the report period.
(2) Basic EPS =P0÷S
S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk（= total number of shares at the period-begin + the
number of shares increased due to transferring capital reserve into share capital + number of
shares increased due to issuance of new shares * the next month for increase of shares/the number
of months during the report period）73
Of which: P0 refers to net profit attributable to shareholders holding ordinary shares or net profit
attributable to shareholders holding ordinary shares after deducting non-recurring gains and losses;
S weighted average number of ordinary shares issued out; S0 refers to total number of shares at
the period-begin; S1 refers to the number of shares increased due to transferring capital reserve
into share capital or dividend distribution of shares during the report period; Si refers to the
number of shares increased due to issuance of new shares or debt for equity swap during the report
period; Sj refers to the number of shares decreased due to stock repurchase during the report
period; Sk refers to the number of split-share during the report period; M0 refers to the number of
months during the report period; Mi refers to the number of months from the next month to the
end of the report period for increase of shares; Mj refers to the number of months from the next
month to the end of the report period for decrease of shares
As approved by the shareholders’ general meeting 2008, based on the total share capital of
698,974,104 shares as at 31 Dec. 2008, the Company transferred capital reserve into share capital
at the rate of 4 for 10, totaling 279,589,641 shares, thus, denominator of EPS for 2008 and 2008
being: S=698,974,104+279,589,641=978,563,745 shares
(3) Diluted EPS =P1/（S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ weighted average amount of
ordinary shares increased due to subscription warrant, stock options, convertible bonds, etc.）
Of which, P1 refers to net profit attributable to shareholders holding ordinary shares or net profit
attributable to shareholders holding ordinary shares after deducting non-recurring gains and losses.
The Company considered all influence of dilutive potential ordinary share against net profit and
made adjustment according to the provisions of Accounting Standard for Business Enterprise.
When the Company calculated diluted EPS, it shall consider all influence of dilutive potential
ordinary share against net profit attributable to shareholders holding ordinary shares or net profit
attributable to shareholders holding ordinary shares after deducting non-recurring gains and losses,
till to minimum diluted EPS.74
VII. Documents Available for Reference
1. Text of the Semi-Annual Report 2010 carried the autograph of the Legal
representative.
2. Financial Report carried signature and seal of person in charge of the Company,
person in charge of accounting work and person in charge of the accounting firm.
3. Original copies of all the documents of the Company and original manuscripts of
public notices disclosed publicly in newspapers designated by China Securities
Regulatory Commission within the reporting period.
4. Original copies of Articles of Association of the Company.
5. Other related materials
Board of Directors of
Foshan Electrical and Lighting Co., Ltd
17 Aug. 201075
Balance Sheet
Prepared by Foshan Electrical and Lighting Co., Ltd. 30 Jun. 2010 Unit: RMB Yuan
Closing amount Opening amount
Items
Consolidation Parent company Consolidation Parent company
Current assets:
Monetary funds 879,598,148.06 782,711,326.84 1,036,582,265.88 927,931,735.27
Settlement fund reserve
Dismantle fund
Transaction financial asset 121,570.00 121,570.00
Notes receivable 55,710,598.19 54,072,362.58 54,093,298.72 51,333,256.72
Account receivable 269,399,731.55 271,297,772.17 284,367,231.84 304,213,230.54
Account paid in advance 28,816,434.60 28,776,390.60 15,594,986.51 11,992,075.44
Premium receivables
Receivables from reinsurers
Reinsurance contract reserve
receivables
Interest receivable
Dividend receivable
