Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
ANNUAL REPORT 2019
April 2020
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Foshan Electrical and Lighting Co., Ltd. (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or mate rial omissions therein.
He Yong, the Company’s legal representative, Liu Xingming, the Company’s General
Manager, and Tang Qionglan, the Company’s Chief Financial Officer (CFO) hereby
guarantee that the Financial State ments carried in this Report are factual, accurate and
complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
The future plans and other forward-looking statements, as well as the cautionary statements
mentioned in this Report shall NOT be considered as virtual promises of the Company to
investors. And investors are kindly reminded to be well aware of possible risks.
The Company has described in detail in this Report the risk of uncertainty in macro-economy,
the risk of market competition, the risk of rising labor costs, the risk of rising raw material
prices, the risk of falling prices of inventories, the risk of exchange rate fluctuations and the
risk of doubtful receivable accounts. Please refer to the section headed “Potential Risks” in Item
IX of Part IV of this Report .
The Board has approved a final dividend plan as follows: based on the total share capital of
1,399,346,154 shares, a cash dividend of RMB1.85 (tax inclusive) per 10 shares is to be
distributed to the shareholders, with no bonus issue from either profit or capital reserves.
This Report have been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese versions shall
prevail.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 5
Part III Business Summary ............................................................................................................... 9
Part IV Operating Performance Discussion and Analysis ........................................................... 14
Part V Significant Events ................................................................................................................ 45
Part VI Share Changes and Shareholder Information ................................................................. 69
Part VII Preferred Shares ............................................................................................................... 80
Part VIII Convertible Corporate Bonds ........................................................................................ 81
Part IX Directors, Supe rvisors, Senior Management and Staff .................................................. 82
Part X Corporate Governance ........................................................................................................ 93
Part XI Corporate Bonds .............................................................................................................. 103
Part XII Financial State ments ...................................................................................................... 104
Part XIII Documents Available for Reference............................................................................. 250
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Definitions
Term Definition
Foshan Electrical and Lighting Co., Ltd. and its consolidated subsidiaries,
The “Company”, “FSL” or “we”
except where the context otherwise requires
GRAM Guangdong Rising Assets M anagement Co., Ltd.
Electronics Group Guangdong Electronics Information Industry Group Ltd.
GD Rising Finance Guangdong Rising Finance Holding Co., Ltd.
Shenzhen Rising Investment Shenzhen Rising Investment Development Co., Ltd.
Hong Kong Rising Investment Hong Kong Rising Investment Development Limited
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
General meeting General meeting of Foshan Electrical and Lighting Co., Ltd.
Board of Directors The board of directors of Foshan Electrical and Lighting Co., Ltd.
Supervisory Committee The supervisory committee of Foshan Electrical and Lighting Co., Ltd.
Annual report auditor Zhongzheng Tiantong Certified Public Accountants LLP
Expressed in the Chinese currency of Renminbi, expressed in tens of thousands
RM B, RMB’0,000, RM B’00,000,000
of Renminbi, expressed in hundreds of millions of Renminbi
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name FSL, FSL-B Stock code 000541, 200541
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 佛山电器照明股份有限公司
Abbr. 佛山照明
Company name in English (if
FOSHAN ELECTRICAL AND LIGHTING CO.,LTD
any)
Abbr. (if any) FSL
Legal representative He Yong
Registered address No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Zip code 528000
Office address No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Zip code 528000
Company website www.chinafsl.com
Email address gzfsligh@pub.foshan.gd.cn
II Contact Information
Board Secretary Securities Representative
Name He Yong Huang Yufen
No. 64, Fenjiang North Road, Chancheng No. 64, Fenjiang North Road, Chancheng
Address District, Foshan City, Guangdong District, Foshan City, Guangdong
Province, P.R.China Province, P.R.China
Tel. （0757）82810239 （0757）82966028
Fax （0757）82816276 （0757）82816276
Email address yh888@chinafsl.com fslhyf@163.com
III Media for Information Disclosure and Place where this Report Is Lodged
Newspapers designated by the Company for China Securities Journal, Securities Times, Securities Daily, Ta Kung Pao
information disclosure (HK)
Website designated by CSRC for publication of this
http://www.cninfo.com.cn
Report
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Board Secretary’s Office, FSL Office Building, No. 64, Fenjiang North
Place where this Report is lodged
Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
IV Change to Company Registered Information
Unified social credit code 91440000190352575W
Change to principal activity of the Company
Unchanged
since going public (if any)
Every change of controlling shareholder since
Unchanged
incorporation (if any)
V Other Information
The independent audit firm hired by the Company:
Name Zhongzheng Tiantong Certified Public Accountants LLP
Office address 13/F, Tower B, Jinyun Building, A43 Xizhimen Avenue North, Haidian District, Beijing
Accountants writing signatures Tong Quanyong, Luo Dongri
The independent sponsor hired by the Company to exercise constant supervision over the Company in the
Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in
the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
2019-over-2018
2019 2018 2017
change (%)
Operating revenue (RM B) 3,337,576,747.66 3,801,955,946.76 -12.21% 3,800,188,261.54
Net profit attributable to the listed
301,182,906.24 377,615,133.62 -20.24% 740,308,725.30
company’s shareholders (RM B)
Net profit attributable to the listed
company’s shareholders before 283,753,154.31 354,513,585.67 -19.96% 353,549,021.39
exceptional gains and losses (RM B)
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Net cash generated from/used in
508,084,757.46 617,987,487.05 -17.78% 215,821,192.79
operating activities (RM B)
Basic earnings per share (RM B/share) 0.2152 0.2699 -20.27% 0.5290
Diluted earnings per share
0.2152 0.2699 -20.27% 0.5290
(RM B/share)
Weighted average return on equity
6.37% 8.36% -1.99% 15.14%
(%)
Change of 31
December 2019 over
31 December 2019 31 December 2018 31 December 2017
31 December 2018
(%)
Total assets (RMB) 6,175,200,008.24 5,588,166,699.30 10.50% 5,675,811,824.29
Equity attributable to the listed
4,880,736,800.07 4,319,259,418.46 13.00% 4,779,115,459.39
company’s shareholders (RM B)
VII Accounting Data Differences unde r China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Sta ndards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
VIII Key Financial Information by Quarter
Unit: RM B
Q1 Q2 Q3 Q4
Operating revenue 889,232,750.52 797,951,910.34 755,281,612.77 895,110,474.03
Net profit attributable to the listed
86,659,035.18 80,616,690.57 63,440,260.60 70,466,919.89
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 74,681,526.84 79,836,460.82 64,734,076.20 64,501,090.45
exceptional gains and losses
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Net cash generated from/used in
29,966,955.13 160,714,878.35 145,265,388.22 172,137,535.76
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs
materially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RM B
Item 2019 2018 2017 Note
Gain or loss on disposal of non-current
assets (inclusive of impairment allowance -413,275.62 -1,671,154.30 176,540,060.61
write-offs)
Government subsidies charged to current
profit or loss (exclusive of government
subsidies given in the Company’s ordinary
6,485,365.31 30,005,231.23 1,185,148.00
course of business at fixed quotas or
amounts as per the government’s uniform
standards)
Gain or loss on fair-value changes in
held-for-trading and derivative financial
assets and liabilities & income from disposal
of held-for-trading and derivative financial
15,574,400.00 -477,200.00 269,362,165.95
assets and liabilities and other investments
in debt obligations (exclusive of the
effective portion of hedges that arise in the
Company’s ordinary course of business)
Non-operating income and expense other
-2,543,083.02 -594,356.14 1,640,395.69
than the above
Less: Income tax effects 2,635,263.29 4,222,066.76 61,971,050.60
Non-controlling interests effects (net
-961,608.55 -61,093.92 -2,984.26
of tax)
Total 17,429,751.93 23,101,547.95 386,759,703.91 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part III Business Summary
I Principal Activity of the Company in the Reporting Period
1. The Company’s Principal Activities or Products
We design, manufacture and market high-quality, green and energy-efficient lighting products and electrical
products, as well as provide complete lighting and electrical solutions. Our products mainly include electrical
products such as LED light sources and luminaries, automotive LED luminaries, traditional light sources switches
and socket. Currently, we have three major operating divis ions, namely, lighting, electrical products and vehicle
lighting. Upon years of development, we have won quite many honors, and our “FSL” and “Fenjiang” brands
have been certified as “Famous China Brands”.
2. Main business models
(1) Procurement model
We mainly procure raw materials such as lamp beads, lamp holders, electronic components, aluminum substrate,
plastic parts, metal materials, quartz tubes and fuel by way of bids invitation. A bids invitation supervisory
committee consisting of personnel from several departments will be set up in the future. For every kind of our
main raw materials, we usually have a few suppliers to choose from in procurement so that the procurement prices
would be fair, the supply of raw materials in time and the good quality of the raw materials ensured.
(2) Production models
① Production of the conventional products
Concerning the conventional products, we analyze sales of every month and predict future market demand so as to
formulate a production plan for the coming month. And our workshops produce according to the plan to avoid
extra stock and at the same time ensure that there is enough for sale.
② Production according to orders
Different from the conventional lighting products which are of little variation in specifications, LED lighting
products are at a fast pace of renewal and different customers often have different requirements regarding the
products’ appearances and performance indexes. Therefore, we have to organize individualized production for
some orders for LED lighting products, export orders in particular. For this kind of orders, we formulate our
production plans based on them and then make procurement plans according to the production plans, which will
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
help effectively control the stock and the procurement prices of raw materials, reduce capital occupation and
improve our operating efficiency to the maximum.
③ Combination of independent production and outsourcing
With a high production capacity, we produce most of our products and parts on our own. Only a small portion of
parts and low-tech products is outsourced to sub-manufacturers, who will produce in strict accordance with our
requirements. We will also tag along their production processes and examine carefully the quality of the products
finished. In this way, our supply of products is guaranteed.
(3) Sales model
Domestically, we mainly adopt a commercial agent model. In terms of channels, we have wholesale, franchised
store, illumination engineering & commercial lighting, industrial and mining outdoor channels, e-commerce &
retail sales and automotive lighting channels.
For overseas markets, we primarily adopt OEM/ODM models and also sell under our own brands (through
agents).
3. Main driving forces for growth
Despite the impact of negative factors such as domestic economic downturn and US-China trade war during the
Reporting Period, with the evolution of the industrial competition model, consumers are getting increasingly
concerned with product quality and brand. As a result, companies with weak competitiveness will be gradually
elbowed out of the market while large enterprises or enterprises with core competitiveness will have more market
opportunities. By virtue of its advantages in technology, brand, channel and scale, the Company has continued to
promote the technical upgrading of main products, improve product quality, beef up market expansion and
optimize and upgrade the product sales structure through sustained spending on R&D and technical innovation.
Meanwhile, it has gained an advantageous position in the process of enhancing market concentration by
increasing the level of production automation, effectively controlling purchase costs and ramping up production
efficiency.
4. Development stage and periodicity of the lighting industry as well as our position in the market
The recent years have witnessed the rapid rise of the LED lighting technology. Due to the sharp drop in their cost
and their remarkable performance in energy saving & emission reduction, LED lighting products have been
generally accepted by consumers, resulting in a higher and higher penetration rate as well as a fast-shrinking
market for conventional lighting products. However, after years of fast development and renewal, growth in LED
lighting has slowed down. Particularly the LED downstream with a low requirement for market access is suf fering
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
from an obvious problem of structural overcapacity, leading to the disordered, cutthroat competition on the market.
Under the double hits by a macro economic downturn and fierce competition, large enterprises will expand
through mergers and acquisitions for stronger competitiveness, while some small and medium ones can only face
the fate of being washed out of the market due to lack of competitiveness, which is bringing the entire industry
into an integration phase. As a necessity for daily life, lighting products are mainly under the influence of the
macro economy and the real estate sector but are little affected by seasons and regions.
Generally speaking, China’s lighting industry is insufficiently centralized with no overwhelmingly superior
enterprises despite an enlarging market share of competitive brands. Upon years of development, we have become
a leading and quite competitive lighting enterprise with strong competitiveness in brand, production scale, channel,
R&D, etc.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
M ajor assets M ain reason for significant changes
Equity assets No significant change during the Reporting Period
Fixed assets No significant change during the Reporting Period
Intangible assets No significant change during the Reporting Period
The ending amount was down 47.01% from the beginning amount, primarily driven by
Construction in progress
the transfer of certain plants in Gaoming District, Foshan City to fixed assets.
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
The core competitiveness of the Company mainly reflects on fours aspects listed below:
Channel advantage
The Company has been sticking to the market strategy of deeply cultivating and refining channels. Over years of
development and experience, the Company has been equipped with five major sales channels in domestic market
(wholesale, franchised store, e-commerce & retail sales, illumination engineering & commercial lighting and
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
industrial and mining outdoor channels), forming a marketing network covering the whole country; in foreign
market, the Company has made active steps to develop international market business, sold products to more than
100 countries and regions in North America, Europe, Southeast Asia, Africa and Oceania, and kept improving
overseas sales channel. By virtue of its powerful and comprehensive sales channels, the Company has enabled its
products to enter market rapidly, substantially enhancing its market development abilities and competitiveness.
Brand advantage
The Company has accumulated more than 60 years’ experience in the lighting industry and enjoyed continuously
increasing influence and brand value for its “FSL”. In recent years, with the enhancement of its development
positioning, product design and user experience, the Company has initiated the strategy of brand upgrading and
carried out promotion by centering around the new “Professional, Healthy, Fashionable and Intelligent”. In
addition, it has driven the transition of “FSL” from an industrial brand to a popular brand to maintain the brand
vitality and competitiveness. Among the Company’s brands, both “FSL” and “Fenjiang” are China Famous
Trademarks. The brand “FSL” has become one of the most influential and popular industrial brands in China, and
the powerful brand influence has played a key role in driving the sustained growth of the Company’s sales.
Technical R&D advantage
The Company has been valuing the R&D of new products and the development of innovation and R&D teams. It
has further increased spending on technology and independent product innovation. The Company is equipped with
its own electric light source institute, National CNAS Lighting Laboratory and Guangdong Engineering
Technology Development Center. It has won the title of “Provincial IP Advantaged Enterprise” and obtained 404
domestic patents and 26 foreign patents. In terms of the development of the R&D team, the Company has
formulated a comprehensive R&D personnel management policy and appraisal system, intensified the
introduction of high calibre talents, and reinforced cooperation with colleges and universities in
industry-university-research projects, which has created a smooth path for the development of R&D professionals
and provided strong support for it to maintain a technology-leading position and to further carry out product
innovation.
Scale advantage
As one of the enterprises to first step into the industry of producing and selling lighting products, the Company
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
possesses the manufacture culture of refining production and the large-scale manufacturing capability by years of
experience accumulation. The Company has production bases in Foshan, Nanjing and Xinxiang. The large-scale
and centralized production brings obvious economic benefits to the Company, which not only shows in
manufacture cost of products, but also shows in aspects such as raw material procurement and product pricing.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part IV Operating Performance Discussion and Analysis
I Overvie w
(I) Summary
2019 saw intense pressure on the lighting industry as a whole. In terms of the macro economic situation, China’s
economy slowed down in growth, with a tightening real estate policy, a slower growth in consumer demand and
greater hardship for the real economy; overseas, developed economies were in lack of impetus for growth,
emerging economies saw a weakening momentum in growth, and the deteriorating China-U.S. trade friction
created a negative impact and mounting pressure on exporters in China. From the industry perspective, on one
hand, LED lighting has developed at a fast pace, the penetration rate of LED lighting products has continued to
increase, and the growth of market demand has slowed down in recent years; on the other hand, lighting
companies are under pressure on both revenue and profit amid fierce competition caused by new production
capacity, as well as rising labor and logistics costs and other rigid costs. In face of an unfavorable external
environment, the Company continued to focus on the strategic objective of “Cutting-edge Technology,
International Brand and Market and Large-scale Production”, deepen technological reform and refine the product
mix towards high- and mid-end products. Meanwhile, refinement was also carried out in the organizational and
distribution channel structures so that the Company could better adapt to market competition. For the Reporting
Period, the Company achieved operating revenue of RMB3337.5767 million, a year-on-year decrease of12.21%;
and a net profit attributable to the listed company’s shareholders of RMB301.1829 million, a year-on-year
decrease of 20.24%.
(II) Major Work in 2019
1. Greater Innovation Efforts Led to Substantial Growth in Intelligent Products
In 2019, the Company continued to improve its R&D system and policy, introduce high-calibre R&D
professionals, increase R&D spending, accelerate the advancement of innovation, drive the shift from light
sources to lamps, from mid-end to mid- to high-end products and from single lighting products to lighting system
solutions in a bid to enhance the additional value of products.
The Company made active steps to establish industry-education-research and interdisciplinary collaboration with
the upper and middle streams of industrial chains, colleges and technology platform companies as part of its
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
continuous efforts to drive the introduction, promotion and application of new technologies and new processes. In
terms of intelligent lighting, the Company signed strategic cooperation agreements with Alibaba Cloud and Tuya;
the FSLxTmall Genie A.I. Voice Bedside Lamp, developed jointly with Tmall Genie, won the global top design
award “German iF Design Award 2020” in February 2020; the Company connected with more influential
mainstream cloud platforms both at home and abroad, including Huawei, Tencent, Alibaba and Jingdong, and
Amazon, Google, WIZ and key accounts platforms; it conducted collaborative research with technology
companies in lighting Bluetooth modules. In terms of healthy lighting, the Company cooperated with
upper-stream companies for the R&D of healthy lighting products. In terms of industrial des ign, the Company’s
application for recognition of “provincial industrial design center” passed expert view and publicity, with
discussions going on with key colleges on cooperation in industrial des ign. Through various measures, the
Company continued to enhance its innovation level, enrich and refine intelligent products and upgrade intelligent
control technology.
During the Reporting Period, the Company applied for 131 different new patents (including 12 patents, 63 utility
models, 52 design patents and 4 international PCTs and was granted 106 new patents (including 9 patents, 60
utility models, 35 design patents and 2 foreign patents). In 2019, the Company generated a sales revenue of
RMB44,031,000 from intelligent products, a YOY increase of 210%. Won the contracts for a number of
intelligent projects, including Digital Industrial Headquarters Business Complex in Wanbo CBD of Guangzhou,
Guangzhou Vocational School of Tourism and Business, the Administration Committee of the Development Zone
of Binhai New District of Tianjin and Changlong-Xihuan Tunnel of Zhuhai.
2. Improvement in the Marketing System towards Stronger Market Competitiveness
(1) Lighting
In 2019, the Company implemented the BU system reform. It set up the R&D center and three sales BUs, adjus ted
the BU organizational structure and talent structure and teased out BU process and authorization to enable faster
market response. At the same time, it improved the remuneration and inventive system of business units to
mobilize the enthusiasm of employees across all levels.
The Domestic Sales BU continued to advance the marketing model reform, drove distributors to shift from
“shopkeepers” to “itinerant traders”, promoted the expansion of sales channels to rural areas and advanced flat
management to improve the end market service capacity. It actively planned and promoted the sales in the three
economically developed regions, including the Pearl River Delta, the Yangtze River Delta and the
Beijing-Tianjin-Hebei Region, expanded the sales network on a hierarchical basis by centering around the three
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
economic belts, propelled the high-end development of products and further optimized the product mix. It
deepened and refined the sales network in different fields with focus on centralized purchases of proper ties,
renovations of education systems, municipal projects and rail transit projects. All the efforts led to a YOY
increase of 33.75% in the sales revenue from projects and industrial and mining channels in the year.
The E-commerce BU won the contracts for the centralized purchases of Tmall Genie intelligent lamps and Baidu
intelligent lamps, signed a cooperation memorandum with Tmall Genie IOT for collaborative development of
intelligent products for IOT scenarios, such as smart households, worked with Huawei’s IOT team to connect with
Huawei’s HILINK ecosystem for lighting products, and established strategic cooperation with Suning for B2B
key accounts, laying a solid foundation for the future development of e-commerce. In 2019, the E-commerce BU
witnessed a YOY increase of 29.60% in sales revenue.
By analyzing the characteristics of customers at an in-depth level, the Export BU strengthened its marketing work
in “technology + customer service” for key accounts, continued to enhance customer satisfaction and deepened
cooperation with key accounts, as part of its response to U.S.-China trade frictions. It vigorously promoted lamps
and intelligent products and optimized the product sales structure. It toiled to develop new high-quality customers
and expand the market space. It worked on e-commerce channels to lay a good foundation for overseas online
business. By making use of the “Belt and Road” opportunity, the BU energetically promoted the overseas sales of
FSL, which has successfully gained access to the European market, other than Southeast Asia, South Asia, West
Asia and South Africa.
(2) Electrical Products
The Company reinforced its network of end outlets, increased the market coverage of electrical products, assisted
distributors to enhance their market service capacity, and further improved the development and maintenance
work of outlets. It reformed the operation model of KA (engineering) channel and focused on customers with
centralized purchases of properties and brand chain corporation customers. In 2019, the Company secured the
contracts for six cooperation projects of centralized purchase of properties and three cooperation projects with
home decoration companies, and won the bids for 11 projects, effectively enhancing FSL’s industrial visibility
and brand influence for electrical products. The Company expanded the intelligent household field by developing
and promoting intelligent switches, intelligent sockets, intelligent locks and other intelligent products as part of its
effort to extend from the general public market to the mid- to high-end market.
(3) Vehicle Lighting Products
The Company closely followed the development trend of LED vehicle lighting technology, continued to increase
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
spending on the R&D of LED vehicle lighting, strengthened the R&D of new products, diversified the categories
of LED vehicle lighting products and focused on developing LED module projects. Through vigorous market
expansion, the Company undertook 12 new LED module projects in 2019 in a bid to continuously increase the
market share of its products. Meanwhile, the Company set up a back-end market promotion team to carry out end
promotion activities in different places across the country and enhance the product visibility on end market. In
2019, the Company saw a YOY increase of 82% in the sales revenue from LED vehicle lighting products.
3. Deepening intelligent manufacturing by enhancing the integration of automation and information technology
The Company’s production automation has improved substantially over recent years’ continuous development in
production automation. On the basis of that, the Company continued to center around the goal of “Automation,
Flexibility and Large Scale”, optimized automation for some production lines based on the actual production
conditions, and tried to push the standard and modular process from front end to back end, in an effort to enhance
the flexibility and compatibility of production automation. It also enhanced communication and cooperation with
capable equipment suppliers to jointly develop intelligent manufacturing equipment. At the same time, the
Company accelerated the level of information building. On the basis of the existing SAP system, OA system, HR
system and MES system, it established the SRM (supply chain) system, WMS (warehouse) system and PDM
(R&D) system, set up its own e-commerce platform, and promoted the integration of its automated production
lines and information systems, aiming to achieve inter-connectivity and integration and open up its business data
chains in different segments, including R&D, purchase, manufacturing, warehousing and sales. Thus, it will help
the Company’s management to quickly understand production conditions, expedite the adjustment of its
production according to market demands and enhance its overall response speed and management abilities,
providing customers with better delivery experience and achieving the goal of win-win results between the
Company and its customers.
4. Stronger Delicacy Management towards Lower Cost and Higher Efficiency
In 2019, the Company promoted cost reduction and efficiency enhancement by improving production processes
and controlling the quality of raw materials and products. It took a number of measures, including strengthening
delicacy management of production, driving the improvement of production processes, exerting the control of key
expenses and optimizing plant appraisal indicators, to improve production efficiency and cut production and
operating costs. The Company intensified the control of purchase proc ess, and through the SRM (supply chain)
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
system, improved the supply chain management system to guarantee materials supply. It kept close watch on the
market prices of materials, reasonably arranged material purchase plans and further exerted the control over
material costs. It strictly controlled product quality, and to deal with the changes brought by new products and
new processes, strengthened the training on product quality standard systems, further reinforced the quality
monitoring on the whole process ranging from raw material purchase to production and quality inspection, and
implanted quality awareness into each step of production to strengthen product competitiveness.
5. Strengthening brand promotion for brand upgrading
In 2019, the Company continued to strengthen brand promotion. Pursuing a whole new brand image of
“Professional, Healthy, Fashionable and Intelligent”, it carried out multi-dimens ional brand promotion activities
through multiple channels, and promoted the transition of the “FSL” brand from being industry-wide well-known
to being generally well-known. In respect of conventional media, the Company placed in 2019 hard
advertisements on China Central Televis ion (CCT V), Guangzhou Baiyun International Airport, Shanghai
Hongqiao International Airport, Shanghai Pudong International Airport and Beijing-Guangzhou high-speed trains,
which has brought the brand promotion of the Company to a new level and rapidly boosted the brand presence. In
terms of mobile new media, the Company also enhanced advertis ing on high-traffic platforms such as WeChat,
Weibo and Tik Tok, with a view to boosting brand recognition among young consumers. Such a
multi-dimens ional and diverse ad matrix would greatly boost the recognition and influence of the “FSL” brand
and help build a high-end popular brand image. As for image presentation at the retail end, the Company upgraded
the image of its exclusive shops and improved user experience to attract the younger consumers to the shops.
Through multiple measures, the brand presence of the Company has been further strengthened.
II Core Business Analysis
1. Overview
See “I Overview” above.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RM B
2019 2018 Change (%)
18
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
As % of total As % of total
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 3,337,576,747.66 100% 3,801,955,946.76 100% -12.21%
By operating division
Lighting products
3,337,576,747.66 100.00% 3,801,955,946.76 100.00% -12.21%
and luminaries
By product category
LED lighting
2,530,826,166.63 75.83% 2,776,060,566.71 73.02% -8.83%
products
Traditional lighting
685,726,922.53 20.55% 905,695,616.42 23.82% -24.29%
products
Electrical products 80,498,200.00 2.41% 96,493,768.09 2.54% -16.58%
Other 40,525,458.50 1.21% 23,705,995.54 0.62% 70.95%
By operating segment
Domestic 1,983,289,202.28 59.42% 2,158,770,050.28 56.78% -8.13%
Overseas 1,354,287,545.38 40.58% 1,643,185,896.48 43.22% -17.58%
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Operating
Revenue or Operating Profit
√ Applicable □ Not applicable
Unit: RM B
YoY change in YoY change in
Operating Gross profit YoY change in
Cost of sales operating revenue gross profit
revenue margin cost of sales (%)
(%) margin (%)
By operating division
Lighting products
3,337,576,747.66 2,560,513,052.56 23.28% -12.21% -12.40% 0.16%
and luminaries
By product category
LED lighting
2,530,826,166.63 1,975,925,436.56 21.93% -8.83% -9.02% 0.16%
products
Traditional
685,726,922.53 497,438,329.77 27.46% -24.29% -25.53% 1.21%
lighting products
Electrical
80,498,200.00 52,233,400.00 35.11% -16.58% -18.76% 1.75%
products
Other 40,525,458.50 34,915,886.23 13.84% 70.95% 86.21% -7.06%
By operating segment
19
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Domestic 1,983,289,202.28 1,484,503,844.14 25.15% -8.13% -5.99% -1.71%
Overseas 1,354,287,545.38 1,076,009,208.42 20.55% -17.58% -19.93% 2.33%
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating division Item Unit 2019 2018 Change (%)
Unit sales Piece 626,090,881 767,969,866 -18.47%
Lighting products
Output Piece 606,160,734 771,535,024 -21.43%
and luminaries
Inventory Piece 101,346,236 121,276,383 -16.43%
Any over 30% YoY movements in the data above and why:
□ Applicable √ Not applicable
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
By operating division and product category
Unit: RM B
2019 2018
Operating division Item As % of total cost As % of total cost Change (%)
Cost of sales Cost of sales
of sales (%) of sales (%)
Lighting products
2,560,513,052.56 100.00% 2,922,833,510.40 100.00% -12.40%
and luminaries
Lighting products
Raw materials 1,939,695,600.35 75.76% 2,199,097,763.69 75.24% -11.80%
and luminaries
Lighting products
Labor cost 340,520,251.28 13.30% 419,756,197.29 14.36% -18.88%
and luminaries
Lighting products Depreciation
245,381,314.70 9.58% 285,228,811.19 9.76% -13.97%
and luminaries and other
Lighting products
Other 34,915,886.23 1.36% 18,750,738.24 0.64% 86.21%
and luminaries
Unit: RM B
Product category Item 2019 2018 Change (%)
20
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
As % of total cost As % of total cost
Cost of sales Cost of sales
of sales (%) of sales (%)
LED lighting
Raw materials 1,571,660,353.88 61.38% 1,754,239,718.12 60.02% -10.41%
products
LED lighting
Labor cost 237,779,502.49 9.29% 265,927,179.88 9.10% -10.58%
products
LED lighting Depreciation and
166,485,580.19 6.50% 151,672,427.91 5.19% 9.77%
products other
LED lighting
Subtotal 1,975,925,436.56 77.17% 2,171,839,325.91 74.31% -9.02%
products
Traditional
Raw materials 323,991,639.55 12.65% 388,968,905.47 13.31% -16.71%
lighting products
Traditional
Labor cost 98,224,247.66 3.84% 149,172,301.24 5.10% -34.15%
lighting products
Traditional Depreciation and
75,222,442.56 2.94% 129,804,090.42 4.44% -42.05%
lighting products other
Traditional
Subtotal 497,438,329.77 19.43% 667,945,297.12 22.85% -25.53%
lighting products
Electrical
Raw materials 44,043,606.92 1.72% 55,889,140.10 1.91% -21.19%
products
Electrical
Labor cost 4,516,501.13 0.18% 4,656,716.17 0.16% -3.01%
products
Electrical Depreciation and
3,673,291.95 0.14% 3,752,292.86 0.13% -2.11%
products other
Electrical
Subtotal 52,233,400.00 2.04% 64,298,149.13 2.20% -18.76%
products
Other products
Other 34,915,886.23 1.36% 18,750,738.24 0.64% 86.21%
and services
Total 2,560,513,052.56 100.00% 2,922,833,510.40 100.00% -12.40%
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
The Company convened the 26th Meeting of the 8th Board of Directors on 7 September 2018, which reviewed
and approved the Proposal on the De-Registration of Wholly-owned Subsidiary Guangdong Fozhao Finance
Lease Co., Ltd. (hereinafter referred to as “Fozhao Lease”). Upon the receipt of the Notice on Approval of
21
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
De-Registration from the Foshan Administration for Market Regulation in 2019, the de-registration procedure of
Fozhao Lease has been completed and Fozhao Lease has been excluded from the scope of the Company’s
consolidated financial statements.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RM B) 578,233,699.96
Total sales to top five customers as % of total sales of the
17.32%
Reporting Period (%)
Total sales to related parties among top five customers
0.00%
as % of total sales of the Reporting Period (%)
Information about top five customers:
Sales revenue contributed for
No. Customer As % of total sales revenue (%)
the Reporting Period (RM B)
1 Customer A 323,032,103.83 9.68%
2 Customer B 93,927,668.88 2.81%
3 Customer C 63,499,323.20 1.90%
4 Customer D 52,872,150.14 1.58%
5 Customer E 44,902,453.91 1.35%
Total -- 578,233,699.96 17.32%
Other information about major customers:
√ Applicable □ Not applicable
None of the top five customers is a related party of the Company.
Major suppliers:
Total purchases from top five suppliers (RM B) 189,615,811.39
Total purchases from top five suppliers as % of total
9.73%
purchases of the Reporting Period (%)
Total purchases from related parties among top five
suppliers as % of total purchases of the Reporting Period 2.42%
(%)
22
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Information about top five suppliers:
Purchase in the Reporting
No. Supplier As % of total purchases (%)
Period (RM B)
1 Supplier A 53,916,135.38 2.77%
2 Supplier B 47,177,854.15 2.42%
3 Supplier C 30,521,718.60 1.57%
4 Supplier D 30,276,114.91 1.55%
5 Supplier E 27,723,988.35 1.42%
Total -- 189,615,811.39 9.73%
Other information about major suppliers:
√ Applicable □ Not applicable
Among the top five suppliers, the 2nd supplier is a related party of the Company while the other 4 are not.
3. Expense
Unit: RM B
2019 2018 Change (%) Reason for any significant change
Selling expense 241,414,766.43 237,485,389.89 1.65%
Administrative expense 145,080,623.05 173,871,085.61 -16.56%
Finance costs -27,725,342.20 -26,115,179.16 -6.17%
M ore investments in R&D in the
R&D expense 79,444,261.80 52,726,585.28 50.67% Current Period, including significantly
higher labor cost
4. R&D Expense
√ Applicable □ Not applicable
The Company always took science and technology as the first priority, paid attention to technology R&D,
constantly researched and developed new products and technologies meeting market demands, promoted the
optimization and upgrade of product structure, improved the technology content of products, and improved the
core competitiveness of the Company. Meanwhile, the Company strengthened the research on technique and
technology of products, so as to cut down product cost and improve quality. Where the R&D funds go to: One is
forward-looking technologies and products independently developed by the Company through separate R&D
projects as product and technology reserve for market expansion in the future. For this kind of R&D projects, the
Company usually launches the project and sets up a dedicated research team. The other is new products developed
23
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
according to customers’ technological requirements. For this kind of R&D projects, the Company formulates an
initial design plan and starts trial productions after the plan has been approved by the customer, with the
bench-scale and pilot-scale production expenses included into the R&D expense.
According to the Measures for the Administration of the Accreditation of High-Tech Enterprises, R&D expense
includes the R&D expense recorded in cost of sales and the R&D expense capitalized as per the relevant
accounting standards. In 2019, the Company’s R&D expense amounted to RMB139.0544 million, accounting for
4.17% of the operating revenue. The revenue generated from the sale of products through the bench-scale and
pilot-scale production was recorded in the core business revenue, while RMB55.4257 million and RMB79.4443
million of the costs and expenses incurred were recorded in the cost of sales of core businesses and the R&D
expense respectively.
Unit:RMB’0,000
Operating R&D expense as % of Costs recorded in Expense recorded in
Year R&D expense
revenue operating revenue cost of sales R&D expense
2019 年 333,757.67 13,905.44 4.17% 5,542.57 7,944.43
2018 年 380,195.59 13,959.49 3.67% 8,367.75 5,272.66
Details about R&D expense:
2019 2018 Change (%)
Number of R&D personnel 632 673 -6.09%
R&D personnel as % of total
8.38% 7.29% 1.09%
employees
R&D expense (RM B) 139,054,379.24 139,594,894.62 -0.39%
R&D expense as % of operating
4.17% 3.67% 0.50%
revenue
Capitalized R&D expense
0.00 0.00 0.00%
(RM B)
Capitalized R&D expense as %
0.00% 0.00% 0.00%
of total R&D expense
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
24
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
5. Cash Flows
Unit: RM B
Item 2019 2018 Change (%)
Subtotal of cash generated from
3,716,893,712.44 3,844,002,001.24 -3.31%
operating activities
Subtotal of cash used in operating
3,208,808,954.98 3,226,014,514.19 -0.53%
activities
Net cash generated from/used in
508,084,757.46 617,987,487.05 -17.78%
operating activities
Subtotal of cash generated from
70,764,256.00 271,716,187.40 -73.96%
investing activities
Subtotal of cash used in investing
108,476,166.05 248,587,186.18 -56.36%
activities
Net cash generated from/used in
-37,711,910.05 23,129,001.22 -263.05%
investing activities
Subtotal of cash generated from
2,350,000.00
financing activities
Subtotal of cash used in financing
218,298,000.02 418,531,713.57 -47.84%
activities
Net cash generated from/used in
-215,948,000.02 -418,531,713.57 48.40%
financing activities
Net increase in cash and cash
254,547,798.64 225,101,547.42 13.08%
equivalents
Explanation of why any of the data above varies significantly:
√ Applicable □ Not applicable
1. Net cash generated from operating activities decreased 17.78% year-on-year, primarily driven by a decrease in
proceeds from sale of commodities and rendering of services.
2. Net cash generated from investing activities decreased 263.05% year-on-year, primarily driven by a greater gap
between the purchase amount and the withdrawn amount of bank’s low -risk principal-protected wealth
management products and structured deposits.
3. Net cash used in financing activities increased 48.40% year-on-year, primarily driven by a smaller amount of
cash dividend payout.
4. Net increase in cash and cash equivalents increased 13.08% year-on-year, primarily driven by more net cash
generated from financing activities.
Explanation of why net cash generated from/used in operating activities varies significantly from net profit for the
25
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Reporting Period:
√ Applicable □ Not applicable
For the Reporting Period, net cash generated from operating activities stood at RMB508,084,757.46 while net
profit stood at RMB303,452,471.39, representing a difference of RMB204,632,286.07. Mainly due to the
reinforcement of the settlement and loans with bank’s acceptance bills and the extension of loan repayment term
in the Reporting Period.
III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RM B
Amount As % of total profit M ain source/Reason Recurrent or not
Gains on banks’ low-risk wealth
Return on management products and dividends
60,878,425.30 17.29% Not
investment from holding investments in other
equity instruments
Gain/loss on
Changes in the fair value of
changes in fair 2,024,400.00 0.57% Not
derivative financial instruments
value
Asset impairments -16,675,215.52 -4.74% Inventory valuation allowances Not
Non-operating Government subsidies and other
3,072,145.61 0.87% Not
income income received
Non-operating
5,517,243.94 1.57% Inventory loss Not
expense
Government subsidies that arose in
Other income 11,202,255.25 3.18% the ordinary course of business of Not
the Company
Credit impairment
-3,693,729.47 -1.05% Allowances for doubtful accounts Not
loss
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RM B
31 December 2019 1 January 2019 Change in
Reason for any significant
As % of As % of percentage
Amount Amount change
total assets total assets (%)
M onetary assets 1,125,456,662.64 18.23% 896,703,037.65 15.13% 3.10%
Accounts receivable 712,175,266.51 11.53% 834,420,596.05 14.07% -2.54%
26
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Inventory 637,336,584.06 10.32% 767,319,599.00 12.94% -2.62%
Long-term equity
181,093,725.43 2.93% 182,458,559.69 3.08% -0.15%
investments
Fixed assets 629,832,098.35 10.20% 512,106,912.39 8.64% 1.56%
Construction in
119,030,610.16 1.93% 224,624,447.16 3.79% -1.86%
progress
Investments in other
1,454,740,241.46 23.56% 1,232,130,339.01 20.78% 2.78%
equity instruments
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RM B
Gain/loss on Cumulative
Impairment
fair-value fair-value Purchased in Sold in the
Beginning allowance for Other Ending
Item changes in the changes the Reporting Reporting
amount the Reporting changes amount
Reporting charged to Period Period
Period
Period equity
Financial
assets
1.
Held-for-tradi
ng financial
assets 13,550,000.0 19,550,000.
6,000,000.00
(excluding 0 00
derivative
financial
assets)
2.
Derivative
1,547,200.00 1,547,200.00
financial
assets
4.
Investments
1,232,130,339 222,609,902. 1,454,740,24
in other
.01 45 1.46
equity
instruments
Subtotal of
1,238,130,339 15,097,200.0 222,609,902. 19,550,000. 1,456,287,44
financial
.01 0 45 00 1.46
assets
27
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Total of the 1,238,130,339 15,097,200.0 222,609,902. 19,550,000. 1,456,287,44
above .01 0 45 00 1.46
Financial
-477,200.00 477,200.00 0.00
liabilities
Notes: For details about bank's wealth management products, see "XVII Significant Contracts and Execution" in
"Part V Significant Events".
Details about other changes:
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Unit: RM B
Item Ending carrying value Reason for restriction
M onetary assets 68,958,729.27 Security deposits for notes and forward forex settlement
Notes receivable 67,035,696.27 In pledge for notes pool
Total 135,994,425.54
V Investments Made
1. Total Investment Amount
□ Applicable √ Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RM B
28
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Gain/Lo
Accumu
ss on
lated
fair-valu Purchas Gain/los
Initial M easure Beginni e
fair-valu
ed in
Sold in
s in Ending Account Funding
Security Security Security ng e Reporti
investm ment carrying changes Reporti Reporti carrying
type code name changes ng
method in ng ng value ing title source
ent cost value Reporti charged Period Period Period
to
ng
equity
Period
Investm
Domestic Guoxua ents in
Fair
ally/Overs n 160,000 525,465 135,911, 441,142 4,545,5 661,377 other Self-fun
002074 value
eas listed High-tec ,000.00 ,291.00 870.25 ,021.61 47.50 ,161.25 equity ded
method
stock h instrum
ents
Investm
Domestic ents in
China Fair
ally/Overs 30,828, 68,622, 13,168, 58,141, 2,986,0 81,791, other Self-fun
601818 Everbrig value
eas listed 816.00 989.80 195.34 437.32 27.39 185.14 equity ded
ht Bank method
stock instrum
ents
Investm
Domestic ents in
Fair
ally/Overs Xiamen 292,574 632,987 73,529, 413,943 10,971, 706,517 other Self-fun
N/A value
eas listed Bank ,133.00 ,881.81 836.86 ,585.67 417.60 ,718.67 equity ded
method
stock instrum
ents
Foshan
branch Investm
Domestic of ents in
Fair
ally/Overs Guangd 500,000 500,000 7,962.3 500,000 other Self-fun
N/A value
eas listed ong .00 .00 1 .00 equity ded
method
stock Develop instrum
ment ents
Bank
1,227,5 1,450,1
483,902 222,609 913,227 18,510,
Total -- 76,162. 0.00 0.00 86,065. -- --
,949.00 ,902.45 ,044.60 954.80
61 06
Disclosure date of
announcement on Board’s
consent for securities
investments
29
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Disclosure date of
announcement on general
meeting’s consent for
securities investments (if
any)
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: US$’0,000
Ending
Actua
investm
l
Relation Related- Impairm ent as %
Initial Beginni Purchas gain/l
ship party Type of Sold in ent Ending of the
Operating investm Beginni Ending ng ed in oss in
with the transacti derivativ Reportin allowan investm Compan
party ent ng date date investm Reportin Repor
Compan on or e g Period ce (if ent y’s
amount ent g Period ting
y not any) ending
Perio
net
d
assets
Foshan Forward
branch of forex 14
Not 12 July
China Not settleme 1,200 January 200 200 -1.78
related 2018
Constructi nt 2019
on Bank portfolio
Foshan
Forward
branch of
forex 2 1
the Not
Not settleme 1,200 August Februar 400 400 -0.12
Agricultur related
nt 2018 y 2019
al Bank of
portfolio
China
Foshan
General
branch of
forward 22
Guangzho Not 12 June
Not forex 600 M arch 600 600 1.88
u Rural related 2019
settleme 2019
Commerci
nt
al Bank
Foshan
General
branch of
forward 31
Guangzho Not 24 April
Not forex 600 October 600 600 0.48
u Rural related 2019
settleme 2019
Commerci
nt
al Bank
30
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Foshan General
branch of forward 15
Not 9 M ay
China Not forex 500 October 500 500 4.81
related 2019
Constructi settleme 2019
on Bank nt
Foshan
General
branch of
forward 14
the Not 9 M ay
Not forex 500 October 500 500 4.99
Agricultur related 2019
settleme 2020
al Bank of
nt
China
General
Foshan
forward 4 7
branch of Not
Not forex 800 Novemb January 800 400 400 0.57% -0.94
Bank of related
settleme er 2019 2020
China
nt
Foshan
General
branch of
forward 4
the Not 1 April
Not forex 1,200 Decemb 1,200 1,200 1.71%
Agricultur related 2020
settleme er 2019
al Bank of
nt
China
Total 6,600 -- -- 600 4,200 3,200 1,600 2.28% 9.32
Funding source All self-funded
Legal matters involved (if applicable) N/A
Disclosure date of board announcement
approving derivative investment (if 23 M ay 2018
any)
Disclosure date of general meeting
announcement approving derivative
investment (if any)
Risk Analysis of Forward Exchange Settlement Business: 1. Risk of exchange rate
fluctuations. In the case of large fluctuations in the exchange rate, the quoted price of the
Analysis of risks and control measures bank’s forward exchange rate may be lower than the Company’s quoted exchange rate to the
associated with derivative investments customer, which will make the Company unable to lock the quoted exchange rate to the
held in Reporting Period (including but customer or the bank’s forward exchange rate may deviate from the exchange rate at the
not limited to market risk, liquidity risk, time of the Company’s actual receipt and payment, and causes exchange losses. 2. Risk of
credit risk, operational risk, legal risk, customer default. The customer’s accounts receivable may be overdue, and the payment for
etc.) goods cannot be recovered within the predictable payback period, which will result in the
loss of the Company due to the delayed forward settlement. 3. Risk of payback prediction.
The marketing department shall made corresponding payback prediction based on customer
31
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
orders and expected orders. However, during the actual implementation process, customers
may adjust their orders and predictions, which will result in the Company’s incorrect
payback prediction and cause the risk of delayed delivery of forward exchange settlement.
Adopted Risk Control M easures: 1. The Company will strengthen the research and analysis
of the exchange rate. When the exchange rate fluctuates greatly, it will adjust the business
strategy in a timely manner to stabilize the export business and avoid exchange losses to the
utmost. 2. The M anagement System for Forward Settlement and Sales of Foreign Exchanges
reviewed and approved by the board of directors of the Company stipulates that all forward
foreign exchange settlement businesses of the Company shall be based on the normal
production and operation, and relied on specific business operations to avoid and prevent
various exchange rate risks. However, speculative transaction and interest arbitrage are not
allowed. At the same time, the system clearly defines the operating principles, approval
authority, responsible department and responsible person, internal operation procedures,
information isolation measures, internal risk reporting system, risk management procedures,
and information disclosure related to the forward settlement business as well. In fact, the
system is conducive to strengthen the management of the Company’s forward foreign
exchange settlement business and prevent investment risks. 3. In order to prevent any delay
in the forward exchange settlement, the Company will strengthen the management of
accounts receivable, actively collect receivables, and avoid any overdue receivables. In the
meantime, the Company plans to increase the export purchases and purchase corresponding
credit insurance so as to reduce the risk of default and customer default. 4. The Company’s
forward foreign exchange settlement transactions must be based on the Company’s foreign
exchange earnings prediction. Besides, the Company shall strictly control the scale of it s
forward foreign exchange settlement business, and manage all risks that the Company may
face within a controllable range. 5. The internal audit department of the Company shall
check the actual signing and execution situation of all trading contracts on a regular or
irregular basis.
1. The Company invests in Forward Exchange Settlement 3+3 Portfolio. This product
portfolio is superior to other ordinary forward settlement products during the same period.
