Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 FOSHAN ELECTRICAL AND LIGHTING CO., LTD. THIRD QUARTER REPORT 2017 October 2017 1 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Part I Important Statements The board of directors (the “Board”), the supervisory board (the “Supervisory Board”) as well as the directors, supervisors and senior management of Foshan Electrical and Lighting Co., Ltd. (the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report, and shall be jointly and severally liable for any false representation, misleading statements or material omissions in this Report. All the directors of the Company attended the board meeting for the review of this Report. He Yong, head of the Company, Liu Xingming, accounting head for this Report, and Tang Qionglan, head of the accounting department (head of accounting) of the Company, hereby guarantee that the financial statements carried in this Report are factual, accurate and complete. 2 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Part II Company Fundamentals I Key Consolidated Operating Results Indicate by tick mark whether the Company needs to retrospectively restate any of its accounting data. □ Yes √ No September 30, 2017 December 31, 2016 Change Total assets (RMB) 5,863,350,363.96 6,100,169,400.30 -3.88% Equity attributable to owners of the 4,921,491,291.64 4,990,466,577.12 -1.38% parent (RMB) January-September July-September 2017 YoY change YoY change 2017 Net sales (RMB) 926,328,050.98 13.03% 2,950,253,633.82 14.56% Net margin attributable to shareholders of the Company 450,036,365.74 514.98% 678,531,026.31 142.24% (RMB) Net margin attributable to shareholders of the Company 65,754,068.84 -10.42% 292,938,302.54 4.60% before exceptional gains and losses (RMB) Net cash from operating activities -- -- -103,806,526.11 -132.03% (RMB) Basic earnings per share 0.3538 515.30% 0.5334 142.23% (RMB/share) Diluted earnings per share 0.3538 515.30% 0.5334 142.23% (RMB/share) Weighted average return on equity 8.43% 6.94% 13.42% 7.89% (%) Exceptional gains and losses: √ Applicable □ Not applicable Unit: RMB Item January-September 2017 Note Gains/Losses on disposal of non-current assets (inclusive of offset -4,255,164.43 asset impairment provisions) 3 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Government grants charged to the profit/loss for this Reporting Period (except for the government grants closely related to the 4,234,669.94 business of the Company and given at a fixed quota or amount in accordance with the State’s uniform standards) Gains/Losses on fair value changes of trading financial assets and liabilities & investment income from disposal of trading financial assets and liabilities as well as financial assets available for sale 269,362,165.95 (exclusive of effective hedges related to normal business operations of the Company) Non-operating income and expense other than above 1,572,504.43 Other gain and loss items that meet definition of extraordinary 182,463,231.03 gain/loss Less: Income tax effects 67,778,283.66 Minority interests effects (after tax) 6,399.49 Total 385,592,723.77 -- Explanation of why the Company classified an item as an exceptional gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gains and Losses, or reclassified any exceptional gain/loss item given as an example in the said explanatory announcement as a recurrent gain/loss: □ Applicable √ Not applicable No such cases in the Reporting Period. II Total Number of Shareholders and Shareholdings of Top 10 Shareholders at Period-End 1. Numbers of Common Shareholders and Preference Shareholders with Resumed Voting Rights, and Shareholdings of Top 10 Shareholders Unit: share Total number of preference Total number of common shareholders with resumed 92,189 0 shareholders at period-end voting rights at period-end (if any) Top 10 shareholders Name of Nature of Shareholding Total shares held Restricted shares Pledged or frozen shares shareholder shareholder percentage at period-end held at period-end Status Number Hong Kong Wah Shing Holding Foreign 13.47% 171,360,391 Pledged 83,966,592 Company corporation Limited Prosperity Lamps Foreign 10.50% 133,577,143 4 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 & Components corporation Limited Shenzhen Rising Investment State-owned 5.12% 65,178,305 Development corporation Co., Ltd. Guangdong Electronics State-owned Information 4.74% 60,357,728 Pledged 29,575,287 corporation Industry Group Ltd. Central Huijin Asset State-owned 2.42% 30,799,000 Management Co., corporation Ltd. Essence International Foreign 1.91% 24,277,429 Securities (Hong corporation Kong) Co., Ltd. DBS Vickers Foreign (Hong Kong) Ltd 1.86% 23,645,755 corporation A/C Clients Hong Kong Rising Foreign Investment 1.82% 23,165,684 corporation Development Co., Ltd. China Merchants Foreign Securities (HK) 0.86% 10,928,556 corporation Co., Limited Foreign Zhuang Jianyi 0.85% 10,821,372 8,116,029 