Other account receivable 2,533,825.70 43,012,405.92 12,842,598.07 46,329,398.39
Financial assets purchased under
agreements to resell
Inventories 336,869,415.41 275,438,664.54 234,240,250.37 202,292,392.67
Non-current assets due within 1 year
Other current assets
Total current assets 1,572,928,153.51 1,455,308,922.65 1,637,842,201.39 1,544,213,659.03
Non-current assets:
Loans and advance
Available for sale financial assets
Held to maturity investments
Long-term account receivable
Long-term equity investment 254,124,296.23 385,904,686.07 254,124,296.23 385,904,686.07
Investing property
Fixed asset 640,875,115.15 566,146,369.11 667,218,994.19 605,693,295.95
Project in construction 186,837,099.00 146,271,017.48 184,971,615.68 128,488,231.78
Engineering material
Fixed asset disposal
Bearer biological asset
Oil assets
Intangible assets 226,145,290.05 208,183,202.02 228,064,300.35 209,996,698.18
Development expense
Goodwill
Long-term expense to be76
apportioned
Deferred tax assets 24,178,533.11 23,022,497.08 22,878,756.57 22,419,642.96
Other non-current assets
Total of non-current assets 1,332,160,333.54 1,329,527,771.76 1,357,257,963.02 1,352,502,554.94
Total assets 2,905,088,487.05 2,784,836,694.41 2,995,100,164.41 2,896,716,213.97
Current liabilities:
Short-term borrowings
Borrowing from Central Bank
Deposits and due to banks and other
financial institutions
Placements from banks and other
financial institutions
Transaction financial liabilities
Notes payable
Account payable 242,647,976.54 187,063,896.95 140,739,081.85 120,577,073.98
Account received in advance 10,973,709.53 10,458,328.26 31,482,851.09 29,945,697.96
Financial assets sold under agreements
to repurchase
Handling charges and commission
payable
Employee’s compensation payable 39,092,448.13 38,759,277.53 48,390,789.12 46,769,031.39
Tax payable 21,950,749.40 21,603,065.46 22,246,390.83 21,042,745.31
Interest payable
dividend payable 780,000.00
Other account payable 8,967,503.08 4,015,359.75 36,391,801.59 26,152,530.24
Due to reinsurers
Insurance contract reserve
Customer deposits
Amount payables under security
underwriting
Non-current liabilities due within 1
year
Other current liabilities
Total current liabilities 324,412,386.68 261,899,927.95 279,250,914.48 244,487,078.88
Non-current liabilities:
Long-term borrowings
Debentures payable
Long-term payables
Specific purpose account payables
Provisions for contingent liabilities
Deferred tax liabilities
Other non-current liabilities 10,493,216.58 10,493,216.58 9,852,274.95 9,852,274.95
Total non-current liabilities 10,493,216.58 10,493,216.58 9,852,274.95 9,852,274.9577
Total liabilities 334,905,603.26 272,393,144.53 289,103,189.43 254,339,353.83
Owner’s equity (or shareholders’
equity)
Paid-in capital (or share capital) 978,563,745.00 978,563,745.00 978,563,745.00 978,563,745.00
Capital surplus 586,925,954.53 586,971,440.10 586,925,954.53 586,971,440.10
Less: Treasury Stock
Special reserve
Reserved fund 528,474,746.92 528,474,746.92 528,474,746.92 528,474,746.92
General risk provision
Retained earnings 431,669,285.82 418,433,617.86 566,135,541.76 548,366,928.12
Foreign exchange difference
Total owners' equity attributable to
holding company
2,525,633,732.27 2,512,443,549.88 2,660,099,988.21 2,642,376,860.14
Minority interest 44,549,151.52 45,896,986.77
Total owner’s equity 2,570,182,883.79 2,512,443,549.88 2,705,996,974.98 2,642,376,860.14
Total liabilities and owner’s equity 2,905,088,487.05 2,784,836,694.41 2,995,100,164.41 2,896,716,213.97
Person in charge the Company: Zhong Xincai
Person in charge of accounting work: Zhong Xincai
Person in charge of accounting officer: Wang Shuqiong
Income Statement
Prepared by Foshan Electrical and Lighting Co., Ltd. Jan.-Jun. 2010 Unit: RMB Yuan
Current period Same period of the previous year
Items
Consolidation Parent company Consolidation Parent company
I. Total operation income 824,360,344.65 753,152,624.27 739,813,039.10 767,644,119.09
Including: Sales income 824,360,344.65 753,152,624.27 739,813,039.10 767,644,119.09
Interest income