The first three sessions of vesting conditions of this portfolio are: the spot exchange rate at
maturity is lower than the agreed front-end exchange rate, and the exchange settlement shall
be carried out based on the agreed front-end exchange rate; if the spot exchange rate at
maturity is higher than the agreed front-end exchange rate, the Company can choose not to
Changes in market prices or fair value settle the exchange or choose to settle the exchange based on the spot exchange rate at
of derivative investments in Reporting maturity. The back-end three sessions of vesting conditions are: the spot exchange rate at
Period (fair value analysis should maturity is lower than the agreed back-end exchange rate, and the Company can choose not
include measurement method and to settle the exchange or choose to settle the exchange based on the spot exchange rate at
related assumptions and parameters) maturity; if the spot exchange rate at maturity is higher than the agreed back-end exchange
rate, the exchange settlement shall be carried out based on the agreed back-end exchange
rate. At present, in terms of Forward Exchange Settlement 3+3 Portfolio purchased by the
Company, the spot exchange rates at maturity are all higher than the agreed front -end
exchange rates, and the Company chooses not to exercise the right. T herefore, the product’s
fair value has not changed. 2. The Company invests in general forward forex settlement
products, where settlement is carried out according to the currency, amount and exchange
32
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
rate as stipulated in the forward forex settlement contract. The fair value of the products may
change.
M ajor changes in accounting policies
and specific accounting principles
adopted for derivative investments in N/A
Reporting Period compared to last
reporting period
The independent directors of the Company are of the opinion that during the Reporting
Period, the Company carried out forward forex settlement in strict compliance with the
Company Law, the Regulations of the People’s Bank of China on Foreign Exchange
Opinion of independent directors on Settlement, Sale and Payment and the Company’s M anagement Rules for Forward Foreign
derivative investments and risk control Exchange Settlement and Sale, among others, as well as within the Board’s authorization.
Such trading is primarily aimed to prevent exchange rate fluctuations from impacting the
Company’s export business and operating earnings, with no speculative trading involved. It
is a necessity, and the risk is well under control.
5. Use of Funds Raised
□ Applicable √ Not applicable
No such cases in the Reporting Period
VI Sale of Major Assets and Equity Inte rests
1. Sale of Major Assets
√ Applicable □ Not applicable
Net Proport Implem
profits ion of ented
Relatio
of the net The on
nship The
Compa profits credits schedul
with owners
ny of the and e or
Influen the hip for
generat Compa liabiliti not, if
ce of counter the
Transac ed from ny Pricing Related es not,
the sale party asset
tion the generat basis -party involve explana Disclos
Counte Asset Sales on the (applica involve Disclos
price asset ed from for the transact d have tions ure
rparty sold date Compa ble d has ure date
(RM B’ for the the sale sale of ion or been and index
ny related- been
0,000) period of the asset not transfer measur
(note 3) party transfer
from asset to red in es
transact red in
the the full or taken
ion full or
period- total not by the
case) not
begin net Compa
to the profits ny shall
sales of the be
33
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
date Compa given
(RM B’ ny
0,000)
Announ
cement
on
The
Transfe
sale
r of
will
Equity
6.94% have no
of
of influen
Chengd
equity ce on
Xiamen Based u
of the
Tungste on the Hongbo
Chengd 7 Compa 8
n 1,326.7 evaluati Industri
u M arch 1,955 ny’s 4.37% No N/A Yes Yes Yes M arch
Corpor 5 on al Co.,
Hongbo 2019 busines 2019
ation, result Ltd.
Industri s
Ltd. (Annou
al Co., continu
ncemen
Ltd. ity and
t No.:
stability
2019-0
of the
05)
manage
disclose
ment.
d on
cninfo.
com.cn.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the
Company’s net profit:
Unit: RM B
Relationship Principal Registered Operating Operating
Name with the activity Total assets Net assets Net profit
capital revenue profit
Company
34
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Foshan
Chansheng
M anufacturin 46,395,846.0 45,997,919.7 12,008,176.4
Electronic Subsidiary 1,000,000.00 885,028.64 698,936.92
g 8 2 0
Ballast Co.,
Ltd.
FSL
Chanchang M anufacturin 72,782,944.0 158,523,694. 127,314,519. 95,513,556.4
Subsidiary 2,767,058.20 2,058,884.61
Optoelectroni g 0 06 31 5
cs Co., Ltd.
Foshan
Taimei Times M anufacturin 58,772,995.1 30,709,717.9 129,622,438.
Subsidiary 500,000.00 4,549,331.64 3,682,835.31
Lamps Co., g 4 3 26
Ltd.
FSL New
Light Source M anufacturin 50,000,000.0 58,528,894.3 57,029,125.1 16,839,394.8
Subsidiary 1,082,659.31 970,435.61
Technology g 0 3 6 0
Co., Ltd.
FSL
(Xinxiang) M anufacturin 35,418,439.7 56,884,630.4 50,371,213.4 42,886,072.0
Subsidiary 2,142,741.18 1,619,595.11
Lighting Co., g 6 3 2 2
Ltd.
FSL Lighting
Equipment M anufacturin 15,000,000.0 64,028,453.2 55,910,458.3 68,746,113.1
Subsidiary 613,079.53 423,260.19
Co., Ltd. g 0 4 9 8
Nanjing
Fozhao
Lighting M anufacturin 41,683,200.0 76,880,243.1 61,182,460.0 29,744,601.5
Subsidiary 8,078,062.01 6,034,676.11
Components g 0 5 4 7
M anufacturin
g Co., Ltd.
FSL Zhida
Electric M anufacturin 50,000,000.0 88,774,594.3 48,281,658.5 88,828,868.2
Subsidiary 5,394,223.07 2,376,968.48
Technology g 0 0 6 3
Co., Ltd.
FSL Lighting M anufacturin
Subsidiary 195,812.50 1,258,116.12 -33,096.48 2,248,901.40 24,625.30 24,625.30
GmbH g
Subsidiaries obtained or disposed in the Reporting Period:
√ Applicable □ Not applicable
35
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
How subsidiary was obtained or disposed Effects on overall operations and operating
Subsidiary
in the Reporting Period performance
Guangdong Fozhao Financing Lease Co.,
Cancelling No influence
Ltd.
Information about major majority- and minority-owned subsidiaries:
—Foshan Chansheng Electronic Ballast Co., Ltd. was invested and established by the Company and Mr. Ma
Henglai and had set up and obtained license for business corporation on 26 August 2003. The Company holds
75% equities of the said company; therefore the said subsidiary was included into the scope of the consolidated
financial statements since the date of foundation.
On 24 December 2013, the Company and Mr. Ma Henglai s igned the equity transfer agreement. The Company
purchased 25% equity of Foshan Chansheng Electronic Ballast Co., Ltd. held by Mr. Ma Henglai. After the
purchasing, the Company held 100% equity of Foshan Chansheng Electronic Ballast Co., Ltd.
—FSL Chanchang Optoelectronics Co., Ltd. (renamed on 19 June 2018 from “Foshan Chanchang Electric
Appliances (Gaoming) Co., Ltd.”), which is a Sino-foreign joint venture invested and established by the Company
and Prosperity Lamps and Components Ltd, had obtained license for business corporation on 23 August 2005
through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District, Foshan with
document “MWJMY Zi [2005] No. 79”. The Company holds 70% equities of the said company; therefore the said
subsidiary was included into the scope of the consolidated financial statements since the date of foundation.
On 23 August 2016, the Company and Prosperity Lamps and Components Ltd signed the equity transfer
agreement. The Company purchased 30% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd.
held by Prosperity Lamps and Components Ltd. After the purchasing, the Company held 100% equity of Foshan
Chanchang Electric Appliances (Gaoming) Co., Ltd.
—Foshan Taimei Times Lamps Co., Ltd., which is a Sino-foreign joint venture invested and established by the
Company and Reback North America Investment Limited, had obtained license for Business Corporation on 5
December 2005 through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District,
Foshan with document “MWJMY Zi [2005] No. 97”. The Company holds 70% equities of the said company;
therefore the said subsidiary was included into the scope of the consolidated financial statements since the date of
foundation.
—FSL New Light Source Technology Co., Ltd. (its predecessor was “Foshan Lighting Lamps and Lanterns Co.,
Ltd.” and it changed its name to “FSL New Light Source Technology Co., Ltd.” on 17 December 2014), which is
invested and established by the Company together with Foshan Haozhiyuan Trading Co., Ltd., Shanghai Liangqi
36
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Electric Co., Ltd, Changzhou Sanfeng Electrical & Lighting Co., Ltd., Henan Xingchen Electrical & Lighting Co.,
Ltd., Foshan Hongbang Electrical & Lighting Co., Ltd., Hebei Jinfen Trading Co., Ltd., obtaining its license for
Bus iness Corporation on 27 September 2009. The Company holds 60% equities of this company. Therefore the
said subsidiary was included into the scope of the consolidated financial statements since the date of foundation.
On 25 September 2009 and 19 November 2010, the equity transfer agreement was signed between the Company
and the minority shareholders, in which the minority shareholders respectively transferred their equities of Foshan
Lighting Lamps and Lanterns Co., Ltd. to the Company. After transfer, the Company holds 100% equities of
Foshan Lighting Lamps and Lanterns Co., Ltd.
—FSL (Xinxiang) Lighting Co., Ltd. is a limited liability company which is invested and established by the
Company, obtaining its license for Business Corporation on 17 April 2009. The Company holds 100% equities of
the said company, therefore the said subsidiary was inc luded into the scope of the consolidated financial
statements since date of foundation. On 27 August 2013, the 3rd Meeting of the 7th Board of Directors reviewed
and approved to invest another RMB2 million (land in an industrial park in Xinxiang, Henan Province and
monetary funds) in FSL (Xinxiang) Lighting, increasing the registered capital of FSL (Xinxiang) Lighting to
RMB35,418,439.76.
—Foshan Lighting Lamps and Lanterns Co., Ltd. is a limited liability company invested and established by the
Company with the registered capital of RMB15 million, which had obtained its license for Business Corporation
on 8 May 2013. And the Company holds 100% equities of this company. Therefore the said subsidiary was
included into the scope of the consolidated financial statements since the date of foundation.
—In accordance with the equity transfer agreement signed between the Company and Prosperity Lamps and
Components Ltd. on 27 August 2008, Prosperity Lamps and Components Ltd. transferred 100% equities of
Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. (formerly known as “Prosperity (Nanjing)
Lighting Components Co., Ltd.”, and changed name to “Nanjing Fozhao Lighting Components Manufacturing
Co., Ltd.” on 15 November 2010.) to the Company. Therefore, Nanjing Fozhao Lighting Components
Manufacturing Co., Ltd. became a wholly-owned subsidiary of the Company. The said subsidiary was included
into the scope of the consolidated financial statements since the merger date.
—FSL Zhida Electric Technology Co., Ltd. (FSL Zhida) was incorporated by the Company, Foshan Zhibida
Enterprise Management Co., Ltd. and Dongguan Baida Semiconductor Material Co., Ltd. on a joint investment
basis. FSL Zhida obtained its business license on 21 October 2016. Holding a stake of 51% in it, the Company has
included FSL Zhida in its consolidated financial statements since the date of FSL Zhida’s incorporation.
37
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
—FSL Lighting GmbH is a Limited Liability company invested and set up in German with registered capital
Euro25,000. It got the business license on 30 November 2017 whose 100% stock equity is held by the Company,
and it is included into the scope of consolidated financial statement from the date of establishment.
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Prospects
(I) Development trends of the industry
1. Industry competition
In recent years, costs have kept decreasing and the effects of energy conservation and emission reduction have
been prominent due to the rapid development of the LED lighting technology. In addition, LED has been applied
in increasingly widespread scenarios with the continuous technical breakthroughs. As a result, LED lighting has
maintained a fast and stable development trend in recent years. Over years’ rapid development, although the
overall sales of the LED industry is still increasing, the growth speed has slowed down substantially compared to
the previous years. In the LED lower-stream application area, due to the relatively lower threshold, the problem of
excess structured capacity is quite obvious in the LED lighting industry, which has resulted in chaotic and vicious
competition in the market, mainly manifested as serious product homogenization, ambiguous product standards
and fierce price competition at the finished product end. At present, despite the increasing market concentration
on leading enterprises in LED lighting application, there is still a great number of companies in the industry, with
very fierce competition among different brands. At the same time, the ever-growing raw material prices and
transportation and human resource costs are putting the companies under great pressure for rapid development and
profitability. From a long-term view, as LED lighting industry enters the stage of integration and continuous
reshuffle, the companies with advantages in brand, channel, R&D and fund will use their advantaged position to
keep extending their industrial chain and enhancing their advantages amid the intense competition of industrial
upgrading. As a result, market resources will be further gathered in industrial leading companies. Meanwhile, the
market recession will drive the companies to accelerate technological innovation, proactively develop the new
blue ocean market, continuously work on such market segments as intelligent lighting and healthy lighting and
expand the market space.
2. Industrial Development Trend
38
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(1) Faster Industrial Transformation and Upgrading and Deeper Interdisciplinary Cooperation-based Development
With continuous advancement of market competition and industrial reshuffle, many SMEs lacking core
competitiveness are withdrawing from LED lighting market. As a result, industrial advantaged resources are
gathering in leading enterprises with faster M&As and a gradual shift from industrial M&A to interdisciplinary
integration. Enterprises are continuing to update their service models and transforming from product
manufacturers to product and service system integrated providers, with faster corporate transformation and
upgrading. At the same time, with faster development of digitization, intelligence and IoT, LED lighting is
undergoing the development trend of technology crossover ad industrial interdisciplinary integration. In particular
as intelligent lighting technology is maturing, LED lighting companies will conduct in-depth cooperation with the
companies in cloud computing, IoT, sensor and artificial intelligence in the field of intelligent household, bringing
huge new revolutions to LED lighting industry.
(2) The Rapid Development of Intelligent Lighting Leads the Trend of the Times
As an important part of intelligent household, intelligent lighting market will enter a stage of rapid development
with technological development, product maturity, manufacturers’ proactive promotion and the popularization of
intelligent lighting related concepts. According to OFweek statistics, the global intelligent lighting market size
was US$16.6 billion in 2018. With more prominent energy conservation problems, declining LED component
prices and the engagement of emerging advanced technologies, such as IoT and connection devices, driven by the
building of smart cities, the compound grow rate of the intelligent lighting market is expected to exceed 25% in
the next few years, reaching more than US$40 billion by 2022. Currently, global LED lighting giants are giving
more focus to intelligent lighting, leading to ever-growing development speed of intelligent lighting. Domestic
leading LED companies are stepping into the development and application of intelligent lighting one after another
through interdisciplinary cooperation with big platform enterprises, such as Alibaba, Tencent, Huawei and Xiaomi,
which continuously pushes the development of intelligent household technology and services, including
intelligent lighting. With faster speed and refinement in 5G, such ecosystems as “intelligent households”, “smart
cities” and “smart factories” will be implemented and applied on a large scale with continuous expansion and
improvement of the application scenarios of intelligent lighting. Intelligent lighting is expected to maintain a
momentum of stable high-speed development.
(3) Innovation Becomes the Key to Development as the Industry Enters the Maturity Stage
Over more than ten years of development, LED industry has undergone continuous changes in industrial market
structure, competition framework and market consumption demand. Till now, under the double factors of internal
39
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
and external environment, growth of the overall industrial market size is slowing down, as technologies on
different segments of the industrial chain are maturing with a trend of market concentration, marking that the
industry is gradually entering the maturity stage. According to OFweek statistics, the overall market size of
China’s LED industry reached RMB755.5 billion in 2018 (including upper, middle and lower streams),
representing a YOY increase of 15.1%, while that number from 2014 to 2017 was 35%, 26.2%, 22. 5% and 25.5%
respectively from 2014 to 2017. The growth in 2018 is evidently slower than the years before. By purely relying
on price and size, LED industrial companies will not be able to maintain their competitive edge or expand market
shares. Some competent companies will resort to innovation-driven means to promote new applications and new
products to seize market. Hence, LED industry will witness more emerging applications and technologies in the
future. The large-scale and commercial application of new technologies will bring LED industry to a new stage of
development.
(II) The Future Development Strategies of the Company
The Company will continue to stick to the road of professional development, center around the three key
businesses of “lighting, electrical products and vehicle lighting”, vigorously implement the strategic goal of
“Cutting-Edge Technologies, Internationally-Famous Brands and Large-Scale Production”, drive the shift from
light sources to lamps, from mid-end to mid- to high-end products, from single lighting products to lighting
system solutions and from following innovation through independent R&D to leading innovation focusing on
customer demands, and fully improve the operation quality and sustainable development capacity by increasing
the efficiency of human resources, fund and resources.
(III) Work Plan for 2020
1. R&D, Innovation and Technology Leading
By centering around the industrial trends represented by intelligent products, segmented markets and high-end
quality, the Company will increase spending on the R&D of new technologies, new products and new processes,
speed up the R&D process that drives the mid- to high-end development of products, refine the intelligent product
and segmented market product systems, accelerate the development of “LED+” series products and continue to
upgrade the intelligent control technology. It will reinforce the analysis of the industrial development trend, make
full use of the resources of colleges and research institutions, conduct research on cutting-edge technology,
establish industry-education-research project cooperation and sustain its product competitiveness and sustainable
development. It will further strengthen the staffing of the R&D team, reinforce the building of the R&D system,
improve the overall technological innovation level and lead the high-end process through technology.
40
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
2. Strengthening Delicacy Management of Channels and Expanding Brand Influence
(1) Refining Market Control for Win-Win Results with Customers
The Company will further refine market control over sales prices and regions, impose severe punishment on
vicious competition on end market, mobilize the enthusiasm of distributors and maintain the win-win results with
them.
(2) Opening Up Sales Linearly through Information Services
The Company will continue to promote the flat management of sales BUs and improve its information services to
strengthen connections with end customers and open up sales linearly.
(3) Promoting Sales in the Three Economically Developed Regions and Establishing a Multi-Hierarchical Sales
System
The Company will proactively plan and drive sales in the three economically developed regions, including the
Pearl River Delta, the Yangtze River Delta and the Beijing-Tianjin-Hebei Region, accelerate the planning for
high-end products and establish a multi-hierarchical sales system according to different regional characteristics.
(4) Developing Market Segments and Expanding Market Coverage
The Company will make active steps to develop market segments, look for competent project distributors,
vigorously develop large projects, focus on the fields of real estate, education, municipal works, rail transit,
intelligent firefighting and 5G smart road lamps, establish a product mix based on market demands and provide
users with highly effic ient and professional lighting product solutions.
(5) Continuing to Develop International Market and Enhance the Overseas Influence of FSL
The Company will continue to work on the maintenance and development of key accounts and enhance the
advantage of strategically cooperating with core customers. It will vigorously develop new customers and
continue to promote FSL in European market. It will promote online business in overseas market with an attempt
to combine online and offline business. The Company will use the “Belt and Road” opportunity to extend the
development measure of “going global”; it will strengthen brand promotion overseas to enhance the influence of
FSL.
3. Optimizing the HR Management System and Improving the Healthy Talent Competition Mechanism
The Company will establish two-way professional development channels, form the talent competition model of
“promoting competent employees and abandoning non-performers”, effectively carry out motivation and
promotion, continue to enhance the openness and rationality of the employment system and create a favorable
human resource environment with stable technology, loyalty and effectiveness.
41
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
The Company will work on the talent mechanism adjustment and the remuneration and incentive mechanism
reform, focus on introducing and developing technical, marketing and management talents and optimize the talent
structure. It will strengthen the cultivation and development of young talents with great potentials, include them in
the talent reserve and build a team of key talents to support corporate sustainable development. The Company will
establish and improve the performance appraisal system and the HR management system and build a fair and
incentive remuneration system to inspire and unleash the innovation impetus of talents at the maximum level and
ensure its ability to introduce, retain and motivate talents.
(IV) Potential Risks
1. Risk of Macro Economic Uncertainties
Domestic and foreign countries are facing a number of unstable factors affecting economic development,
including trade frictions, global public health emergencies, international financial market turbulence and intense
geopolitical situations, all of which may result in global economic slowdown. Developed economies, despite their
relatively higher level of economic aggregate, are still facing various problems. For emerging markets and
developing countries, under the forecast of slowing global economic development and industrial production, they
need more economic growth drivers. The economic uncertainties will affect market demands, with impact on the
Company’s performance ultimately.
2. Risk of Market Competition
Lighting industry is an industry with global competition. It is particularly so for domestic companies in the
lower-stream application area of lighting, which face the competition from home appliance and electronic
enterprises and LED upper- and middle-stream chip packaging enterprises that extend to the lighting application
field, in addition to the competition from international famous branded lighting companies. Furthermore, as the
imbalance in industrial supply and demand is rising, the Company will face a market environment with fiercer
competition. The Company may be exposed to the risk of losses in market share if it fails to maintain its
competitive edge in technology, service and price.
3. The risk of rising labor costs and raw material price fluctuations
Due to the influence of domestic labor supply and demand as well as employment policies, labor costs keep
increasing, especially in the Pearl River Delta region with more developed economy. In addition, raw materials of
the Company account for a high proportion of operation costs. As some raw material prices are associated with
uncontrollable factors such as global market conditions and national macroeconomic policies, there is a risk of
price fluctuation of raw materials.
42
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
4. The risk of inventory loss from falling price
As of the end of the reporting period, the inventory amount is high, and the inventory mainly includes raw
materials, semi-finished products and finished products. Due to the large number of product types and models, the
inventory amount of the Company is relatively high. Moreover, as the sales revenue of the Company incr eases
year by year, the raw materials and inventories that are stored to meet production and sales will increase
simultaneous ly. It will lead to a higher inventory maintained in the Company. In case that prices or demand
changes occur in the raw material or product sales market in the future, the Company may experience a risk of
inventory depreciation.
5. The risk of exchange rate fluctuations
The RMB exchange rate in China is based on market supply and demand, with reference to a basket of currencies
for regulation and a managed floating exchange rate system. Exchange rate fluctuations will happen with the
fluctuations of global economy, simmering tension of some regions and the monetary policies of various countries.
Export business accounts for 43.22% of the Company business, and the scale has been increasing year by year. If
the exchange rate fluctuates significantly, business performance of the Company will be affected.
6. The risk of bad debts on accounts receivable
As of the end of the reporting period, the accounts receivable is high. The main debit customers of the Company
are all long-term customers with good business reputations. Major adverse changes in the financial status of major
debtors may result in the risk of bad debts on accounts receivable.
X Communications with the Investment Community such as Researches, Inquiries and
Inte rvie ws
1. During the Reporting Period
√ Applicable □ Not applicable
Type of communication Index to main information
Date Way of communication
party communicated
Investor Relations-EasyIR-
21 February 2019 One-on-one meeting Institution
www.cninfo.com.cn
Investor Relations-EasyIR-
19 M arch 2019 One-on-one meeting Institution
www.cninfo.com.cn
Investor Relations-EasyIR-
5 June 2019 One-on-one meeting Institution
www.cninfo.com.cn
43
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Investor Relations-EasyIR-
3 September 2019 One-on-one meeting Institution
www.cninfo.com.cn
Times of visit 4
Number of visiting institutions 15
Number of visiting individuals 38
Number of other visitors 0
Tip-offs or leakages of substantial
supposedly-confidential information during None
communications
44
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated,
executed or revised in the Reporting Period:
√ Applicable □ Not applicable
According to the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of Listed
Companies (Zheng-Jian-Fa [2012] No. 37) and the Guangdong CSRC Notice on Further Implementing
Regulations Related to Dividend Distribution of Listed Companies (Guang-Dong-Zheng-Jian [2012] No. 91), in
order to further standardize the dividend mechanism, promote a scientific, sustained and stable dividend
mechanism and protect legal rights and interests of investors, in 2012, the Company convened a general meeting
to revise the dividend-related contents in its Articles of Association and specify the dividend conditions, the
lowest dividend ratio, the decision-making procedure, etc.. Meanwhile, it formulated the Management Rules for
Profit Distribution and the Return for Shareholder Plan for the Coming Three Years (2018-2020), specifying the
arrangements and forms of dividends, the cash dividend planning and the distribution intervals, which further
improved the decision-making and supervision procedures for dividend distribution. According to the Company’s
Articles of Association, the profit distributed in cash shall not be less than 30% of the distributable profit achieved
in the year.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and
Yes
played their due role
Non-controlling interests are able to fully express their opinion
Yes
and desire and their legal rights and interests are fully protected
In case of adjusting or chan ging the cash dividend policy, the
conditions and procedures involved are in compliance with Yes
applicable regulations and transparent
45
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years
(including the Reporting Period) are summarized as follows:
For 2017, based on the total 1,272,132,868 shares of the Company as at 31 December 2017, a cash dividend of
RMB3.29 (tax included and dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed to
the A-share and B-share holders for every 10 shares they hold, with the total distributed cash dividends reaching
RMB 418,531,713.57. Meanwhile, converting capital reserve into 1 share to all shareholders for every 10 shares.
For 2018, based on the total 1,399,346,154 shares of the Company as at 31 December 2018, a cash dividend of
RMB1.56 (tax included and dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed to
the A-share and B-share holders for every 10 shares they hold, with the total distributed cash dividends reaching
RMB 218,298,000.02.
For 2019, based on the total 1,399,346,154 shares of the Company as at 31 December 2019, a cash dividend of
RMB1.85 (tax included and dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed to
the A-share and B-share holders for every 10 shares they hold, with the total distributed cash dividends reaching
RMB258,879,038.49.
Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):
Unit: RM B
Net profit
attributable to
ordinary Total cash
Cash shareholders Cash dividends dividends
A as % of B in other forms C as % of B D as % of B
Year dividends (tax of the listed (such as share (including
(%) (%) (%)
inclusive) (A) company in repurchase) (C) those in other
consolidated forms) (D)
statements for
the year (B)
2019 258,879,038.49 301,182,906.24 85.95% 0.00 0.00% 258,879,038.49 85.95%
2018 218,298,000.02 377,615,133.62 57.81% 0.00 0.00% 218,298,000.02 57.81%
2017 418,531,713.57 740,308,725.30 56.53% 0.00 0.00% 418,531,713.57 56.53%
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for the ordinary
shareholders despite the facts that the Company has made profits in the Reporting Period and the profits of the
Company as the parent distributable to the ordinary shareholders are positive.
□ Applicable √ Not applicable
46
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
II Final Dividend Plan for the Reporting Pe riod
√Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RM B) (tax inclusive) 1.85
Additional shares to be converted from capital
0
reserve for every 10 shares (share)
Total shares as the basis for the profit distribution 1,399,346,154
proposal (share)
Cash dividends (RM B) (tax inclusive) 258,879,038.49
Cash dividends in other forms (such as share
0.00
repurchase) (RM B)
Total cash dividends (including those in other
258,879,038.49
forms) (RM B)
Distributable profit (RM B) 1,523,507,818.11
Total cash dividends (including those in other
100%
forms) as % of total profit distribution
Cash dividend policy
Where the Company is at a mature stage of development and has plans for considerable spending, in profit distribution, cash
dividends shall reach at least 40% in the total profit to be distributed.
Details about the proposal for profit distribution and converting capital reserve into share capital
As audited by Zhongzheng Tiantong Certified Public Accountants LLP, the after-tax net profits of RM B286,744,570.37 of the
Company as the parent for 2019, plus the beginning retained profits of RMB1,482,164,706.92, minus the distributed profits of
RM B218,298,000.02 for 2018 and the statutory surplus reserve of RM B 27,103,459.16 for 2019. The ending profits distributable to
shareholders of were RM B1,523,507,818.11 for 2019. The Board of Directors has proposed to allocate profits for 2019 as follows:
Based on the total 1,399,346,154 shares of the Company as at 31 December 2019, a cash dividend of RM B1.85 (tax included and
dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed to the A-share and B-share holders for every
10 shares they hold, with the total cash dividends to be distributed reaching RM B258,879,038.49. The retained profits of
RM B1,264,628,779.62 will be carried forward into the next year. The profit allocation preplan can be effective upon review and
approval of the Shareholders’ General M eeting of the Company.
III Fulfillme nt of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well
as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end
√Applicable □ Not applicable
Date of
Type of Term of
Commitment Promisor Details of commitment commitment Fulfillment
commitment commitment
making
47
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Electronics Group and its
acting-in-concert parties Shenzhen
Rising Investment and Hong Kong
Rising Investment have made a
About
commitment that they shall
Controlling avoidance of 3 December
eliminate the horizontal competition Six months Ongoing
shareholder horizontal 2019
between Foshan NationStar
competition
Optoelectronics Co., Ltd. and the
Company through business
integration or other ways or
arrangements before 4 June 2020.
Electronics Group and its
acting-in-concert parties Shenzhen
Rising Investment and Hong Kong
Rising Investment have made more
commitments as follows to avoid
horizontal competition with the
Company: 1. They shall conduct
supervision and restraint on the
production and operation activities
Commitments made in of themselves and their relevant
acquisition documents enterprises so that besides the
or shareholding enterprise above that is in horizontal
alteration documents competition with the Company for
now, if the products or business of
them or their relevant enterprises
About
become the same with or similar to
Controlling avoidance of 4 December Long-standi
those of the Company or its Ongoing
shareholder horizontal 2015 ng
subsidiaries in the future, they shall
competition
take the following measures: (1) If
the Company thinks necessary, they
and their relevant enterprises shall
reduce and wholly transfer their
relevant assets and business; and (2)
If the Company thinks necessary, it
is given the priority to acquire first,
by proper means, the relevant assets
and business of them and their
relevant enterprises. 2. All the
commitments made by them to
eliminate or avoid horizontal
competition with the Company are
also applicable to their directly or
indirectly controlled subsidiaries.
48
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
They are obliged to urge and make
sure that other subsidiaries execute
what’s prescribed in the relevant
document and faithfully honor all
the relevant commitments. 3. If they
or their directly or indirectly
controlled subsidiaries break the
aforesaid commitments and thus
cause a loss for the Company, they
shall compensate the Company on a
rational basis.
Electronics Group and its
acting-in-concert parties Shenzhen
Rising Investment and Hong Kong
Rising Investment have made a
commitment that during their direct
or indirect holding of the
Company’s shares, they shall 1.
strictly abide by the regulatory
documents of the CSRC and the
SZSE, the Company’s Articles of
Association, etc. and not harm the
interests of the Company or other
shareholders of the Company in
their production and operation
activities by taking advantage of
About reduction
their position as the controlling
Controlling and regulation 4 December Long-standi
shareholder and actual controller; 2. Ongoing
shareholder of related-party 2015 ng
make sure that they or their other
transactions
controlled subsidiaries, branch
offices, jointly-run or associated
companies (the “Relevant
Enterprises” for short) will try their
best to avoid or reduce related-party
transactions with the Company or
the Company’s subsidiaries; 3.
strictly follow the market principle
of justness, fairness and equal value
exchange for necessary and
unavoidable related-party
transactions between them and their
Relevant Enterprises and the
Company, and withdraw from
voting when a related-party
49
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
transaction with them or their
Relevant Enterprises is being voted
on at a general meeting or a board
meeting, and execute the relevant
approval procedure and information
disclosure duties pursuant to the
applicable laws, regulations and
regulatory documents. Where the
aforesaid commitments are broken
and a loss is thus caused for the
Company, its subsidiaries or the
Company’s other shareholders, they
shall be obliged to compensate.
In order to ensure the independence
of the Company in business,
personnel, asset, organization and
finance, Electronics Group and its
acting-in-concert parties Shenzhen
Rising Investment and Hong Kong
Rising Investment have made the
following commitments: 1. They
will ensure the independence of the
Company in business: (1) They
promise that the Company will have
the assets, personnel, qualifications
and capabilities for it to operate
independently as well as the ability
of independent, sustainable
Controlling About 4 December Long-standi
operation in the market. (2) They Ongoing
shareholder independence 2015 ng
promise not to intervene in the
Company’s business activities other
than the execution of their rights as
the Company’s shareholders. (3)
They promise that they and their
related parties will not be engaged
in business that is substantially in
competition with the Company’s
business. And (4) They promise that
they and their related parties will try
their best to reduce related-party
transactions between them and the
Company; for necessary and
unavoidable related-party
transactions, they promise to
50
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
operate fairly following the
market-oriented principle and at fair
prices, and execute the transaction
procedure and the duty of
information disclosure pursuant to
the applicable laws, regulations and
regulatory documents. 2. They will
ensure the independence of the
Company in personnel: (1) They
promise that the Company’s GM ,
deputy GMs, CFO, Company
Secretary and other senior
management personnel will work
only for and receive remuneration
from the Company, not holding any
positions in them or their other
controlled subsidiaries other than
director and supervisor. (2) They
promise the Company’s absolute
independence from their related
parties in labor, human resource and
salary management. And (3) They
promise to follow the legal
procedure in their recommendation
of directors, supervisors and senior
management personnel to the
Company and not to hire or dismiss
employees beyond the Company’s
Board of Directors and General
M eeting. 3. They will ensure the
independence and completeness of
the Company in asset: (1) They
promise that the Company will have
a production system, a auxiliary
production system and supporting
facilities for its operation; legally
have the ownership or use rights of
the land, plants, machines,
trademarks, patents and
non-patented technology in relation
to its production and operation; and
have independent systems for the
procurement of raw materials and
the sale of its products. (2) They
51
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
promise that the Company will have
independent and complete assets all
under the Company’s control and
independently owned and operated
by the Company. And (3) They
promise that they and their other
controlled subsidiaries will not
illegally occupy the Company’s
funds and assets in any way, or use
the Company’s assets to provide
guarantees for the debts of
themselves or their other controlled
subsidiaries with. 4. They will
ensure the independence of the
Company in organization: (1) They
promise that the Company has a
sound corporate governance
structure as a joint-stock company
with an independent and complete
organization structure. And (2) They
promise that the operational and
management organs within the
Company will independently
execute their functions according to
laws, regulations and the
Company’s Articles of Association.
And 5. They will ensure the
independence of the Company in
finance: (1) They promise that the
Company will have an independent
financial department and financial
accounting system with normative,
independent financial accounting
rules. (2) They promise that the
Company will have independent
bank accounts and not share bank
accounts with its related parties. (3)
They promise that the Company’s
financial personnel do not hold
concurrent positions in its related
parties. (4) They promise that the
Company will independently pay its
tax according to law. And (5) They
promise that the Company can make
52
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
financial decisions independently
and that they will not illegally
intervene in the Company’s use of
its funds.
The profits distributed by the
Other commitments Company in cash every year shall
About cash 27 M ay Long-standi
made to minority The Company not be less than 30% of the Ongoing
dividends 2009 ng
interests distributable profits it has achieved
in the year.
Executed on time or
Yes
not
Specific reasons for
failing to fulfill
N/A
commitments on time
and plans for next step
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still within the
forecast period, explain why the forecast has been reached for the Reporting Period.
□Applicable √ Not applicable
IV Occupation of the Company’s Capital by the Controlling Shareholder or Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
V Explanations Given by the Board of Directors, the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Pe riod
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Methods
√Applicable □ Not applicable
Changes in accounting policy Approval procedure Remark
In accordance with the Notice on Revising and Printing the Format
of 2019 General Enterprises Financial Statement (CK [2019] No. 6),
Approved by the 35th M eeting
the Notice on Revising and Printing the Format of Consolidated
of the 8th Board of Directors
Financial Statements (2019) (CK [2019] No. 16) issued by the
M inistry of Finance, the Company adjusted the formats of financial
53
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
statements accordingly.
The M inistry of Finance issued the revised Accounting Standards for
Business Enterprises No.22-Recognition and M easurement of See the Note 44 Changes in
Financial Instruments, Accounting Standards for Business M ain Accounting Policies and
Enterprises No. 23-Transfer of Financial Assets, Accounting Estimates in Part XII (V) of the
th Report for details
Standards for Business Enterprises No. 24-Hedging and Accounting Approved by the 30 M eeting
th
Standards for Business Enterprises No.37-Presentation of Financial of the 8 Board of Directors
Instruments in 2017. The Company starts to implement the above
standards since 1 January 2019 and adjusted the financial statements
accordingly on 1 January 2019 in accordance with the above
standards governing connection regulation.
The M inistry of Finance issued the revised Accounting Standards for
Business Enterprises No.7-Exchange of Non-monetary Assets on 9
M ay 2019 which is carried out since 10 June 2019. No retroactive
adjustment was needed for exchanges of non-monetary assets before
1 January 2019 and adjustment made in accordance with the revised
standards is required for the exchanges of non-monetary assets
th
occurring during the period from 1 January 2019 to the execution Approved by the 35 M eeting
date.
of the 8th Board of Directors
The M inistry of Finance issued the revised Accounting Standards for
Business Enterprises No.12-Debt Restructuring on 16 M ay 2019
which s carried out since 17 June 2019. No retroactive adjustment
was needed for the debt restructuring before 1 January 2019 and
adjustment made in accordance with the revised standards is
required for the debt restructuring occurring during the period of 1
January 2019 to the execution date.
VII Retrospective Restatements due to Correction of Material Accounting Errors in the
Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII YoY Changes to the Scope of the Consolidated Financial Statements
√Applicable □ Not applicable
th th
The Company held the 26 Meeting of the 8 Board of Directors on 7 September 2018, on which the Proposal on
De-Registration of the Wholly-Owned Subsidiary of Guangdong FSL Financing Lease Co., Ltd. (hereinafter
referred to as the “FSL Lease Company”) was reviewed and approved. The Company received the Notice on
Approval of De-Registration issued by the Foshan Market Supervision and Administration Bureau in 2019. The
de-registration procedure of FSL Lease Company has been completed. After the completion of de-registration,
FSL Lease Company will no longer be included into the consolidation scope of financial statements of the
Company.
54
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
IX Engage ment and Disengagement of Independent Auditor
Current independent auditor:
Name of the domestic independent auditor Zhongzheng Tiantong Certified Public Accountants LLP
The Company’s payment to the domestic independent auditor
130
(RM B’0,000)
How many consecutive years the domestic independent auditor
4
has provided audit service for the Company
Names of the certified public accountants from the domestic
Tong Quanyong, Luo Dongri
independent auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants
from the domestic independent auditor have provided audit 4
service for the Company
Name of the foreign independent auditor (if any) Naught
The Company’s payment to the foreign independent auditor
0
(RM B’0,000) (if any)
How many consecutive years the foreign independent auditor has
Naught
provided audit service for the Company (if any)
Names of the certified public accountants from the foreign
independent auditor writing signatures on the auditor’s report (if Naught
any)
How many consecutive years the certified public accountants
from the foreign independent auditor have provided audit service Naught
for the Company (if any)
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
√ Applicable □ Not applicable
In the Reporting Period, the Company engaged Beijing Zhongzheng Tiantong Certified Public Accountants LLP
as its internal control auditor with the total audit fees of RMB480,000.
X Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable √ Not applicable
XI Insolvency and Reorganization
□ Applicable √ Not applicable
55
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
No such cases in the Reporting Period.
XII Major Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Punishme nts and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV Credit Quality of the Company as well as Its Controlling Share holder and Actual
Controller
√Applicable □ Not applicable
In the Reporting Period, the Company and its controlling shareholder and actual controller were not involved in
any unsatisfied court judgments, large-amount overdue liabilities or the like.
XV Equity Incentive Plans, Employee Stock Owners hip Plans or Other Incentive Measures
for Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Major Related-Party Transactions
1. Continuing Related-Party Transactions
√Applicable □ Not applicable
Obtaina
As % of Appro ble
total ved market Index
Relation Transact Over
Total value of transa M ethod price for to
ship Type of Specific Pricing ion the
Related value all ction of same-ty Disclos disclose
with the transacti transacti principl price approve
party (RM B’0 same-typ line settleme pe ure date d
Compan on on e (RM B’0 d line or
,000) e (RM B nt transacti informa
y ,000) not
transactio ’0,000 ons tion
ns ) (RM B’0
,000)
56
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Purchasi
ng
Foshan products
Under
NationSta and Purchas
same 29 www.c
r receivin e of M arket 4,717.7 Remitta
actual 4,717.7 2.42% 21,000 Not 4,717.7 M arch ninfo.c
Optoelect g labor material price 9 nce
controll 9 9 2019 om.cn
ronics service s
er
Co., Ltd. from
related
party
Purchasi
Shareho ng
lder that products
Prosperity
holds and Purchas
Lamps & 29 www.c
over 5% receivin e of M arket Remitta
Compone 387.47 387.47 0.20% 1,200 Not 387.47 M arch ninfo.c
shares g labor material price nce
nts 2019 om.cn
of the service s
Limited
Compan from
y related
party
Purchasi
Guangdo ng
ng products
Under
Fenghua and Purchas
same 29 www.c
Advanced receivin e of M arket Remitta
actual 271.98 271.98 0.14% 1,000 Not 271.98 M arch ninfo.c
Technolo g labor material price nce
controll 2019 om.cn
gy service s
er
Holding from
Co., Ltd. related
party
Purchasi
ng
Enterpri
Hangzhou products
se
Times and Purchas
controll 29 www.c
Lighting receivin e of M arket Remitta
ed by 67.48 67.48 0.03% 100 Not 67.48 M arch ninfo.c
and g labor material price nce
related 2019 om.cn
Electrical service s
natural
Co., Ltd. from
person
related
party
Guangdo Under Purchasi Purchas 29 www.c
M arket Remitta
ng same ng e of 41.05 41.05 2.08% 100 Not 41.05 M arch ninfo.c
price nce
Zhongke actual products equipme 2019 om.cn
57
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Hongwei controll and nt
Semicond er receivin
uctor g labor
Equipmen service
t Co.,Ltd from
related
party
Purchasi
ng
Guangdo
products
ng Under
and Purchas
Electronic same 29 www.c
receivin e of M arket Remitta
Technolo actual 4.66 4.66 0.24% 300 Not 4.66 M arch ninfo.c
g labor equipme price nce
gy controll 2019 om.cn
service nt
Research er
from
Institute
related
party
Purchasi
ng
Shaoguan
products
Green Under
and
Resource same receivin
receivin M arket Remitta
Recycling actual g labor 9.33 9.33 7.96% 9.33 N/A
g labor price nce
Develop controll service
service
ment Co., er
from
Ltd.
related
party
Zhuhai
Doumen
District
Purchasi
Yongxing
ng
sheng
products
Environm Under
and
ental same receivin
receivin M arket Remitta
Industrial actual g labor 5.47 5.47 4.66% 5.47 N/A
g labor price nce
Wastes controll service
service
Recycling er
from
Compreh
related
ensive
party
Treatment
Co., Ltd.
Prosperity Shareho Selling Selling M arket 2,032.3 0.61% 4,200 Not Remitta 29 www.c
58
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Lamps & lder that products products price 2,032.3 8 nce 2,032.3 M arch ninfo.c
Compone holds and 8 8 2019 om.cn
nts over 5% providin
Limited shares g labor
of the service
Compan to
y related
party
Selling
Enterpri products
se and
Prosperity
controll providin 29 www.c
Electrical Selling M arket Remitta
ed by g labor 7.88 7.88 0.00% 200 Not 7.88 M arch ninfo.c
(China) products price nce
related service 2019 om.cn
Co., Ltd.
natural to
person related
party
Selling
Guangzho
products
u
Under and
Dianshen
same providin
g Selling M arket Remitta
actual g labor 0.08 0.08 0.00% 0.08 N/A
Property products price nce
controll service
M anagem
er to
ent Co.,
related
Ltd
party
7,545.5
Total -- -- -- 28,100 -- -- -- -- --
7
Large-amount sales return in detail N/A
In M arch 2019, the Company estimated the total value of its continuing transactions with
Give the actual situation in the related parties Foshan NationStar Optoelectronics Co., Ltd., Guangdong Fenghua Advanced
Reporting Period (if any) where an Technology Holding Co., Ltd., Prosperity Lamps & Components Limited, Prosperity
estimate had been made for the total Electrical (China) Co., Ltd., and Hangzhou Times Lighting and Electrical Co., Ltd.
value of continuing related-party Concerning the purchases from its related parties, the actual amount in 2019 so far was
transactions by type to occur in the RM B55.0523 million, accounting for23.23% of the estimate in 2019. As for the sales to its
Reporting Period related parties, the actual amount in 2019 so far was RM B20.4034 million, accounting for
46.37% of the estimate in 2019.
Reason for any significant difference
between the transaction price and the N/A
market reference price (if applicable)
59
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
√ Applicable □ Not applicable
1. On 26 June 2018, the Company held the 23 rd Meeting of the 8th Board of Directors, and the Proposal on Signing
the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined and approved at the
meeting. On the same day, the Company signed the Financial Services Agreement with Guangdong Ris ing
Finance Co., Ltd. (hereinafter referred to as “Rising Finance”), and Rising Finance would provide deposit and
settlement services for the Company for a term of one year. During the term of validity of the Agreement, the
daily deposit balance of the Company in Rising Finance Company shall not exceed RMB150 million. During the
Reporting Period, the daily deposit balance of the Company in Rising Finance Company was RMB149 million.
2. On 21 June 2019, the Company held the 31st Meeting of the 8th Board of Directors, and the Proposal on Signing
the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined and approved at the
meeting. On the same day, the Company signed the Financial Services Agreement with Guangdong Ris ing
Finance Co., Ltd. (hereinafter referred to as “Rising Finance”), and Rising Finance would provide deposit and
settlement services for the Company for a term of one year. During the term of validity of the Agreement, the
daily deposit balance of the Company in Rising Finance Company shall not exceed RMB150 million. During the
Reporting Period, the daily deposit balance of the Company in Rising Finance Company was RMB149 million.
Index to the current announcements about the said related-party transactions disclosed:
60
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Title of announcement Disclosure date Disclosure website
Announcement on Signing Financial Service
Agreement with Guangdong Rising Finance 27 June 2018 www.cninfo.com.cn
Co., Ltd.
Announcement on Signing Financial Service
Agreement with Guangdong Rising Finance 22 June 2019 www.cninfo.com.cn
Co., Ltd.
XVII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RM B'0,000
Specific type Capital resources Amount incurred Undue Balance Overdue amount
61
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Bank financial products Self-owned funds 46,500 46,500 0
Structural deposits Self-owned funds 60,000 43,000 0
Total 106,500 89,500 0
Particulars of cash entrusted for wealth management with single significant amount or low security, bad liquidity,
and no capital preservation
√ Applicable □ Not applicable
Unit: RM B'0,000
Index
to
transa
Annua Allow Prescr
Type Actual Receip Plan ction
lized Expect ance ibed
of Source Deter gain/lo t/paym for summ
Type Begin Use of yield ed for proced
Truste wealth Princi of Endin minati ss in ent of more ary
of ning princi rate yield impair ure
e manag pal princi g date on of Report such transa and
trustee date pal for (if ment execut
ement pal yield ing gain/lo ction other
refere any) (if ed or
product Period ss or not infor
nce any) not
matio
n (if
any)
China
Bohai
Repay
Bank Princip The
10 ment
Shenz al-prot Comp 9 www.