individual Top 10 non-restricted shareholders Type of stock Name of shareholder Non-restricted shares held at period-end Type Number Hong Kong Wah Shing Holding RMB common 171,360,391 171,360,391 Company Limited stock Prosperity Lamps & Components RMB common 133,577,143 133,577,143 Limited stock Shenzhen Rising Investment 65,178,305 RMB common 65,178,305 5 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Development Co., Ltd. stock Guangdong Electronics Information RMB common 60,357,728 60,357,728 Industry Group Ltd. stock Central Huijin Asset Management RMB common 30,799,000 30,799,000 Co., Ltd. stock Domestically Essence International Securities 24,277,429 listed stock for 24,277,429 (Hong Kong) Co., Ltd. foreign investors Domestically DBS Vickers (Hong Kong) Ltd A/C 23,645,755 listed stock for 23,645,755 Clients foreign investors Domestically Hong Kong Rising Investment 23,165,684 listed stock for 23,165,684 Development Co., Ltd. foreign investors Domestically China Merchants Securities (HK) 10,928,556 listed stock for 10,928,556 Co., Limited foreign investors RMB common Peng Weiyan 8,546,042 8,546,042 stock Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group Ltd. and Hong Kong Rising Investment Development Co., Ltd. are Related or acting-in-concert parties acting-in-concert parties; and Prosperity Lamps & Components Limited and Zhuang Jianyi among shareholders above are acting-in-concert parties. Apart from that, it is unknown whether there is among the top 10 shareholders any other related parties or acting-in-concert parties as defined in the Administrative Measures for the Acquisition of Listed Companies. Individual Shareholder Peng Weiyan held 000 shares in the Company through her common Top 10 common shareholders stock accounts and held 8,546,042 shares in the Company through her accounts of collateral conducting securities margin trading securities for margin trading, representing a total holding of 8,546,042 shares in the (if any) Company. Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yea √ No No such cases in the Reporting Period. 2. Total Number of Preference Shareholders and Shareholdings of Top 10 of Them at Period-End □ Applicable √ Not applicable 6 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Part III Significant Events I Changes in Key Consolidated Financial Statement Items and Reasons for Such Changes √ Applicable □ Not applicable Unit: RMB September 30, December 31, Item 2017/January-Septemb 2016/January-Septemb Change Main reason for change er 2017 er 2016 Monetary funds 862,717,104.55 1,479,283,642.54 -41.68% Cash dividend distribution during this year Notes receivable 46,511,928.45 67,925,843.74 -31.53% Increase in bank acceptance bills received and used to pay to suppliers with endorsement Accounts receivable 835,008,250.20 595,257,954.00 40.28% Increased net sales and credit period adjustments for domestic customers Prepayments 45,923,008.15 30,292,007.11 51.60% Increase in prepayments to suppliers Interest receivable 8,203,896.29 4,612,406.80 77.87% Increase in undue bank interest Other receivables 77,025,711.18 11,977,660.58 543.08% Outstanding amount resulted from selling interests in associated company, and receivable VAT rebates for exports Other current assets 755,215,346.30 441,205,461.72 71.17% Increase in undue bank’s wealth management products Construction in 157,263,729.32 71,479,325.91 120.01% Accelerated expansion of plants in Gaoming progress Disposal of fixed 1,299,216.85 - / Disposal of fixed assets uncompleted assets Long-term deferred 9,476,005.79 6,897,119.78 37.39% Higher expenditure on decoration expense Payroll payable 62,849,578.17 96,021,156.06 -34.55% Last year’s year-end bonuses for employees were paid in current period Taxes payable 72,837,956.78 138,282,644.72 -47.33% Income from sale of shares of Guoxuan High-tech stock had resulted in increase in income taxes in fourth quarter of last year, and corresponding income tax was paid in current period Dividend payable - 6,287,923.09 -100.00% Dividend distribution by subsidiaries Taxes and surtaxes As per Finance & Tax Document [2016] No. 22, 30,774,732.41 17,649,693.22 74.36% vehicle and vessel use tax has been included in taxes and surtaxes since May 1, 2016 Finance costs -6,116,872.70 -12,127,352.31 49.56% Greater foreign exchange losses caused by RMB appreciation 7 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Investment income Sale of interests in associate Qinghai Fozhao 499,104,903.93 18,682,665.76 2571.49% and of shares of Guoxuan High-tech stock in current period Operating margin 795,691,152.75 344,516,114.27 130.96% Increased main operating margin and investment income Non-operating 6,401,542.43 1,805,821.67 254.49% Increased government subsidies income Non-operating 4,849,532.49 7,092,231.89 -31.62% Loss on inventories due to flooding in same expense period of last year Gross margin 797,243,162.69 339,229,704.05 135.02% Increased