Premium income
Handling charges and
commission income
II. Total operation cost 724,146,678.01 655,742,434.86 647,419,095.30 687,813,967.06
Including: Cost of sales 625,470,314.21 571,479,580.10 558,498,600.32 610,594,438.58
Interest expenses
Handling charges and
commission expenses
Surrender value
Net amount of claims
Net amount of insurance
contract reserve withdrawn
Expenditure on policy78
dividends
Reinsurance premium expenses
Taxes and associate charges 7,228,353.99 6,408,030.82 5,264,374.33 4,701,897.40
Selling expenses 39,231,617.50 34,157,925.91 38,330,515.48 33,258,962.45
Administrative expenses 55,859,131.20 42,439,164.15 45,924,040.77 38,427,671.95
Financial expenses -3,457,326.40 -3,009,297.89 -1,872,480.67 -1,705,626.15
Impairment loss -185,412.49 4,267,031.77 1,274,045.07 2,536,622.83
Add: gain from change in fair value
(“-” means loss)
Gain from investment (“-” means
loss)
178,118.10 4,876,871.01 1,420,800.00 1,420,800.00
Including: income form
investment in affiliated enterprise and
joint ventures
Foreign exchange difference (“-”
means loss)
III. Operation profit (“-” means loss) 100,391,784.74 102,287,060.42 93,814,743.80 81,250,952.03
Add: non-operation income 1,531,640.51 1,231,323.31 11,409,839.09 465,173.45
Less: non-business expense 2,529,715.16 2,524,715.16 4,824,150.88 553,958.88
Including: loss from non-current asset
disposal
IV. Total profit (“-” means loss) 99,393,710.09 100,993,668.57 100,400,432.01 81,162,166.60
Less: income tax expense 18,058,926.42 15,642,954.93 20,135,089.14 16,401,414.09
V. Net profit (“-” means loss) 81,334,783.67 85,350,713.64 80,265,342.87 64,760,752.51
Attributable to owners of parent
company
80,817,767.96 85,350,713.64 71,180,439.19 64,760,752.51
Minority interest 517,015.71 0.00 9,084,903.68 0.00
VI. Earnings per share
(I) Basic earnings per share 0.08 0.07
(II) Diluted earnings per share 0.08 0.07
VII. Other composite income 0.00 0.00
VIII. Total composite income 81,334,783.67 85,350,713.64 80,265,342.87 64,760,752.51
Attributable to owners of parent
company
80,817,767.96 85,350,713.64 71,180,439.19 64,760,752.51
Minority interest 517,015.71 9,084,903.68
Person in charge the Company: Zhong Xincai
Person in charge of accounting work: Zhong Xincai
Person in charge of accounting officer: Wang Shuqiong79
Cash Flow Statement
Prepared by Foshan Electrical and Lighting Co., Ltd. Jan.-Jun. 2010 Unit: RMB Yuan
Current period Same period of the previous year
Items
Consolidation Parent company Consolidation Parent company
I. Cash flows from operating activities:
Cash received from sale of commodities
and rendering of service
913,436,533.36 780,869,364.36 806,092,242.90 775,196,453.91
Net increase of deposits from customers
and due from banks
Net increase of loans from the central
bank
Net increase of funds borrowed from
other financial institutions
Cash received from premium of original
insurance contracts
Net cash received from reinsurance
business
Net increase of savings of policy holders
and investment fund
Net increase of disposal of tradable
financial assets
Cash received from interest, handling
charges and commissions
Net increase of borrowed inter-bank
funds
Net increase of buy-back funds
Tax refunds received 9,373,907.90 9,103,907.90 8,393,944.52 8,393,944.52
Other cash received relating to operating
activities
9,491,739.21 9,424,471.25 14,700,803.27 17,842,089.60
Subtotal of cash inflows from operating
activities
932,302,180.47 799,397,743.51 829,186,990.69 801,432,488.03
Cash paid for purchase of commodities
and reception of service
633,133,201.91 527,210,282.87 437,024,191.79 453,178,837.73
Net increase of customer lending and
advance
Net increase of funds deposited in the
central bank and amount due from banks
Cash for paying claims of the original
insurance contract
Cash for paying interest, handling
charges and commissions80
Cash for paying policy dividends
Cash paid to and for employees 128,171,951.00 113,847,318.65 92,109,149.41 79,808,693.89
Various taxes paid 61,532,232.54 50,056,203.44 52,715,851.25 42,027,289.71