Februa of To be
hen ected any’s Augus Invest cninfo
Bank 5,000 ry princi 3.85% 97.57 75.95 receiv Yes Yes
Chego with own t 2019 ment .com.c
2020 pal ed
ngmia floatin idle n
with
o g yield funds
yield
sub-br
anch
China
Guang
fa Repay
Princip The
Bank, 15 ment
al-prot Comp 13 www.
Guang Octob of To be
ected any’s Januar Invest cninfo
zhou Bank 8,000 er princi 3.85% 75.95 64.98 receiv Yes Yes
with own y 2020 ment .com.c
develo 2019 pal ed
floatin idle n
pment with
g yield funds
area yield
sub-br
anch
62
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Repay
Huaxi Princip The
23 ment
a al-prot Comp 23 www.
Octob of To be
Bank, ected any’s Januar Invest cninfo
Bank 5,000 er princi 3.90% 49.15 36.86 receiv Yes Yes
Fosha with own y 2020 ment .com.c
2019 pal ed
n floatin idle n
with
branch g yield funds
yield
China
Repay
M insh Princip The
25 3 ment
eng al-prot Comp www.
Octob Februa of To be
Bank ected any’s Invest cninfo
Bank 5,000 er ry princi 4.00% 55.34 36.16 receiv Yes Yes
Fosha with own ment .com.c
2019 2020 pal ed
n floatin idle n
with
sub-br g yield funds
yield
anch
Repay
Huaxi Princip The
13 14 ment
a al-prot Comp www.
Nove Februa of To be
Bank, ected any’s Invest cninfo
Bank 3,000 mber ry princi 3.78% 28.89 15.22 receiv Yes Yes
Fosha with own ment .com.c
2019 2020 pal ed
n floatin idle n
with
branch g yield funds
yield
China
Guang
fa Repay
Princip The
Bank, 19 17 ment
al-prot Comp www.
Guang Nove Februa of To be
ected any’s Invest cninfo
zhou Bank 2,000 mber ry princi 3.85% 18.99 9.07 receiv Yes Yes
with own ment .com.c
develo 2019 2020 pal ed
floatin idle n
pment with
g yield funds
area yield
sub-br
anch
China
Guang
Repay
fa Princip The
26 24 ment
Bank, al-prot Comp www.
Nove Februa of To be
Guang ected any’s Invest cninfo
Bank 5,000 mber ry princi 3.85% 47.47 18.46 receiv Yes Yes
zhou with own ment .com.c
2019 2020 pal ed
develo floatin idle n
with
pment g yield funds
yield
area
sub-br
63
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
anch
PingA
n Repay
Princip The
Bank, 29 ment
al-prot Comp 2 www.
Fosha Nove of To be
ected any’s M arch Invest cninfo
n Bank 3,500 mber princi 3.80% 34.25 12.02 receiv Yes Yes
with own 2020 ment .com.c
Jiangw 2019 pal ed
floatin idle n
an with
g yield funds
sub-br yield
anch
China
Guang
Repay
fa Princip The
5 ment
Bank, al-prot Comp 4 www.
Dece of To be
Fosha ected any’s M arch Invest cninfo
Bank 4,000 mber princi 3.75% 36.99 10.68 receiv Yes Yes
n with own 2020 ment .com.c
2019 pal ed
Cheng floatin idle n
with
nan g yield funds
yield
sub-br
anch
Bank
Repay
of Princip The
12 ment
Hangz al-prot Comp 12 www.
Dece of To be
hou ected any’s M arch Invest cninfo
Bank 3,000 mber princi 3.85% 28.8 6.01 receiv Yes Yes
Shenz with own 2020 ment .com.c
2019 pal ed
hen floatin idle n
with
sub-br g yield funds
yield
anch
Bank
of
Repay
Shang Princip The
26 ment
hai al-prot Comp 26 www.
Dece of To be
Shenz ected any’s M arch Invest cninfo
Bank 3,000 mber princi 3.80% 28.42 1.56 receiv Yes Yes
hen with own 2020 ment .com.c
2019 pal ed
Qianh floatin idle n
with
ai g yield funds
yield
sub-br
anch
China Princip The Repay
29 06 www.
CITIC al-prot Comp ment To be
Septe Januar Invest cninfo
Bank, Bank ected 5,000 any’s of 3.90% 52.89 49.68 receiv Yes Yes
mber y 2020 ment .com.c
Busine with own princi ed
2019 n
ss floatin idle pal
64
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Depart g yield funds with
ment yield
of
Guang
zhou
branch
Industr
ial Repay
Princip The
Bank 01 ment
al-prot Comp 30 www.
Guang Nove of To be
ected any’s Januar Invest cninfo
zhou Bank 12,000 mber princi 3.77% 111.55 74.37 receiv Yes Yes
with own y 2020 ment .com.c
Baiyu 2019 pal ed
floatin idle n
n with
g yield funds
Sub-br yield
anch
China
Repay
Everbr Princip The
05 ment
ight al-prot Comp 05 www.
Dece of To be
Bank ected any’s M arch Invest cninfo
Bank 5,000 mber princi 3.85% 48.13 13.9 receiv Yes Yes
Guang with own 2020 ment .com.c
2019 pal ed
zhou floatin idle n
with
Sub-br g yield funds
yield
anch
China
Repay
M insh Princip The
11 ment
eng al-prot Comp 11 www.
Dece of To be
Bank ected any’s M arch Invest cninfo
Bank 16,000 mber princi 3.80% 151.58 34.98 receiv Yes Yes
Fosha with own 2020 ment .com.c
2019 pal ed
n floatin idle n
with
sub-br g yield funds
yield
anch
China
Repay
M insh Princip The
27 ment
eng al-prot Comp 27 www.
Dece of To be
Bank ected any’s M arch Invest cninfo
Bank 5,000 mber princi 3.70% 46.12 2.03 receiv Yes Yes
Fosha with own 2020 ment .com.c
2019 pal ed
n floatin idle n
with
sub-br g yield funds
yield
anch
Total 89,500 -- -- -- -- -- -- 912.09 461.93 -- -- -- --
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause
65
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
impairment of cash entrusted for wealth management
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVIII Corporate Social Responsibility (CSR)
1. Measures Taken to Fulfill CSR Commitment
We have always attached importance to the accomplishment of our social value. With “provide returns for
shareholders, provide a platform for employees, create value for customers and create prosperity for the society”
as our mission, we take on the social responsibilities to protect the interests of our creditors, employees, customers,
suppliers and community. We have been utilizing resources in a scientific, rational way, effectively protecting the
natural environment and safeguarding social safety so as to promote common, harmonious and sustainable
development of the Company and the society.
1. Protection of the rights and interests of our shareholders and creditors
We continuously improve our corporate governance structure, regulate our operation and enhance our
management on information disclosure and investor relations. We treat all our investors fairly and justly, ensure
their rights to know about, participate in and vote on the significant events of the Company, and safeguard the
legal rights and interests of all our shareholders, especially our minority shareholders.
2. Protection of the rights and interests of our employees
Considering employees the most valuable resource for our survival and development, we constantly improve our
employment system, improve the compensation packages for our employees and attach importance to talent
cultivation so as to provide opportunities and space for the sustainable development of our employees as well as
realize the common development of the employees and the Company. We also pay attention to the health of our
employees, attach importance to production safety and labor protection, and improve the working and living
conditions for our employees so as to formulate harmonious and stable labor relations.
3. Protection of the rights and interests of our customers and consumers
We have been upholding the “Customer First” principle in our provision of quality products and services to
customers. We operate honestly and disallow any unfair trade practice against commercial ethics, market rules and
the fair competition principle. We also improve our product quality and after-sales services and try to build a
win-win relationship with our customers.
4. Protection of the rights and interests of our suppliers
We respect and protect the legal rights and interests of our suppliers, carefully protect their secret and proprietary
66
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
information, encourage and push them to continuously improve the quality of their products and services through
creating an environment for open and fair competition among them so as to realize mutual benefits and mutual
development of the suppliers and the Company.
5. Environmental protection and sustainable development
As an active response to the government’s call for building an environment-friendly and resource-saving society,
we take on our responsibility of environmental protection and strictly abide by the government’s laws and
regulations in environmental protection. In the Reporting Period, we enhanced the R&D, promotion and sale of
environment-friendly and high-efficient products. We have passed the ISO14001 environmental management
system certification, passed the province’s voluntary clean production examination and won the title of “Clean
Production Enterprise in Guangdong Province”. At the same time, the identification of Green Factory of the
Company has been examined and approved by the Ministry of National Industry and Information Technology. The
Company becomes the demonstration unit of the second batch of the National Green Factory
6. Public relations and welfare
We attach importance to the realization of our social value and see creating a prosperous society as a commitment
that we should take on, trying to boost the local economy through our own development. We have been granted by
the local government the title of “Foshan Over-100-Million Tax Payer” for many years due to our contributions in
boosting the harmonious development of the Company and the community.
2. Measures Taken for Targeted Poverty Alleviation
The Company didn’t take any targeted measures to help people lift themselves out of poverty during the Reporting
Period, no subsequent plan temporarily too.
3. Issues Related to Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the
environmental protection authorities.
No
In strict accordance with the government’s requirements, the Company has been conscientiously carrying out
environment-related work, including establishing and improving various related systems, and continuously
increasing related expenditure. These environment improvement efforts have helped build a good image of the
Company in relation to environmental protection. Meanwhile, the Company’s environmental protecting facilities
have been running stably, with the discharge of waste gas and water in compliance with the relevant standards. No
pollution incidents have occurred.
In addition to the environmental protection authorities’ quarterly examination and supervision, the Company has
also entrusted, on a yearly basis, an independent institution to exam the Company’s waste gas treatment systems,
as well as waste water and noise discharges, so as to minimize environment risk. All the examinations and tests
have been documented and released to the employees on the environmental protection and safety bulletin boards
at every workshop. Employees at all levels, with a strong awareness of environment protection, have been
cooperating closely with each other to implement the policy of “Save Energy, Reduce Consumption, Lower
Pollution and Increase Efficiency”. In all, the Company’s environment risk is controllable and its environment
management keeps improving.
67
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
XIX Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XX Significant Events of Subsidiaries
□ Applicable √ Not applicable
68
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares as
Shares as
dividend
dividend
Percentag New converted Percentag
Shares converted Other Subtotal Shares
e (%) issues from e (%)
from
capital
profit
reserves
13,968,65 13,653,05
1. Restricted shares 1.00% -315,603 -315,603 0.98%
4 1
1.2 Shares held by
1 1 1 0.00%
state-owned legal persons
1.3 Shares held by other
5,041,022 0.36% -315,604 -315,604 4,725,418 0.34%
domestic investors
Among which: Shares held
4,237,081 0.30% -483,109 -483,109 3,753,972 0.27%
by domestic legal persons
Shares held
803,941 0.06% 167,505 167,505 971,446 0.07%
by domestic natural persons
1.4 Shares held by foreign
8,927,632 0.64% 8,927,632 0.64%
investors
Shares held by
8,927,632 0.64% 8,927,632 0.64%
foreign natural persons
1,385,377, 1,385,693
2. Unrestricted shares 99.00% 315,603 315,603 99.02%
500 ,103
2.1 RM B-denominated 1,072,239, 1,072,554
76.62% 315,603 315,603 76.65%
ordinary shares 049 ,652
2.2 Domestically listed 313,138,4 313,138,4
22.38% 22.38%
foreign shares 51 51
1,399,346, 1,399,346
3. Total shares 100.00% 100.00%
154 ,154
Reasons for share changes:
69
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
√ Applicable □ Not applicable
1. During the Reporting Period, some directors and supervisors, as well as all the senior management increased
their shareholdings in the Company, representing an increase of 167,505 restricted shares.
2. 483,108 restricted shares held by domestic legal persons became domestic natural persons’ holdings during the
Reporting Period and were freed from the lock-in period and changed into unrestricted shares.
To sum up the point 1 and point 2 above, 315,603 restricted shares were decreased during the Reporting Period.
Approval of share changes:
√ Applicable □ Not applicable
During the Reporting Period, 483,108 restricted shares were changed into unrestricted shares, which has been
agreed by Shenzhen Stock Exchange and Shenzhen Branch of China Securities Depositary and Clearing
Corporation Limited.
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchases:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the
Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,
respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Reason for
Beginning Increase in Released in Ending restricted
Shareholder restriction/release Date of release
restricted shares Reporting Period Reporting Period shares
from restriction
70
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Lock-up of senior
Liu Xingming 444,150 39,705 0 483,855 management’s Uncertain
shares
Lock-up of senior
Tang Qionglan 30,030 26,925 0 56,955 management’s Uncertain
shares
Lock-up of senior
Wei Bin 55,744 23,175 0 78,919 management’s Uncertain
shares
Lock-up of senior
Jiao Zhigang 56,549 11,250 0 67,799 management’s Uncertain
shares
Lock-up of senior
Chen Yu 34,699 14,850 0 49,549 management’s Uncertain
shares
Lock-up of senior
Zhang Yong 41,547 16,650 0 58,197 management’s Uncertain
shares
Lock-up of senior
Zhang Xuequan 38,289 16,500 0 54,789 management’s Uncertain
shares
Lock-up of senior
Xu Xiaoping 18,727 9,225 0 27,952 management’s Uncertain
shares
Lock-up of senior
Ye Zhenghong 48,946 9,225 0 58,171 management’s Uncertain
shares
Restricted shares
31 December
Li Keli 483,108 0 483,108 0 before the initial
2019
issue
Total 1,251,789 167,505 483,108 936,186 -- --
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
71
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controlle r
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Number of
preferred
Number of
Number of shareholders
ordinary
preferred with resumed
Number of shareholders at
shareholders with voting rights at
ordinary 85,911 the month-end 82,890 0 0
resumed voting the month-end
shareholders prior to the
rights (if any) (see prior to the
disclosure of this
note 8) disclosure of this
Report
Report (if any)
(see note 8)
5% or greater shareholders or top 10 shareholders
Increase/ Shares in pledge or frozen
Sharehol
Total shares decrease Restricted
Name of Nature of ding Unrestricted
held at the in the shares
shareholder shareholder percenta shares held Status Shares
period-end Reporting held
ge
Period
Hong Kong Wah
Foreign legal
Shing Holding 13.47% 188,496,430 188,496,430 In pledge 92,363,251
person
Company Limited
Prosperity Lamps
Foreign legal
& Components 10.50% 146,934,857 146,934,857
person
Limited
Shenzhen Rising
Investment State-owned
5.12% 71,696,136 71,696,136 In pledge 35,800,000
Development Co., legal person
Ltd.
Guangdong
Electronics
State-owned
Information 4.74% 66,393,501 66,393,501 In pledge 32,532,815
legal person
Industry Group
Ltd.
72
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Central Huijin
State-owned
Asset M anagement 2.42% 33,878,900 33,878,900
legal person
Co., Ltd.
Essence
International Foreign legal
2.22% 31,008,913 1,676,727 31,008,913
Securities (Hong person
Kong) Co., Ltd.
Hong Kong Rising
Investment Foreign legal
1.82% 25,482,252 25,482,252
Development Co., person
Ltd.
DBS Vickers(Hong
Foreign legal
Kong) Ltd A/C 1.57% 22,002,137 -100,000 22,002,137
person
Clients
China M erchants
Foreign legal
Securities (Hong 0.87% 12,160,236 -173,600 12,160,236
person
Kong) Co., Ltd
Foreign natural
Zhuang Jianyi 0.85% 11,903,509 8,927,632 2,975,877
person
Strategic investors or general
corporations becoming top -ten
Naught
shareholders due to placing of new
shares (if any) (see Note 3)
Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen
Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry
Group Ltd. and Hong Kong Rising Investment Development Co., Ltd. are acting-in-concert
Related or acting-in-concert parties
parties; and Prosperity Lamps & Components Limited and Zhuang Jianyi are
among the shareholders above
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 M easures for the Acquisition of Listed Companies.
Top 10 unrestricted shareholders
Type of shares
Name of shareholder Unrestricted shares at the Period-end
Type Shares
Hong Kong Wah Shing Holding RM B-denominate
188,496,430 188,496,430
Company Limited d ordinary stock
Prosperity Lamps & Components RM B-denominate
146,934,857 146,934,857
Limited d ordinary stock
Shenzhen Rising Investment RM B-denominate
71,696,136 71,696,136
Development Co., Ltd. d ordinary stock
73
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Guangdong Electronics Information RM B-denominate
66,393,501 66,393,501
Industry Group Ltd. d ordinary stock
Central Huijin Asset M anagement RM B-denominate
33,878,900 33,878,900
Co., Ltd. d ordinary stock
Domestically
Essence International Securities
31,008,913 listed foreign 31,008,913
(Hong Kong) Co., Ltd.
stock
Domestically
Hong Kong Rising Investment
25,482,252 listed foreign 25,482,252
Development Co., Ltd.
stock
Domestically
DBS Vickers (Hong Kong) Ltd A/C
22,002,137 listed foreign 22,002,137
Clients
stock
Domestically
China M erchants Securities (Hong
12,160,236 listed foreign 12,160,236
Kong) Co., Ltd
stock
RM B-denominate
Zhao Xiyi 7,868,765 7,868,765
d ordinary stock
Related or acting-in-concert parties Among the top 10 unrestricted ordinary shareholders, Hong Kong Wah Shing Holding
among the top ten unrestricted Company Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong
public shareholders and between the Electronics Information Industry Group Ltd. and Hong Kong Rising Investment Development
top ten unrestricted public Co., Ltd. are acting-in-concert parties; Apart from that, it is unknown whether there is among
shareholders and the top ten the top 10 shareholders any other related parties or acting-in-concert parties as defined in the
shareholders Administrative M easures for the Acquisition of Listed Companies.
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary
shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: legal person
Legal
Name of controlling Unified social credit
representative/person Date of establishment Principal activity
shareholder code
in charge
Guangdong Electronics Development, production and
Information Industry He Yong 19 October 2000 91440000725458764N sale of electronics, IT products
Group Ltd. and electrical appliances,
74
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
operation of electronic
information networks and
computers, electronic computer
technology service, and
equipment and venue rental
service; sale of electronic
computers and fittings, electronic
components, electron devices,
and electrical machinery and
equipment; wholesale of coal;
energy performance contracting
service, development and
consulting service of
energy-saving technology, and
manufacture and installation of
energy-saving equipment;
parking lot operation (188
Yueken Road, Tianhe District,
Guangzhou, Guangdong
Province, P.R.China); import and
export of goods; and training of
professional and technical
personnel.
Equity and venture capital
investment (approval shall be
obtained for each specific
investment project); industrial
investment (approval shall be
obtained for each specific
investment project); trustee
service for asset management
(not including securities,
Shenzhen Rising
insurance, funds, financial
Investment Wu Xiaohui 27 August 2003 91440300754255560K
service, human resources
Development Co., Ltd.
consulting service and other
restricted business); and
investment information
consulting service, economic
information consulting service,
investment management
planning, corporate identity
design (excluding restricted
business).
75
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Guangdong Rising
Investment and asset
Finance Holding Co., Liu Zumian 14 November 2014 91440400315213166P
management
Ltd.
Hong Kong Rising
Investment and asset
Investment Deng Qian 11 July 2001 764105
management
Development Limited
At the end of the Reporting Period,
1. Guangdong Electronics Information Industry Group Ltd. held 79,753,050 shares in Foshan NationStar
Optoelectronics Co., Ltd., representing 12.90% of the total shares of Foshan NationStar Optoelectronics
Co., Ltd.
2. Shenzhen Rising Investment Development Co., Ltd. held shares in domestic and overseas listed
companies as follows:
(1) held 139,715,902 shares in Zhongjin Lingnan (000060), accounting for 3.91% of total shares of
Zhongjin Lingnan
Shareholdings of (2) held 4,192,734 shares in Fenghua Advanced Technology (000636), accounting for 0.47% of total
controlling shareholder shares of Fenghua Advanced Technology
in other listed (3) held 1,302,027 shares in Dongjiang Environmental (002672), accounting for 0.15% of total shares of
companies at home or Dongjiang Environmental
abroad in reporting (4) held 1,303,363 shares in Central China Securities (601375), accounting for 0.03% of total shares of
period Central China Securities
3. Guangdong Rising Finance Holding Co., Ltd. held shares in domestic and overseas listed companies as
follows:
(1) held 21,733,582 shares in Dongjiang Environmental (002672), accounting for 2.47% of total shares of
Dongjiang Environmental
(2) held 7,551,648 shares in Zhongjin Lingnan (000060), accounting for 0.21% of total shares of Zhongjin
Lingnan
(3) held 5,791,924 shares in NationStar Optoelectronics (002449), accounting for 0.94% of total shares of
NationStar Optoelectronics
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets management
Type of the actual controller: legal person
Legal
Date of Unified social credit
Name of actual controller representative/pers Principal activity
establishment code
on in charge
76
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Asset management and operation,
equity management and operation,
investment operation, and management
and re-investment of investment
earnings; other business authorized by
the state-owned assets administration
of the Guangdong Province; contractor
service for overseas projects and
domestic projects calling for
Guangdong Rising Assets 23 December international bids, contractor service
Liu Weidong 91440000719283849E
M anagement Co., Ltd. 1999 for survey, consulting, design and
supervision of the aforesaid overseas
projects, export of equipment and
materials for the aforesaid overseas
projects, and dispatch of contract
workers for the aforesaid overseas
projects; property rental service; and
exploitation, sale and deep processing
of rare earth (operated by the branches
with the relevant licenses).
At the end of the Reporting Period, Guangdong Rising Assets M anagement Co., Ltd. directly or
indirectly held the following stakes in other listed companies at home or abroad:
1. a 42.87% stake of 129,372,517 shares in Rising Nonferrous (stock code: 600259);
Shareholdings of the actual 2. a 32.49% stake of 1,159,811,571 shares in Zhongjin Lingnan Nonfemet (stock code: 000060);
controller in other listed
3. a 20.49% stake of 183,495,085 shares in Fenghua Advanced (stock code: 000636);
companies at home or
4. a 21.32% stake of 131,804,995 shares in NationStar Optoelectronics (stock code: 002449);
abroad in this Reporting
5. a 21.84% stake of 186,526,928 A shares and H shares in Dongjiang Environment (stock code:
Period
002672);
6. a 6.94% stake of 5,614,082,653 shares in China Telecom (stock code: 00728. HK).
7. a 0.23% stake of 9,024,363 shares in Central China Securities (stock code: 601375).
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company:
77
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
State-owned Assets Supervision and Administration Commission of
the People’s Government of Guangdong Province
100%
Guangdong Rising Assets M anagement Co., Ltd.
100% 100% 100%
Guangdong Rising Finance Holding Hong Kong Rising Investment Guangdong Electronics
Co., Ltd. Development Limited Information Industry Group Ltd.
0.541% 100% 4.745% 100%
%
Shenzhen Rising Investment Hong Kong Wah Shing Holding
Development Co., Ltd. 1.821% Company Limited
5.124% 13.470%
Foshan Electrical and Lighting Co., Ltd.
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset
management.
□ Applicable √ Not applicable
4. Other 10% or Greater Corporate Shareholders
√ Applicable □ Not applicable
Legal representative / Date of
Name of corporate shareholder Registered capital Business scope
company principal establishment
Import and export of
electronics, electric lighting
products, lamps, electric
Prosperity Lamps & Components
Zhuang Jianyi 28 April 1978 HKD2 million lighting equipment, etc., and
Limited
design, installation and
after-sales service of
lighting solutions
78
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
79
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
80
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part VIII Convertible Corporate Bonds
□ Applicable √ Not applicable
No convertible corporate bonds in the Reporting Period.
81
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part IX Directors, Supervisors, Senior Management and Staff
I Change in Shareholdings of Directors, Supervisors and Senior Management
Increase Decrease
Other
Incumb Beginning in the in the Ending
Office Start of End of increase/d
Name ent/For Gender Age shareholding Reporting Reporting shareholding
title tenure tenure ecrease
mer (share) Period Period (share)
(share)
(share) (share)
25 25
Board Incumb
He Yong M ale 59 December December 0 0 0 0 0
Chairman ent
2015 2018
Vice 25 25
Zhuang Incumb
Board M ale 68 December December 11,903,509 0 0 0 11,903,509
Jianyi ent
Chairman 2015 2018
25 25
Incumb
Cheng Ke Director M ale 45 December December 11,550 0 0 0 11,550
ent
2015 2018
25 25
Incumb
Qi Siyin Director M ale 39 December December 0 0 0 0 0
ent
2015 2018
25 25
Huang Incumb
Director M ale 50 December December 0 0 0 0 0
Zhiyong ent
2015 2018
25 25
Liu Director Incumb
M ale 57 December December 592,200 52,940 0 0 645,140
Xingming & GM ent
2015 2018
Independ 25 25
Zhang Incumb
ent Female 70 December December 0 0 0 0 0
Nan ent
Director 2015 2018
Independ 25 25
Incumb
Lu Rui ent M ale 44 December December 0 0 0 0 0
ent
Director 2015 2018
Independ 25 25
Incumb
Lyu Wei ent M ale 55 December December 0 0 0 0 0
ent
Director 2015 2018
82
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Chairman
of the
Li Superviso Incumb 25 April 30 June
M ale 56 0 0 0 0 0
Huashan ry ent 2019 2020
Committe
e
25 25
Zhuang Superviso Incumb
M ale 34 December December 0 0 0 0 0
Junjie r ent
2015 2018
Ye 25 25
Superviso Incumb
Zhenghon M ale 46 December December 65,261 12,300 0 0 77,561
r ent
g 2015 2018
20 25
Superviso Incumb
Lin Qing M ale 50 September December 22,583 0 0 0 22,583
r ent
2016 2018
20 25
Liang Superviso Incumb
Female 45 September December 0 0 0 0 0
Yueyi r ent
2016 2018
25
Zhang Incumb 23 August
Vice GM M ale 42 December 51,052 22,000 0 0 73,052
Xuequan ent 2016
2018
25
Tang Incumb 26 January
CFO Female 49 December 40,040 35,900 0 0 75,940
Qionglan ent 2016
2018
25
Incumb 26 January
Wei Bin Vice GM M ale 50 December 74,326 30,900 0 0 105,226
ent 2016
2018
25
Jiao Incumb 26 January
Vice GM M ale 47 December 75,399 15,000 0 0 90,399
Zhigang ent 2016
2018
25
Incumb 26 January
Chen Yu Vice GM M ale 47 December 46,266 19,800 0 0 66,066
ent 2016
2018
25
Zhang Incumb 23 August
Vice GM M ale 45 December 55,396 22,200 0 0 77,596
Yong ent 2016
2018
25
Xu Incumb 26 January
Vice GM M ale 49 December 24,970 12,300 0 0 37,270
Xiaoping ent 2016
2018
83
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Chairman
of the
Superviso 24 July 25 April
Li Jinkun Former M ale 55 0 0 0 0 0
ry 2018 2019
Committe
e
Secretary
26 January 29 June
Lin Yihui of the Former M ale 65 53,790 0 0 0 53,790
2016 2019
Board
Total -- -- -- -- -- -- 13,016,342 223,340 0 0 13,239,682
Note: The management used an equity incentive fund to purchase shares of the Company,s stock at
the end of the year.
II Change of Directors, Supervisors and Senior Management
√Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Chairman of the
Li Jinkun Supervisory Left 11 April 2019 Job turnover
Committee
Secretary of the
Lin Yihui Dismiss 29 June 2019 Resign for personal reason
Board
III Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors,
supervisors and senior management:
1. Working Experience of the Directors
Mr. He Yong: Han nationality, born in September 1960, a member of the Communist Party of China. He
graduated from Open University of Hong Kong with a MBA. He once acted as the Vice-minister of the Operating
and Management Department of Guangdong Ris ing Assets Management Co., Ltd., the Chairman of the Reform
and Stableness Office, the Minister of the Operating and Management Department, the Supervisor of Shenzhen
Zhongjin Lingnan Nonfemet Co., Ltd., the GM of Guangdong Electronics Information Industry Group Ltd. and
Deputy Secretary. Now he serves as the Chairman of the Board of Directors of Guangdong Electronics
Information Industry Group Ltd., the Party Secretary and the Chairman of Foshan NationStar Optoelectronics Co.,
Ltd., the Chairman of Foshan Sigma Venture Capital Co., Ltd. And he has been the Board Chairman of the
Company since December 2015.
Mr. Zhuang Jianyi: born in 1951, with a bachelor’s degree and MBA. He now acts as the Chairman of Hong
Kong Youchang Lighting Equipment, and has been engaged in the electric light source equipment production as
well as the trading business for about 40 years. From 1995 to 2010, he acted as the Directors, the Vice Chairman
and the Chairman of the Company. And he was elected as a vice chairman of the 8 th Board of the Company in
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
December 2015.
Mr. Cheng Ke: Han nationality, born in February 1974, a member of the Communist Party of China and an
auditor with the bachelor’s degree. He once acted as the Attendant of the Audit Divis ion of Guangzhou Dongshan
Corporate Authority of Guangzhou Military Logistics Department, the Assistant Supervisor, the Supervisor, the
Senior Executive, the Vice-Minister and the Minister of the Financing Plan Department of Guangdong Rising
Assets Management Co., Ltd., Vice GM of Hubei Ashennan Expressway Development Co., Ltd., Hubei Gdrising
Han-E Expressway Co., Ltd. and Hubei Han-Cai Expressway Co., Ltd. and now acts as the Vice-Minister of the
Audit Department of Guangdong Rising Assets Management Co., Ltd. and the Director of Guangdong Rising
Finance Co., Ltd, Foshan NationStar Optoelectronics Co., Ltd, and Hong Kong Rising Investment Development
Limited. And he was elected as a director of the 8 th Board of the Company in December 2015.
Mr. Qi Siyin: Chinese nationality, with no right of permanent residence abroad. Born in May 1980, a member of
the Communist Party of China, postgraduate degree, dual master’s degrees. He ever worked in Guangdong
Provincial Expressway Development Co., Ltd., former investor relations management clerk, investor relations
management director, information disclosure director and securities affairs representative of the Securities
Department. He has been working in Guangdong Rising Assets Management Co., Ltd. as Senior Director of
Capital Operation Department, Deputy Secretary of the Communist Youth League, Deputy Director and Director;
as Director and Deputy General Manager of Hong Kong Rising Investment Co., Ltd since 2007. Currently, he
works as the Office Director of Board of Directors in Guangdong Rising Assets Management Co., Ltd, the
director of Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd, Guangdong Fenghua Advanced Technology Holding
Co., Ltd, Foshan NationStar Optoelectronics Co., Ltd, Guangdong Nanyue Bank Co., Ltd, and E Fund
Management Co., Ltd. In October 2016, he elected as the director of the 8th Board of Directors of the Company.
Mr. Huang Zhiyong: Han nationality, born in August 1969, a member of the Communist Party of China and an
engineer. He graduated from Xidian University with a bachelor’s degree of Electronic Devices Structures. He
once acted as the Vice GM of Shenzhen Primatronix (Nanho) Electronics Ltd., the Minister of Enterprise
Development Department and the GM Assistant of Guangdong Electronics Information Industry Group Ltd. He
now acts as the Vice GM and a member of Communist Party of China of Guangdong Electronics Information
Industry Group Ltd. and the Chairman and Party branch secretary of Guangdong HuaSheng data solid-state
storage Co., Ltd. And he was elected as a director of the 8th Board of the Company in December 2015.
Mr. Liu Xingming: Born in June 1962, a member of the Communist Party of China and an engineer with a
bachelor’s degree. He joined the Company in 1983, and acted as Vice GM from 1997 to 2005; acted as GM of the
Company from December 2005 to November 2008; acted as Vice GM of the Company in December 2008; elected
as the Director of the Company from 1995 to Dec. 2015; acted as Vice Director of the Board from April 2011 to
December 2015; from April 2012 up to now, he acted as the GM and Vice Director of the Board; after 1995, he
was elected as the Director of the Company; and he was elected as a director of the Company in April 2016. In
July 2015, he was elected as the Party Secretary of the Company.
Ms. Zhang Nan (Independent Director): Han nationality, born in February 1949, a member of the Communist
Party of China and a senior economist. She graduated from Chinese Academy of Social Sciences with a master
degree of economic law. She once acted as the Vice-Minister of Beijing Electronic Instruments Industry System
Office, Deputy Director of Audit and Regulations Bureau, the Director, the Deputy Director and the Chief of the
research laboratory of SETC, the Regulations Bureau and the Economic cadre training center as well as the
bureau-level Supervisor of the large enterprises of the Board of Supervisors of the State-owned Assets Supervision
and Administration Commission and retired in March 2009. She used to be an Independent Director of CSCL and
Guandgong Rising Nonferrous Metals Co., Ltd. And she was elected as an independent director of the 8 th Board of
the Company in December 2015.
85
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Mr. Lu Rui (Independent Director): Chinese Han Nationality, no permanent residency abroad, born in January
1975. He is now a professor of Finance, doctorial tutor, the Head of the Accounting and Capital Operation
Research Center of the Lingnan College of Sun Yat-Sen University. He graduated in 2003 from the Management
Accounting of Sun Yat-Sen University with a master’s degree of Management; and in 2006, he graduated from the
Management Accounting of Sun Yat-Sen University with a doctor’s degree of Management. He acted as the
Teaching Assistant and the Lecturer of the Financial Accounting Department of Guangzhou Finance & Trade
Management Institute during the period from July 1996 to August 2003; the Lecturer and associate professor of
the Finance and Taxation Department of Lingnan College of Sun Yat-Sen University during the period from July
2006 to October 2012; and the associate professor of Finance of the Lingnan College of Sun Yat-Sen University
during the period from November 2012 to June 2016. And he has been a profession of Finance and doctorial tutor
at the Lingnan College of Sun Yat-Sen University since July 2016. His other academic and social posts mainly
include: the member of Expert Committee of China Association for Public Companies, a national leading
accounting professional recognized by the Ministry of Finance, the member of All-China Financial Youth
Federation, the member of the senior member of Accounting Society of China, the member of Accounting Society
of America; the Independent Director of Guangzhou Goaland Energy Conservation Tech Co., Ltd., Shenzhen
Kingsion Technology Co, Ltd. Huabang Construction Investment Group and Bank of Guangzhou; the Director of
Guangzhou Zijing Education Co., Ltd. And he was elected as an independent director of the 8 th Board of the
Company in December 2015.
Mr. Lyu Wei (Independent Director): Chinese Nationality, born in December 1964. He is a doctoral candidate in
economic administration at Fudan University and a doctor’s degree holder in economics. He was a teaching
assistant, a lecturer, a departmental chief, an associate profession and then a professor at Fudan University during
the period from August 1989 to March 2003. And he has been working in Shanghai Jiao Tong Univers ity since
April 2003. Now he is a professor and doctoral tutor of the Department of Business Administration of the Antai
Economics and Management School of Shanghai Jiao Tong University, the executive director of the Academic
Council of China Marketing Association, the editorial board member of Korean Journal of Marketing, and an
independent director of Shanghai Shine-Link International Logistics Co., Ltd., Luolai Lifestyle Technology
Co.,Ltd., Shandong Wohua Pharmaceutical Co.,Ltd., Shanghai Lujiazui Finance & Trade Zone Development Co.,
Ltd. and China Yongda Automobile Services Co., Ltd. And he was elected as an independent director of the 8th
Board of the Company in December 2015.
2. Working Experience of the Supervisors
Mr. Li Huashan: Male, a member of the Communist Party of China, Chinese Han Nationality, born in September
1963, an engineer graduated from Air Force Telecommunications Engineering Academy with a bachelor degree.
He once acted as the wireless engineer and the director in the Communication Repair Institute of Air F orce Unit
86336, the staff officer of Air Command Communication Agency of Guangzhou Military Area, assistant to office
director, head of Administration and Security Division, vice minister of Administration and Security Department,
and vice minister of Operation Department in Guangdong Rising Assets Management Co., Ltd., director, deputy
Party secretary, secretary of Committee for Discipline Inspection in Guangdong Zhongren Group Co., Ltd.,
director, deputy Party secretary, secretary of Committee for Discipline Inspection, vice GM in Guangdong Ris ing
Investment Group Co., Ltd., Party secretary, deputy chairman of the board in Guangdong Huihua Group Co., Ltd.,
director, deputy Party secretary, secretary of Committee for Discipline Inspection, chairman of the labor union in
Guangdong Rising Real Estate Group Co., Ltd. He was elected as the member of the Party Committee, secretary
of Committee for Discipline Inspection of the Company in December of 2018 and the chairman of the
Supervisory Committee of the Company in April of 2019.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Mr. Zhuang Junjie: Born in September 1985, a Hong Kong permanent resident. He graduated with a bachelor’s
degree and once acted as the Consultant Manager of Accenture Software and now acts as the Director of Hong
Kong Youchang Lighting Equipment Co., Ltd. And he was elected as a supervisor of the 8th Supervisory Board of
the Company in December 2015.
Mr. Ye Zhenghong: Born in June 1973, a member of the Communist Party of China with a college degree. He
joined the Company from July 1995; worked in the Machine Repair Shop from July 1995 to June 1997; worked in
the Mechanical Power Department from July 1997 to January 2001; acted as Equipment Management Director in
T8 Fluorescent Lamp Factory from February 2001 to January 2005; acted as Director of Machine Repair
Workshop from May 2005 to January 2007; acted as Chief Officer of Machinery Dynamic Department from May
2006 to December 2007; and acted as factory director of T8 Fluorescent Lamp Factory from January 2008 to
February 2016; and acted as Chief Officer of Production Department from March 2016 to March 2019; and acted
as the director of E-Commerce Business Department and vice GM of FSL Zhida Electric Technology Co., Ltd.
from April 2019 to February 2020; and acted as the director of E-Commerce Business Department and GM of
FSL Zhida Electric Technology Co., Ltd. since March 2020 ; the Chairman of the 5th Supervisory Committee and
th th th
the Employee Supervisor of the 6 , 7 and 8 Supervisory Committee.
Mr. Lin Qing: born in September 1969, member of the Communist Party of China, undergraduate degree, electric
light source engineer; has been working in the company since August 1991; worked as mercury lamp workshop
technician and workshop director from June 1996 to February 2002; as the w orkshop director and factory director
of the fluorescent lamp factory from March 2002 to September 2009; as the director of Technology Department
since October 2009; in July 2015, elected as a discipline committee member of the company’s CPC committee.
And he was elected as a Employee Supervisor of the Company in September 2016.
Ms. Liang Yueyi: born in June 1974, member of the Communist Party of China, college degree; has been
working in the company since August 1995; worked as the Secretary to the President from August 1995 to
September 2002; as clerk of the Import & Export Trade Department from October 2002 to December 2006; as the
Deputy Manager of the Import & Export Trade Department since January 2007; a member of the company’s CPC
committee since July 2015; as a female member of the company’s labor union since April 2016. And she was
elected as a Employee Supervisor of the Company in September 2016..
3. Working experience of the Senior Management Staff
Mr. Liu Xingming: Born in Jun. 1962, a member of the Communist Party of China and an engineer with a
bachelor’s degree. He joined the Company in 1983, and acted as Vice GM from 1997 to 2005; acted as GM of the
Company from December 2005 to November 2008; acted as Vice GM of the Company in Dec ember 2008; elected
as the Director of the Company from 1995 to December 2015; acted as Vice Chairman of the Board from April
2011 to December 2015; from April 2012 up to now, he acted as the GM of the Company; and he was elected as a
director of the Company in April 2016. In July 2015, he was elected as the Party Secretary of the Company.
Mr. Zhang Xuequan: Born in December 1977, a member of the Communist Party of China with a bachelor’s
degree. He joined the Company in October 1996. He worked in the former Iodine-tungsten Lamp Workshop from
October to December 1996; worked in the Technology Department and then the Quality Control Department from
January 1997 to August 2002; acted as the Workshop Manager of Lamp Workshop from September 2002 to May
2008; acted as the Department Director of the Business Management Department of the Company from June 2008
to August 2016. He has concurrently acted as the Office Director since February 2016. He has been the Party
Branch Secretary for the Administrative Office of the Company from July 2010 to June 2017, and a member of
the party committee of the Company since July 2015. He was a supervisor of the Company from May 2013 to
August 2016 and has been a vice GM of the Company since August 2016; Act as the Deputy General Manager of
87
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
the Company since March 2020.
Ms. Tang Qionglan: born in March 1970, member of the Communist Party of China, bachelor degree, China
Certified Public Accountant, worked as an accountant in Foshan Certified Public Accountants, served as audit
manager of BDO China Shu Lun Pan Certified Public Accountants LLP Foshan Branch; as Deputy Manager of
the Finance Department, Manager, Chief Financial Officer, Deputy General Manager and Chief Financial Officer
of Foshan NationStar Optoelectronics Co., Ltd. from October 2008 to January 2016. In January 2016, he elected
as the Chief Financial Officer of the Company.
Mr. Wei Bin: Born in May 1969, a member of the Communist Party of China and an engineer with a bachelor’s
degree. He joined in the Company in 1991, and responsible for the product development of the graduate school of
the Company from March 1992 to December 1996, acted as Workshop Manager of Energy Saving Lamp
Workshop from January 1997 to December 2004, acted as Workshop Manager of HID Workshop from January to
December 2005, acted as Workshop Manager of T5 Workshop from 2006 to November 2008, acted as the
Department Director of the Technology Department from November 2008 to 2009 and acted as Vice GM of the
Company from September 2009.
Mr. Jiao Zhigang: Born in May 1972, a member of the Communist Party of China with a bachelor’s degree. He
graduated from South China University of Technology in July 1994, and at the same year he entered Foshan
Electrical and Lighting Co., Ltd. He acted as Warehouse Director of the Company from August 1995 to September
2013, acted as Department Director of Human Resources Department from May 2010 to September 2013;
selected as Employee Supervisor from March 2007 to September 2013, and as Chairman of the Supervisory of the
Company from May 2010 to September 2013. He acted as Vice GM of the Company in September 2013.
Mr. Chen Yu: Born in December 1972, a member of the Communist Party of China and an engineer with a
bachelor’s degree. He entered Foshan Electrical and Lighting Co., Ltd. in July 1994. And acted as workshop
manager of parabolic reflector, coating film, energy saving lamp, factory director of the branch factory of
Gaoming and workshop manager of general bulbs from January 1997 to December 2012, acted as Director of
Production Department, OEM Department and Mechanical Dynamics Department from January to August 2013,
acted as Director of Production Department and OEM Department from September 2013 to May 2014 as well as
acted as Vice GM of the Company from May 2014.
Mr. Zhang Yong: Born in June 1974, a member of the Communist Party of China and a mechanical engineer with
a college degree. From July 1997, he joined in the Foshan Electrical and Lighting Co., Ltd. and successively acted
as Deputy Director and Director of Lamp Filament Appliance Workshop from October 1999 to June 2008; acted
as Factory Director of Gaoming Fluorescent Lamp Factory and Factory Director of Gaoming Branch Factory from
July 2008 to December 2008; respectively acted as Department Director of Product Department, OEM
Department, Mechanical Dynamics Department and Infrastructure Department from January 2009 to December
2012; acted as General Manager Assistant from March 2013 to August 2016. He was a supervisor and the
Chairman of the Board of Supervisors of the Company from September 2013 to August 2016; has been the
chairman of the Labor Union of the Company since September 2013; was elected as the Deputy Party Secretary in
July 2015; and has been a vice GM of the Company since August 2016.
Mr. Xu Xiaoping: born in July 1970, member of the Communist Party of China, postgraduate degree, engineer.
Worked as Deputy General Manager and General Manager of Guangdong Fenghua Advanced Technology
Holding Co., Ltd. Xin’gu Branch from September 2000 to December 2013, also as the General Manager of
Guangdong Fenghua Semiconductor Technology Co., Ltd. from January 2011 to December 2013, and Deputy
Director of Headquarters Operations Center from January 2013 to February 2015; as the General Manager of
Guangdong Fenghua Advanced Technology Holding Co., Ltd. Lihua Branch from March 2015 to January 2016;
won the first prize of scientific and technological progress of Zhaoqing in 2008; won the title of the “Ninth Batch
88
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
of Top Talents of Zhaoqing” in 2010; served as Deputy General Manager of the company in January 2016.
Offices held concurrently in shareholding entities:
√Applicable □Not applicable
Office held in
Remuneration or
the
Name Shareholding entity Start of tenure End of tenure allowance from the
shareholding
shareholding entity
entity
Guangdong Electronics Information Chairman,
He Yong Yes
Industry Group Ltd. Party Secretary
Chairman of
Zhuang Jianyi Prosperity Lamps & Components Limited Yes
the Board
Guangdong Electronics Information
Huang Zhiyong Vice GM Yes
Industry Group Ltd.
Zhuang Junjie Prosperity Lamps & Components Limited Director Yes
Offices held concurrently in other entities:
√Applicable □Not applicable
Remuneration or
Office held in
Name Other entity Start of tenure End of tenure allowance from
the entity
the entity
Vice-M inister
Guangdong Rising Assets M anagement Co.,
Cheng Ke of the Audit Yes
Ltd.
Department
Guangdong Rising Assets M anagement Co., Director of
Qi Siyin Yes
Ltd. Board Office
Lingnan (University) College of Sun Professor and
Lu Rui Yes
Yat-Sen University doctoral tutor
Antai Economics and M anagement School Professor and
Lyu Wei Yes
of SJTU doctoral tutor
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors
and senior management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior Manage ment
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior
management:
Decision-making procedure for the The Remuneration & Appraisal Committee under the Board of Directors decides the
remuneration of directors, remuneration of directors, supervisors and senior management in accordance with the Plan for
supervisors and senior management
Implementing the Equity Incentive M echanism for M iddle-and Top-Rank M anagement
89
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Personnel, Compensation Plan for Executive Officers, and the Salary System reviewed and
approved on the 2001 Annual Shareholders’ General M eeting, and the particulars on
completing current main financial indexes & operating goals, as well as the fulfillment of job
responsibilities by them.
The remuneration of directors (excluding independent directors), supervisors and senior
management who withdraw remuneration in the Company are all decided in accordance with
Basis for determining the the Company’s Plan for Implementing the Equity Incentive M echanism for M iddle-and
remuneration of directors, Top-Rank M anagement Personnel, Compensation Plan for Executive Officers, and the Salary
supervisors and senior management System and the relevant appraisal indexes.
The allowance of independent directors should be granted according to the standard reviewed
and approved by 2015 Annual Shareholders’ General M eeting.