main operating margin and investment income Income tax expense 114,494,430.09 58,506,429.76 95.70% Increase in gross margin Net margin 682,748,732.60 280,723,274.29 143.21% Increased main operating margin and investment income Net margin 678,531,026.31 280,104,920.60 142.24% Increased main operating margin and investment attributable to income owners of the parent Minority interests 4,217,706.29 618,353.69 582.09% Increased earnings of subsidiaries income Total comprehensive Increase in net margin attributable to owners of 469,538,225.37 26,222,196.02 1690.61% income the parent Earnings per share Increase in net margin attributable to owners of 0.5334 0.2202 142.23% the parent Net cash flows from Income from sale of shares of Guoxuan operating activities High-tech stock had resulted in increase in -103,806,526.11 324,048,913.00 -132.03% income taxes in fourth quarter of last year, and corresponding income tax was paid in current period; and prepayments to suppliers increased Net cash flows from Sale of interests in associate Qinghai Fozhao investing activities 12,659,213.62 -605,074,904.70 102.09% and of shares of Guoxuan High-tech stock in current period Net cash flows from Significant increase in cash dividends paid -522,068,416.83 -15,935,708.57 -3176.09% financing activities Effect of foreign Greater foreign exchange losses caused by RMB exchange rate appreciation -3,350,808.67 833,739.33 -501.90% changes on cash and cash equivalents Net increase in cash Decrease in net cash flows from operating and -616,566,537.99 -296,127,960.94 -108.21% and cash equivalents financing activities 8 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 II Progress, Influence and Solutions Associated with Significant Events √ Applicable □ Not applicable 1. On June 27, 2017, the Company signed an Equity Transfer Agreement with KEDA Clean Energy Co., Ltd., transferring the Company’s 38% stake in Qinghai Fozhao Lithium Energy Exploitation Co., Ltd. to the latter for RMB189.8176 million. On August 28, 2017, the equity transfer formalities were completed with the industrial and commercial administration. The Company recognized, on this transaction, an investment income of RMB184.2847 million and a net margin of RMB160.4804million (net of tax) for the third quarter of 2017. 2. During the period July 6, 2017 through August 1, 2017, the Company sold 8,770,400 (approximately 0.9994%) shares of the Guoxuan High-tech stock through bidding at the relevant stock exchange for RMB304,428,520.24 in total. Excluding the related costs and tax, the Company obtained, from this transaction, an investment income of RMB270.9981 million and a net margin of RMB228.9578 million for the third quarter of 2017. III Commitments that the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company and Other Commitment Makers, Failed to Fulfill on Time During Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. IV Forecast of 2017 Annual Operating Results Warning of a possible loss on or a significant year-over-year change in accumulative net margin during the period the beginning of the current year through the end of the next reporting period, as well as the reasons: □ Applicable √ Not applicable V Securities Investments □ Applicable √ Not applicable No such cases in the Reporting Period. VI Investments in Derivative Financial Instruments □ Applicable √ Not applicable No such cases in the Reporting Period. 9 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 VII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc. during Reporting Period √ Applicable □ Not applicable Date of visit Way of visit Type of visitor About See www.cninfo.com.cn – EasyIR – 07/06/2017 By one-on-one meeting Institution Investor Relations 08/30/2017 By phone Institution VIII Irregularities Arising from Provision of Guarantees for Third Parties □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s Funds by Its Controlling Shareholder or Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. X Targeted Measures Taken to Help People Lift Themselves out of Poverty The Company did not take such measures in the third quarter of the year and has no such plans for now. 10 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Part IV Financial Statements I Financial Statements 1. Consolidated Balance Sheet Prepared by Foshan Electrical and Lighting Co., Ltd. September 30, 2017 Unit: RMB Item September 30, 2017 December 31, 2016 Current assets: Monetary funds 862,717,104.55 1,479,283,642.54 Settlement reserve Interbank lendings Financial assets at fair value through gains/losses Derivative financial assets Notes receivable 46,511,928.45 67,925,843.74 Accounts receivable 835,008,250.20 595,257,954.00 Prepayments 45,923,008.15 30,292,007.11 Premiums receivable Reinsurance premiums receivable Receivable reinsurance contract reserve Interest receivable 8,203,896.29 4,612,406.80 Dividends receivable Other accounts receivable 77,025,711.18 