Other cash paid relating to operating
activities
33,859,096.29 33,281,845.21 19,686,975.53 26,641,635.50
Subtotal of cash outflows from operating
activities
856,696,481.74 724,395,650.17 601,536,167.98 601,656,456.83
Net cash flows from operating activities 75,605,698.73 75,002,093.34 227,650,822.71 199,776,031.20
II. Cash Flows from investment activities:
Cash received from disposal of
investments
1,193,874.04 1,193,874.04
Cash received from investment income 178,118.10 4,840,571.97 1,420,800.00 2,797,173.53
Net cash received from disposal of fixed
assets, intangible assets and other
long-term assets
-697,200.00
Net cash received from disposal of
subsidiary or other business units
Other cash received relating to
investment activities
10,000,000.00 10,000,000.00
Subtotal of cash inflows from
investment activities
1,371,992.14 6,034,446.01 10,723,600.00 12,797,173.53
Cash paid to acquire fixed assets,
intangible assets and other long-term assets
29,406,644.35 22,726,409.89 83,215,330.08 85,231,807.60
Cash paid for investment 1,036,005.00 1,036,005.00 9,574,789.08 12,574,789.08
Net increase of pledged loans
Net cash paid to acquire subsidiaries and
other business units
Other cash paid relating to investment
activities
Subtotal of cash outflows from investment
activities
30,442,649.35 23,762,414.89 92,790,119.16 97,806,596.68
Net cash flows from investment activities -29,070,657.21 -17,727,968.88 -82,066,519.16 -85,009,423.15
III. Cash flows from financing activities:
Cash received from absorbing
investment
2,000,000.00
Including: Cash received by
subsidiaries from investment of minority
interest
Cash received from borrowings
Cash received from issuance of bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from financing 2,000,000.0081
activities
Cash paid to repay loans
Cash paid for interest expenses and
distribution of dividends or profit
202,806,459.02 201,781,832.57 146,542,767.52 146,083,976.34
Including: dividends or profit paid to
minority shareholders by subsidiaries
Other cash payments relating to
financing activities
Sub-total of cash outflows from financing
activities
202,806,459.02 201,781,832.57 146,542,767.52 146,083,976.34
Net cash flows from financing activities -202,806,459.02 -201,781,832.57
-144,542,767.5
2
-146,083,976.3
4
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
-712,700.32 -712,700.32 -2,544,293.22 -2,544,643.80
V. Net increase in cash and cash
equivalents
-156,984,117.82 -145,220,408.43 -1,502,757.19 -33,862,012.09
Add: beginning balance of cash and
cash equivalents
1,036,582,265.88 927,931,735.27 927,868,735.28 886,298,530.33
VI. Closing balance of cash and cash
equivalents
879,598,148.06 782,711,326.84 926,365,978.09 852,436,518.24
Person in charge the Company: Zhong Xincai
Person in charge of accounting work: Zhong Xincai
Person in charge of accounting officer: Wang Shuqiong
Supporting Statement on Cash Flow Statement
Prepared by Foshan Electrical and Lighting Co., Ltd. Jan.-Jun. 2010 Unit: RMB Yuan
Supplementary information Current period
Same period of the
previous year
1. Transferring net profit into cash flows of operating activities:
Net profit 81,334,783.67 80,265,342.87
Plus: Provision for assets impairment -185,412.49 1,274,045.07
Depreciation of fixed assets 57,148,508.53 62,055,384.65
Amortization of intangible assets 1,919,010.30 2,311,658.24
Amortization of long-term deferred expenses 92,232.00
Loss on disposal of fixed assets, intangible assets and other
long-term assets (income is listed as “-”)
44,259.98 -6,793,726.04
Losses on change in fair value（income is listed as “-”） -82
Financial expense（income is listed as “-”） 712,700.32 1,072,992.60
Investment losses（income is listed as “-”） -178,118.10 -1,420,800.00
Deferred tax – credit item（Less: debt item） 818,548.82 -187,037.92
Decrease of inventories (increase is listed as “-”) -102,629,165.04 30,677,530.01
Decrease in operating receivables (increase is listed as “-”) -2,427,440.30 -54,715,426.68
Increase in operating payables (decrease is listed as “-”) 39,048,023.04 113,018,627.91
