意见反馈 手机随时随地看行情
  • 公司公告

公司公告

粤照明B:2021年年度报告(英文版)2022-04-01  

                        Foshan Electrical and Lighting Co., Ltd.                  Annual Report 2021




      FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
                                     ANNUAL REPORT 2021




                                           March 2022




                                                                           1
 Foshan Electrical and Lighting Co., Ltd.                                         Annual Report 2021




           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 manage ment 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 material omissions therein.
Wu Shenghui, the Company’s legal representative, Tang Qionglan, the Company’s Chief
Financial Officer (CFO), and Liang Yuefei, the person-in-charge of the Company’s accounting
organ (equivalent to accounting manager) hereby guarantee that the Financial Statements
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
me ntioned in this Report shall NOT be considered as virtual promises of the Company to
investors. And investors are kindly re minded 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 fiercer market competition, the risk of rising raw material prices, and the risk of
exchange rate fluctuations. Please refer to the section headed “Potential Risks” in Ite m XI of
Part III of this Report.
The Board has approved a final dividend plan as follows: based on the share capital of
1,348,994,647 shares (the total share capital of 1,361,994,647 shares minus the remaining
13,000,000 A-shares repurchased in the share repurchase account at the disclosure date of the
2021 Annual Report, a cash dividend of RMB1 (tax inclusive) per 10 shares is to be
distributed to the shareholders, with no bonus issue from either profit or capital reserves.
Where any change occurs to the total shares entitled to the final dividend due to any new issue,
grant of equity incentives, etc. when the final dividend plan is implemented, the dividend per
share shall remain the same while the total payout amount shall be adjusted accordingly.
This Report has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version shall
prevail.




                                                                                                   2
 Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021




                                                  Table of Contents




Part I Important Notes, Table of Contents and Definitions ........................................................... 2

Part II Corporate Information and Key Financial Information ................................................... 6

Part III Manage ment Discussion and Analysis ............................................................................. 12

Part IV Corporate Governance ...................................................................................................... 51

Part V Environme ntal and Social Responsibility .......................................................................... 79

Part VI Significant Events ............................................................................................................... 86

Part VII Share Changes and Shareholder Information ............................................................. 153

Part VIII Preferred Shares ........................................................................................................... 165

Part IX Corporate Bonds .............................................................................................................. 166

Part X Financial Statements ......................................................................................................... 167




                                                                                                                                           3
 Foshan Electrical and Lighting Co., Ltd.                                           Annual Report 2021




                                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 stamped by the Company’s legal representative, Chief

Financial Officer, and the person-in-charge of the Company’s accounting organ.

2. The original copy of the Independent Auditor’s Report signed and stamped by the certified public

accountants and stamped by the CPA firm.

3. The originals of all the Company’s announcements and documents disclosed to the public during

the Reporting Period on the media designated by the CSRC for information disclosure.




                                                                                                     4
 Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021




                                                            Definitions


                        Term                                                                Definition
                                                         Foshan Electrical and Lighting Co., Ltd. and its consolidated subsidiaries,
The “Company”, “listed company”, “FSL” or “we”
                                                         except where the context otherwise requires
Rising Group                                             Guangdong Rising Holdings Group Co., Ltd.
Electronics Group                                        Guangdong Electronics Information Industry Group Ltd.
                                                         Guangdong Rising Capital Investment Co., Ltd. (formerly known as
Rising Capital
                                                         “Guangdong Rising Finance Holding Co., Ltd.”)
Shenzhen Rising Investment                               Shenzhen Rising Investment Development Co., Ltd.

Hong Kong Rising Investment                              Rising Investment Development Limited
Hongkong Wah Shing                                       Hongkong Wah Shing Holding Company Limited
NationStar Optoelectronics                               Foshan NationStar Optoelectronics Co., Ltd.
Sigma                                                    Foshan Sigma Venture Capital Co., Ltd.
Nanning Liaowang                                         Nanning Liaowang Auto Lamp Co., Ltd.
CSRC                                                     China Securities Regulatory Commission

SZSE                                                     Shenzhen Stock Exchange
General meeting                                          General meeting of Foshan Electrical and Lighting Co., Ltd.
Board of Directors                                       The board of directors of Foshan Electrical and Lighting Co., Ltd.
Supervisory Committee                                    The supervisory committee of Foshan Electrical and Lighting Co., Ltd.
Annual report auditor                                    Zhongzheng Tiantong Certified Public Accountants LLP
                                                         Expressed in the Chinese currency of Renminbi, expressed in tens of thousands
RMB, RMB’0,000, RMB’00,000,000
                                                         of Renminbi, expressed in hundreds of millions of Renminbi




                                                                                                                                         5
 Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021




        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           Wu Shenghui

Registered address             No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China

Zip code                       528000

Changes of registered address N/A

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                                        Huang Zhenhuan                           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                               fsldsh@chinafsl.com                      fslhyf@163.com


III Media for Information Disclosure and Place where this Report Is Lodged

Stock exchange website where this Report is disclosed http://www.cninfo.com.cn

Media and website where this Report is disclosed      China Securities Journal, Ta Kung Pao (HK), and http://www.cninfo.com.cn



                                                                                                                                 6
 Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


                                                        Board Office, FSL Office Building, No. 64, Fenjiang North Road,
Place where this Report is lodged
                                                        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
                                             Unchanged
Company since going public (if any)