11,977,660.58 Financial assets purchased under agreements to resell Inventories 696,098,069.44 753,681,605.19 Assets held for sale Non-current assets due within one year Other current assets 755,215,346.30 441,205,461.72 Total current assets 3,326,703,314.56 3,384,236,581.68 Non-current assets: Loans and advances to customers 11 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Available-for-sale financial assets 1,487,028,388.75 1,732,150,857.01 Held-to-maturity investments Long-term accounts receivable Long-term equity investments 178,570,902.09 210,394,932.69 Investment property Fixed assets 467,695,253.63 446,006,929.66 Construction in progress 157,263,729.32 71,479,325.91 Engineering materials Disposal of fixed assets 1,299,216.85 Productive living assets Oil-gas assets Intangible assets 157,093,681.84 160,330,395.13 R&D expense Goodwill Long-term deferred expense 9,476,005.79 6,897,119.78 Deferred income tax assets 34,747,640.13 43,547,918.44 Other non-current assets 43,472,231.00 45,125,340.00 Total non-current assets 2,536,647,049.40 2,715,932,818.62 Total assets 5,863,350,363.96 6,100,169,400.30 Current liabilities: Short-term borrowings Borrowings from Central Bank Money deposits accepted and inter-bank deposits Interbank borrowings Financial liabilities at fair value through gains/losses Derivative financial liabilities Notes payable Accounts payable 527,220,341.52 552,255,512.33 Advances received 42,661,372.56 41,180,818.13 Financial assets sold for repurchase Fees and commissions payable Payroll payable 62,849,578.17 96,021,156.06 Taxes payable 72,837,956.78 138,282,644.72 12 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Interest payable Dividends payable 6,287,923.09 Other accounts payable 42,588,320.54 50,104,338.81 Reinsurance premiums payable Insurance contract reserve Payables for acting trading of securities Payables for acting underwriting of securities Liabilities held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 748,157,569.57 884,132,393.14 Non-current liabilities: Long-term borrowings Bonds payable Of which: Preference shares Perpetual bonds Long-term accounts payable Long-term payroll payable Special payables Provisions Deferred income 11,988,518.55 10,449,768.49 Deferred income tax liabilities 162,487,211.47 200,112,595.11 Other non-current liabilities Total non-current liabilities 174,475,730.02 210,562,363.60 Total liabilities 922,633,299.59 1,094,694,756.74 Owners’ equity: Share capital 1,272,132,868.00 1,272,132,868.00 Other equity instruments Of which: Preference shares Perpetual bonds Capital reserve 285,821,459.07 285,821,459.07 Less: Treasury shares Other comprehensive income 920,760,865.02 1,133,971,372.25 13 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Special reserve Surplus reserve 733,924,951.81 733,924,951.81 Provisions for general risks Retained earnings 1,708,851,147.74 1,564,615,925.99 Equity attributable to owners of the parent 4,921,491,291.64 4,990,466,577.12 Minority interests 19,225,772.73 15,008,066.44 Total owners’ equity 4,940,717,064.37 5,005,474,643.56 Total liabilities and owners’ equity 5,863,350,363.96 6,100,169,400.30 Legal representative: He Yong Accounting head for this Report: Liu Xingming Head of the accounting department: Tang Qionglan 2. Parent Company Balance Sheet Unit: RMB Item September 30, 2017 December 31, 2016 Current assets: Monetary funds 667,157,114.92 1,235,417,964.88 Financial assets at fair value through gains/losses Derivative financial assets Notes receivable 46,261,928.45 66,222,840.44 Accounts receivable 839,280,380.89 611,855,496.90 Prepayments 82,556,888.67 117,217,953.23 Interest receivable 6,801,320.95 3,590,629.01 Dividends receivable 14,671,820.57 Other accounts receivable 147,874,521.01 56,714,849.84 Inventories 622,228,347.25 717,097,516.25 Assets held for sale Non-current assets due within one year Other current assets 644,989,742.55 379,932,325.87 Total current assets 3,057,150,244.69 3,202,721,396.99 Non-current assets: Available-for-sale financial assets 1,487,028,388.75 1,732,150,857.01 Held-to-maturity investments Long-term accounts receivable Long-term equity investments 662,168,191.85 693,992,222.45 14 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Investment property Fixed assets 389,773,077.10 375,075,102.44 Construction in progress 156,507,082.15 69,589,510.14 Engineering materials Disposal of fixed assets 1,298,243.60 Productive living assets Oil-gas assets Intangible assets 113,443,209.63 117,017,633.92 R&D expense Goodwill Long-term deferred expense 9,028,211.01 6,897,119.78 Deferred income tax assets 29,075,542.10 37,790,043.38 Other non-current assets 43,011,520.00 44,519,790.00 Total non-current assets 2,891,333,466.19 3,077,032,279.12 Total assets 5,948,483,710.88 6,279,753,676.11 Current liabilities: Short-term borrowings Financial liabilities at fair value through gains/losses Derivative financial liabilities Notes payable