Net cash flows arising from operating activities:
75,605,698.73
227,650,822.71
3. Net increase in cash and cash equivalents:
Closing balance of cash 879,598,148.06 926,365,978.09
Less: Opening balance of cash 1,036,582,265.88 927,868,735.28
Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -156,984,117.82 -1,502,757.19
Person in charge the Company: Zhong Xincai
Person in charge of accounting work: Zhong Xincai
Person in charge of accounting officer: Wang Shuqiong83
Statement to the Provision for Impairment of Assets
(Consolidated Financial statement)
Prepared by Foshan Electrical and Lighting Co., Ltd. Jan.-Jun. 2010 Unit: RMB Yuan
Decrease in the reporting
period
Items
Opening book
balance
Increase in the
reporting period Reversed
amount
Writingoff
Closing book
balance
I. Reserve for bad debts 21,483,504.87 606,177.78 791,590.27 21,298,092.38
II. Reserve for falling price of inventory 143,155.25 143,155.25
III. Provision for impairment of financial
assets available for sale
IV. Provision for impairment of
held-to-maturity investment
V. Provision for impairment of long-term
equity investment
9,148,904.81 9,148,904.81
VI. Provision for impairment of investment
real estate
VII. Provision for impairment of fixed assets 2,043,648.78 2,043,648.78
VIII. Provision for impairment of project
materials
IX. Provision for impairment of construction
in progress
X. Provision for impairment of productive
biological assets
Of which: Provision for impairment of
mature productive biological assets
XI. Provision for impairment of oil–gas
assets
XII. Provision for impairment of intangible
assets
XIII. Provision for impairment of goodwill
XIV. Other
Total 32,819,213.71 606,177.78 791,590.27 32,633,801.22
Person in charge the Company: Zhong Xincai
Person in charge of accounting work: Zhong Xincai
Person in charge of accounting officer: Wang Shuqiong84
Consolidated Statement of Changes in Owners’ Equity
Prepared by Foshan Electrical and Lighting Co., Ltd. For the first half year of 2010 Unit: RMB Yuan
Amount for the current period Amount for the previous period
Owners’ equity attributable to parent company Owners’ equity attributable to parent company
Items Paid-in
capital (or
share
capital)
Capital
reserve
Less:
treasur
y stock
Specifi
c
reserve
s
Surplus
public
reserve
Genera
l risk
reserve
Retaine
d profit
Others
Minorit
y
interest
s
Total
owners
’ equity
Paid-in
capital
(or share
capital)
Capital
reserve
Less:
treasur
y stock
Specifi
c
reserve
s
Surplus
public
reserve
Genera
l risk
reserve
Retaine
d profit
Others
Minorit
y
interest
s
Total
owners
’ equity
I. Balance at the end of last year
978,563,
745.00
586,9
25,95
4.53
528,4
74,74
6.92
566,1
35,54
1.76
45,89
6,986.
77
2,705,
996,9
74.98
698,97
4,104.0
0
866,5
65,59
5.53
508,3
27,32
8.02
527,8
78,05
9.71
30,97
5,077.
08
2,632,
720,1
64.34
Add: change of accounting policy
Correction of errors in previous
periods
Others
II. Balance at the beginning of this
year
978,563,
745.00
586,9
25,95
4.53
528,4
74,74
6.92
566,1
35,54
1.76
45,89
6,986.
77
2,705,
996,9
74.98
698,97
4,104.0
0
866,5
65,59
5.53
508,3
27,32
8.02
527,8
78,05
9.71
30,97
5,077.
08
2,632,
720,1
64.34
III. Increase/ decrease of amount in
this year (“-” means decrease)
-134,4
66,25
5.94
-1,347
,835.2
5
-135,8
14,09
1.19
279,58
9,641.0
0
-279,6
39,64
1.00
20,14
7,418.
90
38,25
7,482.
05
14,92
1,909.
69
73,27
6,810.
64
(I) Net profit
80,81
7,767.
96
517,0
15.71
81,33
4,783.
67
212,1
79,20
3.83
14,05
7,642.
37
226,2
36,84
6.20
(II) Other composite income -50,00 -50,0085
0.00 0.00
Subtotal of (I) and (II)
80,81
7,767.
96
517,0
15.71
81,33
4,783.
67
-50,00
0.00
212,1
79,20
3.83
14,05
7,642.
37
226,1
86,84
6.20
(III) Capital input and reduction
of owners
1,000,
000.0
0
1,000,
000.0
0
1. Capital input of owners
1,000,
000.0
0
1,000,
000.0
0
2. Amount of stock payment
included in the owners’ equity
3. Others
(IV) Profit distribution
-215,2
84,02
3.90
-1,864
,850.9
6
-217,1
48,87
4.86
20,14
7,418.
90
-173,9
21,72
1.78
-135,7
32.68
-153,9
10,03
5.56
1. Withdrawing surplus public
reserve
20,14
7,418.
90
-20,14
7,418.