Actual payment of the remuneration The total remuneration (before tax) actually paid to the directors, supervisors and senior
of directors, supervisors and senior
management staff for 2019 were RM B9.2987 million.
management
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RM B'0,000
Total before-tax
Any
Incumbent/Forme remuneration
Name Office title Gender Age remuneration
r from the
from related party
Company
He Yong Board Chairman M ale 59 Incumbent Yes
Vice Board
Zhuang Jianyi M ale 68 Incumbent Yes
Chairman
Cheng Ke Director M ale 45 Incumbent Yes
Qi Siyin Director M ale 39 Incumbent Yes
Huang Zhiyong Director M ale 50 Incumbent Yes
Liu Xingming Director & GM M ale 57 Incumbent 141.56 No
Independent
Zhang Nan Female 70 Incumbent No
Director
Independent
Lu Rui M ale 44 Incumbent 14.4 No
Director
Independent
Lyu Wei M ale 55 Incumbent 14.4 No
Director
Chairman of the
Li Huashan Supervisory M ale 56 Incumbent 77.7 No
Committee
Zhuang Junjie Supervisor M ale 34 Incumbent Yes
Ye Zhenghong Supervisor M ale 46 Incumbent 58.31 No
90
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Lin Qing Supervisor M ale 50 Incumbent 37.56 No
Liang Yueyi Supervisor Female 45 Incumbent 48.02 No
Zhang Xuequan Vice GM M ale 42 Incumbent 71.56 No
Tang Qionglan CFO Female 49 Incumbent 81.56 No
Wei Bin Vice GM M ale 50 Incumbent 78.56 No
Jiao Zhigang Vice GM M ale 47 Incumbent 78.56 No
Chen Yu Vice GM M ale 47 Incumbent 71.56 No
Zhang Yong Vice GM M ale 45 Incumbent 71.56 No
Xu Xiaoping Vice GM M ale 49 Incumbent 59.56 No
Chairman of the
Li Jinkun Supervisory M ale 55 Former Yes
Committee
Lin Yihui Board Secretary M ale 65 Former 25 No
Total 929.87
Equity incentives for directors, supervisors and senior management in the Reporting Period:
□ Applicable √ Not applicable
V Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company 5,349
Number of in-service employees of main subsidiaries 2,192
Total number of in-service employees 7,541
Total number of employees with remuneration in this Reporting
7,541
Period
Number of retirees to whom the Company or its main
0
subsidiaries need to pay retirement pension
Functions
Function Number of employees
Production 5,825
Sales 795
Technical 694
Financial 47
Administrative 180
Total 7,541
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Educational backgrounds
Educational background Number of employees
Bachelor and above 639
College 1,069
Technical secondary school and high school 1,214
Below high school 4,619
Total 7,541
2. Employee Remuneration Policy
The general principal of the employee’s remuneration policy is: as for the external part, the Company should
maintain the market competitiveness of the talents by possessing of the attraction and as for the internal part,
should possess of the impartiality and consistency. The salary level of the external labor market and the social
average salary level as well as the wage guiding issued by the governmental department are the important
reference basis for the confirm of the salary standard of the Company; to confirm different pay grade according to
different positions and the position characteristics and to furthest incentive the enthusiasm of the employees; to
abide with the principal of giving priority to effic iency and give consideration of the fairness and to object to the
equalitarianism when distributing the remunerations, to pay with generous compensation for those excellent
employees who creates great value, to appropriately incline to the key talents and the market supply shortage
talents; the lowest salary of the Company should not be lower than the local lowest salary standard.
3. Employee Training Plans
The Company has been setting great store on the training and development work of the employees, and c ombined
with the actual situation, annual plan, the position nature and the responsibilities as well as the development
demands, the Company built up a complete training plan and required all departments to work out annual training
plan. The training plan will be implemented through the methods of having classes by internal lecturers and
external engaged professors as well as going out. In addition, a training system with multiple levels, channels,
fields and ways will be built. The main training work includes the new employee orientation training, the
on-the-job personnel professional training, the frontline staff skills training, skills training for sales personnel,
skills training for managerial personnel, skills training for professional technical personnel etc., to constantly
improve the overall quality of the current employees for realizing the win-win situation and mutual progress.
4. Labor Outsourcing
□ Applicable √ Not applicable
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part X Corporate Governance
I General Information of Corporate Governance
During the Reporting Period, in strict accordance with relevant requirements of Company Law, Securities Law,
Code of Corporate Governance of Listed Companies and Rules of Stock Listing of Shenzhen Stock Exchange as
well as other relevant laws, rules and regulations, the Company continuously perfected the corporate governance
structure and set up an effective corporate governance system. At present, the Company has set up governance
structure of responsible Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee and
managers, who performed right of decision-making, execution and supervision respectively according to their
duties; besides, the Company set up special committees of the Board of Directors and system for independent
directors. The Company strengthened information disclosure of principal shareholders and persons
acting-in-concert, forbidden shareholders of the Company to misapply their rights. The Company separated from
the principal shareholder in personnel, assets, business, financial affairs and organizational, and was absolutely
impendent. The Company timely revised and perfected various systems in accordance with the latest issued laws
& rules and relevant regulations of CSRC and Shenzhen Stock Exchange. And the corporate governance is
basically in line with the requirements of relevant laws, regulations and regulatory documents.
Indicate by tick market whether there is any material incompliance with the regulatory documents issued by the
CSRC governing the governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,
Asset, Organization and Financial Affairs
The Company is completely separated from its controlling shareholder in aspects such as business, personnel,
assets, institutions and finance and possesses independent and complete business and self-dependent operating
ability.
1. As for the business, the Company is independent of the controlling shareholders and the subordinate enterprises
and owns the independent business departments and management system as well as possesses of impendent and
entire business and self-dependent operating ability.
2. As for the personnel, the Company formulates the independent management system such as the labor, personnel
and the salary, possesses the independent personnel department and the operating management team. The Senior
Executives of the Company are serving at the Company in full time and receiving the salary from the Company.
3. As for the assets, the assets of the Company are independent and entire with clear ownership, and possesses the
independent production system, BOP system and the supporting facilities, as well as possesses the legal ownership
of the land, factories, equipments related to the production and operating and the assets such as the trademark,
patent and the non-patent technology, and possesses the entire control and govern power of all the as sets of the
Company without any behavior such as any controlling shareholder occupies the assets of the Company.
4. As for the institutions, the Company set up the independent and entire organizations and institutions, and the
construction as well as the operating of the corporate governance institutions is executed strictly executed
according to the Articles of Association, and the production and operating as well as the offices are entirely
93
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
independent from the controlling shareholders with any situation of working under one roof with the controlling
shareholders.。
5. As for the finance, the Company set up the independent finance department and builds up the independent and
normative accounting and financial control system according to the requirements of the ASBE, set up the
independent bank account and pays the taxes legally and independently and the Company could make the
financial decisions independently without any situation of the shareholding intervenes the capital usage.
III Horizontal Competition
√ Applicable □ Not applicable
Nature of Solution’s
Name of controlling
Type of issue controlling Cause for issue Solution progress and
shareholder
shareholder follow-up plan
Controlling shareholders have made
a commitment: (I). Eliminating the
horizontal competition between
Foshan NationStar Optoelectronics
Co., Ltd. and the Company through
business integration or other ways
or arrangements before 4 June 2020.
(II) Commitment of other
arrangements for avoiding
horizontal competition. As for
Guangdong avoiding the horizontal competition
Some enterprises
Electronics with Foshan Electrical and Lightin g,
controlled by the
Information the further commitments on the
Local controlling
Industry Group Ltd., relevant arrangements made by the
State-owned shareholders engage
Shenzhen Rising Electronics Group, Shenzhen
Horizontal Assets in the same or
Investment Guangdong Rising Investment and Ongoing
competition Supervision and similar business
Development Co., Hong Kong Guangdong Rising
Administration with the Company,
Ltd., Hong Kong Investment as follows: 1. the
Commission which incurs
Rising Investment commitment maker will execute the
horizontal
Development supervision and restriction on the
competition.
Limited production and the operating
activities of the company and the
relevant enterprises except for the
above enterprises currently involved
with the horizontal competition with
Foshan Electrical and Lighting and
if there is same or similar situation
occurs horizontal competition with
Foshan Electrical and Lighting from
the future promises and the relevant
enterprises on the products or
94
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
business, the commitment maker
following measures to solve the
problem: (1) when commits to adopt
the Foshan Electrical and Lighting
considers it is necessary, the
Company and the relevant
enterprises would decrease the
shareholding until entirely
completes the transfer of the held
relevant assets and business; (2)
when Foshan Electrical and
Lighting considers it is necessary,
should take preference to purchase
the relevant assets and business held
by the commitment maker and the
relevant enterprises through
appropriate methods; 2.each
commitment made by the
commitment maker on eliminating
or avoiding the horizontal
competition is also adapted to the
subordinate enterprises directly or
indirectly controlled by the
commitment maker and the
Company owns the obligation to
urge and ensure the other
subordinate enterprises to carry out
each events and arrangement stated
on the document and to strictly
abide to the whole commitments. 3.
If the commitment maker or the
subordinate enterprises directly or
indirectly controlled by the
company violated the above
commitments that led to the losses
of Foshan Electrical and Lighting,
the commitment maker should pay
for the reasonable compensation.”
Guangdong Related-party The controlling shareholders
Electronics transactions existed committed: 1. guaranteed to strictly
Related-party Information between some abide by the each regulation from
Local SASAC Ongoing
transactions Industry Group Ltd., enterprises the CSRC, the normative laws
Shenzhen Rising controlled by the documents of SZSE and the Articles
Investment controlling of Association of Foshan Electrical
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Development Co., shareholders and the and Lighting. Among the production
Ltd., Hong Kong Company and operating activities since then,
Rising Investment the promisee would not take
Development advantage of the position of the
Limited controlling shareholders and the
actual controller to carry out any
behavior that harm the benefits of
Foshan Electrical and Lighting and
other shareholders; 2. the promisee
and the other subsidiaries, the
branch companies, the joint
ventures or associated companies
(hereinafter referred to as the
“relevant enterprises”) will try their
best to avoid and reduce the related
transactions with Foshan Electrical
and Lighting and its subsidiaries; 3.
as for the related transactions which
are indeed necessary and could not
be avoided between the promisee,
the relevant enterprises and Foshan
Electrical and Lighting, will strictly
abide by the market principles of
fairness, justice with valuable
consideration. When the Annual
General M eeting or the Board of
Directors is executing the voting on
the related transactions which
involved with the promisee and the
relevant enterprises, should execute
the obligation of avoiding the voting
and at the same time execute the
transactions vetting process as well
as the information disclosure
obligations according to the relevant
laws and regulations and the
normative documents. If violated
the above commitments and caused
the losses to Foshan Electrical and
Lighting as well as the subsidiaries
and other shareholders, the
promisee should assume
compensation liability.
96
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to disclosed
M eeting Type Date of the meeting Disclosure date
participation ratio information
Announcement on
Resolutions of the
The 2018 Annual Annual General 2018 Annual General
37.83% 25 April 2019 26 April 2019
General M eeting M eeting M eeting (No.
2019-021) disclosed on
www.cninfo.com.cn
Announcement on
Resolutions of the 1st
The 1st Extraordinary
Extraordinary Extraordinary General
General M eeting of 39.28% 3 December 2019 4 December 2019
General M eeting M eeting of 2019 (No.
2019
2019-032) disclosed on
www.cninfo.com.cn
2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting
Rights
□ Applicable √ Not applicable
V Pe rformance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of independent directors at board meetings and general meetings
Total number The
Board
of board Board Board independent
Board meetings
meetings the meetings meetings the director failed General
Independent meetings attended by
independent attended independent to attend two meetings
director attended on way of
director was through a director failed consecutive attended
site telecommunica
eligible to proxy to attend board meetings
tion
attend (yes/no)
Zhang Nan 7 1 6 0 0 No 0
Lu Rui 7 1 6 0 0 No 0
Lyu Wei 7 1 6 0 0 No 0
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
2. Objections Raised by Independent Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
3. Other Information about the Performance of Duty by Independent Directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the Company:
During the Reporting Period, in accordance with the requirements of Company Law, Code of Governance of
Listed Companies, Guidance on the Establishment of the Independent Directors System of the Listed Companies,
Articles of Association and relevant systems, the independent directors of the Company attended the board
sessions held during the Reporting Period, carefully reviewed the proposals proposed on the sessions, paid
attention to the operation of the Company, performed the duties sincerely and diligently, and issued independent
opinion on purchase of financial products, related-party transactions, profit distribution, etc., as well as proposed
precious advices on perfection of systems and decision of routine operation of the Company, so as to play an
active role in protecting the legal right of the Company and its shareholders.
VI Performance of Duty by Specialized Committees under the Board in the Reporting Period
(I) Work Accomplished by the Audit Committee
According to the related provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange, as
well as the Rules of Implementation for the Audit Committee of the Board, the Audit Committee diligently
performed the following work duties:
1. On 14 March 2019, the Audit Committee convened to discuss and approve the following topics:
(1) 2018 financial audit and internal control audit report of the Company;
(2) The proposal for renewing the engagement of accounting firm;
Considering that Beijing Zhongzheng Tiantong Certified Public Accountants (LLP) is professional and
experienced in financial audit of listed companies, and performed its duties diligently in the Company's financial
audit work and internal control audit work in 2018, playing the role of the auditing agency well. Moreover, after a
year of auditing, it is familiar with the Company’s business development and financial status. Therefore, the Audit
Committee proposed to continue to employ Beijing Zhongzheng Tiantong Certified Public Accountants (special
ordinary partnership) as the annual financial auditing agency and internal control auditing agency of the Company
in 2019.
(3) 2018 annual work report and 2019 work plan of the Audit Department.
2. On 23 May 2019, the Audit Committee held a meeting, on which the Proposal on Appointment of Liang Yuefei
and Su Minqing Respectively as the Minister and Vice Minister of the Audit Department was reviewed and
approved.
The Audit Committee believed that Liang Yuefei and Su Minqing possessed rich work experience in finance and
audit affairs and the appointment of Liang Yuefei and Su Minqing respectively as the Minister and Vice Minister
of the Audit Department helps to improve the audit work quality of the Company and further increase the internal
audit work level of the Company.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(II) The work of the Remuneration and Assessment Committee
On 14 March 2019, the Remuneration and Assessment Committee of the Board of Directors convened a meeting
to assess of the remuneration of the senior management of the Company based on the major financial indicators
and business objectives of the Company in 2018, the scope of work and major responsibilities of the senior
management of the Company and the indicators of assessment system related to the senior management’s job
performance. It was considered that the remuneration of the senior management personnel of the Company in
2018 was determined based on the principle of “Remuneration Plan for Senior Management” and the relevant
regulations of “Remuneration System” of the Company. The implementation of the Company's accrued incentive
fund was in line with the “Establishment of Equity Incentive System for Middle and Senior Management” which
was reviewed and approved at the general meeting of shareholders. The incentives implemented by the Company
for middle and senior management personnel, business and technology elites was legal and reasonable, and it was
conducive to improve the integration of interests of the management and the Company as well as shareholders.
VII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in
the Reporting Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
VIII Appraisal of and Incentive for Senior Manage ment
The senior management of the Company is appointed by the Board of Directors, evaluated by the Remuneration
and Appraisal Committee of the Board of Directors according to their work abilities, duty performance and
fulfillment of the operating performance management, and paid according to Establishing Equity Incentive
System for Middle and Senior Management and Remuneration System of the company considered and passed at
the Annual Shareholders’ General Meeting of the Company in 2001, the Remuneration Plan for Executive Officers
considered and approved by the Board and salary system of the Company.
IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
2. Internal Control Self-Evaluation Report
Disclosure date of the internal control
10 April 2020
self-evaluation report
Index to the disclosed internal control
See www.cninfo.com.cn for the Internal Control Self-Evaluation Report 2019
self-evaluation report
Evaluated entities’ combined assets as % of
100.00%
consolidated total assets
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Evaluated entities’ combined operating
revenue as % of consolidated operating 100.00%
revenue
Identification standards for internal control weaknesses
Weaknesses in internal control over financial Weaknesses in internal control not
Type
reporting related to financial reporting
Defect with one of the following
characteristics should be recognized as a
serious defect: 1. being punished for
seriously violating the national laws, the
administrative laws and regulations and
the normative documents; 2. the
Company suffers a serious economic loss
Defect with one of the following due to any serious errors made in
characteristics should be recognized as a decision-making caused by serious lack
serious defect: 1. the defect involved with of decision-making procedures on
the malpractices of the Directors, the significant events or unfair
Supervisors and the Senior Executives; 2. the decision-making; 3. the Company’s
controlled environment is invalid; 3. the CPA reputation has been unrepairably
discovered any significant misstatement damaged by any conduct in violation of
from the current financial report while the laws and regulations which produces a
internal control could not discover the far-reaching negative impact and draws
mistake during the operating process; 4. the the public’s attention widely; 4. the
supervision from the Corporate Audit major business involved with the
Committee and the internal audit institution production and operating of the
Nature standard
on the internal control. If there met with one Company lack of the system control or
of the situation of the following, should be the system control is invalid; 5. the
recognized as an important defect: 1. the results of the internal control assessment
recognized important defect is not solved turn out to include any serious defects
during the reasonable period; 2. corrects the and such defects fail to be rectified
published financial report; 3. the function of effectively within 12 months. Defects
the internal audit of the Company is invalid; with the following characteristics should
4. the control of whether execute the be recognized as important defects: 1.
selection and the application of the owing to partly lack of the
accounting policies according to the decision-making process on signif icant
Generally Accepted Accounting Principles is events and the undemocratic
invalid. decision-making process which caused
the decision-making mistake that led the
Company face with certain economic
losses; 2. the negative influences owning
to the unlawful acts and the irregularities
h involve with wide ran ge and cause
public concern among the partial regions
which bring certain harms to the
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
reputation of the Company; 3. the system
of the major business involved with the
production and operating of the
Company is incomplete or partially
invalid; 4. the results of the internal
control assessment turn out to include
any serious defects and such defects fail
to be rectified effectively within 6
months.
Based on the data of the 2019 consolidated According to the quantitative criterion of
statements, the quantitative criterion of the internal control defects of the
confirming the important degree of the financial report, the quantitative criterion
misstatement (including the false negatives) of the internal control defects assessment
from of the consolidated statements of the of the non-financial report confirmed by
listed companies is as follows: serious the Company is as follows: serious
Quantitative standard
defect: misstatement ≥1.0% of the total defect: misstatement ≥1.0% of the total
assets amount; important defects: 0.5% of assets amount; important defects: 0.5%
the total assets amount ≤misstatement ＜ of the total assets amount ≤misstatement
1.0% of the total assets amount; common ＜1.0% of the total assets amount;
defects: misstatement ＜ 0.5% of the total common defects: misstatement＜0.5% of
assets amount. the total assets amount.
Number of material weaknesses in internal
0
control over financial reporting
Number of material weaknesses in internal
0
control not related to financial reporting
Number of serious weaknesses in internal
0
control over financial reporting
Number of serious weaknesses in internal
0
control not related to financial reporting
X Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
Zhongzheng Tiantong Certified Public Accountants LLP considered that: Foshan Electrical and Lighting Co., Ltd. maintained
effective internal control of the financial report in all significant aspects according to the Basic Standards for Internal Control and
relevant regulations.
Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 10 April 2020
Index to such report disclosed See www.cninfo.com.cn for the Auditor’s Report on Internal Control
Type of the auditor’s opinion Unmodified unqualified opinion
101
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
M aterial weaknesses in internal
control not related to financial None
reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the
Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent
with the internal control self-evaluation report issued by the Company’s Board.
√ Yes □ No
102
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part XI Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, w hich were outstanding
before the date of this Report’s approval or were due but could not be redeemed in full?
No.
103
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part XII Financial Statements
I Independent Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing this report 8 April 2020
Name of the independent auditor Zhongzheng Tiantong Certified Public Accountants LLP
No. of independent auditor’s report ZZTT (2020) Auditor’s Report No. 0700001
Names of certified public accountants Tong Quanyong, Luo Dongri
Text of the Independent Auditor’s Report
Independent Auditor’s Report
ZZTT (2020) Auditor’s Report No. 0700001
To the Shareholders of Foshan Electrical and Lighting Co., Ltd.
I Opinion
We have audited the financial statements of Foshan Electrical and Lighting Co., Ltd. (the “Company”), which
comprise the consolidated balance sheets and balance sheet of the company as the parent as of 31 December 2019,
the consolidated income statement and income statement of the company as the parent, consolidated cash flow
statement and cash flow statement of the company as the parent and consolidated statement of changes in owners’
equity and statement of changes in owners’ equity of the company as the parent for the year then ended, as well as
the notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
and parent company financial position of the Company at 31 December 2019, and the consolidated and the
company as the parent operating results and cash flows for the year then ended, in conformity with the Chinese
Accounting Standards (CAS).
II Basis for Opinion
We conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of Financial
Statements section of our report. We are independent of the Company in accordance with the China Code of
Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with
the said Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
III Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
104
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. And key audit matter identified in our audit is summarized as follows:
(I) Recognition of Revenue
1. Event description
As stated in the notes “III. Significant Accounting Policies and Accounting Estimation (XXIV)” and “V Notes on
the Key Items in the Consolidated Financial Statements (IV)” to the consolidated financial statements, the
Company takes the transfer of major risks and remunerations in respect of commodity ownership to the buyers as
the recognition time of revenue. In addition, it has formulated specific policies for the recognition of revenue for
different types of business with revenue. In 2019, it achieved an operating revenue of RMB3,337,576,747.66,
which decreased RMB464,379,199.10 compared to that of last year with a reduction rate of 12.21%. As operating
revenue is one of the key performance indicators of The Company and there are hereditary risks of the revenue
being manipulated to achieve the objective or expected level, we identify the recognition of revenue as a key audit
event.
2. Audit response
With regard to FSL’s revenue recognition, we mainly implemented the following procedures: (1) Understand and
test the design and implementation of key internal control related to revenue recognition to verify the
effectiveness of internal control. (2) Seek confirmation from customers for the balance of accounts receivable. (3)
Perform sampling inspection of contract related shipment and acceptanc e, payment and settlement, product
placement and return policies and other important contractual terms and conditions. (4) Examine the credit limit
for customers and the approval record to identify whether there is any unapproved sale on credit. (5) Search the
business registration record of customers through open information platforms, obtain and examine the list of
related parties to check whether FSL is related to any of the customers. (6) Select FSL’s revenue and trading
samples and verify the invoices, shipment documents and customs declaration documents for export. (7) Obtain
the record of product replacement and return and check whether there is any major abnormal replacement or
return. (8) By comparing with industrial peers and considering the changes in FSL’s customers, product mix, price
management and other related factors, assess the reasonableness of the changes in FSL’s operating revenue. (9)
Verify the authenticity and completeness of the current revenue through other revenue audit procedures, such as
checking the payment collection after the period and examining FSL’s statement of account with customers.
(II) Measurement of fair value of investment in other equity instruments
1. Event description
As stated in the notes “III. Significant Accounting Policies and Accounting Estimation (IX) and (XXXI)” and “V
Notes on the Key Items in the Consolidated Financial Statements (X)” to the consolidated financial statements, the
Company starts to implement the revised Accounting Standards for Business Enterprises No. 22-Recognition and
Measurement of Financial Instruments enacted by the Ministry of Finance in 2017 since 1 January 2019, and
measured the equity investments at fair value and the changes thereof would be recorded into other
comprehensive income. As of 31 December 2019, the Company’s investment in other equity instruments was
RMB1,454,740,241.46, accounting for 23.56% of total assets of the consolidated financial statement. Because
amount of investment in other equity instruments is large, and the measurement of fair value involves estimations
and judgment of management layer, we should confirm the measurement of fair value of investment in other
equity instruments as the key auditing item.
2. Audit response
With regard to FSL’s fair value of investment in other equity instruments, we mainly implemented the following
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
procedures: (1) Obtain the management’s basis for classifying equity instruments and verify its reasonableness; (2)
Review the investment agreements, understand related investment clauses and identify clauses related to the
valuation of financial instruments; (3) Search and confirm the open active market price of public equity
investment projects on the day of closing fair value measurement to verify the accuracy of the fair value
measurement; (4) Confirm the investment cost of non-public equity projects to assess the reasonableness of the
unobservable inputs and observable inputs adopted by the management in measuring the fair value of the financial
instruments classified as Level 3; (5) Evaluate whether the disclosure related to the fair value assessment of the
financial instruments measured at fair value and classified as Level III in the financial statements meets the
requirements of accounting standards.
IV Other Information
The Company’s management is responsible for the other information. The other information comprises all of the
information included in the Company’s 2019 Annual Report other than the financial statements and our auditor’s
report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
V Responsibilities of Management and Those Charged with Governance for Financial Statements
The Company’s management is responsible for the preparation of the financial statements that give a fair view in
accordance with CAS, and for designing, implementing and maintaining such internal control as the management
determines is necessary to enable the preparation of financ ial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the management either intends to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI Auditor’s Responsibilities for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fr aud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
106
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting polic ies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required by CAS to draw users’ attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are inadequate, we should express modified opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financ ial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for the
direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any noteworthy deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are ther efore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Beijing Zhongzheng Tiantong Certified Chinese CPA:
Public Accountants LLP （Engagement Partner）
Tong Quanyong
Chinese CPA:
Beijing China Luo Dongri
8 April 2020
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
II Financial State ments
Currency unit for the financial statements and the notes thereto: RM B
1. Consolidated Balance Sheet
Prepared by Foshan Electrical and Lighting Co., Ltd.
31 December 2019
Unit: RM B
Item 31 December 2019 31 December 2018
Current assets:
M onetary assets 1,125,456,662.64 896,646,719.87
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 901,166,682.64
Financial assets at fair value through
profit or loss
Derivative financial assets
Notes receivable 109,444,480.94 107,506,613.50
Accounts receivable 712,175,266.51 834,420,596.05
Accounts receivable financing
Prepayments 7,851,390.78 13,811,905.18
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 22,307,344.76 21,745,690.53
Including: Interest receivable 5,152,364.04
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 637,336,584.06 767,319,599.00
Contractual assets
Assets classified as held for sale
Current portion of non-current assets
Other current assets 52,502,863.59 864,093,663.30
Total current assets 3,568,241,275.92 3,505,544,787.43
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Available-for-sale financial assets 897,716,590.20
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables
Long-term equity investments 181,093,725.43 182,458,559.69
Investments in other equity
1,454,740,241.46
instruments
Other non-current financial assets
Investment property
Fixed assets 629,832,098.35 512,106,912.39
Construction in progress 119,030,610.16 224,624,447.16
Productive living assets
Oil and gas assets
Use rights assets
Intangible assets 167,826,499.74 172,725,277.21
R&D expense
Goodwill
Long-term prepaid expense 7,727,394.74 6,852,985.35
Deferred income tax assets 36,847,064.36 37,831,704.45
Other non-current assets 9,861,098.08 48,305,435.42
Total non-current assets 2,606,958,732.32 2,082,621,911.87
Total assets 6,175,200,008.24 5,588,166,699.30
Current liabilities:
Short-term borrowings
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
Financial liabilities at fair value
477,200.00
through profit or loss
Derivative financial liabilities
Notes payable 374,665,327.74 452,683,676.97
Accounts payable 559,016,692.70 532,597,143.95
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Advances from customers 50,449,357.17 43,850,788.04
Contractual liabilities
Financial assets sold under
repurchase agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of
securities
Payroll payable 83,156,852.86 96,088,621.59
Taxes payable 17,211,068.21 25,354,466.37
Other payables 46,073,344.71 43,115,011.68
Including: Interest payable
Dividends payable
Handling charges and commissions
payable
Reinsurance payables
Liabilities directly associated with
assets classified as held for sale
Current portion of non-current
liabilities
Other current liabilities
Total current liabilities 1,130,572,643.39 1,194,166,908.60
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income 155,000.31
Deferred income tax liabilities 137,216,136.70 52,530,509.00
Other non-current liabilities
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Total non-current liabilities 137,216,136.70 52,685,509.31
Total liabilities 1,267,788,780.09 1,246,852,417.91
Owners’ equity:
Share capital 1,399,346,154.00 1,399,346,154.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 158,608,173.07 158,608,173.07
Less: Treasury stock
Other comprehensive income 776,260,348.19 297,667,872.80
Specific reserve
Surplus reserves 836,559,645.36 809,456,186.20
General reserve
Retained earnings 1,709,962,479.45 1,654,181,032.39
Total equity attributable to owners of
4,880,736,800.07 4,319,259,418.46
the Company as the parent
Non-controlling interests 26,674,428.08 22,054,862.93
Total owners’ equity 4,907,411,228.15 4,341,314,281.39
Total liabilities and owners’ equity 6,175,200,008.24 5,588,166,699.30
Legal representative: He Yong General M anager: Liu Xingming Chief Financial Officer: Tang Qionglan
2. Balance Sheet of the Company as the Parent
Unit: RM B
Item 31 December 2019 31 December 2018
Current assets:
M onetary assets 1,059,001,233.28 848,949,693.91
Held-for-trading financial assets 901,166,682.64
Financial assets at fair value through
profit or loss
Derivative financial assets
Notes receivable 107,567,164.99 104,945,398.61
Accounts receivable 666,106,832.53 795,897,932.65
Accounts receivable financing
Prepayments 6,614,791.10 25,444,445.34
111
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Other receivables 37,934,614.96 43,538,848.72
Including: Interest receivable 5,152,364.04
Dividends receivable
Inventories 553,557,529.00 692,681,479.03
Contractual assets
Assets classified as held for sale
Current portion of non-current assets
Other current assets 43,118,385.01 856,504,839.81
Total current assets 3,375,067,233.51 3,367,962,638.07
Non-current assets:
Investments in debt obligations
Available-for-sale financial assets 897,716,590.20
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables
Long-term equity investments 464,886,827.69 466,251,661.95
Investments in other equity
1,454,740,241.46
instruments
Other non-current financial assets
Investment property
Fixed assets 573,844,707.66 427,947,613.74
Construction in progress 116,240,559.37 222,570,503.14
Productive living assets
Oil and gas assets
Use rights assets
Intangible assets 125,673,065.66 129,452,067.42
R&D expense
Goodwill
Long-term prepaid expense 4,891,398.93 5,106,268.25
Deferred income tax assets 34,205,213.27 35,908,741.15
Other non-current assets 8,440,448.08 46,852,235.42
Total non-current assets 2,782,922,462.12 2,231,805,681.27
Total assets 6,157,989,695.63 5,599,768,319.34
Current liabilities:
112
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Short-term borrowings
Held-for-trading financial liabilities
Financial liabilities at fair value
477,200.00
through profit or loss
Derivative financial liabilities
Notes payable 376,265,327.74 452,683,676.97
Accounts payable 689,846,497.35 681,490,174.69
Advances from customers 46,758,714.00 41,912,301.85
Contractual liabilities
Payroll payable 68,658,329.30 84,220,746.16
Taxes payable 12,374,430.19 17,528,644.83
Other payables 125,001,875.83 114,073,355.23
Including: Interest payable
Dividends payable
Liabilities directly associated with
assets classified as held for sale
Current portion of non-current
liabilities
Other current liabilities
Total current liabilities 1,318,905,174.41 1,392,386,099.73
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income
Deferred income tax liabilities 137,216,136.70 52,530,509.00
Other non-current liabilities
Total non-current liabilities 137,216,136.70 52,530,509.00
Total liabilities 1,456,121,311.11 1,444,916,608.73
Owners’ equity:
113
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Share capital 1,399,346,154.00 1,399,346,154.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 166,211,779.15 166,211,779.15
Less: Treasury stock
Other comprehensive income 776,242,987.90 297,672,884.34
Specific reserve
Surplus reserves 836,559,645.36 809,456,186.20
Retained earnings 1,523,507,818.11 1,482,164,706.92
Total owners’ equity 4,701,868,384.52 4,154,851,710.61
Total liabilities and owners’ equity 6,157,989,695.63 5,599,768,319.34
Legal representative: He Yong General M anager: Liu Xingming Chief Financial Officer: Tang Qionglan
3. Consolidated Income Statement
Unit: RM B
Item 2019 2018
1. Revenue 3,337,576,747.66 3,801,955,946.76
Including: Operating revenue 3,337,576,747.66 3,801,955,946.76
Interest income
Premium income
Handling charge and
commission income
2. Costs and expenses 3,036,750,150.30 3,397,178,722.20
Including: Cost of sales 2,560,513,052.56 2,922,833,510.40
Interest expense
Handling charge and
commission expense
Surrenders
Net claims paid
Net amount provided as
insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
expense
114
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Taxes and surcharges 38,022,788.66 36,377,330.18
Selling expense 241,414,766.43 237,485,389.89
Administrative expense 145,080,623.05 173,871,085.61
R&D expense 79,444,261.80 52,726,585.28
Finance costs -27,725,342.20 -26,115,179.16
Including: Interest
371,567.15
expense
Interest
24,418,569.09 11,450,858.00
income
Add: Other income 11,202,255.25 31,210,613.26
Return on investment (“-” for loss) 60,878,425.30 53,329,524.74
Including: Share of profit or loss
1,755,751.49 6,165,040.30
of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Foreign exchange gain (“-” for
loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
2,024,400.00 -477,200.00
for loss)
Credit impairment loss (“-” for
-3,693,729.47
loss)
Asset impairment loss (“-” for loss) -16,675,215.52 -37,673,120.95
Asset disposal income (“-” for
-78,039.44
loss)
3. Operating profit (“-” for loss) 354,562,732.92 451,089,002.17
Add: Non-operating income 3,072,145.61 3,808,610.50
Less: Non-operating expense 5,517,243.94 3,827,826.27
4. Profit before tax (“-” for loss) 352,117,634.59 451,069,786.40
Less: Income tax expense 48,665,163.20 71,919,450.25
5. Net profit (“-” for net loss) 303,452,471.39 379,150,336.15
5.1 By operating continuity
5.1.1 Net profit from continuing
303,452,471.39 379,150,336.15
operations (“-” for net loss)
5.1.2 Net profit from discontinued
operations (“-” for net loss)
115
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
5.2 By ownership
5.2.1 Net profit attributable to
301,182,906.24 377,615,133.62
owners of the Company as the parent
5.2.1 Net profit attributable to
2,269,565.15 1,535,202.53
non-controlling interests
6. Other comprehensive income, net of
189,240,788.90 -418,939,460.98
tax
Attributable to owners of the Company
189,240,788.90 -418,939,460.98
as the parent
6.1 Items that will not be
189,218,417.07
reclassified to profit or loss
6.1.1 Changes caused by
remeasurements on defined benefit
pension schemes
6.1.2 Other comprehensive
income that will not be reclassified to
profit or loss under the equity method
6.1.3 Changes in the fair value of
189,218,417.07
investments in other equity instruments
6.1.4 Changes in the fair value of
the company’s credit risks
6.1.5 Other
6.2 Items that will be reclassified to
22,371.83 -418,939,460.98
profit or loss
6.2.1 Other comprehensive
income that will be reclassified to profit
or loss under the equity method
6.2.2 Changes in the fair value of
investments in other debt obligations
6.2.3 Gain/Loss on changes in the
fair value of available-for-sale financial -418,935,204.44
assets
6.2.4 Other comprehensive
income arising from the reclassification
of financial assets
6.2.5 Gain/Loss arising from the
reclassification of held-to-maturity
investments to available-for-sale financial
assets
6.2.6 Allowance for credit
impairments in investments in other debt
obligations
116
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
6.2.7 Reserve for cash flow
hedges
6.2.8 Differences arising from the
translation of foreign
22,371.83 -4,256.54
currency-denominated financial
statements
6.2.9 Other
Attributable to non-controlling
interests
7. Total comprehensive income 492,693,260.29 -39,789,124.83
Attributable to owners of the Company
490,423,695.14 -41,324,327.36
as the parent
Attributable to non-controlling
2,269,565.15 1,535,202.53
interests
8. Earnings per share
8.1 Basic earnings per share 0.2152 0.2699
8.2 Diluted earnings per share 0.2152 0.2699
Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before the
combinations was RM B0.00, with the amount for last year being RM B0.00.
Legal representative: He Yong General M anager: Liu Xingming Chief Financial Officer: Tang Qionglan
4. Income Statement of the Company as the Parent
Unit: RM B
Item 2019 2018
1. Operating revenue 3,235,948,439.05 3,702,821,298.76
Less: Cost of sales 2,538,328,460.62 2,937,650,787.51
Taxes and surcharges 32,695,622.91 27,577,025.83
Selling expense 222,786,236.44 209,377,549.84
Administrative expense 124,637,990.70 157,272,662.59
R&D expense 69,817,196.60 51,004,161.82
Finance costs -27,260,802.84 -25,129,599.00
Including: Interest expense 371,567.15
Interest income 23,903,504.29 10,435,158.99
Add: Other income 10,837,075.25 28,953,872.06
Return on investment (“-” for
61,208,653.50 81,803,713.29
loss)
117
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Including: Share of profit or
1,755,751.49 6,165,040.30
loss of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
2,024,400.00 -477,200.00
for loss)
Credit impairment loss (“-” for
-2,467,565.77
loss)
Asset impairment loss (“-” for
-16,240,391.22 -37,157,044.60
loss)
Asset disposal income (“-” for
loss)
2. Operating profit (“-” for loss) 330,305,906.38 418,192,050.92
Add: Non-operating income 2,522,638.65 3,361,305.10
Less: Non-operating expense 3,039,777.74 3,284,428.73
3. Profit before tax (“-” for loss) 329,788,767.29 418,268,927.29
Less: Income tax expense 43,044,196.92 53,237,088.87
4. Net profit (“-” for net loss) 286,744,570.37 365,031,838.42
4.1 Net profit from continuing
286,744,570.37 365,031,838.42
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income, net of
189,218,417.07 -418,935,204.44
tax
5.1 Items that will not be reclassified
189,218,417.07
to profit or loss
5.1.1 Changes caused by
remeasurements on defined benefit
pension schemes
5.1.2 Other comprehensive income
that will not be reclassified to profit or
loss under the equity method
5.1.3 Changes in the fair value of
189,218,417.07
investments in other equity instruments
5.1.4 Changes in the fair value of
the company’s credit risks
5.1.5 Other
118
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
5.2 Items that will be reclassified to
-418,935,204.44
profit or loss
5.2.1 Other comprehensive income
that will be reclassified to profit or loss
under the equity method
5.2.2 Changes in the fair value of
investments in other debt obligations
5.2.3 Gain/Loss on changes in the
fair value of available-for-sale financial -418,935,204.44
assets
5.2.4 Other comprehensive income
arising from the reclassification of
financial assets
5.2.5 Gain/Loss arising from the
reclassification of held-to-maturity
investments to available-for-sale
financial assets
5.2.6 Allowance for credit
impairments in investments in other
debt obligations
5.2.7 Reserve for cash flow hedges
5.2.8 Differences arising from the
translation of foreign
currency-denominated financial
statements
5.2.9 Other
6. Total comprehensive income 475,962,987.44 -53,903,366.02
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Legal representative: He Yong General M anager: Liu Xingming Chief Financial Officer: Tang Qionglan
5. Consolidated Cash Flow Statement
Unit: RM B
Item 2019 2018
1. Cash flows from operating activities:
Proceeds from sale of commodities and
3,512,742,623.39 3,605,503,899.24
rendering of services
Net increase in customer deposits and
interbank deposits
119
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Net increase in borrowings from the
central bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Interest, handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Net proceeds from acting trading of
securities
Tax rebates 83,431,462.66 143,119,777.70
Cash generated from other operating
120,719,626.39 95,378,324.30
activities
Subtotal of cash generated from operating
3,716,893,712.44 3,844,002,001.24
activities
Payments for commodities and services 2,167,028,031.70 2,142,755,608.20
Net increase in loans and advances to
customers
Net increase in deposits in the central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
Net increase in interbank loans granted
Interest, handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 618,899,328.71 645,756,586.20
Taxes paid 192,588,156.19 222,679,823.50
Cash used in other operating activities 230,293,438.38 214,822,496.29
Subtotal of cash used in operating
3,208,808,954.98 3,226,014,514.19
activities
Net cash generated from/used in operating
508,084,757.46 617,987,487.05
activities
2. Cash flows from investing activities:
120
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Proceeds from disinvestment 19,550,000.00 220,000,000.00
Return on investment 51,173,422.00 51,208,590.20
Net proceeds from the disposal of fixed
assets, intangible assets and other 40,834.00 507,597.20
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from investing
70,764,256.00 271,716,187.40
activities
Payments for the acquisition of fixed
assets, intangible assets and other 53,476,166.05 168,587,186.18
long-lived assets
Payments for investments 55,000,000.00 80,000,000.00
Net increase in pledged loans granted
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
108,476,166.05 248,587,186.18
activities
Net cash generated from/used in investing
-37,711,910.05 23,129,001.22
activities
3. Cash flows from financing activities:
Capital contributions received 2,350,000.00
Including: Capital contributions by
2,350,000.00
non-controlling interests to subsidiaries
Borrowings obtained
Cash generated from other financing
activities
Subtotal of cash generated from financing
2,350,000.00
activities
Repayments of borrowings
Payments for interest and dividends 218,298,000.02 418,531,713.57
Including: Dividends paid by
subsidiaries to non-controlling interests
Cash used in other financing activities
Subtotal of cash used in financing
218,298,000.02 418,531,713.57
activities
Net cash generated from/used in financing
-215,948,000.02 -418,531,713.57
activities
121
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
4. Effect of foreign exchange rate changes
122,951.25 2,516,772.72
on cash and cash equivalents
5. Net increase in cash and cash
254,547,798.64 225,101,547.42
equivalents
Add: Cash and cash equivalents,
795,285,756.38 570,184,208.96
beginning of the period
6. Cash and cash equivalents, end of the
1,049,833,555.02 795,285,756.38
period
Legal representative: He Yong General M anager: Liu Xingming Chief Financial Officer: Tang Qionglan
6. Cash Flow Statement of the Company as the Parent
Unit: RM B
Item 2019 2018
1. Cash flows from operating activities:
Proceeds from sale of commodities
3,381,315,269.05 3,483,708,617.22
and rendering of services
Tax rebates 83,431,462.66 143,095,603.13
Cash generated from other operating
103,736,924.38 83,179,427.33
activities
Subtotal of cash generated from
3,568,483,656.09 3,709,983,647.68
operating activities
Payments for commodities and
2,259,948,774.41 2,348,474,172.05
services
Cash paid to and for employees 465,547,076.42 408,213,944.72
Taxes paid 146,779,499.56 136,626,264.27
Cash used in other operating
207,660,819.69 191,822,944.12
activities
Subtotal of cash used in operating
3,079,936,170.08 3,085,137,325.16
activities
Net cash generated from/used in
488,547,486.01 624,846,322.52
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 19,550,000.00 200,000,000.00
Return on investment 51,503,650.20 76,706,836.19
Net proceeds from the disposal of
fixed assets, intangible assets and other 40,330.00
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
122
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Cash generated from other investing
activities
Subtotal of cash generated from
71,093,980.20 276,706,836.19
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other 50,654,548.37 160,084,524.03
long-lived assets
Payments for investments 55,000,000.00 80,000,000.00
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
105,654,548.37 240,084,524.03
activities
Net cash generated from/used in
-34,560,568.17 36,622,312.16
investing activities
3. Cash flows from financing activities:
Capital contributions received
Borrowings obtained
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
Repayments of borrowings
Payments for interest and dividends 218,298,000.02 418,531,713.57
Cash used in other financing
activities
Subtotal of cash used in financing
218,298,000.02 418,531,713.57
activities
Net cash generated from/used in
-218,298,000.02 -418,531,713.57
financing activities
4. Effect of foreign exchange rate
100,477.42 2,482,708.91
changes on cash and cash equivalents
5. Net increase in cash and cash
235,789,395.24 245,419,630.02
equivalents
Add: Cash and cash equivalents,
747,588,730.42 502,169,100.40
beginning of the period
6. Cash and cash equivalents, end of the
983,378,125.66 747,588,730.42
period
Legal representative: He Yong General M anager: Liu Xingming Chief Financial Officer: Tang Qionglan
123
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
7. Consolidated Statements of Changes in Owners’ Equity
2019
Unit: RM B
2019
Equity attributable to owners of the Company as the parent
Other equity Other Non-c
Total
instruments Less: compr Surplu Retain ontroll
Item Capital Specifi Genera owners
Share
Treasu ehensi s ed Subtot ing
Prefe Perpe ’
capita reserve c l Other
ry ve reserve earnin al interes
rred tual equity
l Other s reserve reserve
stock incom s gs ts
share bond
s s e
1,399
1. Balances as 158,60 297,66 809,45 1,654, 4,319, 22,054 4,341,
,346,
at the end of the 8,173. 7,872. 6,186. 181,03 259,41 ,862.9 314,28
154.0
prior year 07 80 20 2.39 8.46 3 1.39
0
Add:
Adjustments for 289,35 289,35 289,35
changed 1,686. 1,686. 1,686.
accounting 49 49 49
policies
Adjustments
for corrections
of previous
errors
Adjustments
for business
combinations
under common
control
Other
adjustments
1,399
2. Balances as 158,60 587,01 809,45 1,654, 4,608, 22,054 4,630,
,346,
at the beginning 8,173. 9,559. 6,186. 181,03 611,10 ,862.9 665,96
154.0
of the year 07 29 20 2.39 4.95 3 7.88
0
3. Increase/
189,24 27,103 55,781 272,12 276,74
decrease in the 4,619,
0,788. ,459.1 ,447.0 5,695. 5,260.
period (“-” for 565.15
90 6 6 12 27
decrease)
124
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3.1 Total 189,24 301,18 490,42 492,69
2,269,
comprehensive 0,788. 2,906. 3,695. 3,260.
565.15
income 90 24 14 29
3.2 Capital
increased and 2,350, 2,350,
reduced by 000.00 000.00
owners
3.2.1
Ordinary shares 2,350, 2,350,
increased by 000.00 000.00
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4 Other
27,103 -245,4 -218,2 -218,2
3.3 Profit
,459.1 01,459 98,000 98,000
distribution
6 .18 .02 .02
3.3.1
27,103 -27,10
Appropriation
,459.1 3,459.
to surplus
6 16
reserves
3.3.2
Appropriation
to general
reserve
3.3.3
-218,2 -218,2 -218,2
Appropriation
98,000 98,000 98,000
to owners (or
.02 .02 .02
shareholders)
3.3.4 Other
3.4 Transfers
within owners’
equity
125
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by surplus
reserves
3.4.4
Changes in
defined benefit
pension
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
1,399
4. Balances as 158,60 776,26 836,55 1,709, 4,880, 26,674 4,907,
,346,
at the end of the 8,173. 0,348. 9,645. 962,47 736,80 ,428.0 411,22
154.0
period 07 19 36 9.45 0.07 8 8.15
0
2018
Unit: RM B
126
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
2018
Equity attributable to owners of the Company as the parent
Other equity Other Non-co
instruments Less: compr Surplu Retain ntrollin Total
Item Capital Specifi Genera
Share
Treasu ehensi s ed Subtot g owners’
Prefe Perp
capita reserve c l Other
ry ve reserve earnin al interest equity
rred etual
l Other s reserve reserve
stock incom s gs s
share bond
s s e
1,272
1. Balances as 285,82 716,60 772,95 1,731, 4,779, 4,799,6
,132, 20,519,
at the end of 1,459. 7,333. 3,002. 600,79 115,45 35,119.