Accounts payable 741,919,260.89 701,814,818.26 Advances received 41,580,168.01 38,406,798.91 Payroll payable 37,021,297.12 66,764,581.34 Taxes payable 58,163,522.65 121,939,572.62 Interest payable Dividends payable Other accounts payable 115,761,425.55 258,368,416.59 Liabilities held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities 994,445,674.22 1,187,294,187.72 Non-current liabilities: Long-term borrowings Bonds payable 15 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Of which: Preference shares Perpetual bonds Long-term payables Long-term payroll payable Special payables Provisions Deferred income 11,639,768.34 9,984,768.34 Deferred income tax liabilities 162,487,211.47 200,112,595.11 Other non-current liabilities Total non-current liabilities 174,126,979.81 210,097,363.45 Total liabilities 1,168,572,654.03 1,397,391,551.17 Owners’ equity: Share capital 1,272,132,868.00 1,272,132,868.00 Other equity instruments Of which: Preference shares Perpetual bonds Capital reserve 293,425,065.15 293,425,065.15 Less: Treasury shares Other comprehensive income 920,760,865.02 1,133,971,372.25 Special reserve Surplus reserve 733,924,951.81 733,924,951.81 Retained earnings 1,559,667,306.87 1,448,907,867.73 Total owners’ equity 4,779,911,056.85 4,882,362,124.94 Total liabilities and owners’ equity 5,948,483,710.88 6,279,753,676.11 Legal representative: He Yong Accounting head for this Report: Liu Xingming Head of the accounting department: Tang Qionglan 3. Consolidated Income Statement for July-September Unit: RMB Item July-September 2017 July-September 2016 1. Operating revenue 926,328,050.98 819,510,785.90 Including: Net sales 926,328,050.98 819,510,785.90 Interest revenue Premium revenue Fee and commission revenue 16 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 2. Operating expenses 888,962,375.54 729,336,869.53 Including: Cost of sales 760,791,362.20 624,355,439.15 Interest expense Fee and commission expense Surrenders Net claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surtaxes 10,388,130.08 5,398,114.76 Selling expense 67,350,699.34 69,476,830.23 Administrative expense 47,679,268.38 46,549,040.03 Finance costs 999,034.66 -5,681,599.27 Asset impairment losses 1,753,880.88 -10,760,955.37 Add: Gains on fair value changes (“-” for losses) Investment income (“-” for losses) 485,095,621.91 4,961,917.99 Including: Share of gains/losses of 184,214,592.25 -6,569.56 associates and joint ventures Exchange gains (“-” for losses) Other income 3. Operating margin (“-” for losses) 522,461,297.35 95,135,834.36 Add: Non-operating income 379,146.55 230,805.09 Including: Gains on disposal of non-current assets Less: Non-operating expense 79,758.80 2,175,174.95 Including: Losses on disposal of 776,026.47 non-current assets 4. Gross margin (“-” for losses) 522,760,685.10 93,191,464.50 Less: Income tax expense 71,896,928.74 19,080,452.47 5. Net margin (“-” for losses) 450,863,756.36 74,111,012.03 Attributable to owners of the 450,036,365.74 73,179,107.88 parent Attributable to minority interests 827,390.62 931,904.15 6. Other comprehensive income, net of -236,235,978.37 -394,818,856.95 tax 17 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Other comprehensive income, net of tax attributable to owners of the -236,235,978.37 -394,818,856.95 parent 6.1 Other comprehensive income that will not be reclassified into gains/losses 6.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 6.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 6.2 Other comprehensive income to be subsequently reclassified -236,235,978.37 -394,818,856.95 into gains/losses 6.2.1 Share of other comprehensive income of investees that -21,831,908.42 will be reclassified into gains/losses under equity method 6.2.2 Gains/Losses on fair value changes of available-for-sale -214,404,069.95 -394,818,856.95 financial assets 6.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 6.2.4 Effective gains/losses on cash flow hedges 6.2.5 Currency translation differences 6.2.6 Other Other comprehensive income, net of tax attributable to minority interests 7. Total comprehensive income 214,627,777.99 -320,707,844.92 Attributable to owners of the 213,800,387.37 -321,639,749.07 parent Attributable to minority interests 827,390.62 931,904.15 8. Earnings per share 8.1 Basic earnings per share 0.3538 0.0575 8.2 Diluted earnings per share 0.3538 0.0575 Where business mergers under the same control occurred in the current period, the net margin achieved by the merged parties before 18 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 the business mergers was RMB0.00, with the amount for the same period of last year being RMB0.00. Legal representative: He Yong Accounting head for this Report: Liu Xingming Head of the accounting department: Tang Qionglan 4. Parent Company Income Statement for July-September Unit: RMB Item July-September 2017 July-September 2016 1. Operating revenue 903,446,254.75 