90
2. Withdrawing general risk
reserve
3. Distribution to owners (or
shareholders)
-215,2
84,02
3.90
-1,864
,850.9
6
-217,1
48,87
4.86
-153,7
74,30
2.88
-135,7
32.68
-153,9
10,03
5.56
4. Others
(V) Internal carrying forward of 279,58 -279,586
owners’ equity 9,641.0
0
89,64
1.00
1. New increase of capital (or
share capital) from capital reserves
279,58
9,641.0
0
-279,5
89,64
1.00
2. Converting surplus reserves
to capital (or share capital)
3. Surplus reserves make up
losses
4. Others
(VI) Specific reserves
1. Appropriated in current
period
2. Used in current period
IV. Balance at the end of this period
978,563,
745.00
586,9
25,95
4.53
528,4
74,74
6.92
431,6
69,28
5.82
44,54
9,151.
52
2,570,
182,8
83.79
978,56
3,745.0
0
586,9
25,95
4.53
528,4
74,74
6.92
566,1
35,54
1.76
45,89
6,986.
77
2,705,
996,9
74.98
Person in charge the Company: Zhong Xincai
Person in charge of accounting work: Zhong Xincai
Person in charge of accounting officer: Wang Shuqiong87
Statement of Change in Owners’ Equity of Parent Company
Prepared by Foshan Electrical and Lighting Co., Ltd. For the first half year of 2010 Unit: RMB Yuan
Amount for the current period Amount for the previous period
Items
Paid-in
capital
(or share
capital)
Capital
reserve
Less:
treasury
stock
Specific
reserves
Surplus
public
reserve
General
risk
reserve
Retained
profit
Total
owners’
equity
Paid-in
capital
(or share
capital)
Capital
reserve
Less:
treasury
stock
Specific
reserves
Surplus
public
reserve
General
risk
reserve
Retained
profit
Total
owners’
equity
I. Balance at the end of last year
978,563
,745.00
586,971
,440.10
528,474
,746.92
548,366
,928.12
2,642,3
76,860.
14
698,974
,104.00
866,561
,081.10
508,327
,328.02
520,814
,460.93
2,594,6
76,974.
05
Add: change of accounting policy
Correction of errors in previous
periods
Others
II. Balance at the beginning of this
year
978,563
,745.00
586,971
,440.10
528,474
,746.92
548,366
,928.12
2,642,3
76,860.
14
698,974
,104.00
866,561
,081.10
508,327
,328.02
520,814
,460.93
2,594,6
76,974.
05
III. Increase/ decrease of amount in
this year (“-” means decrease)
-129,93
3,310.2
6
-129,93
3,310.2
6
279,589
,641.00
-279,58
9,641.0
0
20,147,
418.90
27,552,
467.19
47,699,
886.09
(I) Net profit
85,350,
713.64
85,350,
713.64
201,474
,188.97
201,474
,188.97
(II) Other composite income88
Subtotal of (I) and (II)
85,350,
713.64
85,350,
713.64
201,474
,188.97
201,474
,188.97
(III) Capital input and reduction
of owners
1. Capital input of owners
2. Amount of stock payment
included in the owners’ equity
3. Others
(IV) Profit distribution
-215,28
4,023.9
0
-215,28
4,023.9
0
20,147,
418.90
-173,92
1,721.7
8
-153,77
4,302.8
8
1. Withdrawing surplus public
reserve
20,147,
418.90
-20,147,
418.90
2. Withdrawing general risk
reserve
3. Distribution to owners (or
shareholders)
-215,28
4,023.9
0
-215,28
4,023.9
0
-153,77
4,302.8
8
-153,77
4,302.8
8
4. Others
(V) Internal carrying forward of
owners’ equity
279,589
,641.00
-279,58
9,641.0
0
1. New increase of capital (or
share capital) from capital reserves
279,589
,641.00
-279,58
9,641.0
0
2. Converting surplus reserves89
to capital (or share capital)
3. Surplus reserves make up
losses
4. Others
(VI) Specific reserves
1. Appropriated in current
period
2. Used in current period
IV. Balance at the end of this period
978,563
,745.00
586,971
,440.10
528,474
,746.92
418,433
,617.86
2,512,4
43,549.
88
978,563
,745.00
586,971
,440.10
528,474
,746.92
548,366
,928.12
2,642,3
76,860.
14
Person in charge the Company: Zhong Xincai
Person in charge of accounting work: Zhong Xincai
Person in charge of accounting officer: Wang Shuqiong