868.0 660.40
the prior year 07 78 36 6.18 9.39 79
0
Add:
Adjustments
for changed
accounting
policies
Adjustments
for corrections
of previous
errors
Adjustments
for business
combinations
under common
control
Other
adjustments
2. Balances as 1,272
285,82 716,60 772,95 1,731, 4,779, 4,799,6
at the ,132, 20,519,
1,459. 7,333. 3,002. 600,79 115,45 35,119.
beginning of 868.0 660.40
07 78 36 6.18 9.39 79
the year 0
3. Increase/
127,2 -127,2 -418,9 36,503 -77,41 -459,8 -458,32
decrease in the 1,535,2
13,28 13,286 39,460 ,183.8 9,763. 56,040 0,838.4
period (“-” for 02.53
6.00 .00 .98 4 79 .93 0
decrease)
3.1 Total -418,9 377,61 -41,32
1,535,2 -39,789
comprehensive 39,460 5,133. 4,327.
02.53 ,124.83
income .98 62 36
127
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary shares
increased by
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4
Other
36,503 -455,0 -418,5 -418,53
3.3 Profit
,183.8 34,897 31,713 1,713.5
distribution
4 .41 .57 7
3.3.1
36,503 -36,50
Appropriation
,183.8 3,183.
to surplus
4 84
reserves
3.3.2
Appropriation
to general
reserve
3.3.3
-418,5 -418,5 -418,53
Appropriation
31,713 31,713 1,713.5
to owners (or
.57 .57 7
shareholders)
3.3.4
Other
3.4 Transfers 127,2 -127,2
within owners’ 13,28 13,286
equity 6.00 .00
128
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3.4.1
Increase in
127,2 -127,2
capital (or
13,28 13,286
share capital)
6.00 .00
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3 Loss
offset by
surplus reserves
3.4.4
Changes in
defined benefit
pension
schemes
transferred to
retained
earnings
3.4.5
Other
comprehensive
income
transferred to
retained
earnings
3.4.6
Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
129
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
1,399
4. Balances as 158,60 297,66 809,45 1,654, 4,319, 4,341,3
,346, 22,054,
at the end of 8,173. 7,872. 6,186. 181,03 259,41 14,281.
154.0 862.93
the period 07 80 20 2.39 8.46 39
0
Legal representative: He Yong General M anager: Liu Xingming Chief Financial Officer: Tang Qionglan
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2019
Unit: RM B
2019
Other equity
Other Retaine
instruments Less: Total
Item Share Capital compreh Specific Surplus d
Preferr Perpet Treasury Other owners’
capital reserves ensive reserve reserves earning
ed ual Other stock equity
income s
shares bonds
1. Balances as at 1,399,3 1,482,1
166,211, 297,672, 809,456, 4,154,851,
the end of the 46,154. 64,706.
779.15 884.34 186.20 710.61
prior year 00 92
Add:
Adjustments for
289,351, 289,351,6
changed
686.49 86.49
accounting
policies
Adjustments
for corrections of
previous errors
Other
adjustments
2. Balances as at 1,399,3 1,482,1
166,211, 587,024, 809,456, 4,444,203,
the beginning of 46,154. 64,706.
779.15 570.83 186.20 397.10
the year 00 92
3. Increase/
decrease in the 189,218, 27,103,4 41,343, 257,664,9
period (“-” for 417.07 59.16 111.19 87.42
decrease)
3.1 Total 286,74
189,218, 475,962,9
comprehensive 4,570.3
417.07 87.44
income 7
3.2 Capital
increased and
130
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
reduced by
owners
3.2.1
Ordinary shares
increased by
owners
3.2.2
Capital increased
by holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4 Other
-245,40
3.3 Profit 27,103,4 -218,298,0
1,459.1
distribution 59.16 00.02
8
3.3.1
27,103,4 -27,103
Appropriation to
59.16 ,459.16
surplus reserves
3.3.2
-218,29
Appropriation to -218,298,0
8,000.0
owners (or 00.02
2
shareholders)
3.3.3 Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by surplus
131
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
reserves
3.4.4
Changes in
defined benefit
pension schemes
transferred to
retained earnings
3.4.5 Other
comprehensive
income
transferred to
retained earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balances as at 1,399,3 1,523,5
166,211, 776,242, 836,559, 4,701,868,
the end of the 46,154. 07,818.
779.15 987.90 645.36 384.52
period 00 11
2018
Unit: RM B
2018
Other equity
Other
instruments Less: Total
Item Share Capital compre Specific Surplus Retained
Preferr Perpet Treasur Other owners’
capital reserves hensive reserve reserves earnings
ed ual Other y stock equity
income
shares bonds
1. Balances as 1,272,
293,425 716,608 772,953 1,572,167 4,627,286,7
at the end of the 132,86
,065.15 ,088.78 ,002.36 ,765.91 90.20
prior year 8.00
Add:
Adjustments for
changed
accounting
policies
132
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Adjustments
for corrections
of previous
errors
Other
adjustments
2. Balances as 1,272,
293,425 716,608 772,953 1,572,167 4,627,286,7
at the beginning 132,86
,065.15 ,088.78 ,002.36 ,765.91 90.20
of the year 8.00
3. Increase/
127,21 -127,21 -418,93
decrease in the 36,503, -90,003,0 -472,435,07
3,286. 3,286.0 5,204.4
period (“-” for 183.84 58.99 9.59
00 0 4
decrease)
3.1 Total -418,93
365,031,8 -53,903,366
comprehensive 5,204.4
38.42 .02
income 4
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary shares
increased by
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4 Other
3.3 Profit 36,503, -455,034, -418,531,71
distribution 183.84 897.41 3.57
3.3.1
Appropriation 36,503, -36,503,1
to surplus 183.84 83.84
reserves
133
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3.3.2
Appropriation -418,531, -418,531,71
to owners (or 713.57 3.57
shareholders)
3.3.3 Other
3.4 Transfers 127,21 -127,21
within owners’ 3,286. 3,286.0
equity 00 0
3.4.1
Increase in 127,21 -127,21
capital (or share 3,286. 3,286.0
capital) from 00 0
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by
surplus reserves
3.4.4
Changes in
defined benefit
pension
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
134
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3.6 Other
4. Balances as 1,399,
166,211, 297,672 809,456 1,482,164 4,154,851,7
at the end of the 346,15
779.15 ,884.34 ,186.20 ,706.92 10.61
period 4.00
Legal representative: He Yong General M anager: Liu Xingming Chief Financial Officer: Tang Qionglan
III Company profile
(I) Basic information
Foshan Electrical and Lighting Co., Ltd. (hereinafter referred to as “the Company”), a joint-stock limited
company jointly founded by Foshan Electrical and Lighting Company, Nanhai Wuzhuang Color Glazed Brick
Field, and Foshan Poyang Printing Industrial Co. on 20 October 1992 by raising funds under the approval of YGS
(1992) No. 63 Document issued by the Joint Examination Group for Experimental Enterprises in Stock System of
Guangdong Province and the Economic System Reform Commission of Guangdong Province, is an enterprise
with its shares held by both the corporate and the natural persons. As approved by China Securities Regulatory
Commission with Document (1993) No. 33, the Company publicly issued 19.3 million shares of social public
shares (A shares) to the public in October 1993, and was listed in Shenzhen Stock Exchange for trade on 23
November 1993. The Company was approved to issue 50,000,000 B shares on 23 July 1995. And, as approved to
change into a foreign-invested stock limited company on 26 August 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 11 December 2000, as approved by China Securities Regulatory Commission with ZJGS Zi [2000] No. 175
Document, the Company additionally issued 55,000,000 A shares. At approved by the Shareholders ’ General
Meeting 2006, 2007, 2008, 2014 and 2017 the Company implemented the plan of capitalization of capital reserve,
after the transfer, the registered capital of the Company has increased to RMB1,399,346,154.00.
Credibility code of the Company: 91440000190352575W.
Legal representative: Mr. He Yong
Address: No. 64, Fenjiang North Road, Foshan, Guangdong Province
Main business of the company and its subsidiaries (hereinafter referred to as “the Company”): lighting products
and electro technical products.
The business term of the Company is long-term, which was calculated from the date of issuance of License of
Bus iness Corporation.
The Financial Report was approved and authorized for issue by the Board of Directors on 8 April 2020.
(II) Consolidation scope of financial statement
The consolidation scope of the financial statement during the Reporting Period including the Company and the 9
subordinate subsidiaries such as FSL Chanchang Optoelectronics Co., Ltd. ( referred to as “Chanchang
Company”), Foshan Chansheng Electronic Ballast Co., Ltd. ( referred to as “Chansheng Company”), Foshan
Taimei Times Lamps and Lanterns Co., Ltd. ( referred to as “Taimei Company”), Nanjing Fozhao Lighting
Components Co., Ltd. ( referred to as “Nanjing Fozhao”), FSL (Xinxiang) Lighting Co., Ltd. ( referred to as
“Xinxiang Company”), Foshan Electrical and Lighting New Light Source Technology Co., Ltd. ( referred to as
“New Light Source Company”), Foshan Lighting Lamps & Components Co., Ltd. ( referred to as “Lamps &
Components Company”) and FSL Zhida Electric Technology Co., Ltd ( referred to as “Zhida Electric
Technology”), and FSL LIGHTING GmbH (referred to as “FSL LIGHTING”), a total of nine subsidiaries in all.
135
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
The consolidation scope of financial statement in the Reporting Period decreased one subsidiary Guangdong
Fozhao Financial Leas ing Co., Ltd. (referred to as “Leasing Company”) compared with that of last year.
For details, see relevant contents in Note VIII “Changes in the consolidation scope”, and Note IX “Equities in
other entities”
IV Basis for Preparation of Financial State ments
1. Preparation Basis
The financial statements of the Company are based on the continuing operation, and are confirmed and measured
according to the actual transactions and events, the Accounting Standards for Business Enterprises - Bas ic
Standards, other various specific accounting standards, the application guide, the interpretation of accounting
standards for business enterprises (hereinafter referred to as the Accounting Standards for Business Enterprises).
And based on the following important accounting policies, and accounting estimations, they are prepared
according to the relevant regulations of Rules for the Information Disclosure of Companies Publicly Issuing
Securities No. 15 - General Provisions on Financial Reporting of China Securities Regulatory Commission
(Revised in 2014). Except the Cash Flow Statement prepared under the principle of cash basis, the rest of financial
statement of the Company are prepared under the principle of accrual basis.
The Company didn’t find anything like being suspicious of the ability of continuing operation within 12 months
from the end of the Reporting Period with all available information.
2. Continuation
The Company has no matters affecting the continuing operation of the Company and is expected to have the
ability to continue to operate in the next 12 months. The financial statements of the Company are prepared on the
basis of continuing operation.
V Important Accounting Policies and Estimations
Reminders of the specific accounting policies and accounting estimations:
The Company confirmed the specific accounting policies and estimations according to production and operation
features, mainly reflecting in the method of provision for accounts receivables bad debt (Note 12. Accounts
Receivable), depreciation of fixed assets and amortization of intangible assets (Note 24. Fixed Assets and Note 30.
Intangible Assets), and recognized time point of income (Note 39. Revenue), etc.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with the Accounting Standards for Business
Enterprises, which factually and completely present the Company’s and the consolidated financial positions,
business results and cash flows, as well as other relevant information.
2. Fiscal Year
A fiscal year starts on January 1st and ends on December 31st according to the Gregorian calendar.
136
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3. Operating Cycle
An operating cycle for the Company is 12 months, which is also the classification criterion for the liquidity of its
assets and liabilities.
4. Recording Currency
Renminbi is the recording currency for the statements of the Company, and the financial statements are listed and
presented by Renminbi.
5. Accounting Treatment Methods for Business Combinations under the Same Control or not under the
Same Control
1. Business Combinations under the Same Control
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes
payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the
book value among final controller’s consolidated financial statement of the owner's equity of the merged
enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the
long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the
debts borne by the merging party shall offset against the capital reserve. If the capital res erve is insufficient to
dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,
regard the share of the book value among final controller’s consolidated financial statement of the owner's equity
of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocks
issued shall be regarded as the capital stock, while the difference between the initial cos t of the long-term equity
investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is
insufficient to dilute, the retained earnings shall be adjusted.
2. Business Combinations not under the Same Control
The Company measured the paid assets as the consideration of business combination and liabilities happened or
undertaken by fair value. The difference between fair value and its book value shall be included into the current
losses and gains. The Company distributed combined cost on the purchasing date.
The difference of the combination cost greater than the fair value of the identifiable net assets of the acquiree
acquired is recognized as goodwill; the difference of the combination cost less than the fair value of the
identifiable net assets of the acquiree acquired is included into current losses and gains.
As for the assets other than intangible assets acquired from the acquiree in a bus iness combination (not limited to
the assets which have been recognized by the acquiree), if the economic benefits brought by them are likely to
flow into the Company and their fair values can be measured reliably, they shall be separately recognized and
measured in light of their fair values; intangible asset whose fair value can be measured reliably shall be
separately recognized as an intangible asset and shall measured in light of its fair value; As for the liabilities other
than contingent liabilities acquired from the acquiree, if the performance of the relevant obligations is likely to
result in any out-flow of economic benefits from the Company, and their fair values can be measured reliably,
they shall be separately recognized and measured in light of their fair values; As for the contingent liabilities of
the acquiree, if their fair values can be measured reliably, they shall separately recognized as liabilities and shall
be measured in light of their fair values.
137
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
6. Methods for Preparing Consolidated Financial Statements
1. Principle of Determining the Scope of Consolidation
The scope of consolidation of the consolidated financial statements of the Company is determined on the bas is of
control. Control means that the investors has the right to invest in the investee and enjoy a variable return through
the participation of the relevant activities of the investee, and has the ability to use the power over the investee to
affect the amount of its return. The Company includes the subsidiaries with actual right of control (including
separate entity controlled by the Parent Company) into consolidated financ ial statements.
2. Principles, Procedures and Methods for the Preparation of Consolidated Statements
(1) Principles, Procedures and Methods for the Preparation of Consolidated Statements
All subsidiaries included into the scope of consolidated financial statements adopted same accounting policies and
fiscal year with the Company. If the accounting policies and fiscal year of the subsidiaries are different to the
Company’s, necessary adjustment should be made in accordance with the Company’s accounting policies and
fiscal year when consolidated financial statements are prepared.
The consolidated financial statements are based on the financial statements of the Parent Company and
subsidiaries included into the consolidated scope. The consolidated financ ial statements are prepared by the
Company who makes adjustment to long-term equity investment to subsidiaries by equity method according to
other relevant materials after the offset of the share held by the Parent Company in the equity capital investment
of the Parent Company and owner’s equity of subsidiaries and the significant transactions and intrabranch within
the Company.
For the balance formed because the current loss shared by the minority shareholders of the subsidiary is more than
the share enjoyed by the minority shareholders of the subsidiary in the initial shareholders’ equity, if the Articles
of Corporation or Agreement didn’t stipulate that minority shareholders should be responsible for it, then the
balance need to offset the shareholders’ equity of the Company; if the Articles of Corporation or Agreement
stipulated that minority shareholders should be responsible for it, then the balance need to offset the minority
shareholders’ equity.
(2) Treatment Method of Increasing or Disposing Subsidiaries during the Reporting Period
During the Reporting Period, if the subsidiaries were added due to Business combinations under the same control,
then initial book balance of consolidated balance sheet need to be adjusted; the income, expenses, and profits of
subsidiaries from the combination’s period-begin to the end of the reporting period need to be included into
consolidated income statement; the cash flow of subsidiaries from the combination’s period-begin to the end of
the reporting period need to be included into consolidated cash flow statement. if the subsidiaries were added due
to Business combinations not under the same control, then initial book balance of consolidated balance sheet
doesn’t need to be adjusted; the income, expenses, and profits of subsidiaries from the purchasing date to the end
of the reporting period need to be included into consolidated income statement; the cash flow of subsidiaries from
purchasing date to the end of the reporting period need to be included into consolidated cash flow statement.
During the Reporting Period, if the Company disposed the subsidiaries, then the income, expenses, and profits of
subsidiaries from period-begin to the disposal date need to be included into consolidated income statement; the
cash flow of subsidiaries from period-begin to the disposal date need to be included into consolidated cash flow
statement.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above and be divided into
138
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
joint operations and joint ventures.
When the Company is the joint venture party of the joint operations, should recognize the following items related
to the interests share of the joint operations:
(1) Recognize the assets individually held and the assets jointly held by recognizing according to the holding
share;
(2) Recognize the liabilities undertook individually and the liabilities jointly held by recognizing according to the
holding share;
(3) Recognize the revenues occurred from selling the output share of the joint operations enjoy by the Company;
(4) Recognize the revenues occurred from selling the assets of the joint operations according to the holding share;
(5) Recognize the expenses individually occurred and the expenses occurred from the joint operations according
to the holding share of the Company.
When the Company is the joint operation party of the joint ventures, should recognize the investment of the joint
ventures as the long-term equity investment and be measured according g to the said methods of the notes of the
long-term equity investment of the financial statement.
8. Recognition Standard for Cash and Cash Equivalents
In the Company’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for
cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,
which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign Currency and Accounting Method for Foreign Currency
1. Foreign Currency Business
Foreign currency shall be recognized by employing systematic and reasonable methods, and shall be translated
into the amount in the functional currency at the exchange rate which is approximate to the spot exchange rate of
the transaction date. On the balance sheet date, the foreign currency monetary items shall be translated at the spot
exchange rate. The balance of exchange arising from the difference between the spot exchange rate on the balance
sheet date and the spot exchange rate at the time of initia l recognition or prior to the balance sheet date shall be
recorded into the profits and losses at the current period except that the balance of exchange arising from foreign
currency borrowings for the purchase and construction or production of qualified assets shall be capitalized. The
foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange
rate on the transaction date.
2. Translation of Foreign Currency Financial Statements
The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet
date. Among the owner’s equity items, except for the items as “undistributed profits”, other items shall be
translated at the spot exchange rate at the time when they are incurred. The revenues and the expenses items of the
income statement should be translated according to the spot rate on the exchange date.
The difference of the foreign currency financial statements occurred from the above translation should be listed
under the “other comprehensive income” item of the owners’ equity of the consolidated financial statement. As
for the foreign currency items which actually form into the net investment of the foreign operation, the exchange
difference occurred from the exchange rate changes should be listed under the “other comprehensive income” of
139
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
the owners’ equity among the consolidated financial statement when compile the consolidated financial statement.
When disposing the foreign operation, as for the discounted difference of the foreign financial statement related to
the foreign operation should be transferred in the current gains and losses according to the proportion. The foreign
cash flow adopts the spot exchange rate on the occurring date of the cash flow. And the influenced amount of the
exchange rate changes should be individually listed among the cash flow statement.
10. Financial Instruments
Financial instruments refer to the contracts that constitute a company’s financial assets and the financial liab ilities
or equity instruments of other units.
1. Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a financial asset or financial
liability.
A financial asset (or part of a financial asset or part of a group of similar financ ial assets) that meets the following
conditions should be derecognized, or in other words, be written off from its account and balance sheet:
1) The right to receive cash flow from the financial asset has expired;
2) The right to receive cash flow from the financial asset has been transferred, or the “transfer” agreement
specifies the obligation to duly pay the full amount of cash flow received to a third party; and (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.
A financ ial liability that has been fulfilled, canceled or expired should be derecognized. If a financial liability is
replaced with another financial liability by the same creditor on almost entirely different terms materially, or the
terms for an existing liability have been almost fully revised materially, such replacement or revision should be
treated as derecognition of the original liability and recognition of the new liability, and the difference should be
included into current profits/losses.
A financial asset traded in a conventional manner should be recognized and derecognized by trade-date
accounting. The trading of financial assets in a conventional manner means that financial assets are received or
delivered by the deadline as specified in regulations or general practice according to contract provisions. Trade
date refers to the date committed by the Company to buy or sell a financial asset.
2. Classification and measurement of financial assets
The Company classifies the financial assets when initially recognized into financial assets measured at amortized
cost, financial assets measured by the fair value and the changes recorded in other comprehensive income and
financial assets at fair value through profit or loss based on the business model for financial assets management
and characteristics of contractual cash flow of financial assets. Financial assets initially recognized shall be
measured at their fair values. For accounts receivable and notes receivable excluding major financing or without
regard to financing over one year generated from ales of commodities or provision of labor services, the initial
measurement shall be conducted based on the transaction price.
For financial assets at fair value through profit or loss, the transaction expenses thereof shall be directly included
into the current profit or loss; for other financial assets, the transaction expenses thereof shall be included into the
initially recognized amount.
The subsequent measurement of financial assets depends on the classification thereof:
(1) Debt instrument investments measured at amortized cost
Financial assets meeting the following conditions at the same time shall be classified as financ ial assets measured
at amortized cost: the business mode of the Company to manage such financial assets targets at collecting the
140
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
contractual cash flow. The contract of such financial assets stipulates that the cash flow generated in the specific
date is the payment of the interest based on the principal and outstanding principal amount. The interest income
for this kind of financial assets shall be recognized by effective interest method, and the gains or losses generated
from the derecognition, modification or impairment shall all be included into the current profit or loss. This kind
of financial assets mainly consist of monetary capital, accounts receivable and notes receivable, other receivables,
investments in debt obligations and long-term receivables. The Company presents the investments in debt
obligations due within one year since the balance sheet date and long-term receivables as current portion of
non-current assets and the original investments in debt obligations with maturity date within one year as other
current assets.
(2) Investments in debt instruments measured at fair value and changes thereof recorded into other comprehensive
income
Financial assets meeting the following conditions at the same time shall be classified as financ ial assets measured
at fair value and changes thereof recorded into other comprehensive income: the business mode of the Company
to manage such financial assets takes contract cash flow collected as target and selling as target. The contract of
such financial assets stipulates that the cash flow generated in the specific date is the payment of the interest based
on the principal and outstanding principal amount. The interest income for this kind of financial assets shall be
recognized by effective interest method.
All changes in fair value should be included into other comprehensive income except for interest income,
impairment losses and exchange differences, which should be recognized as current profits/losses. When a
financial asset is derecognized, the cumulative gains or losses included into other comprehensive income
previously should be transferred out and included into current profits/losses. Such financial assets should be
presented as other credit investments. Other credit investments that will mature within one year from the date of
balance sheet should be presented as non-current assets due within one year, and other credit investments with the
original maturity date coming within one year should be presented as other current assets.
(3) Equity instrument investment measured at fair value with changes included into other comprehensive income
The Company irrevocably chooses to designate part of non-trading equity instrument investments as financial
assets measured at fair value with changes included into other comprehensive income. Only related dividend
income (excluding the dividend income confirmed to be recovered as part of investment costs) will be rec ognized
into current profits/losses, while subsequent changes in fair value will be recognized into other comprehensive
income without the withdrawal of impairment provisions required. When a financial asset is derecognized, the
cumulative gains or losses included into other comprehensive income previously should be recognized into
retained earnings. Such financial assets should be presented as other equity investments.
A financial asset that meets one of the following conditions is classified as a trading financial asset: The financial
asset has been acquired in order to be sold or repurchased in the near future; the financial asset is part of an
identifiable financ ial instrument portfolio under centralized management, and there is evidence proving that the
company has recently adopted a short-term profit model; it is a derivative instrument, but derivative instruments
that are designated as and are effective hedging instruments and those conforming with financial guarantee
contracts are excluded.
(4) Financial assets at fair value through profit or loss
The Company classifies financial assets except for above-mentioned financial assets measured with amortized
cost and financial assets measured with fair value whose change is included into other comprehensive income into
financial assets at fair value through profit or loss. The subsequent measurement of such kind of financial assets
shall be conducted by fair value method and all changes in fair value shall be recorded into the current profit or
loss. Such financial assets shall be presented as trading financial assets, and those will due over one year since the
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balance sheet date and expectedly held over one year shall be presented as other non-current financial assets.
3. Classification and measurement of financial liabilities
The Company’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value
through profit or loss, other financial liabilities and derivative instruments designated as effective hedging
instruments. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately
recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are
included in the initial recognition amounts.
The subsequent measurement of financial liabilities depends on the classification thereof:
(1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include trading financial liabilities (including the derivative
instruments belonging to financial liabilities) and financial liabilities designated at the initial recognition to be
measured by the fair value and their changes are recorded in the current profit or loss.
A financial liability that meets one of the following conditions is classified as a trading financial liability: The
financial liability has been undertaken in order to be sold or repurchased in the near future; the financial liability is
part of an identif iable financial instrument portfolio under centralized management, and there is evidence proving
that the company has recently adopted a short-term profit model; it is a derivative instrument, but derivative
instruments that are designated as and are effective hedging instruments and those conforming with financial
guarantee contracts are excluded. Trading financial liabilities (including derivative instruments classified as
financial liabilities) should be subsequently measured at fair value, and all changes in fair value should be
recorded into current profits/losses, except for those related to hedging accounting.
(2) Other financial liabilities
For such kind of financial liabilities, the subsequent measurement shall be conducted by effective interest method
based on the amortized cost.
4. Impairment of financial instruments
Based on expected credit losses, the Company carries out impairment treatment on financial assets measured at
amortized cost and debt instrument investments measured at fair value with changes included into other
comprehensive income, rental receivables, contract assets and financial assets and recognizes bad debt provision.
Credit losses refer to the difference between all contract cash flows discounted by the original actual interest rate
receivable according to contracts and all cash flows expected to be received by the Company, which is the present
value of all cash shortfalls. The financial assets purchased by or originating from the Company with credit
impairment should be discounted by the actual interest rate of the financial assets after credit adjustment.
In respect of receivable accounts and contract assets that do not contain significant financing components, the
Company uses the simplified measurement method to measure bad debt provision by the amount equivalent to the
expected credit losses of the whole duration.
In respect of receivable accounts and contract assets that contain significant financing components, the Company
opts to use the simplified measurement method to measure bad debt provision by the amount equivalent to the
expected credit losses for the whole duration.
For other financial assets and financial guarantee contracts than the above using the simplified measurement
method, the Company on the balance sheet date assesses whether their credit risks have increased substantially
since the initial recognition. If the credit risks have not increased substantially s ince the initial recognition and are
in the first stage, the Company will measure bad debt provision by the amount equivalent to the expected credit
losses for the next 12 months and calculate interest income by the book balance and the actual interest rate; if the
credit risks have increased obviously without credit impairment since the initial rec ognition and are in the second
stage, the Company will measure bad debt provision by the amount equivalent to the expected credit losses for the
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whole duration and calculate interest income by the book balance and the actual interest rate; if the credit risks
have increased substantially with credit impairment since the initial recognition and are in the third stage, the
Company will measure bad debt provision by the amount equivalent to the expected credit losses for the whole
duration and calculate interest income by the amortized cost and the actual interest rate. For financial instruments
with only low credit risks on the balance sheet date, the Company assumes that their credit risks have not
increased substantially since the initial recognition.
The Company 1) assesses expected credit losses of financial assets with credit impairment based on individual
items; 2) assesses expected credit losses of financial assets that are not derecognized but with changes in contract
cash flows due to revision of or renegotiation on contracts by the Company and the counterparty, based on
individual items; 3) assesses expected credit losses of other financial assets based on age combination.
The Company considers related past matters, current conditions, the reasonableness of the forecast on future
economic conditions and well-founded information when assessing expected credit losses.
The Company’s information of the judgment standards for remarkable increase in credit risks, definition of assets
with incurred credit impairment and assumption of measurement on expected credit losses is disclosed in this
Note 12 Accounts Receivable.
When no longer reasonably expects to recover all or partial contractual cash flow of financial assets, the Company
directly writes down the carrying amount of the financial assets.
5. Financial instruments offset
a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet when
the following conditions are met at the same time: When the Company has a legal right that is currently
enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net
basis, or to realize the financial asset and settle the financial liability simultaneously.
6. Financial guarantee contract
A financial guarantee contract refers to a contract in which a specific debtor shall compensate the contract holder
suffering the losses when the debtor is unable to repay the debt in due course according to the debt instrument
terms. Financial guarantee contracts are measured at fair value at the initial recognition. After the initial
recognition, all financial guarantee contracts should be subsequently measured by the higher amount between the
amount of bad debt provision for expected credit losses recognized on the balance sheet date and the balance of
the initially recognized amount deducting the cumulative amortization recognized according to the income
recognition principle, except for the financial guarantee contracts designated as financial liabilities measured at
fair value with changes recorded into current profits/losses.
7. Derivative financ ial instruments
The Company uses derivative financial instruments, which are initially measured at the fair value on the signature
date of the derivative transaction contract and subsequently measured at their fair value. A derivative financial
instrument with a positive fair value is recognized as an asset and that with a negative fair value is recognized as a
liability.
Gains or losses from changes in the fair value of derivative instruments are directly recognized into current
profits/losses.
8. Revision of financial assets
For the financial assets that are not derecognized but with changes in contract cash flows due to revision of or
renegotiation on contracts by the Company and the counterparty, the Company recalculates the book balance of
the financial assets according to the renegotiated or revised contract cash flows by the discounted value of the
original actual interest rate (or the actual interest rate after credit adjustment). Relevant gains or losses are
recorded into current profits/losses. Costs or expenses for the revision of financial assets are adjusted to the
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revised book balance of financial assets and amortized in the remaining period of the revised financial assets.
9. Transfer of financial assets
As for the Company transferred nearly all of the risks and rewards related to the ownership of a financial asset to
the transferee, should derecognize the financial assets; as for maintained nearly all of the risks and rewards related
to the ownership of a financial asset, should continue to recognize the transferred financial assets .
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 and recognize the assets and liabilities
generated; (2) If it does not give up its control over the financial asset, it shall, according to the extent of its
continuous involvement in the transferred financial asset, recognize the related financial asset and recognize the
relevant liability accordingly.
11. Notes Receivable
Category Accounting estimate policy
Bank’s acceptance bill The Company evaluates that the portfolio has relatively low credit risks, and generally
no provision for impairment is made.
12. Accounts Receivable
The Company withdraws the impairment loss for accounts receivable excluding significant financing component
with the simplified method.
1. Accounts Receivable with Significant Single Amount for which the Bad Debt Provision is Made Individually
Definition or amount criteria for an account M aking separate bad-debt provisions for accounts receivable with a significant single
receivable with a significant single amount amount
M aking separate bad-debt provisions for For an account receivable with a significant single amount, the impairment test shall be
accounts receivable with a significant single carried out on it separately. If there is any objective evidence of impairment, the
amount impairment loss is recognized and the bad-debt provision is made according to the
difference between the present value of the account receivable’s future cash flows and
its carrying amount.
2. Accounts Receivable for which the Bad Debt Provision is Withdrawn by Credit Risk Characteristics
Group name Withdrawal method of bad debt provision
Common transaction group Aging analysis method
Internal transaction group Other methods
In the groups, those adopting aging analys is method to withdraw bad debt provision:
Aging Withdrawal proportion of accounts receivable
3%
Within 1 year (including 1 year)
10%
1 to 2 years
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30%
2 to 3 years
50%
3 to 4 years
80%
4 to 5 years
100%
Over 5 years
3. Accounts Receivable with an Insignificant Single Amount but for which the Bad Debt Provis ion is Made
Independently
Reason of individually withdrawing bad debt There are definite evidences indicate the obvious difference of thee return
provision ability
Withdrawal method for bad debt provision Recognizing the impairment loss and withdrawing the bad debt provision
according to the difference between the present value of the account
receivable’s future cash flows and its carrying amount.
13. Accounts Receivable Financing
Not applicable
14. Other Receivables
Recognition method and accounting treatment for expected credit losses of other receivables
Refer to Note 12 Accounts Receivable for details about the recognition method and accounting treatment for
expected credit losses of other receivables which is the same as that of accounts receivable since 1 January 2019.
15. Inventories
1. Classification of Inventory
Inventory refers to finished products, goods in process, and materials consumed in the production process or the
provision of labor services held by the Company for sale in daily activities, mainly including raw materials, goods
in process, materials in transit, finished products, commodities, turnover materials, and commissioned processing
materials. Turnover materials include low-value consumables and packaging.
2. Pricing Method of Inventory Sent Out
The inventory is valued at actual cost when acquired, and inventory costs include procurement costs, processing
costs and other costs. The weighted average method is used when receiving or sending out inventory.
3. Basis for Determining the Net Realizable Value of Inventory and the Method of Withdrawal for Inventory
Impairment
Net realizable value refers to the estimated selling price of the inventory minus the estimated cost to be incurred at
the time of completion, the estimated selling expenses and the relevant taxes and fees in daily activities. In
determining the net realizable value of inventory, the conclusive evidence obtained is used as the basis and the
purpose of holding the inventory and the impact of the events after the balance sheet date should be taken into
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account.
For finished products, the materials used for sale and other goods used for direct sale, the net realizable value is
determined by the estimated selling price of the inventory minus the estimated selling expenses and related taxes
in the process of normal production and operation.
For materials inventory needs to be processed, the net realizable value is determined by the estimated selling price
of the finished products minus the estimated cost to be incurred, the estimated sales costs and the relevant taxes
and fees in the process of normal production and operation.
4. Inventory System
The inventory system of the Company is perpetual inventory.
5. Amortization Method of Turnover Materials
Low-value consumables are amortized in one-off method.
The packaging is amortized in one-off method.
16. Contractual Assets
Not applicable
17. Contractual Cost
Not applicable
18. Assets Held for Sale
1. Assets Held for Sale
When a company relies mainly on selling (including the exchanges of non-monetary assets with commercial
substance) instead of continuing to use a non-current asset or disposal group to recover its book value, the
non-current asset or disposal group is classified as asset held for sale. The non-current assets mentioned above do
not include investment properties that are subsequently measured by the fair value model, biological assets
measured by fair value less net selling costs, assets formed from employee remuneration, financial assets, deferred
income tax assets and rights generated from insurance contracts.
Disposal group refers to a group of assets that are disposed of together as a whole through sale or other means in a
transaction, and the liabilities directly related to these assets transferred in the transaction. In certain
circumstances, the disposal group includes goodwill obtained in business combination.
The Company recognizes non-current assets or disposal groups that meet both of the following conditions as held
for sale: ① Assets or disposal groups can be sold immediately under current conditions based on the practice of
selling such assets or disposal groups in similar transactions; ② Sales are highly likely to occur, that is, the
Company has already made a resolution on a sale plan and obtained a certain purchase commitment, and the sale
is expected to will be completed within one year, and the sale has been approved if relevant regulations require
relevant authority or regulatory authority of the Company to approve it.
Non-current assets or disposal groups specifically obtained by the Company for resale will be classified by the
Company as a held-for-sale category on the acquisition date when they meet the stipulated conditions of
“expected to be sold within one year” on the acquisition date, and may well satisfy the category of held-for-sale
within a short time (which is usually 3 months).
If one of the following circumstances cannot be controlled by the Company and the transaction between
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non-related parties fails to be completed within one year, and there is sufficient evidence that the Company still
promises to sell the non-current assets or disposal groups, the Company should continue to classify the
non-current assets or disposal groups as held-for-sale: ①The purchaser or other party unexpectedly sets
conditions that lead to extension of the sale. The Company has already acted on these conditions in a timely
manner and it is expected to be able to successfully deal with the conditions that led to the extension of the s ale
within one year after the conditions were set. ②Due to unusual circumstances, the non-current assets or disposal
groups held for sale failed to be sold within one year. In the first year, the Company has taken necessary measures
for these new conditions and the assets or disposal groups meet the conditions of held-for-sale again.
If the Company loses control of a subsidiary due to the sale of investments to its subsidiaries, whether or not the
Company retains part of the equity investment after the sale, when the proposed sale of the investment to the
subsidiary meets the conditions of held- for-sale, the investment to the subsidiary will be classified as
held-for-sale in the individual financial statement of the parent company, and all the assets and liabilities of the
subsidiary will be classified as held-for-sale in the consolidated financial statement.
When the company initially measures or re-measures non-current assets or disposal groups held for sale on the
balance sheet date, if the book value is higher than the fair value minus the net amount of the sale costs, the book
value will be written down to the net amount of fair value minus the sale costs, and the amount written down will
be recognized as impairment loss of assets and included in the current profit and loss, and provision for
impairment of held-for-sale assets will be made. For the confirmed amount of impairment loss of assets of the
disposal groups held for sale, the book value of goodwill of the disposal groups will be offset first, and then the
book value of various non-current assets in the disposal groups will be offset according to the proportions.
If the net amount that the fair value of the non-current assets or disposal groups held for sale on the follow -up
balance sheet date minus the sale costs increases, the previous written-down amount will be restored, and reversed
to the asset impairment loss confirmed after the assets being classified as held-for-sale. The reversed amount will
be included in the current profit or loss. The book value of goodwill that has been deducted cannot be reversed.
Non-current assets held for sale or non-current assets in the disposal group are not subject to depreciation or
amortization. Interest and other expenses of liabilities in the disposal group held for sale will be confirmed as
before.
When a non-current asset or disposal group ceases be classified as held-for-sale or a non-current asset is removed
out from the held-for-sale disposal group due to failure in meeting the classification conditions for the category of
held-for-sale, it will be measured by one of the followings whichever is lower:
① The book value before being classified as held for sale will be adjusted according to the depreciation,
amortization or impairment that would have been recognized under the assumption that it was not classified as
held for sale;
② The recoverable amount.
2. Termination of Operation
Termination of operation refers to a separately identifiable constituent part that satisfies one of the following
conditions that has been disposed of by the Company or is classified as held-for-sale:
(1) This constituent part represents an independent main business or a separate main business area.
(2) This constituent part is part of an associated plan that is intended to be disposed of in an independent main
business or a separate major business area.
(3) This constituent part is a subsidiary that is specifically acquired for resale.
3. Presentation
In the balance sheet, the Company distinguishes the non-current assets held for sale or the assets in the disposal
group held for sale separately from other assets, and distinguish the liabilities in the disposal group held for sale
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separately from other liabilities. The non-current assets held for sale or the assets in the disposal group held for
sale are not be offset against the liabilities in the disposal group held for sale. They are presented as current assets
and current liabilities respectively.
The Company lists profit and loss from continuing operations and profit and loss from operating profits in the
income statement. For the termination of operations for the current period, the Company restates the information
originally presented as profit or loss of continuing operation in the current financial statements to profit or loss of
termination of the comparable accounting period. If the termination of operation no longer meets the conditions of
held-for-sale, the Company restates the information originally presented as a profit and loss of termination in the
current financial statements to profit or loss of continuing operation of the comparable accounting period.
19. Investments in Debt Obligations
Not applicable
20. Other Investments in Debt Obligations
Not applicable
21. Long-term Receivables
Not applicable
22. Long-term Equity Investments
Long-term equity investment refers to the Company’s long-term equity investment with control, joint control or
significant influence on the investee. The long-term equity investment of the Company which has no control, joint
control or significant influence on the investee is accounted for as financial assets available-for-sale or financial
assets at fair value and changes recognized in profit or loss for the current period. For details of accounting
policies, please refer to 10. Financial instruments
Joint control refers to the control that is common to an arrangement in accordance with the relevant agreement,
and the relevant activities of the arrangement must be agreed upon by the participant who has shared the control.
Significant influence refers to the Company has the power to participate in decision-making on the financial and
operating policies of the investee, but can’t control or jointly control the formulation of these policies with other
parties.
1. Investment Cost Recognition for Long-term Equity Investments
(1) For the merger of enterprises under the same control, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment,
and the direct relevant expenses occurred for the merger of enterprises shall be included into the profits and losses
of the current period.
(2) For the merger of enterprises not under the same control, The combination costs shall be the fair valu es, 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
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reliably, the Company shall record the said amount into the combination costs.
(3) The cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid. The cost consists of the expenses directly relevant to the obtainment of the long-term
equity investment, taxes and other necessary expenses.
(4) The cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued.
(5) The cost of a long-term investment obtained by the exchange of non-monetary assets (having commercial
nature) shall be recognized base on taking the fair value and relevant payable taxes as the cost of the assets
received.
(6) The cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at the
fair value.
2. Subsequent Measurement of Long-term Equity Investment and Recognized Method of Profit/Loss
The long-term equity investment with joint control (except for the common operator) or significant influence on
the investee is accounted by equity method. In addition, the Company's financial statements use cost method to
calculate long-term equity investments that can control the investee.
(1) Long-term Equity Investment Accounted by Cost Method
When the cost method is used for accounting, the long-term equity investment is priced at the initial investment
cost, and the cost of the long-term equity investment is adjusted according to additional investment or recovered
investment. Except the price actually paid when acquired investment or cash dividends or profits that have been
declared but not yet paid included in the consideration, current investment income is recognized by the cash
dividends or profits declared by the investee.
(2) Long-term Equity Investment Accounted by Equity Method
When the equity method is used for accounting, if the initial investment cost of the long-term equity investment is
greater than the fair value of the investee’s identifiable net assets, the initial investment cost of the long-term
equity investment shall not be adjusted; if the initial investment cost is less than the fair value of the investee’s
identifiable net assets, the difference shall be recorded into the current profits and losses, and the cost of the
long-term equity investment shall be adjusted at the same time.
When the equity method is used for accounting, the investment income and other comprehensive income shall be
recognized separately according to the net profit or loss and other comprehensive income realized by the investee,
and the book value of the long-term equity investment shall be adjusted at the same time. The part entitled shall be
calculated according to the profits or cash dividends declared by the investee, and the book value of the long-term
equity investment shall be reduced accordingly. For other changes in the owner’s equity other than the net profit
or loss, other comprehensive income and profit distribution of the investee, the book value of the long-term equity
investment shall be adjusted and inc luded in the capital reserve. When the share of the net profit or loss of the
investee is recognized, the net profit of the investee shall be adjusted and recognized according to the fair value of
the identifiable assets of the investee when the investment is made. If the accounting policies and accounting
periods adopted by the investee are inconsistent with the Company, the financial statements of the investee shall
be adjusted according to the accounting policies and accounting periods of the Company and the investment
income and other comprehensive income shall be recognized accordingly. For the transactions between the
Company and associates and joint ventures, if the assets made or sold don’t constitute business, the unrealized
gains and losses of the internal transactions are offset by the proportion attributable to the Company, and the
investment gains and losses are recognized accordingly. However, the loss of unrealized internal transactions
incurred by the Company and the investee attributable to the impairment loss of the transferred assets shall not be
offset. If the assets made to associates or joint ventures constitute business, and the investor makes long-term
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
equity investment but does not obtain the control, the fair value of the investment shall be taken as the initial
investment cost of the new long-term equity investment, and the difference between initial investment and the
book value of the investment is fully recognized in profit or loss for the current period. If the assets sold by the
Company to joint ventures or associates constitute business, the difference between the consideration and the book
value of the business shall be fully credited to the current profits and losses. If the assets purchased by Company
from joint ventures or associates constitute business, conduct accounting treatment in accordance with the
provisions of Accounting Standard for Business Enterprises No. 20 - Business combination, and the profits or
losses related to the transaction shall be recognized in full.
When the net loss incurred by the investee is recognized, the book value of the long-term equity investment and
other long-term equity that substantially constitute the net investment in the investee shall be written down to zero.
In addition, if the Company has an obligation to bear additional losses to the investee, the estimated liabilities are
recognized in accordance with the obligations assumed and included in the current investment losses. If the
investee has realized net profit in later period, the Company will resume the recognition of the income share after
the income share has made up the unrecognized loss share.
(3) Acquisition of Minority Interests
In the preparation of the consolidated financial statements, capital reserve shall be adjusted according to the
difference between the long-term equity investment increased due to the purchase of minority interests and the
share of the net assets held by the subsidiary from the date of purchase (or the date of combination) calculated
according to the proportion of the new shareholding ratio, and retained earnings shall be adjusted if the capital
reserve is insufficient to offset.
(4) Disposal of Long-term Equity Investment
In the consolidated financial statements, the parent company partially disposes of the long-term equity investment
in the subsidiary without the loss of control, and the difference between the disposal price and the net assets of the
subsidiary corresponding to the disposal of the long-term equity investment is included in the shareholders’ equity.
If the disposal of long-term equity investment in subsidiaries results in the loss of control over the subsidiaries,
handle in accordance with the relevant accounting policies described in NotesⅥ. “Principles, Procedures and
Methods for the Preparation of Consolidated Statements” .
In other cases, the difference between the book value and the actual acquisition price shall be recorded into the
current profits and losses for the disposal of the long-term equity investment.
For long-term equity investment accounted by the equity method and residual equity after disposal still accounted
by the equity method, other comprehensive income originally inc luded in the shareholders’ equity shall be treated
in the same basis of the investee directly disposing related assets or liabilities by corresponding proportion. The
owner’s equity recognized by the change of the owner’s equity of the investee other than the net profit or loss,
other comprehensive income and profit distribution is carried forward proportionally into the current profits and
losses.
For long-term equity investment accounted by the cost method and residual equity after disposal still accounted by
the cost method, other comprehensive income accounted by equity method or recognized by financial instrument
and accounted and recognized by measurement criteria before the acquisition of the control over the investee is
treated in the same basis of the investee directly disposing related assets or liabilities, and carried forward
proportionately into the current profits and losses. Other changes of owner’s equity in net assets of the investee
accounted and recognized by the equity method other than the net profit or loss, other comprehensive income and
profit distribution are carried forward proportionally into the current profits and losses.
3. Impairment Provisions for Long-term Equity Investments
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For the relevant testing method and provision making method, see Notes 31. Impairment of Long-term Assets.
23. Investment Property
Not applicable
24. Fixed Assets
(1) Recognition Conditions
Fixed assets of the Company refers to the tangible assets that simultaneously possess the features as follows: they
are held for the sake of producing commodities, rendering labor service, renting or business management; and
their useful life is in excess of one accounting year and unit price is higher. No fixed assets may be recognized
unless it simultaneously meets the conditions as follows: ① The economic benefits pertinent to the fixed asset are
likely to flow into the Company; and ② The cost of the fixed asset can be measured reliably.