831,582,855.08 Less: Operating expenses 763,482,738.06 637,457,080.01 Taxes and surtaxes 7,416,305.60 2,932,685.10 Selling expense 62,278,091.63 68,412,649.71 Administrative expense 46,031,248.74 45,821,532.99 Finance costs 2,362,018.02 -4,467,105.10 Asset impairment losses 1,617,784.82 -10,827,360.48 Add: Gains on fair value changes (“-” for losses) Investment income (“-” for loss) 484,167,951.90 4,961,917.99 Including: Share of gains/losses of 184,214,592.25 -6,569.56 associates and joint ventures Other income 2. Operating margin (“-” for losses) 504,426,019.78 97,215,290.84 Add: Non-operating income 321,854.74 158,665.11 Including: Gains on disposal of non-current assets Less: Non-operating expense 49,663.66 2,113,816.96 Including: Losses on disposal of 744,668.48 non-current assets 3. Gross margin (“-” for losses) 504,698,210.86 95,260,138.99 Less: Income tax expense 67,376,029.03 18,378,235.96 4. Net margin (“-” for losses) 437,322,181.83 76,881,903.03 5. Other comprehensive income, net of -236,235,978.37 -394,818,856.95 tax 5.1 Other comprehensive income that will not be reclassified into gains and losses 5.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 19 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 5.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 5.2 Other comprehensive income to be subsequently reclassified into -236,235,978.37 -394,818,856.95 gains/losses 5.2.1 Share of other comprehensive income of investees that -21,831,908.42 will be reclassified into gains/losses under equity method 5.2.2 Gains/Losses on fair value changes of available-for-sale financial -214,404,069.95 -394,818,856.95 assets 5.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 5.2.4 Effective gains/losses on cash flow hedges 5.2.5 Currency translation differences 5.2.6 Other 6. Total comprehensive income 201,086,203.46 -317,936,953.92 7. Earnings per share 7.1 Basic earnings per share 7.2 Diluted earnings per share Legal representative: He Yong Accounting head for this Report: Liu Xingming Head of the accounting department: Tang Qionglan 5. Consolidated Income Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Operating revenue 2,950,253,633.82 2,575,181,713.34 Including: Net sales 2,950,253,633.82 2,575,181,713.34 Interest revenue Premium revenue Fee and commission revenue 2. Operating expenses 2,653,667,385.00 2,249,348,264.83 20 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Including: Cost of sales 2,307,723,142.05 1,947,337,999.85 Interest expense Fee and commission expense Surrenders Net claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surtaxes 30,774,732.41 17,649,693.22 Selling expense 149,002,693.03 142,728,637.64 Administrative expense 146,470,089.98 128,666,867.97 Finance costs -6,116,872.70 -12,127,352.31 Asset impairment losses 25,813,600.23 25,092,418.46 Add: Gains on fair value changes (“-” for losses) Investment income (“-” for losses) 499,104,903.93 18,682,665.76 Including: Share of gains/losses of 185,758,558.04 -26,209.68 associates and joint ventures Exchange gains (“-” for losses) Other income 3. Operating margin (“-” for losses) 795,691,152.75 344,516,114.27 Add: Non-operating income 6,401,542.43 1,805,821.67 Including: Gains on disposal of 20,253.97 non-current assets Less: Non-operating expense 4,849,532.49 7,092,231.89 Including: Losses on disposal of 4,255,164.43 999,118.72 non-current assets 4. Gross margin (“-” for losses) 797,243,162.69 339,229,704.05 Less: Income tax expense 114,494,430.09 58,506,429.76 5. Net margin (“-” for losses) 682,748,732.60 280,723,274.29 Attributable to owners of the 678,531,026.31 280,104,920.60 parent Attributable to minority interests 4,217,706.29 618,353.69 6. Other comprehensive income, net of -213,210,507.23 -254,501,078.27 tax Other comprehensive income, net -213,210,507.23 -254,501,078.27 of tax attributable to owners of the 21 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 parent 6.1 Other comprehensive income that will not be reclassified into gains/losses 6.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 6.1.2 Share of other comprehensive income of investees that cannot be reclassified into gains/losses under equity method 6.2 Other comprehensive income to be subsequently reclassified -213,210,507.23 -254,501,078.27 into gains/losses 6.2.1 Share of other comprehensive income of investees that -21,831,908.42 will be reclassified into gains/losses under equity method 6.2.2 Gains/Losses on fair value changes of available-for-sale -191,378,598.81 -255,315,043.41 financial assets 6.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 6.2.4 Effective gains/losses on cash flow hedges 6.2.5 Currency translation differences 6.2.6 Other 813,965.14 Other comprehensive income, net of tax attributable to minority interests 7. Total comprehensive income 469,538,225.37 26,222,196.02 Attributable to owners of the 465,320,519.08 25,603,842.33 parent Attributable to minority interests 4,217,706.29 618,353.69 8. Earnings per share 8.1 Basic earnings per share 0.5334 0.2202 8.2 Diluted earnings per share 0.5334 0.2202 Where business mergers under the same control occurred in the current period, the net margin achieved by the merged parties before the business mergers was RMB0.00, with the amount for the same period of last year being RMB0.00. 22 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Legal representative: He Yong Accounting head for this Report: Liu Xingming Head of the accounting department: Tang Qionglan 6. Parent Company Income Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Operating revenue 2,883,642,659.04 2,614,040,071.22 Less: Operating expenses 2,313,440,394.16 1,993,164,589.95 Taxes and surtaxes 21,444,604.66 10,758,187.57 Selling expense 136,340,918.02 141,048,891.13 Administrative expense 144,429,787.11 128,230,793.51 Finance costs -2,112,235.62 -8,265,724.94 Asset impairment losses 24,670,993.37 24,960,867.30 Add: Gains on fair value changes (“-” for losses) Investment income (“-” for loss) 497,071,428.38 18,682,665.76 Including: Share of gains/losses of 185,758,558.04 -26,209.68 associates and joint ventures Other income 2. Operating margin (“-” for losses) 742,499,625.72 342,825,132.46 Add: Non-operating income 6,068,688.15 1,548,088.24 Including: Gains on disposal of 9,401.71 non-current assets Less: Non-operating expense 2,091,041.16 5,850,398.69 Including: Losses on disposal of 1,528,785.79 937,680.22 non-current assets 3. Gross margin (“-” for losses) 746,477,272.71 338,522,822.01 Less: Income tax expense 101,422,029.01 56,240,423.99 4. Net margin (“-” for losses) 645,055,243.70 282,282,398.02 5. Other comprehensive income, net of -213,210,507.23 -255,315,043.41 tax 5.1 Other comprehensive income that will not be reclassified into gains and losses 5.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 5.1.2 Share of other comprehensive income of investees that 23 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 cannot be reclassified into gains/losses under equity method 5.2 Other comprehensive income to be subsequently reclassified into -213,210,507.23 -255,315,043.41 gains/losses 5.2.1 Share of other comprehensive income of investees that -21,831,908.42 will be reclassified into gains/losses under equity method 5.2.2 Gains/Losses on fair value changes of available-for-sale financial -191,378,598.81 -255,315,043.41 assets 5.2.3 Gains/Losses on reclassifying held-to-maturity investments into available-for-sale financial assets 5.2.4 Effective gains/losses on cash flow hedges 5.2.5 Currency translation differences 5.2.6 Other 6. Total comprehensive income 431,844,736.47 26,967,354.61 7. Earnings per share 7.1 Basic earnings per share 7.2 Diluted earnings per share Legal representative: He Yong Accounting head for this Report: Liu Xingming Head of the accounting department: Tang Qionglan 7. Consolidated Cash Flow Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Cash generated by or used in operating activities: Cash generated by sale of 2,689,003,504.65 2,312,207,975.75 commodities and rendering of service Net increase in money deposits from customers and interbank placements Net increase in loans from Central Bank Net increase in funds borrowed from other financial institutions 24 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Cash received as premiums of original insurance contracts Net cash generated by reinsurance business Net increase in deposits of policy holders and investment fund Net increase in disposal of financial assets at fair value through gains/losses Interest, fees and commissions received Net increase in interbank borrowings Net increase in funds in repurchase business Tax rebates received 74,944,574.17 58,629,989.95 Cash generated by other operating 40,868,251.39 33,828,787.79 activities Subtotal of cash generated by operating 2,804,816,330.21 2,404,666,753.49 activities Cash paid for goods and services 1,873,635,380.49 1,340,524,458.10 Net increase in loans and advances to customers Net increase in funds deposited in Central Bank and interbank placements Cash paid for claims of original insurance contracts Interest, fees and commissions paid Cash paid as policy dividends Cash paid to and for employees 538,117,713.71 442,206,958.62 Taxes paid 328,954,823.22 176,309,686.13 Cash used in other operating 167,914,938.90 121,576,737.64 activities Subtotal of cash used in operating 2,908,622,856.32 2,080,617,840.49 activities Net cash from operating activities -103,806,526.11 324,048,913.00 2. Cash generated by or used in investing activities: Cash generated by disinvestments 19,221,175.20 7,005.00 Cash received as investment income 479,129,177.90 17,173,398.25 Net cash generated by disposal of fixed assets, intangible assets and other 1,626,000.00 73,000.00 long-term assets 25 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Net cash generated by disposal of subsidiaries or other