(2) Depreciation Method
Expected net salvage
Category of fixed assets M ethod Useful life Annual deprecation
value
Housing and building Average method of
3—30 years 5% 31.67%-3.17%
useful life
M achinery equipments Average method of
2—10 years 5% 47.50%-9.50%
useful life
Transportation vehicle Average method of
5—10 years 5% 19.00%-9.50%
useful life
Average method of
Electronic equipment 2—8 years 5% 47.50%-11.88%
useful life
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
25. Construction in Progress
1. Pricing of Construction in Progress
The constructions are accounted according to the actual costs incurred. The constructions shall be carried forward
into fixed assets at the actual cost when reach intended usable condition. The borrowing expenses eligible for
capitalization incurred before the delivery of the construction are included in the construction cost; after the delivery,
the relevant interest expense shall be recorded into the current profits and losses.
2. Standard and Time of Construction in Progress Carrying Forward into Fixed Assets
The Company’s construction in progress is carried forward into fixed assets when the construction completes and
reaches intended usable condition. The criteria for determining the intended usable condition shall meet one of the
following:
(1) The physical construction (including installation) of fixed assets has been completed or substantially completed;
(2) Has been produced or run for trial, and the results indicate that the assets can run normally or can produce stable
products stably, or the results of the trial operation show that it can operate normally;
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(3) The amount of the expenditure on the fixed assets constructed is little or almost no longer occurring;
(4) The fixed assets purchased have reached the design or contract requirements, or basically in line with the design
or contract requirements.
3. Provision for Impairment of Construction in Progress
Please refer to Note 31: Long-term Asset Impairment under Note V for the impairment test method and provision
for impairment of construction in progress.
26. Borrowing Costs
The borrowing costs refer to interest and other related costs incurred by the Company as a result of borrowings,
including interest on borrowings, amortization of discounts or premiums, ancillary expenses and exchange
differences arising from foreign currency borrowings. The borrowing costs incurred by the Company directly
attributable to the acquisition, construction or production of assets eligible for capitalization are capitalized and
included in the cost of the relevant assets. Other borrowing costs are recognized as expenses according to the
amount at the time of occurrence, and are included in the current profits and losses.
1. Principle of capitalization of borrowing costs
Borrowing costs can be capitalized when all the following conditions are met: Asset expenditure has already
occurred; borrowing costs have already occurred; construction or production activities necessary to bring the
assets to the intended useable or sellable status have already begun.
2. Capitalization period of borrowing costs
Capitalization period refers to the period from the capitalization of borrowing costs starting to the end of
capitalization, excluding the period when capitalization is suspended.
If assets that meet the conditions of capitalization are interrupted abnormally in the course of construction or
production, and the interruption time exceeds 3 consecutive months, the capitalization of borrowing costs shall be
suspended. The borrowing costs incurred during the interruption are recognized as expenses and included in
current profits and losses until the acquisition or construction of the assets is resumed. The capitalization of the
borrowing costs continues if the interruption is a procedure necessary for the purchase or production of ass ets
eligible for capitalization to meet the intended useable or sellable status.
The borrowing costs shall cease to be capitalized when the purchased or produced assets that meet the conditions
of capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligible
for capitalization meet the intended useable or sellable status can be included in the current profits and losses
when incurred.
3. Calculation method of capitalized amount of borrowing costs
During the period of capitalization, the capitalization amount of interests (including amortization of discounts or
premiums) for each accounting period is determined in accordance with the following provis ions:
(1) For special borrowings for the acquisition or c onstruction of assets eligible for capitalization, the interest
expenses actually incurred in the current period of borrowings shall be recognized after deducting the interest
income obtained by depositing the unused borrowing funds into the bank or investment income obtained from
temporary investment.
(2) Where the general borrowing is occupied for the acquisition or construction of assets eligible for capitalization,
the Company multiplies the weighted average of the asset expenditure of the accumulated asset expenditure
exceeding the special borrowing by the capitalization rate of the general borrowing to calculate the amount of
interest that should be capitalized for general borrowings. The capitalization rate is determined based on the
weighted average interest rate of general borrowings.
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27. Living Assets
Not applicable
28. Oil and Gas Assets
Not applicable
29. Right-of-use Assets
Not applicable
30. Intangible Assets
(1) Pricing Method, Useful Li fe and Impairment Test
1. Recognition Criteria of Intangible Assets
Intangible assets are identifiable non-monetary assets that are owned or controlled by the Company without physical
form. The intangible assets are recognized when all the following conditions are met: (1) Conform to the definition
of intangible assets; (2) Expected future economic benefits related to the assets are likely to flow into the Company;
(3) The costs of the assets can be measured reliably.
2. Initial Measurement of Intangible Assets
Intangible assets are initially measured at cost. Actual costs are determined by the following principles:
(1) The cost of the acquisition of intangible assets, including the purchase price, relevant taxes and other expenses
directly attributable to the intended use of the asset. The payment of purchase price of intangible assets exceeding
normal credit terms is deferred, and the cost of intangible assets having financing nature in essence shall be
recognized based on the present value of the purchase price. The difference between the actual payment pr ice and
the present value of the purchase price shall be recorded into the current profits and losses in the credit period except
that can be capitalized in accordance with the Accounting Standard for Business Enterprises No. 17 - Borrowing
Cost.
(2) The cost of investing in intangible assets shall be recognized according to the value agreed upon in the
investment contract or agreement, except that the value of the contract or agreement is unfair.
3. Subsequent Measurement of Intangible Assets
The Company shall determine the useful life when it obtains intangible assets. The useful life of intangible assets is
limited, and the years of the useful life or output that constitutes the useful life or similar measurement units shall be
estimated. The intangible assets are regarded as intangible assets with uncertain useful life if the term that brings
economic benefits to the Company is unforeseeable
Intangible assets with limited useful life shall be amortized by straight line method from the time when the
intangible assets are available until can’t be recognized as intangible assets; intangible assets with uncertain useful
life shall not be amortized. The Company reviews the estimated useful life and amortization method of intangible
assets with limited useful life at the end of each year, and reviews the estimated useful life of intangible assets with
uncertain useful life in each accounting period. For intangible assets that evidence shows the useful life is limited,
the useful life shall be estimated and the intangible assets shall be amortized in the estimated useful life.
4. Recognition Criteria and Withdrawal Method of Intangible Asset Impairment Provision
The impairment test method and withdrawal method for impairment provision of intangible assets are detailed in
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Note 31: Long-term asset impairment under Note V.
(2) Accounting Policy for Internal Research and Development Expendi tures
The expenditures in internal research and development projects of the Company are classified into expenditures in
research stage and expenditures in development stage. The expenditures in research stage are included in the
current profits and losses when incurred. The expenditures in development stage are recognized as intangible
assets when meeting the following conditions:
(1) The completion of the intangible assets makes it technically feasible for using or selling;
(2) Having the intention to complete and use or sell the intangible assets;
(3) The way in which an intangible asset generates economic benefits, including the proof that the products
produced with the intangible asset have market or the proof of its usefulness if the intangible asset has market and
will be used internally;
(4) Having sufficient technical, financial resources and other resources to support the development of the
intangible assets and the ability to use or sell the intangible assets;
(5) Expenditure attributable to the development stage of intangible assets can be measured reliably.
The cost of self-developed intangible assets includes the total expenditure incurred since meeting intangible assets
recognition criterion until reaching intended use. Expenditures that have been expensed in previous periods are no
longer adjusted.
Non-monetary assets exchange, debt restructuring, government subsidies and the cost of intangible assets acquired
by business combination are recognized according to relevant provisions of Accounting Standard for Business
Enterprises No. 7 - Non-monetary assets exchange, Accounting Standard for Business Enterprises No. 12 - Debt
restructuring, Accounting Standards for Business Enterprises No. 16 - Government subsidies, Accounting
Standard for Business Enterprises No. 20 - Business combination respectively.
31. Impairment of Long-term Assets
For non-current non-financial assets such as fixed assets, construction in progress, intangible assets with limited
useful life, investment real estate measured in cost mode and long-term equity investments in subsidiaries, joint
ventures and associates, the Company determines whether there is indication of impairment at balance sheet date.
If there is indication of impairment, then estimate the amount of its recoverable value and test the impairment.
Goodwill, intangible assets with uncertain useful life and intangible assets that have not yet reached useable state
shall be tested for impairment every year, whether or not there is any indication of impairment.
If the impairment test results indicate that the recoverable amount of the asset is lower than its book value, the
impairment provision shall be made at the difference and included in the impairment loss. The recoverable
amount is the higher of the fair value of the asset minus the disposal cost and the present value of the expected
future cash flow of the asset. The fair value of the asset is recognized according to the price of the sales agreement
in the fair trade; if there is no sales agreement but there is an active market, the fair value is recognized according
to the buyer’s bid of the asset; if there is no sales agreement or active market, the fair value of asset shall be
estimated based on the best information that can be obtained. Disposal costs include legal costs related to disposal
of assets, related taxes, handling charges, and direct costs incurred to enable the asset reaching sellable status. The
present value of the expected future cash flows of the assets is recognized by the amount discounted at appropriate
discount rate according to the expected future cash flows arising from the continuing use of the asset and the final
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
disposal. The provision for impairment of assets is calculated and recognized on the basis of individual assets. If it
is difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group shall
be recognized by the asset group to which the asset belongs. The asset group is the smallest portfolio of assets that
can generate cash inflows independently.
The book value of the goodwill presented separately in the financial statements shall be apportioned to the asset
group or portfolio of asset groups that is expected to benefit from the synergies of the business combination when
the impairment test is conducted. The corresponding impairment loss is recognized if the test results indicate that
the recoverable amount of the asset group or portfolio of asset groups containing the apportioned goodwill is
lower than its book value. The amount of the impairment loss shall offset the book value of the goodwill
apportioned to the asset group or portfolio of asset groups, and offset the book value of other assets in proportion
according to the proportion of the book value of other assets except the goodwill in the asset group or portfolio of
asset groups.
Once the impairment loss of the above asset is recognized, the portion that the value is restored will not be written
back in subsequent periods.
32. Long-term Prepaid Expense
Long-term prepaid expense refers to general expenses with the apportioned period over one year (one year
excluded) that have occurred but attributable to the current and future periods. Long-term deferred expense shall
be amortized averagely within benefit period. In case of no benefit in the future accounting period, the amortized
value of such project that fails to be amortized shall be transferred into the profits and losses of the current period.
33. Contractual Liabilities
Not applicable
34. Payroll
(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and
benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing
fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term
compensation actually happened during the accounting period when the active staff offering the service for the
Group should be recognized as liabilities and is inc luded in the current gains and losses or relevant assets cost. Of
which the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
Welfare after demission mainly includes defined contribution plans and defined benefit plans. Of which defined
contribution plans mainly include basic endowment insurance, unemployment insurance, annuity funds, etc., and
the corresponding payable and deposit amount should be included into the relevant assets cost or the current gains
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
and losses when happen.
(3) Accounting Treatment of the Demission Welfare
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor
contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a
layoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier date
between the time when the Group could not one-sided withdraw the demission welfare which offered by the plan
or layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to the
reorganization of the payment of the demission welfare and at the same time includes which into the current gains
and losses. But if the demission welfare is estimated that could not totally pay after the end of the annual report
within 12 months, should be disposed according to other long-term payroll payment.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare.
The group would recorded the salary and the social security insurance fees paid and so on from the employee’s
service terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under the
condition that they meet the recognition conditions of estimated liabilities.
The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should be
accounting disposed according to the setting drawing plan, while the rest should be disposed according to the
setting revenue plan.
35. Lease Liabilities
Not applicable
36. Provisions
1. Recognition of Provisions
The obligation such as external guaranty, pending litigation or arbitration, product quality assurance, layoff plan,
loss contract, restructuring and disposal of fixed assets, pertinent to a contingencies shall be recognized as an
provisions when the following conditions are satisfied simultaneously: ① That obligation is a current obligation
of the enterprise; ② It is likely to cause any economic benefit to flow out of the enterprise as a result of
performance of the obligation; and ③ The amount of the obligation can be measured in a reliable way
2. Measurement of Provisions
The provisions shall be initially measured in accordance with the best estimate of the necessary expenses for the
performance of the current obligation. If there is a sequent range for the necessary expenses and if all the
outcomes within this range are equally likely to occur, the best estimate shall be determined in accordance with
the middle estimate within the range. In other cases, the best estimate shall be conducted in accordance with the
following situations, respectively: ① If the Contingencies concern a single item, it shall be determined in the light
of the most likely outcome. ② If the Contingencies concern two or more items, the best estimate should be
calculated and determined in accordance with all possible outcomes and the relevant probabilities. ③ When all or
some of the expenses necessary for the liquidation of an provisions 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
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
the reimbursement will be obtained. The Company shall check the book value of the provisions on the balance
sheet date. The amount of compensation is not exceeding the book value of the recognized provisions .
37. Share-based Payment
Not applicable
38. Other Financial Instruments such as Preferred Shares and Perpetual Bonds
Not applicable
39. Revenue
Has implemented the new standards governing revenue
□ Yes √ No
1. Sale of Goods
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: ① The
significant risks and rewards of ownership of the goods have been transferred to the buyer by the Company; ② The
Company retains neither continuous management right that usually keeps relation with the ownership nor effective
control over the sold goods; ③ The revenue amount could be reliably measured; and ④ The relevant economic
benefits may flow into the Company, and the relevant cost which had occurred or will occur could be reliably
measured.
Specific principles for recognition of the “domestic sale and export” incomes of the Company:
(1) Method for recognition of the domestic sale income: According to the buyer’s requirements, the Company
delivers to the buyer the products that have been considered qualified upon examination. The amount of the income
has been determined and the sales invoice has been issued. The payment for the delivered products has been
received in full or is expectedly recoverable.
(2) Method for recognition of the export income: The Company produces the products according to the contract
signed with the buyer. After the products have been examined as qualified, the Company completes the customs
clearing procedure for export. The shipping company loads the products for shipping. The amount of the income has
been determined and the export sales invoice has been issued. The payment for the delivered products has been
received in full or is expectedly recoverable.
2. Provision of Labor Services
In the case that the results of the labor service transaction can be reliab ly estimated, the income from the provision of
labor services shall be recognized at the balance sheet date by the percentage of completion method according to the
progress of the labor transaction.
The result of the provision of labor services can be reliably estimated refers that all the following conditions are met:
① The amount of income can be measured reliably; ②The relevant economic benefits are likely to inflow to the
enterprise; ③ The progress of the transaction can be reliably determined; ④ The cost incurred and to be incurred in
the transaction can be measured reliably.
If the result of the provision of labor services can’t be reliably estimated, the income from the provision of labor
services shall be recognized according to the cost of labor services that have incurred and are expected to be
compensated, and the cost of labor services that have incurred is recognized as the current expenses. If the cost of
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
labor services already incurred isn’t expected to be compensated, the income will not be recognized.
If the contract or agreement between the Company and other enterprises includes the sale of goods and the provision
of labor services, and the sale of goods and the provision of labor services can be distinguished and measured
separately, the sale of goods and the provision of labor services shall be dealt with separately; if the sale of goods
and the provision of labor services can’t be distinguished or can’t be measured separately, the contract will be
treated as sale of goods.
3. Income from Transferring the Right to Use Assets
The operating income is calculated and recognized according to the time and method stipulated by relevant
contracts and agreements.
4. Interest Income
Recognized when all the follow ing conditions are met: ① The amount of income can be measured reliably; ②
Economic benefits related to the transaction can inflow.
40. Government Subsidies
1. Category of Government Subsidies
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Company from the
government, which mainly include government subsidies related to assets and government subsidies related to
income.
2. Distinction Standard of Government Subsidies Related to Assets with Government Subsidies Related to Income
The government subsidies related to assets refer to the government subsidies obtained for acquisition, construction
or otherwise formation of long-term assets. The government subsidies related to income refer to the government
subsidies except the government subsidies related to assets.
The specific standard of classifying the government subsidies as subsidies related to assets: government subsidies
for acquisition, construction or otherwise formation of long-term assets.
The specific criteria that the Company classifies government subsidies as income related is: other government
subsidies other than asset-related government subsidies.
If the government documents do not specify the subsidy object, the bases that the Company classified the
government subsidies as assets-related subsidies or income-related subsidies were as follows: (1) If the specific
items for which the subsidy is targeted are stipulated in government documents, divide according to the relative
proportion of the amount of expenditure that forms assets and the amount of expenditure included in the cost in
the budget for that particular project, and the proportion shall be reviewed at each balance sheet date and changed
as necessary; (2) if the government documents only have a general statement of the purpose and do not specify a
specific project, the subsidy is recognized as government subsidy related to income.
3. Measurement of Government Subsidies
If a government subsidy is a monetary asset, it shall be measured according to the amount received or receivable.
If a government subsidy is a non-monetary asset, it shall be measured at its fair value, and shall be measured at a
nominal amount (RMB1) when the fair value cannot be obtained reliably.
For confirmed government subsidies that need to be returned, if there is relevant deferred income, the book
balance of related deferred income shall be written off and the excess shall be charged to profit or loss for the
Current Period; for other circumstances, it shall be directly charged to profit or loss for the Current.
4. Accounting Treatment for Government Subsidies
The Company adopts the gross method to confirm government subsidies. The government subsidies related to
assets are recognized as deferred income, and are charged to the current profit or loss in a reasonable and
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
systematic manner within the useful lives of the relevant assets (subsidies related to the daily activities of the
Company are included in other income; while subsidies unrelated to the daily activities of the Company are
included in non-operating income). Government subsidies measured at nominal amounts are directly charged to
profit or loss for the Current Period. Where the relevant assets are sold, transferred, scrapped or damaged before
the end of their useful lives, the balance of related undistributed deferred income shall be transferred to the profit
or loss of the asset disposal in the Current Period.
Government subsidies related to income shall be treated as follows:
(1) government subsidies used to compensate the relevant costs, expenses or losses of the Company in the
subsequent period shall be recognized as deferred income, and shall be included in the current profit and loss
during the period of confirming the relevant costs, expenses or losses (subsidies related to the daily activities of
the Company are included in other income; while subsidies unrelated to the daily activities of the Company are
included in non-operating income);
(2) government subsidies used to compensate the relevant costs, expenses or losses incurred by the Company
shall be directly included in the current profits and losses (subsidies related to the daily activities of the Company
are included in other income; while subsidies unrelated to the daily activities of the Company are included in
non-operating income).
For government subsidies that include both assets-related and income-related parts, they should be distinguished
separately for accounting treatment; for government subsidies that are difficult to be distinguished, they should be
classified as income-related.
41. Deferred Income Tax Assets/Deferred Income Tax Liabilities
The income tax of the Company includes the current income tax and deferred income tax. Both are recorded into
the current gains and losses as income tax expenses or revenue, except in the following circumstances:
(1) The income tax generated from the business combination shall be adjusted into goodwill;
(2) The income tax related to the transaction or event directly included in shareholders’ equity shall be recorded
into shareholders’ equity.
At the balance sheet date, the Company recognizes the deferred income tax assets or deferred income tax
liabilities in accordance with the balance sheet liability method for the temporary difference between the book
value of assets or liabilities and its tax base.
The Company recognizes all taxable temporary differences as deferred income tax liabilities unless taxable
temporary differences arise in the following transactions:
(1) The initial recognition of goodwill or the initial recognition of the assets or liabilities arising from a transaction
with the following characteristics: the transaction is not a business combination and neither the accounting profit
nor the taxable income is incurred at the time of the transaction;
(2) The time of write-back of taxable temporary differences related to the investments in subsidiaries, associates
and joint ventures can be controlled and the temporary differenc es are likely to not be written back in the
foreseeable future.
The Company recognizes the deferred income tax assets arising from deductible temporary differences, subject to
the amount of taxable income obtained to offset the deductible temporary differences, unless the deductible
temporary differences arise in the following transactions:
(1) The transaction is not a business combination, and the transaction does not affect the accounting profit or the
amount of taxable income;
(2) The deductible temporary differences related to the investments in subsidiaries, associates and joint ventures
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
are not met simultaneous ly: Temporary differences are likely to be written back in the foreseeable future and are
likely to be used to offset the taxable income of deductible temporary differences in the future.
At the balance sheet date, the Company measures the deferred income tax assets and deferred income tax
liabilities at the applicable tax rate of the period expected to recover the asset or pay off the liabilities according to
tax law, and reflects the income tax effect of expected assets recovery or liabilities payoff method at the balance
sheet date.
At the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likely
that sufficient taxable income will not be available to offset the benefit of the deferred income tax assets in the
future period, the book value of the deferred income tax assets will be written down. If it is probable that
sufficient taxable income will be available, the amount of write-down will be written back.
42. Lease
(1) Accounting Treatment of Operating Lease
(1) The lease fee paid by the Company for rented assets shall be apportioned using the straight-line method over
the entire lease term without deducting the rent-free period and shall be included in the current period expenses.
The initial direct costs related to the lease transaction paid by the Company are included in current expenses.
When the lessor of the asset assumes the lease-related expenses that should be borne by the Company, the
Company should deduct the part of the expenses from the total rental amount, and the deducted rental expenses
are apportioned during the lease term and included in the current expenses.
(2) The rental fees received by the company for leasing assets are apportioned on a straight-line basis over the
entire lease term without deducting the rent-free period and are recognized as lease income. The initial direct
expenses related to lease transactions paid by the company are included in the current expenses; if the amount is
larger, they are capitalized and are recorded in the current period in stages on the same basis as the recognition of
lease income during the entire lease period.
When the company assumes the lease-related expenses that should be borne by the lessee, the company deducts
the expenses from the total amount of rental income and allocates the deducted rental expenses during the lease
period.
(2) Accounting Treatments of Financial Lease
(1) Financing leased assets: on the lease starting date, the Company recorded the lower one of the fair value of the
leased asset and the present value of the minimum lease payments on the lease beginning date as the entering
value in an account, recognized the amount of the minimum lease payments as the entering value in an account of
long-term account payable, and treated the balance between the recorded amount of the leased asset and the
long-term account payable as unrecognized financing charges. The company adopted the effective interest method
to amortize the unrecognized financing expenses during the asset lease period and included it into financial
expenses.
(2) Assets leased by finance: On the lease beginning date, the Company recognized the financial lease receivables,
and the difference between the sum of unguaranteed residual values and its present value as unrealized financing
income. It is recognized as lease income during any lease period in the future. The initial direct costs incurred by
the Company in relation to the lease transaction, were included in the initial measurement of the financial lease
receivable and the amount of revenue recognized during the lease period shall be reduced.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
43. Other Significant Accounting Policies and Estimates
Not applicable
44. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Changes in accounting policy Approval procedure Remark
In accordance with the Notice on Revising and
Printing the Format of 2019 General Enterprises
Financial Statement (CK [2019] No. 6), the Notice on
See the 1-(1) of the Note 44 Changes
Revising and Printing the Format of Consolidated Approved by the 35th M eeting of the
in M ain Accounting Policies and
Financial Statements (2019) (CK [2019] No. 16) 8th Board of Directors
Estimates for details
issued by the M inistry of Finance, the Company
adjusted the formats of financial statements
accordingly.
The M inistry of Finance issued the revised
Accounting Standards for Business Enterprises No.
22-Recognition and M easurement of Financial
Instruments, Accounting Standards for Business
Enterprises No. 23-Transfer of Financial Assets,
Accounting Standards for Business Enterprises No.
Approved by the 30th M eeting of the See the Note from 10 to 14 for
24-Hedging and Accounting Standards for Business th
8 Board of Directors details
Enterprises No. 37-Presentation of Financial
Instruments in 2017. The Company starts to
implement the above standards since 1 January 2019
and adjusted the financial statements accordingly on 1
January 2019 in accordance with the above standards
governing connection regulation.
The M inistry of Finance issued the revised
Accounting Standards for Business Enterprises No.
7-Exchange of Non-monetary Assets on 9 M ay 2019
which is carried out since 10 June 2019. No
retroactive adjustment was needed for exchanges of Approved by the 35th M eeting of the
non-monetary assets before 1 January 2019 and 8th Board of Directors
adjustment made in accordance with the revised
standards is required for the exchanges of
non-monetary assets occurring during the period from
1 January 2019 to the execution date.
The M inistry of Finance issued the revised
Approved by the 35th M eeting of the
Accounting Standards for Business Enterprises No.
8th Board of Directors
12-Debt Restructuring on 16 M ay 2019 which s
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
carried out since 17 June 2019. No retroactive
adjustment was needed for the debt restructuring
before 1 January 2019 and adjustment made in
accordance with the revised standards is required for
the debt restructuring occurring during the period of 1
January 2019 to the execution date.
Change of accounting policies caused by change of Accounting Standards for Business Enterprises
(1) The Company prepared 2019 Financial Statements in accordance with the Notice on Revising and Printing the
Format of 2019 General Enterprises Financial Statements (CK [2019] No. 6), the Notice on Revising and Printing
the Format of Consolidated Financ ial Statements (2019) (CK [2019] No. 16) issued by the Ministry of Finance
and the requirements of the Accounting Standards for Business Enterprises. Retroactive adjustment was adopted
for the changes in the accounting policy. The significantly affected items and amounts in 2018 Financial
Statements are as follows:
Unit: RM B
Item and amount in original financial statement Item and amount in new financial statement
Item Amount Item Amount
Notes receivable and accounts 941,927,209.55 Notes receivable 107,506,613.50
receivable Accounts receivable 834,420,596.05
Notes payable and accounts payable 985,280,820.92 Notes payable 452,683,676.97
Accounts payable 532,597,143.95
(2) The new standards governing financial instruments divide financial assets into three categories: financial
assets measured at amortized cost, financial assets at fair value through other comprehensive income, and
financial assets at fair value through profit or loss. The Company reclassified the financial assets with the business
model for financial assets management and the contract cash flow characteristics thereof on the first execution
date. The new accounting standards governing financial instruments replace the incurred loss method of the
original standards governing financial instruments with expected credit loss method of the new standards
governing financial instruments.
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Financial Instruments, Revenue or Leases since 2019
√ Applicable □ Not applicable
Consolidated balance sheet:
Unit: RM B
Item 31 December 2018 1 January 2019 Adjustment
Current assets:
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
M onetary assets 896,646,719.87 896,703,037.65 56,317.78
Settlement reserve
Interbank loans granted
Held-for-trading financial
851,096,046.26 851,096,046.26
assets
Financial assets at fair
value through profit or loss
Derivative financial assets
Notes receivable 107,506,613.50 107,506,613.50
Accounts receivable 834,420,596.05 834,420,596.05
Accounts receivable
financing
Prepayments 13,811,905.18 13,811,905.18
Premiums receivable
Reinsurance receivables
Receivable reinsurance
contract reserve
Other receivables 21,745,690.53 16,593,326.49 -5,152,364.04
Including: Interest
5,152,364.04 -5,152,364.04
receivable
Dividends
receivable
Financial assets purchased
under resale agreements
Inventories 767,319,599.00 767,319,599.00
Contractual assets
Assets classified as held
for sale
Current portion of
non-current assets
Other current assets 864,093,663.30 24,093,663.30 -840,000,000.00
Total current assets 3,505,544,787.43 3,511,544,787.43 6,000,000.00
Non-current assets:
Loans and advances to
customers
Investments in debt
obligations
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Available-for-sale financial
897,716,590.20 -897,716,590.20
assets
Investments in other debt
obligations
Held-to-maturity
investments
Long-term receivables
Long-term equity
182,458,559.69 182,458,559.69
investments
Investments in other equity
1,232,130,339.01 1,232,130,339.01
instruments
Other non-current financial
assets
Investment property
Fixed assets 512,106,912.39 512,106,912.39
Construction in progress 224,624,447.16 224,624,447.16
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 172,725,277.21 172,725,277.21
R&D expense
Goodwill
Long-term prepaid
6,852,985.35 6,852,985.35
expense
Deferred income tax assets 37,831,704.45 37,831,704.45
Other non-current assets 48,305,435.42 48,305,435.42
Total non-current assets 2,082,621,911.87 2,417,035,660.68 334,413,748.81
Total assets 5,588,166,699.30 5,928,580,448.11 340,413,748.81
Current liabilities:
Short-term borrowings
Borrowings from central
bank
Interbank loans obtained
Held-for-trading financial
477,200.00 477,200.00
liabilities
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Financial liabilities at fair
477,200.00 -477,200.00
value through profit or loss
Derivative financial
liabilities
Notes payable 452,683,676.97 452,683,676.97
Accounts payable 532,597,143.95 532,597,143.95
Advances from customers 43,850,788.04 43,850,788.04
Contractual liabilities
Financial assets sold under
repurchase agreements
Customer deposits and
interbank deposits
Payables for acting trading
of securities
Payables for underwriting
of securities
Payroll payable 96,088,621.59 96,088,621.59
Taxes payable 25,354,466.37 25,354,466.37
Other payables 43,115,011.68 43,115,011.68
Including: Interest
payable
Dividends
payable
Handling charges and
commissions payable
Reinsurance payables
Liabilities directly
associated with assets
classified as held for sale
Current portion of
non-current liabilities
Other current liabilities
Total current liabilities 1,194,166,908.60 1,194,166,908.60
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
165
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Including: Preferred
shares
Perpetu
al bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income 155,000.31 155,000.31
Deferred income tax
52,530,509.00 103,592,571.32 51,062,062.32
liabilities
Other non-current
liabilities
Total non-current liabilities 52,685,509.31 103,747,571.63 51,062,062.32
Total liabilities 1,246,852,417.91 1,297,914,480.23 51,062,062.32
Owners’ equity:
Share capital 1,399,346,154.00 1,399,346,154.00
Other equity instruments
Including: Preferred
shares
Perpetu
al bonds
Capital reserves 158,608,173.07 158,608,173.07
Less: Treasury stock
Other comprehensive
297,667,872.80 587,019,559.29 289,351,686.49
income
Specific reserve
Surplus reserves 809,456,186.20 809,456,186.20
General reserve
Retained earnings 1,654,181,032.39 1,654,181,032.39
Total equity attributable to
owners of the Company as 4,319,259,418.46 4,608,611,104.95 289,351,686.49
the parent
Non-controlling interests 22,054,862.93 22,054,862.93
Total owners’ equity 4,341,314,281.39 4,630,665,967.88 289,351,686.49
166
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Total liabilities and owners’
5,588,166,699.30 5,928,580,448.11 340,413,748.81
equity
Note for adjustment:
In 2017, M inistry of Finance respectively revised and issued the Accounting Standards for Business Enterprises No. 22 - Recognition
and M easurement of Financial Instruments (CK[2017]No.7), the Accounting Standards for Business Enterprises No. 23 – Transfer of
Financial Assets (CK[2017]No.8), the Accounting Standards for Business Enterprises No. 24 – Hedging Accounting (CK[2017]No.9),
and the Accounting Standards for Business Enterprises No. 37 – Presentation of Financial Instruments (CK[2017]No.14). The
Company starts to implement above new standards since 1 January 2019. In accordance with the link up provision, no adjustment
was made to information of comparative period, and the Company retroactively adjusted the retained earnings of period -begin or
other comprehensive income based on the difference between the original standards and the new standards on the first execution date.
Those originally recorded into “available-for-sale financial assets” are now recorded into “trading financial assets” and “other
investments in equity instruments”; those originally recorded into “financial liabilities at fair value through profit or los s” are now
recorded into “trading financial liabilities”.
Balance sheet of the Company as the parent:
Unit: RM B
Item 31 December 2018 1 January 2019 Adjustment
Current assets:
M onetary assets 848,949,693.91 849,006,011.69 56,317.78
Held-for-trading financial
851,096,046.26 851,096,046.26
assets
Financial assets at fair
value through profit or loss
Derivative financial assets
Notes receivable 104,945,398.61 104,945,398.61
Accounts receivable 795,897,932.65 795,897,932.65
Accounts receivable
financing
Prepayments 25,444,445.34 25,444,445.34
Other receivables 43,538,848.72 38,386,484.68 -5,152,364.04
Including: Interest
5,152,364.04 -5,152,364.04
receivable
Dividends
receivable
Inventories 692,681,479.03 692,681,479.03
Contractual assets
Assets classified as held
for sale
167
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Current portion of
non-current assets
Other current assets 856,504,839.81 16,504,839.81 -840,000,000.00
Total current assets 3,367,962,638.07 3,373,962,638.07 6,000,000.00
Non-current assets:
Investments in debt
obligations
Available-for-sale financial
897,716,590.20 -897,716,590.20
assets
Investments in other debt
obligations
Held-to-maturity
investments
Long-term receivables
Long-term equity
466,251,661.95 466,251,661.95
investments
Investments in other equity
1,232,130,339.01 1,232,130,339.01
instruments
Other non-current financial
assets
Investment property
Fixed assets 427,947,613.74 427,947,613.74
Construction in progress 222,570,503.14 222,570,503.14
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 129,452,067.42 129,452,067.42
R&D expense
Goodwill
Long-term prepaid
5,106,268.25 5,106,268.25
expense
Deferred income tax assets 35,908,741.15 35,908,741.15
Other non-current assets 46,852,235.42 46,852,235.42
Total non-current assets 2,231,805,681.27 2,566,219,430.08 334,413,748.81
Total assets 5,599,768,319.34 5,940,182,068.15 340,413,748.81
Current liabilities:
168
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Short-term borrowings
Held-for-trading financial
477,200.00 477,200.00
liabilities
Financial liabilities at fair
477,200.00 -477,200.00
value through profit or loss
Derivative financial
liabilities
Notes payable 452,683,676.97 452,683,676.97
Accounts payable 681,490,174.69 681,490,174.69
Advances from customers 41,912,301.85 41,912,301.85
Contractual liabilities
Payroll payable 84,220,746.16 84,220,746.16
Taxes payable 17,528,644.83 17,528,644.83
Other payables 114,073,355.23 114,073,355.23
Including: Interest
payable
Dividends
payable
Liabilities directly
associated with assets
classified as held for sale
Current portion of
non-current liabilities
Other current liabilities
Total current liabilities 1,392,386,099.73 1,392,386,099.73
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred
shares
Perpetu
al bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
169
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Deferred income
Deferred income tax
52,530,509.00 103,592,571.32 51,062,062.32
liabilities
Other non-current
liabilities
Total non-current liabilities 52,530,509.00 103,592,571.32 51,062,062.32
Total liabilities 1,444,916,608.73 1,495,978,671.05 51,062,062.32
Owners’ equity:
Share capital 1,399,346,154.00 1,399,346,154.00
Other equity instruments
Including: Preferred
shares
Perpetu
al bonds
Capital reserves 166,211,779.15 166,211,779.15
Less: Treasury stock
Other comprehensive
297,672,884.34 587,024,570.83 289,351,686.49
income
Specific reserve
Surplus reserves 809,456,186.20 809,456,186.20
Retained earnings 1,482,164,706.92 1,482,164,706.92
Total owners’ equity 4,154,851,710.61 4,444,203,397.10 289,351,686.49
Total liabilities and owners’
5,599,768,319.34 5,940,182,068.15 340,413,748.81
equity
Note for adjustment:
In 2017, M inistry of Finance respectively revised and issued the Accounting Standards for Business Enterprises No. 22 - Recognition
and M easurement of Financial Instruments (CK[2017]No.7), the Accounting Standards for Business Enterprises No. 23 – Transfer of
Financial Assets (CK[2017]No.8), the Accounting Standards for Business Enterprises No. 24 – Hedging Accounting (CK[2017]No.9),
and the Accounting Standards for Business Enterprises No. 37 – Presentation of Financial Instruments (CK[2017]No.14). The
Company starts to implement above new standards since 1 January 2019. In accordance with the link up provision, no adjustment
was made to information of comparative period, and the Company retroactively adjusted the retained earnings of period -begin or
other comprehensive income based on the difference between the original standards and the new standards on the first execution date.
Those originally recorded into “available-for-sale financial assets” are now recorded into “trading financial assets” and “other
investments in equity instruments”; those originally recorded into “financial liabilities at fair value through profit or los s” are now
recorded into “trading financial liabilities”.
170
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(4) Retroactive Adjustments to Comparative Data of Prior Years when Execution of any New Standards
Governing Financial Instruments or Leases since 2019
√ Applicable □ Not applicable
The comparative statements of financial assets in classification and measurement before and after the execution of
the new standards governing financial instruments on 1 January 2019
A. Consolidated financial statement
31 December 2018 1 January 2019
(original standards governing financial instruments) (new standards governing financial instruments)
Item M easurement Carrying value Item M easurement Carrying value
category category
M onetary assets Amortized cost 896,646,719.87 M onetary assets Amortized cost 896,646,719.87
Other Amortized cost 5,152,364.04 M onetary assets Amortized cost 56,317.78
receivables-interest Held-for-trading At fair value through 5,096,046.26
receivable financial assets profit or loss
Other current Amortized cost 840,000,000.00 Held-for-trading At fair value through 840,000,000.00
assets-wealth financial assets profit or loss
management
products and
structural deposits
Available-for-sale Cost 897,716,590.20 Investment in other Investment in 1,232,130,339.01
financial assets method/measured equity instruments held-not for-trading
at fair value equity instruments
designated to be
measured at fair
value through other
comprehensive
income
Held-for-trading At fair value through 6,000,000.00
financial assets profit or loss
Financial liabilities At fair value 477,200.00 Held-for-trading At fair value through 477,200.00
at fair value financial liabilities profit or loss
through profit or
loss
B. Financial statement of the Company as the parent
31 December 2018 1 January 2019
(original standards governing financial instruments) (new standards governing financial instruments)
Item M easurement Carrying value Item M easurement Carrying value
category category
M onetary assets Amortized cost 848,949,693.91 M onetary assets Amortized cost 848,949,693.91
Other Amortized cost 5,152,364.04 M onetary assets Amortized cost 56,317.78
171
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
receivables-interest Held-for-trading At fair value through 5,096,046.26
receivable financial assets profit or loss
Other current Amortized cost 840,000,000.00 Held-for-trading At fair value through 840,000,000.00
assets-wealth financial assets profit or loss
management
products and
structural deposits
Available-for-sale Cost 897,716,590.20 Investment in other Investment in 1,232,130,339.01
financial assets method/measured equity instruments held-not for-trading
at fair value equity instruments
designated to be
measured at fair
value through other
comprehensive
income
Held-for-trading At fair value through 6,000,000.00
financial assets profit or loss
Financial liabilities At fair value 477,200.00 Held-for-trading At fair value through 477,200.00
at fair value financial liabilities profit or loss
through profit or
loss
The reconciliation statement of the carrying values of the original financial assets and financial liabilities adjusted into those
according to the new standards governing financial instruments on 1 January 2019
A. Consolidated financial statement
Item Carrying value on 31 Reclassified Remeasured Carrying value on 1
December 2018 January 2019
(according to the (according to the new
original standards standards governing
governing financial financial instruments)
instruments)
Financial assets at amortized cost according to the new standards governing financial instruments
M onetary assets 896,646,719.87
Add: transfer of other 56,317.78
receivables-interest receivable
M onetary assets (listed according 896,703,037.65
to the new standards governing
financial instruments)
Other receivables-interest 5,152,364.04
receivable
Less: transferred to monetary 56,317.78
assets
Less: Transferred to 5,096,046.26
held-for-trading financial assets
172
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Other receivables-interest
receivable (listed according to the
new standards governing financial
instruments)
Other current assets-wealth 840,000,000.00
management products and
structural deposits
Less: transferred to 840,000,000.00
held-for-trading financial assets
Other current assets-wealth
management products and
structural deposits (listed
according to the new standards
governing financial instruments)
Financial assets at fair value according to the new standards governing financial instruments
Held-for-trading financial assets
Add: transfer of other 5,096,046.26
receivables-interest receivable
Add: transfer of other current 840,000,000.00
assets-wealth management
products and structural deposits
Add: transfer of available-for-sale 6,000,000.00
financial assets
Held-for-trading financial assets 851,096,046.26
(listed according to the new
standards governing financial
instruments)
Available-for-sale financial assets 897,716,590.20
Less: transferred to investment in 891,716,590.20 340,413,748.81
other equity instruments
Less: transferred to 6,000,000.00
held-for-trading financial assets
Investment in other equity 1,232,130,339.01
instruments (listed according to
the new standards governing
financial instruments)
Financial liabilities at fair value according to the new standards governing financial instruments
Financial liabilities at fair value 477,200.00
through profit or loss
Less: transferred to 477,200.00
held-for-trading financial
liabilities
173
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Held-for-trading financial 477,200.00
liabilities (listed according to the
new standards governing financial
instruments)
B. Financial statement of the Company as the parent
Item Carrying value on 31 Reclassified Remeasured Carrying value on 1
December 2018 January 2019
(according to the (according to the new
original standards standards governing
governing financial financial instruments)
instruments)
Financial assets at amortized cost according to the new standards governing financial instruments
M onetary assets 848,949,693.91
Add: transfer of other 56,317.78
receivables-interest receivable
M onetary assets (listed according 849,006,011.69
to the new standards governing
financial instruments)
Other receivables-interest 5,152,364.04
receivable
Less: transferred to monetary 56,317.78
assets
Less: Transferred to 5,096,046.26
held-for-trading financial assets
Other receivables-interest
receivable (listed according to the
new standards governing financial
instruments)
Other current assets-wealth 840,000,000.00
management products and
structural deposits
Less: transferred to 840,000,000.00
held-for-trading financial assets
Other current assets-wealth
management products and
structural deposits (listed
according to the new standards
governing financial instruments)
Financial assets at fair value according to the new standards governing financial instruments
Held-for-trading financial assets
Add: transfer of other 5,096,046.26
receivables-interest receivable
174
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Add: transfer of other current 840,000,000.00
assets-wealth management
products and structural deposits
Add: transfer of available-for-sale 6,000,000.00
financial assets
Held-for-trading financial assets 851,096,046.26
(listed according to the new
standards governing financial
instruments)
Available-for-sale financial assets 897,716,590.20
Less: transferred to investment in 891,716,590.20 340,413,748.81
other equity instruments
Less: transferred to 6,000,000.00
held-for-trading financial assets
Investment in other equity 1,232,130,339.01
instruments (listed according to
the new standards governing
financial instruments)
Financial liabilities at fair value according to the new standards governing financial instruments
Financial liabilities at fair value 477,200.00
through profit or loss
Less: transferred to 477,200.00
held-for-trading financial
liabilities
Held-for-trading financial 477,200.00
liabilities (listed according to the
new standards governing financial
instruments)
The reconciliation statement of the original provision for impairment of financial assets adjusted into that according to the new
standards governing financial instruments on 1 January 2019
A. Consolidated financial statement
Item Carrying value on 31 Reclassified Remeasured Carrying value on 1
December 2018 January 2019
(according to the (according to the new
original standards standards governing
governing financial financial instruments)
instruments)
Financial assets at amortized cost
Of which: provisions for
impairment of notes receivable
Provisions for impairment of 49,017,296.46 49,017,296.46
accounts receivable
175
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Provisions for impairment of other 1,331,371.60 1,331,371.60
receivables
Provisions for impairment of 5,850,000.00 -5,850,000.00
available-for-sale financial assets
B. Financial statement of the Company as the parent
Item Carrying value on 31 Reclassified Remeasured Carrying value on 1
December 2018 January 2019
(according to the (according to the new
original standards standards governing
governing financial financial instruments)
instruments)
Financial assets at amortized cost
Of which: provisions for
impairment of notes receivable
Provisions for impairment of 46,625,926.10 46,625,926.10
accounts receivable
Provisions for impairment of other 1,301,617.92 1,301,617.92
receivables
Provisions for impairment of 5,850,000.00 -5,850,000.00
available-for-sale financial assets
45. Other
Naught
VI. Taxes
1. Main Taxes and Tax Rates
Category of taxes Tax basis Tax rate
Sales volume from goods selling or taxable
VAT 3%, 6%, 9%, 10%, 13%, 16%
service
Urban maintenance and construction tax Turnover tax payable 7%, 5%
Enterprise income tax Taxable income 15%, 20%, 25%
Educational surtax Turnover tax payable 3%
Local educational surtax Turnover tax payable 2%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
Foshan Electrical and Lighting Co., Ltd. 15%
176
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
FSL Chanchang Optoelectronics Co., Ltd. 25%
Foshan Chansheng Electronic Ballast Co., Ltd. 20%
Foshan Taimei Times Lamps and Lanterns Co., Ltd. 25%
Nanjing Fozhao Lighting Components M anufacturing Co., Ltd. 25%
Foshan Electrical & Lighting (Xinxiang) Co., Ltd. 25%
FSL New Light Source Technology Co., Ltd. 25%
Foshan Lighting Lamps and Lanterns Co., Ltd. 25%
FSL Zhida Electric Technology Co., Ltd. 15%
FSL Lighting GmbH 15%
2. Tax Preference
The Company passed the re-examination for High-tech Enterprises in 2017, as well as won the “Certificate of
High-tech Enterprise” after approval by Department of Science and Technology of Guangdong Province,
Department of Finance of Guangdong Province, Guangdong Provincial Bureau of State Taxation and Guangdong
Provincial Bureau of Local Taxation. In accordance with relevant provis ions 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 January 2017.
FSL Zhida Electric Technology Co., Ltd. passed the examination for High-tech Enterprises in December 2019,
and thus FSL Zhida Electric Technology Co., Ltd. paid the corporate income tax based on a tax rate of 15% within
three years since 1 January 2019 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.
According to Notice of Implementation of Inclusive Tax Reduction Policy to Small and Micro Enterprises by
Ministry of Finance and State Administration of Taxation (CS [2019] No. 13), Foshan Chansheng Electronic
Ballast Co., Ltd. is applicable to the preferential tax policy for small low-profit enterprises in 2019: the portion of
annual taxable income less than RMB1 million shall be included in the taxable income based on a tax rate of 25%
and 20% of preferential tax rate paid for the corporate income tax; the portion of annual taxable income more than
RMB1 million but less than RMB3 million shall be included in the taxable income based on a tax rate of 50% and
20% of preferential tax rate paid for the corporate income tax.
3. Other
Paid according to the relevant regulation of the tax law.
VII. Notes to Main Items of Consolidated Financial State ments
1. Monetary Assets
Unit: RM B
177
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Item Ending balance Beginning balance
Cash on hand 18,281.85 34,937.47
Bank deposits 1,048,694,037.32 784,166,295.87
Other monetary assets (Note 1) 70,079,965.12 112,445,486.53
Unexpired interest (Note 2) 6,664,378.35 56,317.78
Total 1,125,456,662.64 896,703,037.65
Of which: Total amount deposited
1,232,977.34 739,617.83
overseas
Other notes
Note 1: Other monetary assets includes cash deposit for notes, cash deposit for future foreign exchange settlement,
guarantee deposit, investment fund deposited in securities companies and e-commerce balance, of which, the cash
deposit for notes and cash deposit for future foreign exchange settlement are restricted assets. For details, please
refer to Note VII-Notes to Items of Consolidated Financial Statements (81. Assets with Restricted Ownership and
Right to Use).