business units Cash generated by other investing activities Subtotal of cash generated by investing 499,976,353.10 17,253,403.25 activities Cash paid to acquire fixed assets, intangible assets and other long-term 177,317,139.48 68,923,429.83 assets Cash paid for investments 310,000,000.00 545,865,000.00 Net increase in pledged loans Net cash paid to acquire subsidiaries and other business units Cash used in other investing 7,539,878.12 activities Subtotal of cash used in investing 487,317,139.48 622,328,307.95 activities Net cash from investing activities 12,659,213.62 -605,074,904.70 3. Cash generated by or used in financing activities: Cash received as capital contributions Including: Cash received from minority shareholder investments by subsidiaries Cash received as borrowings Cash generated by issuance of bonds Cash generated by other financing activities Subtotal of cash generated by financing activities Repayment of borrowings Cash paid for interest expenses and 522,068,416.83 15,935,708.57 distribution of dividends or profit Including: dividends or profit paid 5,660,290.78 by subsidiaries to minority interests Cash used in other financing activities Sub-total of cash used in financing 522,068,416.83 15,935,708.57 activities Net cash from financing activities -522,068,416.83 -15,935,708.57 26 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 4. Effect of foreign exchange rate -3,350,808.67 833,739.33 changes on cash and cash equivalents 5. Net increase in cash and cash -616,566,537.99 -296,127,960.94 equivalents Add: Opening balance of cash and 1,479,283,642.54 933,546,108.37 cash equivalents 6. Closing balance of cash and cash 862,717,104.55 637,418,147.43 equivalents Legal representative: He Yong Accounting head for this Report: Liu Xingming Head of the accounting department: Tang Qionglan 8. Parent Company Cash Flow Statement for January-September Unit: RMB Item January-September 2017 January-September 2016 1. Cash generated by or used in operating activities: Cash generated by sale of 2,602,335,552.74 2,340,439,622.75 commodities and rendering of service Tax rebates received 74,944,574.17 58,629,989.95 Cash generated by other operating 33,784,521.55 28,947,588.49 activities Subtotal of cash generated by operating 2,711,064,648.46 2,428,017,201.19 activities Cash paid for goods and services 2,191,779,261.68 1,675,836,030.87 Cash paid to and for employees 236,224,216.19 170,220,863.77 Taxes paid 242,191,570.41 101,878,975.55 Cash used in other operating 172,691,140.62 117,489,938.22 activities Subtotal of cash used in operating 2,842,886,188.90 2,065,425,808.41 activities Net cash from operating activities -131,821,540.44 362,591,392.78 2. Cash generated by or used in investing activities: Cash generated by disinvestments 19,221,175.20 7,005.00 Cash received as investment income 492,162,728.87 17,173,398.25 Net cash generated by disposal of fixed assets, intangible assets and other 1,580,000.00 14,000.00 long-term assets Net cash generated by disposal of subsidiaries or other business units 27 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Cash generated by other investing activities Subtotal of cash generated by investing 512,963,904.07 17,194,403.25 activities Cash paid to acquire fixed assets, intangible assets and other long-term 164,644,278.87 63,757,043.28 assets Cash paid for investments 265,000,000.00 545,865,000.00 Net cash paid to acquire subsidiaries and other business units Cash used in other investing 7,500,000.00 activities Subtotal of cash used in investing 429,644,278.87 617,122,043.28 activities Net cash from investing activities 83,319,625.20 -599,927,640.03 3. Cash generated by or used in financing activities: Cash received as capital contributions Cash received as borrowings Cash generated by issuance of bonds Cash generated by other financing activities Subtotal of cash generated by financing activities Repayment of borrowings Cash paid for interest expenses and 516,408,126.05 15,935,708.57 distribution of dividends or profit Cash used in other financing activities Sub-total of cash used in financing 516,408,126.05 15,935,708.57 activities Net cash from financing activities -516,408,126.05 -15,935,708.57 4. Effect of foreign exchange rate -3,350,808.67 833,739.14 changes on cash and cash equivalents 5. Net increase in cash and cash -568,260,849.96 -252,438,216.68 equivalents Add: Opening balance of cash and 1,235,417,964.88 633,291,177.30 cash equivalents 6. Closing balance of cash and cash 667,157,114.92 380,852,960.62 equivalents 28 Foshan Electrical and Lighting Co., Ltd. Third Quarter Report 2017 Legal representative: He Yong Accounting head for this Report: Liu Xingming Head of the accounting department: Tang Qionglan II Auditor’s Report Are the Q3 2017 financial statements audited? □Yes √ No These financial statements are unaudited. The Board of Directors Foshan Electrical and Lighting Co., Ltd. October 25, 2017 29