Note 2: The undue interest does not belong to cash and cash equivalents.
2. Trading Financial Assets
Unit: RM B
Item Ending balance Beginning balance
Financial assets at fair value through profit
899,619,482.64 845,096,046.26
or loss
Including:
Wealth management products (note) 467,869,852.09 241,944,150.72
Structural deposits (note) 431,749,630.55 603,151,895.54
Financial assets designated to be measured
1,547,200.00 6,000,000.00
at fair value through profit or loss
Total 901,166,682.64 851,096,046.26
Other notes:
They are the principal-guaranteed wealth management products of banks with maturity date over three months
and investment cycle less than one year and the structural deposits cannot be terminated in advance.
3. Derivative Financial Assets
Not applicable
178
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
4. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RM B
Item Ending balance Beginning balance
Bank acceptance bill 109,444,480.94 107,506,613.50
Total 109,444,480.94 107,506,613.50
Please refer to the relevant information of disclosure of bad debt provision of other receivables if adopting the general mode of
expected credit loss to withdraw bad debt provision of notes receivable.
□ Applicable √ Not applicable
(2) Notes Receivable Withdrawn, Reversed or Collected during the Reporting Period
Naught
(3) Notes Receivable Pledged at the Period-end
Unit: RM B
Item Amount pledged at the period-end
Bank acceptance bill 67,035,696.27
Total 67,035,696.27
(4) Notes Receivable which Had Endorsed by the Company or Had Discounted and Had not Due on the
Balance Sheet Date at the Period-end
Unit: RM B
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bill 56,863,345.47
Total 56,863,345.47
(5) Notes Transferred to Accounts Receivable because Drawer of the Notes Fails to Executed the Contract
or Agreement
Naught
(6) The Actual Write-off Accounts Receivable
Naught
179
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
5. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RM B
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra Withdraw
Carrying Carrying
Proportio wal Proportio al
Amount Amount value Amount Amount value
n proportio n proportio
n n
Accounts receivable
23,377,2 16,266,8 7,110,413 23,377,22 16,266,81 7,110,413.5
withdrawn bad debt 3.06% 69.58% 2.65% 69.58%
23.66 10.09 .57 3.66 0.09 7
provision separately
Of which:
Accounts receivable
740,781, 35,716,2 705,064,8 860,060,6 32,750,48 827,310,18
withdrawn bad debt 96.94% 4.82% 97.35% 3.81%
145.60 92.66 52.94 68.85 6.37 2.48
provision by group
Of which:
764,158, 51,983,1 712,175,2 883,437,8 49,017,29 834,420,59
Total 100.00% 6.80% 100.00% 5.55%
369.26 02.75 66.51 92.51 6.46 6.05
Individual withdrawal of bad debt provision:
Unit: RM B
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Involved in the lawsuit,
the Company won the
Customer A 14,220,827.14 7,110,413.57 50.00% lawsuit in the first
instance, and the other
side has appealed.
Involved in the lawsuit
Customer B 9,156,396.52 9,156,396.52 100.00% with long aging.
Expected irrecoverable
Total 23,377,223.66 16,266,810.09 -- --
Withdrawal of bad debt provision by group:
Unit: RM B
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Credit risk group 740,781,145.60 35,716,292.66 4.82%
180
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Total 740,781,145.60 35,716,292.66 --
Disclosure by aging
Unit: RM B
Aging Carrying amount
Within 1 year (including 1 year) 663,779,904.80
1 to 2 years 58,181,262.60
2 to 3 years 22,204,210.61
Over 3 years 19,992,991.25
3 to 4 years 5,365,572.32
4 to 5 years 2,306,889.59
Over 5 years 12,320,529.34
Total 764,158,369.26
(2) Accounts Receivable Withdrawn, Reversed or Collected during the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RM B
Changes in the Reporting Period
Category Beginning amount Ending balance
Withdrawal Reversal or recovery Write-off
Accounts receivable 49,017,296.46 3,076,684.86 110,878.57 51,983,102.75
Total 49,017,296.46 3,076,684.86 110,878.57 51,983,102.75
Of which bad debt provision recovered or reversed with significant amount during Reporting Period:
Naught
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RM B
Item Amount
No.1 110,652.83
Other retails accounts 225.74
Total 110,878.57
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RM B
Ending balance of accounts Proportion to total ending balance Ending balance of bad debt
Name of units
receivable of accounts receivable (%) provision
No. 1 105,391,428.29 13.79% 3,161,742.85
No. 2 37,026,996.74 4.85% 1,110,809.90
181
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
No. 3 20,353,852.72 2.66% 610,615.58
No. 4 19,217,070.82 2.51% 576,512.12
No. 5 17,862,770.80 2.34% 1,330,554.10
Total 199,852,119.37 26.15%
(5) Derecognition of Accounts Receivable due to the Transfer of Financial Assets
Naught
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable
Naught
6. Accounts Receivable Financing
Naught
7. Prepayment
(1) Listed by Aging
Unit: RM B
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 4,151,087.73 52.87% 8,074,848.21 58.46%
1 to 2 years 1,687,169.78 21.49% 3,525,963.03 25.53%
2 to 3 years 710,290.79 9.05% 721,403.24 5.22%
Over 3 years 1,302,842.48 16.59% 1,489,690.70 10.79%
Total 7,851,390.78 -- 13,811,905.18 --
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
Unit: RM B
Name of units Relationship with the Ending balance Proportion to total Prepayment time
Company prepayments (%)
No. 1 Non-related party 1,020,929.09 13.00% Y2019
No. 2 Non-related party 738,514.14 9.41% Y2019
No. 3 Non-related party 601,013.10 7.65% Y2017-2019
No. 4 Non-related party 332,473.41 4.23% Y2019
182
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
No. 5 Non-related party 307,514.01 3.92% Y2017-Y2019
Total 3,000,443.75 38.21%
8. Other Receivables
Unit: RM B
Item Ending balance Beginning balance
Other receivables 22,307,344.76 16,593,326.49
Total 22,307,344.76 16,593,326.49
(1) Interest Receivable
Naught
(2) Dividends Receivable
Naught
(3) Other Receivables
1) Other Receivables Classified by Account Nature
Unit: RM B
Nature Ending carrying amount Beginning carrying amount
VAT export tax refunds 8,154,485.23 6,252,642.96
Performance bond 3,236,931.10 2,905,450.00
Staff borrow and deposit 5,991,107.91 3,451,053.16
Rent, water & electricity fees 1,686,102.59 765,582.10
Other 5,187,134.14 4,549,969.87
Total 24,255,760.97 17,924,698.09
2) Information of Withdrawal of Bad Debt Provision
Unit: RM B
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
427,381.20 903,990.40 1,331,371.60
2019
183
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Balance of 1 January
2019 in the Current —— —— —— ——
Period
Withdrawal of the
166,368.30 450,676.31 617,044.61
Current Period
Balance of 31 December
593,749.50 1,354,666.71 1,948,416.21
2019
Changes of carrying amount with significant amount changed of loss provision in the current period
□Applicable √Not applicable
Disclosure by aging
Unit: RM B
Aging Carrying amount
Within 1 year (including 1 year) 19,791,650.37
1 to 2 years 1,897,234.23
2 to 3 years 1,552,433.11
Over 3 years 1,014,443.26
3 to 4 years 565,642.96
4 to 5 years 162,042.14
Over 5 years 286,758.16
Total 24,255,760.97
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RM B
Beginning Changes in the Reporting Period
Category Ending balance
balance Withdrawal Reversal or recovery Write-off
Other receivables 1,331,371.60 617,044.61 1,948,416.21
Total 1,331,371.60 617,044.61 1,948,416.21
Of which bad debt provision reversed or recovered with significant amount during Reporting Period:
Naught
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Naught
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RM B
184
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Proportion to total
ending balance of Ending balance of
Name of the entity Nature Ending balance Aging
other receivables bad debt provision
(%)
No. 1 Export rebates 8,154,485.23 Within 1 year 33.62% 244,634.56
No. 2 Social insurance 1,742,504.58 Within 1 year 7.18% 52,275.14
No. 3 Other 1,296,947.31 Within 4 years 5.35% 396,659.49
No. 4 Other 698,071.26 Within 3 years 2.88% 109,288.47
No. 5 Rent, water &
691,931.41 Within 1 year 2.85% 20,757.94
electricity fees
Total -- 12,583,939.79 -- 51.88% 823,615.60
6) Accounts Receivable Involving Government Subsidies
Naught
7) Derecognition of Other Receivables due to the Transfer of Financial Assets
Naught
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables
Naught
9. Inventory
Whether the Company has executed the new revenue standards
□ Yes √ No
(1) Category of Inventory
Unit: RM B
Ending balance Beginning balance
Item Falling price Falling price
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
Raw materials 124,826,657.81 2,426,340.03 122,400,317.78 126,493,040.39 1,912,404.69 124,580,635.70
Goods in process 32,861,535.80 32,861,535.80 34,923,287.33 34,923,287.33
Inventory goods 380,880,872.40 25,335,631.67 355,545,240.73 495,768,205.24 25,743,927.08 470,024,278.16
Semi-finished
125,058,072.72 1,658,579.31 123,399,493.41 135,536,163.37 787,982.05 134,748,181.32
goods
185
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Low priced and
easily worn 3,129,996.34 3,129,996.34 3,043,216.49 3,043,216.49
articles
Total 666,757,135.07 29,420,551.01 637,336,584.06 795,763,912.82 28,444,313.82 767,319,599.00
(2) Falling Price Reserves of Inventory
Unit: RM B
Increase Decrease
Beginning
Item Reversal or Ending balance
balance Withdrawal Other Other
write-off
Raw materials 1,912,404.69 2,179,459.99 1,665,524.65 2,426,340.03
Inventory goods 25,743,927.08 11,251,759.62 11,660,055.03 25,335,631.67
Semi-finished
787,982.05 1,414,915.85 544,318.59 1,658,579.31
goods
Total 28,444,313.82 14,846,135.46 13,869,898.27 29,420,551.01
(3) Notes to the Ending Balance of Inventory Including Capitalized Borrowing Expense
Naught
(4) Completed Unsettled Assets Formed from the Construction Contact at the Period-end
Naught
10. Contract Assets
Naught
11. Held-for-Sale Assets
Naught
12. Current Portion of Non-current Assets
Naught
13. Other Current Assets
Whether the Company has executed the new revenue standards
□ Yes √ No
186
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Unit: RM B
Item Ending balance Beginning balance
Deductible input tax of VAT 49,860,530.03 21,691,700.53
Advance payment of enterprise income tax 2,642,333.56 2,401,962.77
Total 52,502,863.59 24,093,663.30
14. Creditor’s Rights Investment
Naught
15. Other Creditor’s Rights Investment
Naught
16. Long-term Accounts Receivable
Naught
17. Long-term Equity Investment
Unit: RM B
Increase/decrease
Ending
Gains and Adjustme
Beginnin Cash Withdraw Ending balance
Additiona losses nt of
g balance Reduced Changes bonus or al of balance of
Investees l recognize other
(carrying investmen of other profits impairme Other (carrying depreciati
investmen d under comprehe
value) t equity announce nt value) on
t the equity nsive
d to issue provision reserves
method income
I. Joint ventures
II. Associated enterprises
Shenzhen
Primatron
ix 182,458,5 1,755,751 3,120,585 181,093,7
(Nanho) 59.69 .49 .75 25.43
Electronic
s Ltd.
182,458,5 1,755,751 3,120,585 181,093,7
Subtotal
59.69 .49 .75 25.43
182,458,5 1,755,751 3,120,585 181,093,7
Total
59.69 .49 .75 25.43
187
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
18. Other Equity Instrument Investment
Unit: RM B
Item Ending balance Beginning balance
Non-listed equity investment 711,571,895.07 638,042,058.21
Listed equity investment 743,168,346.39 594,088,280.80
Total 1,454,740,241.46 1,232,130,339.01
Disclosure of non-trading equity instrument investment by items
Unit: RM B
Reason for
Amount of other assigning to Reason for other
comprehensive measure in fair comprehensive
Dividend income Accumulative Accumulative
Item income value and the income
recognized gains losses
transferred to changes included transferred to
retained earnings in the current retained earnings
gains and losses
Not satisfied with
Stock of Guoxuan the condition of
4,545,547.50 441,142,021.61
High-tech trading equity
instrument
Not satisfied with
Stock of the condition of
2,986,027.39 58,141,437.32
Everbright Bank trading equity
instrument
Not satisfied with
the condition of
Xiamen Bank 10,971,417.60 413,943,585.67
trading equity
instrument
Not satisfied with
Guangdong
the condition of
Development 7,962.31
trading equity
Bank Co.,Ltd
instrument
Foshan Fochen Not satisfied with
Road the condition of
Development trading equity
Company instrument
Limited
Not satisfied with
Shenzhen
the condition of
Zhonghao
trading equity
(Group) Ltd
instrument
188
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Total 18,510,954.80 913,227,044.60
19. Other Non-current Financial Assets
Naught
20. Investment Property
Naught
21. Fixed Assets
Unit: RM B
Item Ending balance Beginning balance
Fixed assets 629,832,098.35 512,106,912.39
Total 629,832,098.35 512,106,912.39
(1) List of Fixed Assets
Unit: RM B
Houses and M achinery Transportation Electronic
Item Total
buildings equipment equipment equipment
I. Original carrying
value
1. Beginning
710,892,641.29 721,559,752.40 22,584,005.26 27,863,135.01 1,482,899,533.96
balance
2. Increased
160,788,118.95 22,399,252.57 651,700.23 1,507,112.62 185,346,184.37
amount of the period
(1) Purchase 9,413,232.54 651,700.23 1,421,170.90 11,486,103.67
(2) Transfer
from construction in 160,788,118.95 12,986,020.03 85,941.72 173,860,080.70
progress
(3) Enterprise
combination increase
3. Decreased
8,677,753.58 1,563,188.28 72,287.50 10,313,229.36
amount of the period
(1) Disposal or
7,395,472.55 1,563,188.28 72,287.50 9,030,948.33
scrap
189
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(2) Equipment
1,282,281.03 1,282,281.03
transformation
4. Ending balance 871,680,760.24 735,281,251.39 21,672,517.21 29,297,960.13 1,657,932,488.97
II. Accumulative
depreciation
1. Beginning
432,350,311.91 497,669,898.94 16,516,228.63 21,965,331.34 968,501,770.82
balance
2. Increased
21,320,267.22 40,082,389.78 1,111,251.18 2,271,943.40 64,785,851.58
amount of the period
(1) Withdrawal 21,320,267.22 40,082,389.78 1,111,251.18 2,271,943.40 64,785,851.58
3. Decreased
7,754,453.03 1,467,828.99 37,323.11 9,259,605.13
amount of the period
(1) Disposal or
7,026,246.86 1,467,828.99 37,323.11 8,531,398.96
scrap
(2) Equipment
728,206.17 728,206.17
transformation
4. Ending balance 453,670,579.13 529,997,835.69 16,159,650.82 24,199,951.63 1,024,028,017.27
III. Depreciation
reserves
1. Beginning
2,290,422.72 428.03 2,290,850.75
balance
2. Increased
1,829,080.06 1,829,080.06
amount of the period
(1) Withdrawal 1,829,080.06 1,829,080.06
3. Decreased
47,557.46 47,557.46
amount of the period
(1) Disposal or
47,557.46 47,557.46
scrap
4. Ending balance 4,071,945.32 428.03 4,072,373.35
IV Carrying value
1. Ending carrying
418,010,181.11 201,211,470.38 5,512,866.39 5,097,580.47 629,832,098.35
value
2. Beginning
278,542,329.38 221,599,430.74 6,067,776.63 5,897,375.64 512,106,912.39
carrying value
190
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(2) List of Temporarily Idle Fixed Assets
Unit: RM B
Original carrying Accumulated Depreciation
Item Carrying value Note
value depreciation reserves
T5, T8,
energy-saving lamp 7,940,325.52 5,945,024.07 1,943,741.93 51,559.52
production line
Total 7,940,325.52 5,945,024.07 1,943,741.93 51,559.52
(3) Fixed Assets Leased in by Financing Lease
Naught
(4) Fixed Assets Leased out by Operation Lease
Naught
(5) Fixed Assets Failed to Accomplish Certification of Property
Fuwan standard workshop J3 and K1, Gaoming Family Housing Building Eight and Fuwan Employee Dormitory
Seven have been put into use and carried over fixed assets. As of 31 December 2019, relevant certificates of
property were in procedure. The management layer is of the opinion that there is no substantial legal impediment
in the procedure of certificates as well as no significant negative influence to the normal operation of the
Company.
(6) Disposal of Fixed Assets
Naught
22. Construction in Progress
Unit: RM B
Item Ending balance Beginning balance
Construction in progress 119,030,610.16 224,624,447.16
Total 119,030,610.16 224,624,447.16
(1) List of Construction in Progress
Unit: RM B
Item Ending balance Beginning balance
191
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
Construction in
119,030,610.16 119,030,610.16 224,624,447.16 224,624,447.16
progress
Total 119,030,610.16 119,030,610.16 224,624,447.16 224,624,447.16
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RM B
Of
Proporti
which:
on of Accumul Capitaliz
amount
accumul ative ation rate
Transferr of
Beginnin Other ative amount of
Increase ed in Ending Job capitaliz Capital
Item Budget g decrease investme of interests
d amount fixed balance schedule ed resources
balance d amount nt in interest for the
assets interests
construct capitaliz Reportin
for the
ions to ation g Period
Reportin
budget
g Period
Fuwan
intellige
49,070,0 41,583,1 5,124,95 46,708,0
nt 95.19% 95.00% Other
00.00 09.95 2.15 62.10
worksho
pH
Gaoming
R&D
worksho 45,000,0 12,615,0 18,238,8 30,853,9
68.56% 85.00% Other
p 11, 12, 00.00 97.54 33.89 31.43
13, 14
and 18
Automat
ic system
of
intellige
nt
21,920,0 11,604,4 486,620. 11,117,8
producti 50.72% 90.00% Other
00.00 61.41 65 40.76
on
worksho
p
(worksh
op H)
192
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Upgradi
ng
project
in Local
6,500,00 5,408,81 5,408,81
roads 83.21% 95.00% Other
0.00 5.09 5.09
and
greening
of
Gaoming
Upgradi
ng
project
of
Standard 4,200,00 3,502,56 3,502,56
83.39% 95.00% Other
C 0.00 8.80 8.80
worksho
p
external
facade
48 tons
electric
melting
furnace 7,766,00 3,149,93 1,145,58 4,295,52
55.31% 80.00% Other
(18025) 0.00 7.35 3.01 0.36
Gaoming
tank
furnace
Fuwan
standard 27,000,0 21,942,2 4,975,99 26,918,2
0.00 99.70% 100.00% Other
worksho 00.00 87.85 0.98 78.83
p K3
Fuwan
standard 26,200,0 21,702,4 4,387,32 26,089,7
0.00 99.58% 100.00% Other
worksho 00.00 30.93 2.56 53.49
p K2
Fuwan
standard 21,661,9 19,241,4 2,420,44 21,661,8
0.00 100.00% 100.00% Other
worksho 00.00 52.36 3.38 95.74
p K1
193
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Fuwan
standard 21,304,9 19,015,0 2,289,82 21,304,9
0.00 100.00% 100.00% Other
worksho 00.00 75.82 7.31 03.13
p J3
Fuwan
standard 20,870,0 18,583,8 2,256,52 20,840,3
0.00 99.86% 100.00% Other
worksho 00.00 45.29 2.40 67.69
p J1
Fuwan
standard 20,510,0 18,367,6 2,111,62 20,479,2
0.00 99.85% 100.00% Other
worksho 00.00 69.88 5.31 95.19
p J2
Family
housing
of
10,860,0 7,693,42 2,120,28 9,813,71
Gaoming 0.00 90.37% 100.00% Other
00.00 3.10 7.87 0.97
,
Building
Eight
Employe
e
Dormitor 7,600,00 5,643,72 1,569,04 7,212,77
0.00 94.90% 100.00% Other
y 0.00 9.10 9.48 8.58
Seven of
Fuwan
290,462, 201,142, 55,551,8 154,320, 486,620. 101,886,
Total -- -- --
800.00 520.58 22.23 983.62 65 738.54
(3) List of the Withdrawal of the Depreciation Reserves for Construction in Progress
Naught
(4) Engineering Materials
Naught
23. Productive Living Assets
Naught
24. Oil and Gas Assets
□ Applicable √ Not applicable
194
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
25. Right-to-use Assets
Naught
26. Intangible Assets
(1) List of Intangible Assets
Unit: RM B
Non-patent Using right of
Item Land use right Patent Total
technology software
I. Original carrying
value
1. Beginning
233,741,723.60 200,000.00 2,773,651.87 236,715,375.47
balance
2. Increased
amount of the period
(1) Purchase
(2) Internal
R&D
(3) Business
combination increase
3. Decreased
amount of the period
(1) Disposal
4. Ending balance 233,741,723.60 200,000.00 2,773,651.87 236,715,375.47
II. Accumulated
amortization
1. Beginning
61,904,106.59 200,000.00 1,885,991.67 63,990,098.26
balance
2. Increased
4,785,078.78 113,698.69 4,898,777.47
amount of the period
(1) Withdrawal 4,785,078.78 113,698.69 4,898,777.47
3. Decreased
amount of the period
(1) Disposal
195
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
4. Ending balance 66,689,185.37 200,000.00 1,999,690.36 68,888,875.73
III. Depreciation
reserves
1. Beginning
balance
2. Increased
amount of the period
(1) Withdrawal
3. Decreased
amount of the period
(1) Disposal
4. Ending balance
IV Carrying value
1. Ending carrying
167,052,538.23 773,961.51 167,826,499.74
value
2. Beginning
171,837,617.01 887,660.20 172,725,277.21
carrying value
The proportion of intangible assets formed from the internal R&D of the Company at the period-end to the ending balance of
intangible assets was 0%.
(2) Land Use Right with Certificate of Title Uncompleted
Naught
27. R&D Expense
Naught
28. Goodwill
Naught
29. Long-term Prepaid Expense
Unit: RM B
Amortization Other decreased
Item Beginning balance Increased amount Ending balance
amount of the period amount
196
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
M aintenance and
6,004,040.42 5,644,088.02 5,730,726.96 5,917,401.48
decoration expenses
Other 848,944.93 1,792,321.52 831,273.19 1,809,993.26
Total 6,852,985.35 7,436,409.54 6,562,000.15 7,727,394.74
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RM B
Ending balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Provision for impairment
93,274,443.32 14,388,688.12 86,933,832.63 13,391,933.49
of assets
Unrealized profit of
1,885,791.90 282,868.80 1,187,129.74 178,069.46
internal transactions
Depreciation of fixed
76,057,614.11 11,908,759.43 75,022,616.39 11,594,644.46
assets
Payroll payable 68,444,986.72 10,266,748.01 83,969,846.94 12,595,477.04
Changes in fair value of
trading financial 477,200.00 71,580.00
liabilities
Total 239,662,836.05 36,847,064.36 247,590,625.70 37,831,704.45
(2) Deferred Income Tax Liabilities Had not Been Off-set
Unit: RM B
Ending balance Beginning balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Changes in fair value of
other equity instrument 913,227,044.60 136,984,056.70 690,617,142.15 103,592,571.32
investment
Changes in fair value of
1,547,200.00 232,080.00
tranding financial assets
Total 914,774,244.60 137,216,136.70 690,617,142.15 103,592,571.32
197
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RM B
M utual set-off amount of Amount of deferred M utual set-off amount of Amount of deferred
deferred income tax income tax assets or deferred income tax income tax assets or
Item
assets and liabilities at liabilities after off-set at assets and liabilities at liabilities after off-set at
the period-end the period-end the period-begin the period-begin
Deferred income tax
36,847,064.36 37,831,704.45
assets
Deferred income tax
137,216,136.70 103,592,571.32
liabilities
(4) List of Unrecognized Deferred Income Tax Assets
Naught
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
The deferred income tax liabilities increased by 32.46% with RMB33,623,565.38 at the period-end compared to
the period-begin, mainly resulted from the rise in stocks of Guoxuan High-tech and Everbright Bank held by the
Company and the fair value of Xiamen Bank.
31. Other Non-current Assets
Whether the Company has executed the new revenue standards
□ Yes √ No
Unit: RM B
Item Ending balance Beginning balance
Land purchase and the ownership implicit
41,755,700.00
of relevant items
Prepayments for business facilities 9,861,098.08 6,549,735.42
Total 9,861,098.08 48,305,435.42
Other notes:
Other non-current assets were RMB-38,444,337.34 at the end of the Reporting Period with a decrease of 79.59%
compared to that at the beginning of the Reporting Period, which was mainly caused by withdrawal of land
purchase and recognition of accounts thereof in the Reporting Period.
32. Short-term Borrowings
Naught
198
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
33. Trading Financial Liabilities
Unit: RM B
Item Ending balance Beginning balance
Of which:
Specified as financial liabilities at fair
477,200.00
value through profit or loss
Of which:
Total 477,200.00
34. Derivative Financial Liabilities
Naught
35. Notes Payable
Unit: RM B
Item Ending balance Beginning balance
Bank acceptance bill 374,665,327.74 452,683,676.97
Total 374,665,327.74 452,683,676.97
The total amount of the due but not paid notes payable at the end of the period was of RMB0.00
36. Accounts Payable
(1) List of Accounts Payable
Unit: RM B
Item Ending balance Beginning balance
Accounts payable 559,016,692.70 532,597,143.95
Total 559,016,692.70 532,597,143.95
(2) Significant Accounts Payable Aging over One Year
Naught
37. Advances from Customer
Whether the Company has executed the new revenue standards
□ Yes √ No
199
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(1) List of Advances from Customers
Unit: RM B
Item Ending balance Beginning balance
Advances from customers 50,449,357.17 43,850,788.04
Total 50,449,357.17 43,850,788.04
(2) Significant Advances from Customers Aging over One Year
Naught
(3) Settled but Uncompleted Projects Formed by Construction Contracts at the Period-end
Naught
38. Contract Liabilities
Naught
39. Payroll Payable
(1) List of Payroll Payable
Unit: RM B
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 96,088,621.59 564,974,134.21 577,905,902.94 83,156,852.86
II. Post-employment
benefit-defined 40,993,425.77 40,993,425.77
contribution plans
Total 96,088,621.59 605,967,559.98 618,899,328.71 83,156,852.86
(2) List of Short-term Salary
Unit: RM B
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus,
95,725,486.52 509,039,057.39 521,920,577.79 82,843,966.12
allowance, subsidy
2. Employee welfare 17,201,557.94 17,201,557.94
3. Social insurance 24,109,320.87 24,109,320.87
200
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Of which: M edical
18,853,545.96 18,853,545.96
insurance premiums
Work-re
979,186.35 979,186.35
lated injury insurance
M aterni
4,276,588.56 4,276,588.56
ty insurance
4. Housing fund 10,650,851.50 10,650,851.50
5.Labor union budget
and employee education 363,135.07 3,973,346.51 4,023,594.84 312,886.74
budget
Total 96,088,621.59 564,974,134.21 577,905,902.94 83,156,852.86
(3) List of Defined Contribution Plans
Unit: RM B
Item Beginning balance Increase Decrease Ending balance
1. Basic pension benefits 39,783,886.46 39,783,886.46
2. Unemployment
1,209,539.31 1,209,539.31
insurance
Total 40,993,425.77 40,993,425.77
Other notes:
The Company participates in the scheme of pension insurance and unemployment insurance established by
government agencies as required. According to the scheme, fees are paid to it on a monthly basis and at the rate of
stipulated by government agencies. In addition to the above monthly deposit fees, the Company no longer
assumes further payment obligations. Corresponding expenses are recorded into the current profits or losses or the
cost of related assets when incurred.
40. Taxes Payable
Unit: RM B
Item Ending balance Beginning balance
VAT 2,848,860.13 3,147,064.81
Corporate income tax 12,419,827.14 14,907,122.79
Personal income tax 595,012.66 704,101.03
Urban maintenance and construction tax 385,734.01 761,673.03
Education surcharge 281,417.17 544,052.17
Property tax 264,468.41 2,374,748.34
Land use tax 187,752.00 2,750,413.52
201
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Other 227,996.69 165,290.68
Total 17,211,068.21 25,354,466.37
41. Other Payables
Unit: RM B
Item Ending balance Beginning balance
Other payables 46,073,344.71 43,115,011.68
Total 46,073,344.71 43,115,011.68
(1) Interest Payable
Naught
(2) Dividends Payable
Naught
(3) Other Payables
1) Other Payables Listed by Nature
Unit: RM B
Item Ending balance Beginning balance
Performance bond 29,641,485.45 27,413,254.10
Relevant expense of sales 3,323,583.65 3,568,835.91
Compensation for lawsuit 1,126,231.95 1,762,533.43
Other 11,982,043.66 10,370,388.24
Total 46,073,344.71 43,115,011.68
2) Significant Other Payables Aging over One Year
Naught
42. Held-for-sale Liabilities
Naught
43. Current Portion of Non-current Liabilities
Naught
202
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
44. Other Current Liabilities
Whether the Company has executed the new revenue standards
□ Yes √ No
Naught
45. Long-term Borrowings
Naught
46. Bonds Payable
Naught
47. Lease Liabilities
Naught
48. Long-term Payables
Naught
49. Long-term Payroll Payable
Naught
50. Provisions
Whether the Company has executed the new revenue standards
□ Yes √ No
Naught
51. Deferred Income
Unit: RM B
Reason for
Item Beginning balance Increase Decrease Ending balance
formation
Government
Government
155,000.31 155,000.31 0.00 subsidies related to
subsidies
assets/income
Total 155,000.31 155,000.31 --
203
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Item involving government subsidies:
Unit: RM B
Amount
Amount
recorded Amount
recorded into
Amount of into other offset cost in Related to
Beginning non-operating Other Ending
Item newly income in the assets/relate
balance income in the changes balance
subsidy the Reporting d to income
Reporting
Reporting Period
Period
Period
Production line
of 50 million Related to
155,000.31 155,000.31
energy-saving assets
fluorescent lamp
Total 155,000.31 155,000.31
52. Other Non-current Liabilities
Whether the Company has executed the new revenue standards
□ Yes √ No
Naught
53. Share Capital
Unit: RM B
Increase/decrease (+/-)
Beginning balance New shares Bonus issue Ending balance
Bonus shares Other Subtotal
issued from profit
The sum of
1,399,346,154.00 0.00 1,399,346,154.00
shares
54. Other Equity Instruments
Naught
55. Capital Reserves
Unit: RM B
Item Beginning balance Increase Decrease Ending balance
Capital premium
151,362,201.53 151,362,201.53
(premium on stock)
Other capital reserves 7,245,971.54 7,245,971.54
204
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Total 158,608,173.07 158,608,173.07
56. Treasury Shares
Naught
57. Other Comprehensive Income
Unit: RM B
Reporting Period
Less:
Less: Recorded
Recorded in in other
other comprehe Attributabl
Income comprehensi nsive e to Attributabl
before ve income in income in Less: owners of e to
Beginning Ending
Item taxation in prior period prior Income the non-contro
balance balance
the and period and tax Company lling
Current transferred to transferred expense as the interests
Period profit or loss to retained parent after tax
in the earnings in after tax
Current the
Period Current
Period
I. Other comprehensive income
587,024,570 222,609,9 33,391,48 189,218,4 776,242,
that may not subsequently be
.83 02.44 5.37 17.07 987.90
reclassified to profit or loss
Changes in fair value of
587,024,570 222,609,9 33,391,48 189,218,4 776,242,
other equity instrument
.83 02.44 5.37 17.07 987.90
investment
II. Other comprehensive income
17,360.2
that may subsequently be -5,011.54 22,371.83 22,371.83
9
reclassified to profit or loss
Differences arising from
translation of foreign 17,360.2
-5,011.54 22,371.83 22,371.83
currency-denominated financial 9
statements
Total of other comprehensive 587,019,559 222,632,2 33,391,48 189,240,7 776,260,
income .29 74.27 5.37 88.90 348.19
205
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
58. Specific Reserve
Naught
59. Surplus Reserves
Unit: RM B
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
672,569,617.84 27,103,459.16 699,673,077.00
reserves
Discretionary surplus
136,886,568.36 136,886,568.36
reserves
Total 809,456,186.20 27,103,459.16 836,559,645.36
Notes, including changes and reason of change:
In line with regulations stipulated in the articles of association, no more statutory surplus reserves shall be
withdrawn if the accumulated amount is more than 50% of registered capital of the Company. The statutory
surplus reserves withdrawn in the Reporting Period was RMB27,103,459.16, of which the accumulated amount
reached 50% of registered capital of the Company
60. Retained Earnings
Unit: RM B
Item Reporting Period Same period of last year
Beginning balance of retained earnings before
1,654,181,032.39 1,731,600,796.18
adjustments
Beginning balance of retained earnings after
1,654,181,032.39 1,731,600,796.18
adjustments
Add: Net profit attributable to owners of the
301,182,906.24 377,615,133.62
Company as the parent
Less: Statutory surplus reserves withdrawn 27,103,459.16 36,503,183.84
Dividend of ordinary shares payable 218,298,000.02 418,531,713.57
Ending retained earnings 1,709,962,479.45 1,654,181,032.39
List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to the
Accounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from same
control.
206
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
61. Operating Revenue and Cost of Sales
Unit: RM B
Reporting Period Same Period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
M ain operations 3,297,051,289.16 2,525,597,166.33 3,778,249,951.22 2,904,082,772.16
Other operations 40,525,458.50 34,915,886.23 23,705,995.54 18,750,738.24
Total 3,337,576,747.66 2,560,513,052.56 3,801,955,946.76 2,922,833,510.40
Whether the Company has executed the new revenue standards
□ Yes √ No
62. Taxes and Surtaxes
Unit: RM B
Item Reporting Period Same period of last year
Urban maintenance and construction tax 13,718,448.61 12,673,452.76
Education surcharge 5,875,150.20 5,459,067.96
Property tax 7,253,138.07 7,538,403.90
Land use tax 5,170,993.34 5,285,219.55
Vehicle and vessel use tax 8,963.29 16,218.98
Stamp duty 1,936,005.71 1,719,791.33
Local education surcharge 3,916,753.75 3,639,365.84
Environmental protection tax 143,335.69 45,809.86
Total 38,022,788.66 36,377,330.18
63. Selling Expense
Unit: RM B
Item Reporting Period Same period of last year
Employee’s remuneration 59,514,723.34 61,175,236.43
Freight 72,159,943.87 75,271,832.22
Business propagandize fees and
44,063,012.20 37,609,042.39
advertizing fees
Sales promotion fees 18,636,028.73 19,875,800.05
Business travel charges 14,446,070.14 12,650,960.49
207
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Dealer meeting expense 3,071,651.46 3,640,647.76
Other 29,523,336.69 27,261,870.55
Total 241,414,766.43 237,485,389.89
64. Administrative Expense
Unit: RM B
Item Reporting Period Same period of last year
Employee’s remuneration 81,935,330.84 106,255,136.92
Depreciation charge 15,698,024.73 15,362,970.68
Office expenses 15,170,870.33 13,142,511.18
Rent of land and management charge 5,590,455.39 5,352,109.19
Amortization of intangible assets 4,898,777.47 4,841,228.15
Other 21,787,164.29 28,917,129.49
Total 145,080,623.05 173,871,085.61
65. R&D Expense
Unit: RM B
Item Reporting Period Same period of last year
Employee’s remuneration 56,240,623.29 34,627,641.09
Expense on equipment debugging 7,388,906.41 6,569,264.14
Fees for certification testing 6,986,168.45 4,743,946.71
M aterial consumption 5,534,108.08 2,732,468.55
Charges related to patents 607,081.96 1,119,733.39
Depreciation and long-term prepayments 663,707.88 413,561.08
Other 2,023,665.73 2,519,970.32
Total 79,444,261.80 52,726,585.28
Other notes:
1. In the Company’s R&D activities, the expense on bench-scale and pilot-scale production is recorded in R&D
expense, the revenue generated from the sale of products through bench-scale and pilot-scale production is
recorded in main operation revenue, and the costs incurred are recorded in the cost of sales of main operation.
2. The R&D expenditure included in amount of R&D expenses was RMB26,717,676.52 with increase of 50.67%
compared with that of last year which was due to the increase in R&D investment during the Reporting Period and
labor costs compared with that of last year.
208
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
66. Finance Costs
Unit: RM B
Item Reporting Period Same period of last year
Interest expense 371,567.15
Less: Interest income 24,418,569.09 11,450,858.00
Foreign exchange gains or losses -4,684,048.90 -16,834,523.05
Other 1,377,275.79 1,798,634.74
Total -27,725,342.20 -26,115,179.16
67. Other Income
Unit: RM B
Sources Reporting Period Same period of last year
Supporting fund for import and export 5,228,150.25 2,282,553.00
Rewards of “Competition among Hundreds
700,000.00 23,710,397.00
of Enterprises”
Subsidy for stabilizing posts 1,091,084.26
Other 5,274,105.00 4,126,579.00
Total 11,202,255.25 31,210,613.26
68. Investment Income
Unit: RM B
Item Reporting Period Same period of last year
Long-term equity investment income
1,755,751.49 6,165,040.30
accounted by equity method
Investment income from holding of trading
1,750,000.00
financial assets
Investment income from disposal of trading
13,550,000.00
financial assets
Investment income from holding of other
18,510,954.80
equity instrument investment
Investment income from holding of
18,873,927.57
available-for-sale financial assets
Income received from financial products and
29,554,019.01 29,098,956.87
structural deposits
Other -4,242,300.00 -808,400.00
209
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Total 60,878,425.30 53,329,524.74
69. Net Gain on Exposure Hedges
Naught
70. Gain on Changes in Fair Value
Unit: RM B
Sources Reporting Period Same period of last year
Trading financial assets 2,024,400.00
Of which: Gain on changes in fair
2,024,400.00
value of derivative financial instrument
Financial liabilities at fair value through
-477,200.00
profit or loss
Total 2,024,400.00 -477,200.00
71. Credit Impairment Loss
Unit: RM B
Item Reporting Period Same period of last year
Bad debt loss of other receivables -617,044.61
Bad debt loss of accounts receivable -3,076,684.86
Total -3,693,729.47
72. Assets Impairment Loss
Whether the Company has executed the new revenue standards
□ Yes √ No
Unit: RM B
Item Reporting Period Same period of last year
I. Bad debt loss -11,904,279.15
II. Loss on inventory valuation -14,846,135.46 -25,768,841.80
VII. Impairment loss of fixed assets -1,829,080.06
Total -16,675,215.52 -37,673,120.95
Other notes:
The assets impairment loss decreased 55.74% with RM B-20,997,905.43compared with that of last year, mainly resulted from the
less withdrawal of falling price loss of inventory in overstocked goods compared with that of last year, and bad debt loss be listed in
the item of “credit impairment loss” according to the requirements of new standard governing financial instruments.
210
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
73. Assets Disposal Income
Unit: RM B
Sources Reporting Period Same period of last year
Disposal income of fixed assets -78,039.44
Total -78,039.44
74. Non-operating Income
Unit: RM B
Amount recorded in the current
Item Reporting Period Same period of last year
non-recurring profit or loss
Government subsidy 511,260.31 2,168,255.23 511,260.31
Total income from disposal of
138,567.76
non-current assets
Of which: Income from
138,567.76
disposal of fixed assets
Other 2,560,885.30 1,501,787.51 2,560,885.30
Total 3,072,145.61 3,808,610.50 3,072,145.61
Government subsidies recorded in current profit or loss:
Unit: RM B
Whether
influence the Special Related to
Distribution Distribution Reporting Same period
Item Nature profits or subsidy or assets/related
entity reason Period of last year
losses of the not to income
year or not
211
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Due to
engaged in
special
industry that
the state
Production encouraged
line of 50 and
million supported, Related to
Subsidy No No 155,000.31 154,999.92
energy-savin gained assets
g fluorescent subsidy
lamp (obtaining in
line with the
law and the
regulations of
national
policy)
Standard
optical
components
Subsidy from
testing
R&D
laboratory
technical Related to
capacity Subsidy No No 272,669.78
updating and assets
construction
transformatio
and product
n, etc.
quality
guarantee
project
Subsidy from
Standard
R&D
development
technical Related to
of wide-angle Subsidy No No 173,385.53
updating and income
stunning
transformatio
LED lights
n, etc.
Subsidy from
Other R&D
miscellaneou technical Related to
Reward No No 356,260.00 1,567,200.00
s government updating and income
subsidies transformatio
n, etc.
Total 511,260.31 2,168,255.23
212
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
75. Non-operating Expense
Unit: RM B
Amount recorded in the current
Item Reporting Period Same period of last year
non-recurring profit or loss
Donation 111,946.90 60,000.00 111,946.90
Total losses from disposal of
413,275.62 1,731,682.62 413,275.62
non-current assets
Of which: Losses from disposal
413,275.62 1,731,682.62 413,275.62
of fixed assets
Losses on inventories 2,618,995.48 1,932,550.28 2,618,995.48
Delaying payment 230,330.34 230,330.34
Penalty 7,095.00 36,499.25 7,095.00
Other 2,135,600.60 67,094.12 2,135,600.60
Total 5,517,243.94 3,827,826.27 5,517,243.94
76. Income Tax Expense
(1) List of Income Tax Expense
Unit: RM B
Item Reporting Period Same period of last year
Current income tax expense 47,448,443.11 72,075,325.91
Deferred income tax expense 1,216,720.09 -155,875.66
Total 48,665,163.20 71,919,450.25
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RM B
Item Reporting Period
Profit before taxation 352,117,634.59
Current income tax expense accounted at statutory/applicable tax
52,817,645.19
rate
Influence of applying different tax rates by subsidiaries 1,914,255.48
Influence of income tax before adjustment -700,603.99
Influence of non-deductable costs, expenses and losses 2,539,670.71
Influence of deductable losses of unrecognized deferred income
-663,395.15
tax at the beginning of the Reporting Period
213
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Influence of R&D expense deduction -4,384,025.91
Regarded as sales 444,122.81
Investment income and final dividend -3,302,505.94
Income tax expense 48,665,163.20
Other notes
The income tax expense decreased 32.33% with RMB-23,254,287.05 in the Reporting Period compared with that
of last year, mainly resulted from the decline of total sales performance in the Reporting Period.
77. Other Comprehensive Income
Refer to Note 57 for details.
78. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RM B
Item Reporting Period Same period of last year
Land purchase and recognition of
41,755,700.00
accounts thereof
Government subsidies received 12,161,459.24 29,539,856.03
Cash margin received 14,050,387.86 9,433,019.86
Deposit interest 17,811,071.70 13,324,810.23
Income from waste 15,659,638.44 15,994,366.63
Income from insurance compensation 1,379,315.03 7,953,870.72
Property and rental income 8,290,054.43 4,314,891.32
Other 9,611,999.69 14,817,509.51
Total 120,719,626.39 95,378,324.30
(2) Cash Used in Other Operating Activities
Unit: RM B
Item Reporting Period Same period of last year
Administrative expense paid in cash 57,772,851.77 61,534,145.31
Selling expense paid in cash 152,608,630.02 132,808,161.86
Finance costs paid in cash 354,365.91 1,267,358.28
Returned government subsidies 10,000,000.00
Returned cash deposit 16,375,903.00 8,876,805.00
214
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Other 3,181,687.68 336,025.84
Total 230,293,438.38 214,822,496.29
(3) Cash Generated from Other Investing Activities
Naught
(4) Cash Used in Other Investing Activities
Naught
(5) Cash Generated from Other Financing Activities
Naught
(6) Cash Used in Other Financing Activities
Naught
79. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RM B
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities:
Net profit 303,452,471.39 379,150,336.15
Add: Provision for impairment of assets 20,368,944.99 37,673,120.95
Depreciation of fixed assets, oil-gas assets,
64,785,851.58 70,186,632.84
and productive living assets
Amortization of intangible assets 4,898,777.47 4,841,228.15
Amortization of long-term prepaid expenses 6,562,000.15 6,034,592.46
Loss from disposal of fixed assets, intangible
assets and other long-term assets (gains: 78,039.44
negative)
Losses from scrapping of fixed assets (gains:
413,275.62 1,593,114.86
negative)
Losses from changes in fair value (gains:
-2,024,400.00 477,200.00
negative)
Investment loss (gains: negative) -60,878,425.30 -53,329,524.74
215
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Decrease in deferred income tax assets
984,640.09 -155,875.66
(increase: negative)
Increase in deferred income tax liabilities
232,080.00
("-" for decrease)
Decrease in inventory ("-" for increase) 115,136,879.48 -46,621,550.93
Decrease in operating receivables ("-" for
261,135,157.63 -80,985,456.28
increase)
Increase in operating payables ("-" for
-206,982,495.64 299,045,629.81
decrease)
Net cash generated from/used in operating
508,084,757.46 617,987,487.05
activities
2.Significant investing and financing
activities without involvement of cash -- --
receipts and payments
3.Net increase/decrease of cash and cash
-- --
equivalents:
Ending balance of cash 1,049,833,555.02 795,285,756.38
Less: Beginning balance of cash 795,285,756.38 570,184,208.96
Net increase in cash and cash equivalents 254,547,798.64 225,101,547.42
(2) Net Cash Paid For Acquisition of Subsidiaries
Naught
(3) Net Cash Received from Disposal of the Subsidiaries
Naught
(4) Cash and Cash Equivalents
Unit: RM B
Item Ending balance Beginning balance
I. Cash 1,049,833,555.02 795,285,756.38
Including: Cash on hand 18,281.85 34,937.47
Bank deposit on demand 1,047,408,408.07 783,346,295.87
Other monetary assets on demand 2,406,865.10 11,904,523.04
III. Ending balance of cash and cash
1,049,833,555.02 795,285,756.38
equivalents
216
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
80. Notes to Items of the Statements of Changes in Owners’ Equity
Notes to the name of “Other” of ending balance of the same period of last year adjusted and the amount adjusted:
Not applicable
81. Assets with Restricted Ownership or Right to Use
Unit: RM B
Item Ending carrying value Reason for restriction
Security deposit of notes and security
M onetary assets 68,958,729.27 deposit of future foreign exchange
settlement
Notes receivable 67,035,696.27 Pledged for notes pool
Total 135,994,425.54 --
82. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RM B
Ending foreign currency Ending balance converted to
Item Exchange rate
balance RM B
M onetary assets -- -- 2,181,879.99
Of which: USD 247,340.08 6.9762 1,725,493.87
EUR 58,395.00 7.8155 456,386.12
HKD
Accounts receivable -- -- 282,214,714.63
Of which: USD 40,453,931.17 6.9762 282,214,714.63
EUR
HKD
Long-term borrowings -- --
Of which: USD
EUR
HKD
Advances from customers 18,901,957.57
Of which: USD 2,666,516.87 6.9762 18,602,154.99
217
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
EUR 38,360.00 7.8155 299,802.58
Prepayments 1,070,987.55
Of which: USD 153,520.19 6.9762 1,070,987.55
Other payables 488,822.33
Of which: USD 70,070.00 6.9762 488,822.33
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, Recording
Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant
Reasons Shall Be Disclosed.
□ Applicable √ Not applicable
83. Arbitrage
Naught
84. Government Subsidy
(1) Basic Information on Government Subsidy
Unit: RM B
Type Amount Presented in Charged to current profit or loss
Rewards for “Competition
among Hundreds of 700,000.00 Other income 700,000.00
Enterprises”
Supporting fund for import and
5,228,150.25 Other income 5,228,150.25
export
Other 5,274,105.00 Other income 5,274,105.00
Production line of 50 million
155,000.31 Non-operating income 155,000.31
energy-saving fluorescent lamp
Other miscellaneous
356,260.00 Non-operating income 356,260.00
government subsidies
Total 11,713,515.56 11,713,515.56
(2) Return of Government Subsidy
□ Applicable √ Not applicable
85. Other
Naught
218
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
VIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control in the Reporting Period
Naught
(2) Combination Cost and Goodwill
Naught
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
Naught
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair Value
Whether there is a transaction that through multiple transaction step by step to realize bus iness combination and
gaining the control during the Reporting Period
□ Yes √ No
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquiree
that Cannot Be Determined on the Acquisition Date or during the Period-end of the Merger
Naught
(6) Other Notes
Naught
2. Business Combination under the Same Control
Naught
3. Counter Purchase
Naught
4. Disposal of Subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
□ Yes √ No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□ Yes √ No
219
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
5. Changes in Combination Scope for Other Reasons
On 7 September 2018, the Company held the 26th meeting of the 8th Board of Directors, in which examined and
approved the Proposal on Cancelling the Wholly-owned Subsidiary Guangdong FSL Finance Leas ing Co., Ltd.
(hereinafter referred as “FSL Leasing Company). The Company received the Notice on Approval of Cancellation
and Registration issued by Market Supervision and Administration of Foshan in 2019 and has completed the
registration cancellation of FSL Leasing Company. FSL Leas ing Company will not be included in the
consolidated financial statements of the Company after deregistering thereof.
6. Other
Naught
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
M ain operating Nature of Holding percentage (%)
Name Registration place Way of gaining
place business Directly Indirectly
Foshan
Chansheng Production and Newly
Foshan Foshan 100.00%
Electronic Ballast sales established
Co., Ltd.
Foshan Lighting
Lamps & Production and Newly
Foshan Foshan 100.00%
Components Co., sales established
Ltd.
Guangdong
Fozhao New
Production and Newly
Light Sources Foshan Foshan 100.00%
sales established
Technology Co.,
Ltd.
FSL Chanchang
Production and Newly
Optoelectronics Foshan Foshan 100.00%
sales established
Co., Ltd.
Foshan Taimei
Production and Newly
Times Lamps and Foshan Foshan 70.00%
sales established
Lanterns Co., Ltd.
220
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Foshan Electrical
& Lighting Production and Newly
Xinxiang Xinxiang 100.00%
(Xinxiang) Co., sales established
Ltd.
Nanjing Fozhao
Lighting
Production and
Components Nanjing Nanjing 100.00% Acquired
sales
M anufacturing
Co., Ltd.
FSL Zhida
Electric Production and Newly
Foshan Foshan 51.00%
Technology Co., sales established
Ltd.
FSL LIGHTING Production and Newly
Germany Germany 100.00%
GmbH sales established
(2) Significant Non-wholly-owned Subsidiary
Unit: RM B
Shareholding proportion The profit or loss Declaring dividends Balance of
Name of non-controlling attributable to the distributed to non-controlling interests
interests non-controlling interests non-controlling interests at the period-end
Foshan Taimei Times
Lamps and Lanterns Co., 30.00% 1,104,850.59 9,212,915.38
Ltd.
FSL Zhida Electric
49.00% 1,164,714.56 17,461,512.70
Technology Co., Ltd.
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RM B
Ending balance Beginning balance
Non-curr Non-curr Non-curr Non-curr
Name Current Total Current Total Current Total Current Total
ent ent ent ent
assets assets liabilities liabilities assets assets liabilities liabilities
assets liability assets liability
221
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Foshan
Taimei
Times
40,797,2 17,975,7 58,772,9 28,063,2 28,063,2 35,881,0 19,031,5 54,912,5 27,885,7 27,885,7
Lamps
59.87 35.27 95.14 77.21 77.21 53.56 31.64 85.20 02.58 02.58
and
Lanterns
Co., Ltd.
FSL
Zhida
Electric 79,707,2 9,067,38 88,774,5 40,492,9 40,492,9 74,044,5 10,388,8 84,433,3 40,878,6 40,878,6
Technolo 13.61 0.69 94.30 35.74 35.74 33.25 13.87 47.12 57.04 57.04
gy Co.,
Ltd.
Unit: RM B
Reporting Period Same period of last year
Cash flows Cash flows
Total Total
Name Operating from Operating from
Net profit comprehensi Net profit comprehensi
revenue operating revenue operating
ve income ve income
activities activities
Foshan
Taimei Times
129,622,438. 138,186,413.
Lamps and 3,682,835.31 3,682,835.31 4,489,707.08 5,050,703.26 5,050,703.26 3,857,467.68
26 51
Lanterns Co.,
Ltd.
FSL Zhida
Electric 88,828,868.2 11,912,536.0 96,231,697.2
2,376,968.48 2,376,968.48 40,799.09 40,799.09 1,465,964.60
Technology 3 3 6
Co., Ltd.
(4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the Company
Naught
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope of
Consolidated Financial Statements
Naught
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling the
Subsidiary
Naught
222
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
Naught
(2) Main Financial Information of Significant Joint Ventures
Naught
(3) Main Financial Information of Significant Associated Enterprises
Naught
(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises
Unit: RM B
Beginning balance/The same period of last
Ending balance/Reporting Period
year
Joint ventures: -- --
The total of following items according to the
-- --
shareholding proportions
Associated enterprises: -- --
Total carrying value of investment 181,093,725.43 182,458,559.69
The total of following items according to the
-- --
shareholding proportions
--Net profit 1,755,751.49 6,165,040.30
--Total comprehensive income 1,755,751.49 6,165,040.30
(5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises to
Transfer Funds to the Company
Naught
(6) The Excess Loss of Joint Ventures or Associated Enterprises
Naught
(7) The Unrecognized Commitment Related to Investment to Joint Ventures
Naught
223
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated Enterprises
Naught
4. Significant Common Operation
Naught
5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Naught
6. Other
Naught
X. The Risk Related to Financial Instruments
The financial instruments of the Company included: monetary funds, notes receivable, accounts receivable, notes
receivable, accounts payable, etc. The details of each financial instrument see relevant items of Note Ⅶ.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The
operating management of the Company was responsible for the risk management target and the recognition of the
policies.
(I) Credit risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the
other party. The credit risk the Company faced was selling on credit which leads to customer credit risk.
The Company will evaluate credit risk of new customer, and set credit limit, once the balance of account
receivable over credit limit, require the customer to pay or producing and delivering goods shall be approved by
the management of the Company.
The Company through monthly aging analys is of account receivable and monitoring the collection situation of the
customer ensured the overall credit risk of the Company was in control scope. Once appear abnormal situation,
the Company should conduct necessary measures to requesting the payment timely.
(II) Liquidity Risk
Liquidity risk is referred to their risk of incurring capital shortage w hen performing settlement obligation in the
way of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient
cash to pay the due liabilities. The liquidity risk is centralized controlled by the Financ ial Department of the
Company. The financial department through supervising the balance of the cash and securities can be convert to
cash at any time and the rolling prediction of cash flow in future 12 months to ensure the Company have sufficient
cash to pay the liabilities under the case of all reasonable prediction, Each financial liability of the Company was
estimated due within 1 year.
(III) Market risk
Market risk was referred to risk of the fair value or future cash flow of financial instrument changed due to the
change of market price, including: exchange rate risk, interest rate risk and other price risk.
1. Exchange rate risk
Exchange rate risk was referred to risk of possible losses due to changes of exchange rate. The exchange rate risk
224
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
undertaken by the Company was mainly generated from USD and EUR. On 31 December 2019, all assets and
liabilities of the Company were balances in RMB except that the balances of assets and liabilities presented in the
Note Ⅶ (82) Foreign Currency Monetary Items were in USD and EUR. The exchange rate risk generated from
those balance of assets and liabilities in foreign currency might influence the running performance of the
Company to some extent.
The Company made efforts to avoid exchange rate risk through forward exchange settlement, improving operation
management and promoting the international competitiveness of the Company, etc.
2. Interest rate risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due to
the change of market price. There was no bank loan in the Company, thus no RMB benchmark interest rate changes
3. Other price risk
Naught
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RM B
Ending fair value
Item Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
-- -- -- --
measurement
(I) Trading financial assets 1,547,200.00 899,619,482.64 901,166,682.64
1.Financial assets at fair
value through profit or 899,619,482.64 899,619,482.64
loss
2. Specified as financial
assets at fair value through 1,547,200.00 1,547,200.00
profit or loss
(III) Other equity
743,168,346.39 711,571,895.07 1,454,740,241.46
instrument investment
II. Inconsistent fair value
-- -- -- --
measurement
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
In line with the market price of shares on the balance sheet date and forward foreign exchange option exchange
rate.
225
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
Items measured at fair value level 2 include bank's wealth management products and structured desposits, which are
measured at the contractual expected yield rate as a reasonable estimate of the fair value.
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Owing to the invested company, Xiamen Bank planned IPO and to list, significant changes have been occurred
to the business environment, operation conditions and financial conditions compared to the initial investment.
Refer to prospectus declaration and relative proportion between the recent issue price of similar listed banks and
net assets, as well as regard the period-end portion of net assets in Xiamen Bank enjoyed by the Company as the
reasonable estimation of fair value to measure.
(2) Owing to the business environment, operation conditions and financial conditions of the invested companies,
China Guangfa Bank and Foshan Fochen Expressway Development Co., Ltd. haven’t changed significantly, the
Company takes investment costs as the reasonable estimation of fair value to measure.
(3) Owing to the business environment, operation conditions and financial conditions of the invested company,
Shenzhen Zhonghao (Group) Co., Ltd. have deteriorated, the Company takes zero element as the reasonable
estimation of fair value to measure.
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning and
Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3
Naught
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if
Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
Naught
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
Naught
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
Financial assets and liabilities not measured at fair value inc lude: monetary assets, accounts receivable and
accounts payable, etc. There is small difference between the carrying value of above financial assets and liabilities
and fair value.
9. Other
Naught
226
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
XII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
share held by voting rights
the Company as owned by the
Name Registration place Nature of business Registered capital
the parent Company as the
against the parent against the
Company Company
Hong Kong Wah Shing
Holding Company Hong Kong Investment HKD110,000 13.47% 13.47%
Limited
Shenzhen Rising
RM B135.409614
Investment Development Shenzhen Investment 5.12% 5.12%
million
Co., Ltd.
Guangdong Electronics
Information Industry Guangzhou Sales & Production RM B462 million 4.74% 4.74%
Group Ltd.
Rising Investment RM B200 million and
Hong Kong Investment 1.82% 1.82%
Development Co., Ltd. HKD1 million
Guangdong Rising
Zhuhai Investment RM B1,393 million 0.54% 0.54%
Finance Holding Co., Ltd.
Total 25.70% 25.70%
Notes: Information on the Company as the parent
The largest shareholder of the Company, Hong Kong Wah Shing Holding Co., Ltd., was the wholly-owned
subsidiary of Electronics Group, and Electronics Group, Shenzhen Rising Investment Development Co., Ltd.
(hereinafter referred to as “Shenzhen Rising”), Guangdong Rising Finance Holding Co., Ltd. (hereinafter referred
to as “GD Rising Finance”) and Rising Investment Development Co., Ltd. (hereinafter referred to as “Rising
Investment”) were the wholly-owned subsidiaries of Guangdong Rising Assets Management Co., Ltd. (hereinafter
referred to as “Rising Company”). In line with the relevant stipulation of Corporation Law and Rules on Listed
Companies Acquis ition, Electronics Group, Shenzhen Rising and Ris ing Investment were persons acting in
concert, and the Rising Company was the actual controller of the Company. As of 31 December 2019, the
aforesaid persons acting in concert holding total A, B share of the Company 359,632,344.00 shares, 25.70 % of
total share equity of the Company.
The final controller of the Company was Guangdong Rising Assets Management Co., Ltd.
2. Subsidiaries of the Company
Refer to Note IX Equity in Other Entities-1. Equity in Subsidiaries for details.
227
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3. Information on the Joint Ventures and Associated Enterprises of the Company
Refer to Note IX Equity in Other Entities-3. Equity in Joint Ventures or Associated Enterprises for details of
significant joint ventures or associated enterprises of the Company.
4. Information on Other Related Parties
Name Relationship with the Company
Foshan NationStar Optoelectronics Co. Ltd. Under same actual controller
Guangdong Fenghua Advanced Technology Holding Co., Ltd. Under same actual controller
Guangdong Rising Optoelectronics Co., Ltd. Under same actual controller
Guangdong Vollsun Data Solid-state Storage Co., Ltd Under same actual controller
Guangdong Rising Finance Limited Under same actual controller
MTM Semiconductor Equipment Co., Ltd. Under same actual controller
Guangdong Electronic Technology Research Institute Under same actual controller
Guangzhou Diansheng Property M anagement Co., Ltd. Under same actual controller
Shaoguan Green Resource Recycling Development Co., Ltd. Under same actual controller
Zhuhai Doumen District Environmental Under same actual controller
Yongxingsheng
Industrial Wastes Recycling Comprehensive Treatment Co., Ltd.
PROSPERITY LAM PS & COM PONENTS LTD Shareholder owning over 5% shares
Hangzhou Times Lighting and Electrical Co., Ltd. Company controlled by related natural person
Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. Company controlled by related natural person
Prosperity Electrical (China) Co., Ltd. Company controlled by related natural person
Siteco Prosperity Lighting (Langfang) Co., Ltd. Company controlled by related natural person
Company controlled by related natural person with significant
OSRAM (China) Lighting Co., Ltd.
influence
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RM B
The approval trade Whether exceed Same period of last
Related party Content Reporting Period
credit trade credit or not year
Foshan NationStar Purchase of
47,177,854.15 210,000,000.00 No 95,223,746.49
Optoelectronics Co., Ltd. materials
Prosperity Lamps and Purchase of
3,874,689.74 12,000,000.00 No 6,066,082.69
Components Ltd. materials
228
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Guangdong Fenghua
Purchase of
Advanced Technology 2,719,775.90 10,000,000.00 No 8,520,579.75
materials
Holding Co., Ltd.
Prosperity Electrical (China) Purchase of
4,500,000.00 729,882.89
Co., Ltd. materials
Hangzhou Times Lighting Purchase of
674,827.48 1,000,000.00 No 673,304.64
and Electrical Co., Ltd. materials
Siteco Prosperity Lighting Purchase of
251,021.56
(Langfang) Co., Ltd. materials
Guangdong Vollsun Data Purchase of
1,600,000.00
Solid-state Storage Co., Ltd. equipment
MTM Semiconductor Purchase of
410,527.58 1,000,000.00 No 653,196.58
Equipment Co., Ltd. equipment
Guangdong Electronic
Purchase of
Technology Research 46,551.72 3,000,000.00 No 1,529,914.53
equipment
Institute
Shaoguan Green Resource
receiving labor
Recycling Development 93,318.58
service
Co., Ltd.
Zhuhai Doumen District
Yongxingsheng
Environmental Industrial receiving labor
54,676.52
Wastes Recycling service
Comprehensive Treatment
Co., Ltd.
Total 55,052,221.67 241,500,000.00 115,247,729.13
Information of sales of goods and provision of labor service
Unit: RM B
Related party Content Reporting Period Same period of last year
PROSPERITY LAM PS &
Sale of products 20,323,829.52 35,007,006.69
COM PONENTS LTD
Guangdong Vollsun Data Solid-state
Sale of products 2,373,517.23
Storage Co., Ltd.
Prosperity Electrical (China) Co., Ltd. Sale of products 78,769.53 215,459.99
Guangdong Rising Optoelectronics Co.,
Sale of products 2,456.90
Ltd.
Guangzhou Diansheng Property
Sale of products 846.90 1,118.97
M anagement Co., Ltd.
229
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Hangzhou Times Lighting and
Sale of products 73,790.53
Electrical Co., Ltd.
Total 20,403,445.95 37,673,350.31
Information of sales/purchase of goods and provision/reception of labor service
The pricing for related-party transactions observes the principle of market subject to the market price when the
transaction happens and relevant accounts shall be paid on time based on actual transaction.
(2) Information on Related-party Trusteeship/Contract
Naught
(3) Information on Related-party Lease
The Company was lessor:
Naught
The Company was lessee:
Unit: RM B
The lease fee confirmed in the The lease fee confirmed in
Name of lessor Category of leased assets
Reporting Period the same period of last year
Guangdong Electronics Information
Vehicles 5,699.21 16,666.67
Industry Group Ltd.
(4) Information on Related-party Guarantee
Naught
(5) Information on Inter-bank Lending of Capital of Related Parties
Naught
(6) Information on Assets Transfer and Debt Restructuring by Related Party
Naught
(7) Information on Remuneration for Key Management Personnel
Unit: RM B
Item Reporting period Same period of last year
Chairman of the Board
General M anager 1,415,554.04 1,775,401.52
Chairman of the Supervisory Committee 777,020.00
230
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Secretary of the Board 250,000.00 1,052,000.00
Chief Financial Officer 815,554.04 1,103,401.52
Other 6,040,140.36 7,589,589.28
Total 9,298,268.44 11,520,392.32
(8) Other Related-party Transactions
Naught
6. Accounts Receivable and Payable of Related Party
(1) Accounts Receivable
Unit: RM B
Ending balance Beginning balance
Item Related party
Carrying amount Bad debt provision Carrying amount Bad debt provision
M onetary
Guangdong Rising
capital-Interest 3,126,022.22 49,800.02
Finance Co., Ltd.
receivable
PROSPERITY
LAMPS &
Accounts receivable 3,158,126.65 94,743.80 3,676,377.29 110,291.32
COM PONENTS
LTD
Guangdong Vollsun
Accounts receivable Data Solid-state 2,653,280.00 265,328.00 2,753,280.00 82,598.40
Storage Co., Ltd.
OSRAM (China)
Accounts receivable 117,554.16 58,777.08 117,554.16 35,266.25
Lighting Co., Ltd.
Prosperity
(Hangzhou) Lighting
Accounts receivable 86,367.27 86,293.82 86,367.27 69,093.82
and Electrical Co.,
Ltd.
Guangdong
Electronics
Other receivables 19,500.00 585.00
Information Industry
Group Ltd.
MTM
Prepayments Semiconductor 28,368.00
Equipment Co., Ltd
231
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Foshan NationStar
Prepayments Optoelectronics Co., 4,866.76
Ltd.
Prosperity Electrical
Prepayments 7,521.37 7,521.37
(China) Co., Ltd.
Total 9,153,738.43 505,142.70 6,738,768.11 297,834.79
(2) Accounts Payable
Unit: RM B
Item Related party Ending carrying amount Beginning carrying amount
Foshan NationStar
Accounts payable 13,443,520.14 17,964,138.25
Optoelectronics Co., Ltd.
PROSPERITY LAM PS &
Accounts payable 554,680.06
COM PONENTS LTD
Guangdong Fenghua Advanced
Accounts payable 384,036.84 1,489,703.61
Technology Holding Co., Ltd.
Hangzhou Times Lighting and
Accounts payable 219,439.95 229,109.60
Electrical Co., Ltd.
Siteco Prosperity Lighting
Accounts payable 251,021.56
(Langfang) Co., Ltd.
Prosperity Electrical (China)
Accounts payable 160,759.70 160,759.70
Co., Ltd.
PROSPERITY LAM PS &
Other payables 488,822.33 480,904.43
COM PONENTS LTD
Guangdong Electronic
Other payables 181,700.00 179,000.00
Technology Research Institute
Prosperity Electrical (China)
Other payables 100,000.00 100,000.00
Co., Ltd.
MTM Semiconductor
Other payables 38,600.00
Equipment Co., Ltd.
Guangdong Electronics
Other payables Information Industry Group 11,111.12
Ltd.
Prosperity Electrical (China)
Advances from customers 52,619.26 38,646.66
Co., Ltd.
Total 15,030,898.22 21,497,674.99
232
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
7. Commitments of Related Party
(1)
Commitment: commitments made in acquisition documents or shareholding alteration documents
Commitment maker: Controlling shareholder
Type of commitment: About avoidance of horizontal competition
Contents: Electronics Group and its acting-in-concert parties Shenzhen Ris ing Investment and Hong Kong Ris ing
Investment have made a commitment that the elimination of the horizontal competition between Foshan Nation
Star Optoelectronics Co., Ltd. and the Company through business integration or other ways or arrangements shall
be completed before 4 June 2020.
Date of commitment making: 3 December 2019
Term of commitment: 6 months
Fulfillment: In execution
(2)
Commitment: commitments made in acquisition documents or shareholding alteration documents
Commitment maker: Controlling shareholder
Type of commitment: About avoidance of horizontal competition
Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Ris ing
Investment have made more commitments as follows to avoid horizontal competition with the Company: 1. They
shall conduct supervision and restraint on the production and operation activities of themselves and their relevant
enterprises so that besides the enterprise above that is in horizontal competition with the Company f or now, if the
products or business of them or their relevant enterprises become the same with or similar to those of the
Company or its subsidiaries in the future, they shall take the following measures: (1) If the Company thinks
necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business;
and (2) If the Company thinks necessary, it is given the priority to acquire first, by proper means, the relevant
assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or
avoid horizontal competition with the Company are also applicable to their directly or indirectly controlled
subsidiaries. They are obliged to urge and make sure that other subsidiaries execute w hat’s prescribed in the
relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly
controlled subsidiaries break the aforesaid commitments and thus cause a loss for the Company, they shall
compensate the Company on a rational basis.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(3)
Commitment: commitments made in acquisition documents or shareholding alteration documents
Commitment maker: Controlling shareholder
Type of commitment: About reduction and regulation of related-party transactions
Content: Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Ris ing
Investment have made a commitment that during their direct or indirect holding of the Company’s shares, they
shall 1. Strictly abide by the regulatory documents of the CSRC and the SZSE, the Company’s Articles of
Association, etc. and not harm the interests of the Company or other shareholders of the Company in their
production and operation activities by taking advantage of their position as the controlling shareholder and actual
controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated
233
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
companies (the “Relevant Enterprises” for short) will try their best to avoid or reduce related-party transactions
with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness, fairness and
equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant
Enterprises and the Company, and withdraw from voting when a related-party transaction with them or their
Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approval
procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents.
Where the aforesaid commitments are broken and a loss is thus caused for the Company, its subsidiaries or the
Company’s other shareholders, they shall be obliged to compensate.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(4)
Commitment: commitments made in acquisition documents or shareholding alteration documents
Commitment maker: Controlling shareholder
Type of commitment: About independence
In order to ensure the independence of the Company in business, personnel, asset, organization and finance,
Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Ris ing
Investment have made the following commitments: 1. They will ensure the independence of the Company in
business: (1) They promise that the Company will have the assets, personnel, qualifications and capabilities for it
to operate independently as well as the ability of independent, sustainable operation in the market. (2) They
promise not to intervene in the Company’s business activities other than the execution of their rights as the
Company’s shareholders. (3) They promise that they and their related parties will not be engaged in business that
is substantially in competition with the Company’s business. And (4) They promise that they and their related
parties will try their best to reduce related-party transactions between them and the Company; for necessary and
unavoidable related-party transactions, they promise to operate fairly following the market-oriented principle and
at fair prices, and execute the transaction procedure and the duty of information disclosure pursuant to the
applicable laws, regulations and regulatory documents. 2.They will ensure the independence of the Company in
personnel: (1) They promise that the Company’s GM, deputy GMs, CFO, Company Secretary and other senior
management personnel will work only for and receive remuneration from the Company, not holding any positions
in them or their other controlled subsidiaries other than director and supervisor. (2) They promise the Company’s
absolute independence from their related parties in labor, human resource and salary management. And (3) They
promise to follow the legal procedure in their recommendation of directors, supervisors and senior management
personnel to the Company and not to hire or dismiss employees beyond the Company’s Board of Directors and
General Meeting. 3. They will ensure the independence and completeness of the Company in asset: (1) They
promise that the Company will have a production system, an auxiliary production system and supporting facilities
for its operation; legally have the ownership or use rights of the land, plants, machines, trademarks, patents and
non-patented technology in relation to its production and operation; and have independent systems for the
procurement of raw materials and the sale of its produc ts. (2) They promise that the Company will have
independent and complete assets all under the Company’s control and independently owned and operated by the
Company. And (3) They promise that they and their other controlled subsidiaries will not illegally occupy the
Company’s funds and assets in any way, or use the Company’s assets to provide guarantees for the debts of
themselves or their other controlled subsidiaries with. 4. They will ensure the independence of the Company in
organization: (1) They promise that the Company has a sound corporate governance structure as a joint-stock
company with an independent and complete organization structure. (2) They promise that the operational and
234
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
management organs within the Company will independently execute their functions according to laws, regulations
and the Company’s Artic les of Association. 5. They will ensure the independence of the Company in finance: (1)
They promise that the Company will have an independent financial department and financial accounting sys tem
with normative, independent financ ial accounting rules. (2) They promise that the Company will have
independent bank accounts and not share bank accounts with its related parties. (3) They promise that the
Company’s financial personnel do not hold concurrent positions in its related parties. (4) They promise that the
Company will independently pay its tax according to law. And (5) They promise that the Company can make
financial decisions independently and that they will not illegally intervene in the Company’s use of its funds.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
8. Other
Naught
XIII. Stock Payme nt
1. The Overall Situation of Stock Payment
□Applicable √ Not applicable
2. The Stock Payment Settled in Equity
□Applicable √ Not applicable
3. The Stock Payment Settled in Cash
□Applicable √ Not applicable
4. Modification and Termination of the Stock Payment
Naught
5. Other
Naught
XIV. Commitme nts and Contingency
1. Significant Commitments
Significant commitments on the balance sheet date
Commitment: Commitment made to small and medium shareholders of the company
Type of commitment: Commitment about cash dividends
235
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Contents: The annual profits distributed in cash by the Company shall be not less than 30% of the distributable
profits of the year.
Date of commitment making: 27 May 2009
Term of commitment: Long-standing
Fulfillment: In execution
2. Contingency
(1) Significant Contingency on Balance Sheet Date
1. Securities false statement liability disputes
According to the Supreme People's Court of the People's Supreme People’s Court of the People's Republic of China
(2017) Supreme People’s Court No. 3437 to No. 3466, No. 3499 and No. 3480 Civil Ruling, the Plaintiff of the
Securities False Statement Liability Disputes (Retrial Application 32) The 32 people were not satisfied with the
Guangdong Provincial Higher People's Court (2016) Guangdong People's Court Decision No. 407-436 and No.
1841-1852 and applied to the Supreme People's Court for a retrial. The Supreme People’s Court ruled that it should
be tried. As of 31 December 2019, thirty one of the above-mentioned cases had concluded. And as of the date of
the audit report, one case hadn’t yet been brought to trial with the amount involved of RMB107,549.00.
2. The lawsuit with Dongguan Lindun
As Dongguan FSL Lindun Energy-saving Technology Co., Ltd. (hereinafter referred to as “Dongguan Lindun”)
defaulted on the payment of the Company, the Company filed a lawsuit with Dongguan First People’s Court on 22
March 2016 (Case No.: (2016) Yue 1971 MC No. 6481), and demanded a verdict that Dongguan Lindun should pay
overdue payment RMB9,559,837.55 and liquidated damages RMB955,983.76 (total: RMB10,515,821.31).
Dongguan Lindun filed Civil Counterclaim with Dongguan First People’s Court on 28 April 2016 against the
Company on the grounds of quality problems in the goods provided by the Company, and requested the Court to
order the Company to indemnify a loss of RMB11,727,003.10 and pay liquidated damages RMB1,552,159.76 (total:
RMB13,279,162.86). On 9 October 2019, Dongguan First People’s Court (2016) Yue 1971 MC No. 6481 Civil
Ruling adjudicated: (1) Dongguan Lindun should pay the payment for goods of RMB9,559,837.55 and liquidated
damages of RMB955,983.75 within 5 days from the effective date of the judgment; (2) the Company should pay
the loss of RMB577,189.00 to Dongguan Lindun within 5 days from the effective date of the judgment; (3) other
claims of the Company and Dongguan Lindun are rejected.
3. The lawsuit with Beijing Zhengshi
As Beijing Zhongao Zhengshi Lighting Appliance Co., Ltd. and its subordinate dealers (hereinafter referred to as
“Beijing Zhengshi”) defaulted on the Company’s payment for goods, the Company filed a lawsuit with the Foshan
Chancheng District People’s Court in September 2017 (Case No.: (2017) Yue 0604 MC No. 13425), demanding
an immediately settlement of the payment and overdue liquidated damages of the loan interest rate at the same
period from 31 July 2017 from No. 1 defendant, Beijing Zhengshi, as well as jointly and severally liability for the
above debt from No. 2 defendant Jiang Zhenghao. On 10 May 2018, in People’s Court of Chancheng District,
Foshan City (2017) Yue 0604 MC No. 13425 Civil Ruling, Beijing Zhengshi was adjudged to pay the payment for
goods of RMB14,220,827.14 and liquidated damages for the Company and Jiang Zhenghao undertook the jointly
and severally liability. Beijing Zhengshi and Jiang Zhenghao were not satisfied with the judgment and applied to
the Foshan Intermediate People’s Court on 24 May 2018 and asked for the revocation of the first instance
judgment and rejection of all claims of the Company. As of the date of the audit report, the above-mentioned case
was at the reception stage and hadn’t yet been brought to trial.
236
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
4. The lawsuit with Shanghai Feilo
As Shanghai Feilo Investment Co., Ltd. (hereinafter referred to as “Shanghai Feilo) defaulted on the Company’s
payment for goods, the Company filed a lawsuit with the Shanghai Xuhui District People’s Court in 2019, and the
claims are as follows: (1) demanding an immediately settlement of the overdue payment for shipped goods with
RMB2,485,037.50 from the defendant; (2) demanding the defendant to take delivery of OEM goods and to pay off
RMB5,923,158.80; (3) demanding the defendant to pay the interest of the principle of RMB8,408,196.30 of loan
interest rate at the same period from the date of the filing of the suit to the actual settlement date of the payment;
(4) demanding No.2 defendant, Shanghai Feilo Acoustics Co., Ltd. (solely-invested shareholder of Shanghai Feilo)
to undertake the joint liability for satisfaction to above obligation. As of the date of the audit report, the case
hasn’t been concluded.
5. The lawsuit with Shanghai Dinghui
Among the year of 2016 and 2017, goods of lamp bead from Shanghai Toplite Technology Co, Ltd. (hereinafter
referred to as “Shanghai Toplite”) supplied to the Company existed quality problems, and the Company shall
return the goods and not pay the payment. Therefore, Shanghai Toplite filed a lawsuit with the Foshan Chancheng
District People’s Court, demanding the payment of RMB2,183,009.58 from the Company and to compute the
interest of the loan interest rate floating 50% at the same period from 21 January 2018 to the actual settlement date
of the payment. In 2019, the Company filed a counterclaim to Foshan Chancheng District People’s Court,
demanding to return goods of lamp bead provided by Shanghai Toplite with RMB3,168,204.00 including tax price,
as well as to compensate the economic loss of RMB2,916,735.00 to the Company (total amount of counterclaim:
6,084,759.00). As of the date of the audit report, the case hasn’t been concluded.
6. The lawsuit with Kaichuang Industrial
As Shenzhen Kaichuang Industrial Co., Ltd. (hereinafter referred to as “Kaichuang Industrial”) defaulted on the
goods of payment of the Company and FSL Chanchang Optoelectronics Co., Ltd., Kaichuang Industrial rejected
to pay off after repeated collections, which has constituted the breach. The Company filed a lawsuit with the
Foshan Gaoming District People’s Court, demanding Kaichuang Industrial one-off payment with
RMB2,123,952.16 and to compute the interest of the loan interest rate floating 50% at the same period from date
of the filing of the suit to the actual settlement date of the payment. As of the date of the audit report, the case
hasn’t been concluded.
7. Disputes on infringement of design patent rights sued by Guangdong Cobra Industrial Co., Ltd. to the Company
Owing to the disputes on the design patent rights, Guangdong Cobra Industrial Co., Ltd. filed a lawsuit with the
Guangzhou Intellectual Property Court to the Company (Case No.: (2019) Yue 73 MC No. 865, (2019) Yue 73
MC No. 866). As of the date of the audit report, the case hasn’t been concluded.
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant
Statements
There was no significant contingency in the Company.
3. Other
Naught
237
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
XV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
Naught
2. Profit Distribution
Unit: RM B
Profits or dividends planned to distribute 258,879,038.49
Reviewed and approved profits or dividends declared to distribute 258,879,038.49
3. Sales Return
Naught
4. Notes to Other Events after Balance Sheet Date
(I) Profit Distribution Plan
The profit distribution plan in 2019 of the Company is as follows: based on the total 1,399,346,154 shares as at
the end of 2019, the Company intends to distribute a cash dividend of RMB1.85(tax included and dividends for
B-share holders to be paid in the Hong Kong dollars) for every 10 shares held by A-share and B-share holder,
with the total distributed cash dividends reaching RMB258,879,038.49. Apart from the aforesaid cash dividend,
the Company would not offer bonus issue from capital reserves and bonus issue from profit in this profit
distribution.
The proposal is still to be submitted to the 2019 Annual General Meeting for review.
(II) Impact on the Epidemic situation of COVID-19 Epidemic
Owing to the outbreak of COVID-19 Epidemic, which has the temporary impact on the material purchase, product
sale and reflow of corporate sales income of the Company to some extent, the ultimate impact depends on the he
prevention and control of the national epidemic situation, duration and the implementation of each regulatory
policies. Now the Company has conducted a series of measures and resumed work and production gradually,
reducing the adverse effects on the Company generated from the epidemic situation as much as possible.
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
Naught
2. Debt Restructuring
Naught
3. Assets Replacement
238
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Naught
4. Pension Plan
Naught
5. Discontinued Operations
Naught
6. Segment Information
Naught
7. Other Significant Transactions and Events with Influence on Investors’ Decision-making
Naught
8. Other
(I) About Equity Incentive Fund
On 16 May 2002, the resolution of The 2001 Annual General Meeting of the Company passed the proposal of
establishing equity incentive system for middle and senior executives, which stipulated that the assessment target
shall be annual return on net assets of 6%. When the annual return on net assets reached 6%, withdraw equity
incentive funds by 5% of the net profit, the accruing proportion of incentive funds and the increase ratio of return on
net assets should increase simultaneously. The scheme was implemented from the fiscal year 2001. The accrued
equity incentive fund of the Company was RMB14 million for the present year.
XVII. Notes of Main Ite ms in the Financial State ments of the Company as the Parent
1. Notes Receivable
(1) Category of Notes Receivable
Unit: RM B
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Item Withdra Withdraw
Carrying Carrying
Proportio wal Proportio al
Amount Amount value Amount Amount value
n proportio n proportio
n n
239
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Accounts receivable
for which bad debt 23,377,2 16,266,8 7,110,413 23,377,22 16,266,81 7,110,413.5
3.27% 69.58% 2.78% 69.58%
provision separately 23.66 10.09 .57 3.66 0.09 7
accrued
Of which:
Accounts receivable
for which bad debt 691,130, 32,134,1 658,996,4 819,146,6 30,359,11 788,787,51
96.73% 4.65% 97.22% 3.71%
provision accrued 612.31 93.35 18.96 35.09 6.01 9.08
by group
Of which:
714,507, 48,401,0 666,106,8 842,523,8 46,625,92 795,897,93
Total 100.00% 6.77% 100.00% 5.53%
835.97 03.44 32.53 58.75 6.10 2.65
Individual withdrawal of bad debt provision by single item:
Unit: RM B
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Reason for withdrawal
Involved in the lawsuit;
the Company won in the
Customer A 14,220,827.14 7,110,413.57 50.00% first instance judgment
and the other side had
appealed
Involved in the lawsuit
Customer B 9,156,396.52 9,156,396.52 100.00% with long aging;
expected irrecoverable
Total 23,377,223.66 16,266,810.09 -- --
Withdrawal of bad debt provision by group:
Unit: RM B
Ending balance
Name
Carrying amount Bad debt provision Withdrawal reason
Credit risk 691,130,612.31 32,134,193.35 4.65%
Total 691,130,612.31 32,134,193.35 --
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RM B
Aging Ending balance
Within 1 year (including 1 year) 629,187,154.43
240
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
1 to 2 years 44,567,434.73
2 to 3 years 21,658,102.87
Over 3 years 19,095,143.94
3 to 4 years 5,365,572.32
4 to 5 years 1,817,662.76
Over 5 years 11,911,908.86
Total 714,507,835.97
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RM B
Changes in the Reporting Period
Category Beginning balance Ending balance
Withdrawal Reversal or recovery Write-off
Accounts receivable 46,625,926.10 1,884,709.32 109,631.98 48,401,003.44
Total 46,625,926.10 1,884,709.32 109,631.98 48,401,003.44
Of which bad debt provision recovered or reversed with significant amount during the Reporting Period:
Naught
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RM B
Item Amount
No. 1 109,420.64
Other driblet small amount 211.34
Total 109,631.98
Of which verification of significant accounts receivable:
Naught
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to Arrears Party
Unit: RM B
Ending balance of accounts Proportion to total ending Ending balance of bad debt
Name
receivable balance of accounts receivable provision
No. 1 105,391,428.29 14.75% 3,161,742.85
No. 2 37,026,996.74 5.18% 1,110,809.90
No. 3 20,353,852.72 2.85% 610,615.58
No. 4 19,217,070.82 2.69% 576,512.12
241
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
No. 5 16,557,721.50 2.32% 1,266,160.92
Total 198,547,070.07 27.79%
(5) Derecognition of Accounts Receivable due to the Transfer of Financial Assets
Naught
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable
Naught
2. Other Receivables
Unit: RM B
Item Ending balance Beginning balance
Other receivables 37,934,614.96 38,386,484.68
Total 37,934,614.96 38,386,484.68
(1) Interest Receivable
Naught
(2) Dividends Receivable
Naught
(3) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RM B
Nature Ending carrying amount Beginning carrying amount
Internal business group 17,624,135.10 22,478,786.69
VAT export tax refunds 8,154,485.23 6,252,642.96
Borrowings and petty cash for employees 5,436,926.32 3,294,170.26
Performance bond 3,231,331.10 2,905,450.00
Rental fees and water & electricity fees 1,476,056.29 765,582.10
Other intercourse 3,896,155.29 3,991,470.59
Total 39,819,089.33 39,688,102.60
242
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
2) Withdrawal of Bad Debt Provision
Unit: RM B
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
406,679.05 894,938.87 1,301,617.92
2019
Balance of 1 January
2019 in the Current —— —— —— ——
Period
Withdrawal of the
125,930.97 456,925.48 582,856.45
Current Period
Balance of 31 December
532,610.02 1,351,864.35 1,884,474.37
2019
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ not applicable
Disclosure by aging
Unit: RM B
Aging Ending balance
Within 1 year (including 1 year) 33,823,552.58
1 to 2 years 3,431,260.38
2 to 3 years 1,549,833.11
Over 3 years 1,014,443.26
3 to 4 years 565,642.96
4 to 5 years 162,042.14
Over 5 years 286,758.16
Total 39,819,089.33
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision
Unit: RM B
Beginning Changes in the Reporting Period
Category Ending balance
balance Withdrawal Reversal or recovery Write-off
Other accounts
1,301,617.92 582,856.45 1,884,474.37
receivable
243
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Total 1,301,617.92 582,856.45 1,884,474.37
Of which bad debt provision recovered or reversed with significant amount during the Reporting Period:
Naught
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Naught
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RM B
Proportion to total
Ending balance of
Name of the entity Nature Ending balance Aging ending balance of
bad debt provision
other receivables%
Internal business
No. 1 14,542,856.74 Within 2 years 36.52%
group
No. 2 Export rebates 8,154,485.23 Within 1 year 20.48% 244,634.56
Internal business
No. 3 2,950,161.82 Within 1 year 7.41%
group
No. 4 Other 1,296,947.31 Within 4 years 3.26% 396,659.49
No. 5 Social insurance 1,037,048.12 Within 1 year 2.60% 31,111.44
Total -- 27,981,499.22 -- 70.27% 672,405.49
6) Accounts Receivable Involving Government Subsidies
Naught
7) Derecognition of Other Receivables due to the Transfer of Financial Assets
Naught
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables
Naught
3. Long-term Equity Investment
Unit: RM B
Item Ending balance Beginning balance
244
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Investment to
283,793,102.26 283,793,102.26 283,793,102.26 283,793,102.26
subsidiaries
Investment to
joint ventures and
181,093,725.43 181,093,725.43 182,458,559.69 182,458,559.69
associated
enterprises
Total 464,886,827.69 464,886,827.69 466,251,661.95 466,251,661.95
(1) Investment to Subsidiaries
Unit: RM B
Beginning Increase/decrease
Ending balance
balance Depreciation Ending balance
Investee Additional Reduced of depreciation
(carrying reserves Other (carrying value)
investment investment reserve
value) withdrawn
Foshan
Chansheng
2,744,500.00 2,744,500.00
Electronic
Ballast Co., Ltd.
FSL Chanchang
Optoelectronics 82,507,350.00 82,507,350.00
Co., Ltd.
Foshan Taimei
Times Lamps
350,000.00 350,000.00
and Lanterns
Co., Ltd.
Nanjing Fozhao
Lighting
Components 72,000,000.00 72,000,000.00
M anufacturing
Co., Ltd.
Foshan
Electrical &
Lighting 35,418,439.76 35,418,439.76
(Xinxiang) Co.,
Ltd.
245
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Guangdong
Fozhao New
Light Sources 50,077,000.00 50,077,000.00
Technology Co.,
Ltd.
Foshan Lighting
Lamps &
15,000,000.00 15,000,000.00
Components
Co., Ltd.
FSL Zhida
Electric
25,500,000.00 25,500,000.00
Technology Co.,
Ltd.
FSL Lighting
195,812.50 195,812.50
GM BH
283,793,102.2
Total 283,793,102.26
6
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RM B
Increase/decrease
Ending
Gains and Adjustme
Beginnin Cash Withdraw Ending balance
Additiona losses nt of
g balance Reduced Changes bonus or al of balance of
Investee l recognize other
(carrying investmen of other profits impairme Other (carrying depreciati
investmen d under comprehe
value) t equity announce nt value) on
t the equity nsive
d to issue provision reserve
method income
I. Joint ventures
II. Associated enterprises
Shenzhen
Primatron
ix 182,458,5 1,755,751 3,120,585 181,093,7
(Nanho) 59.69 .49 .75 25.43
Electronic
s Ltd.
182,458,5 1,755,751 3,120,585 181,093,7
Subtotal
59.69 .49 .75 25.43
182,458,5 1,755,751 3,120,585 181,093,7
Total
59.69 .49 .75 25.43
246
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
（3）Other Notes
Naught
4. Operating Revenue and Cost of Sales
Unit: RM B
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
M ain business 3,124,143,587.99 2,445,365,718.26 3,606,985,537.23 2,858,585,674.76
Other business 111,804,851.06 92,962,742.36 95,835,761.53 79,065,112.75
Total 3,235,948,439.05 2,538,328,460.62 3,702,821,298.76 2,937,650,787.51
Whether the Company has executed the new revenue standards
□ Yes √ No
5. Investment Income
Unit: RM B
Item Reporting Period Same period of last year
Long-term equity investment income
1,755,751.49 6,165,040.30
accounted by equity method
Investment income from disposal of
330,228.20 31,946,218.59
long-term equity investment
Investment income from holding of trading
1,750,000.00
financial assets
Investment income from disposal of trading
13,550,000.00
financial assets
Dividend income from holding of other
18,510,954.80
equity instrument investment
Investment income from holding of
18,873,927.57
available-for-sale financial assets
Investment income from financial products
29,554,019.01 25,626,926.83
and structural deposits
Other -4,242,300.00 -808,400.00
Total 61,208,653.50 81,803,713.29
6. Other
Naught
247
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RM B
Item Amount Note
Gains/losses on the disposal of non-current assets -413,275.62
Government grants recognized in the current period, except
for those acquired in the ordinary course of business or
6,485,365.31
granted at certain quotas or amounts according to the
government’s unified standards
Gain/loss from change of fair value of trading financial
assets and liabilities, derivative financial assets and
liabilities, and investment gains from disposal of trading
financial assets and liabilities, derivative financial assets 15,574,400.00
and liabilities, and other creditor’s rights investment, other
than valid hedging related to the Company’s common
businesses
Other non-operating income and expenses other than the
-2,543,083.02
above
Less: Income tax effects 2,635,263.29
Non-controlling interests effects -961,608.55
Total 17,429,751.93 --
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
EPS (Yuan/share)
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to ordinary
6.37% 0.2152 0.2152
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after deduction 6.00% 0.2028 0.2028
of non-recurring profit or loss
248
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International
and Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and
Chinese Accounting Standards
□ Applicable √ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas
Accounting Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the
Foreign Auditing Agent, Such Foreign Auditing Agent’s Name Shall Be Clearly Stated
Naught
4. Other
Naught
249
Foshan Electrical and Lighting Co., Ltd. Annual Report 2019
Part XIII Documents Available for Reference
Investors and interested parties can get access to the following materials in the Board Secretary’s
Office in the Company’s office building:
1. The financial statements signed and sealed by the Comp any’s legal representative, General
Manager and Chief Financial Officer;
2. The original copy of the Independent Auditor’s Report signed and sealed by the certified public
accountants and stamped by the CPA firm.
3. All the originals of the Company’s announcements and documents that were disclosed to the
public during the Reporting Period on the media designated by the CSRC for information
disclosure.
The Board of Directors
Foshan Electrical and Lighting Co., Ltd.
8 April 2020
250