                                             In April 2006, the State-owned Assets Supervision and Administration Commission
                                             (SASAC) of Foshan Municipal People's Government, the former controlling
                                             shareholder of the Company, transferred 13.47% of shares it held in the Company to
                                             OSRAM Prosperity Holding Company Limited (later renamed as "OSRAM Holding
                                             Company Limited"), and at the same time, SASAC of Foshan Municipal People's
                                             Government transferred 10.50% of shares it held in the Company to Prosperity Lamps
                                             & Components Limited. Upon completion of such transfer, the biggest shareholder of
                                             the Company was OSRAM Prosperity Holding Company Limited, and the Company
                                             had no any controlling shareholder or actual controller. In December 2015, OSRAM of
                                             Germany transferred 100% equity it held in OSRAM Holding Company Limited
                                             (OSRAM Holding Company Limited held 13.47% of shares of the Company, being the
                                             biggest shareholder of the Company and later renamed as "Hongkong Wah Shing
Every change of controlling shareholder
                                             Holding Company Limited") to Electronics Group. In addit ion, Electronics Group and
since incorporation (if any)
                                             its parties acting in concert (Rising Capital, Shenzhen Rising Investment and Hong
                                             Kong Rising Investment), held 23.144% of the shares of the Company through
                                             increasing their shareholding of the Company. Electronics Group and its parties acting
                                             in concert became the controlling shareholder of the Company and Electronics Group
                                             is a wholly-owned subsidiary of Rising Holdings Group. In December 2021,
                                             wholly-owned subsidiaries of Rising Holdings Group, Rising Capital and Shenzhen
                                             Rising Investment transferred 5.94% of shares they held in the Company to Rising
                                             Holdings Group through transfer by agreement for no compensation. Therefore, Rising
                                             Holdings Group and its parties acting in concert held 30% of shares in the Company.
                                             As of the date of this Report, due to the retirement of certain shares repurchased by the
                                             Company, Rising Holdings Group and its parties acting in concert hold 30.82% of
                                             shares in the Company.


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        Feng Wei and Li Qiongqian

The independent sponsor hired by the Company to exercise constant supervision over the Company in the

Reporting Period:

                                                                                                                                         7
 Foshan Electrical and Lighting Co., Ltd.                                                                     Annual Report 2021


□ 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
                                                                                        2021-over-2020
                                                2021                  2020                                         2019
                                                                                          change (%)

Operating revenue (RMB)                      4,772,690,469.14      3,744,914,452.72                27.44%       3,337,576,747.66

Net profit attributable to the listed
                                              250,091,965.87        316,914,185.34                 -21.09%       296,077,926.11
company’s shareholders (RMB)

Net profit attributable to the listed
company’s shareholders before
                                              150,010,381.60        276,795,046.07                 -45.80%       283,753,154.31
exceptional gains and losses
(RMB)

Net cash generated from/used in
                                             -277,025,085.26        394,828,331.90              -170.16%         509,889,792.05
operating activities (RMB)

Basic earnings per share                               0.1854                0.2349                -21.07%                0.2195
(RMB/share)

Diluted earnings per share                             0.1836                0.2327
                                                                                                   -21.10%                0.2174
(RMB/share)

Weighted average return on equity
                                                       4.23%                 5.82%                 -1.59%                 6.18%
(%)

                                                                                         Change of 31
                                                                                      December 2021 over
                                        31 December 2021        31 December 2020                             31 December 2019
                                                                                      31 December 2020
                                                                                             (%)

Total assets (RMB)                           9,699,592,528.61      8,519,336,914.11                13.85%       6,477,955,373.32

Equity attributable to the listed
                                             5,800,558,588.34      6,263,921,304.54                -7.40%       4,944,201,236.25
company’s shareholders (RMB)

Note: The Company repurchased some shares during 2021. For details, see “2. Share repurchase” under “XVI Other Significant
Events” of Part VI of this Report. According to Preparation Rule 9 on Information Disclosure for Companies Offering Their
Securities to the Public—Calculation and Disclosure of ROE and EPS (2010 Revision), EPS of comparative periods have been
recalculated based on the adjusted shares.




                                                                                                                                   8
 Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021



Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before

and after exceptional gains and losses was negative for the last three accounting years, and the latest independent

auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern.

□ Yes √ No

Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before

and after exceptional gains and losses was negative.

□ Yes √ No


VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (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: RMB

                                              Q1                Q2                 Q3                   Q4

Operating revenue                           825,678,013.99   1,129,664,102.21   1,291,797,822.97     1,525,550,529.97

Net profit attributable to the listed
                                             42,203,399.57     68,352,143.36      81,457,735.74        58,078,687.20
company’s shareholders

Net profit attributable to the listed
company’s shareholders before               39,266,019.69     59,684,487.82      49,859,285.46         1,200,588.63
exceptional gains and losses

Net cash generated from/used in
                                             48,558,082.07      -2,778,441.55     -99,365,759.87     -223,438,965.91
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


                                                                                                                        9
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021



IX Exceptional Gains and Losses
√ Applicable □ Not applicable
                                                                                                             Unit: RMB

                      Item                         2021            2020            2019               Note

Gain or loss on disposal of non-current
assets (inclusive of impairment allowance         82,233,742.26    7,466,798.65     -413,275.62
write-offs)

Government subsidies charged to current
profit or loss (exclusive of government
subsidies consistently given in the
                                                  15,971,903.24   25,372,941.13    6,485,365.31
Company’s ordinary course of business at
fixed quotas or amounts as per government
policies or standards)

Capital occupation charges on non-financial
enterprises that are recognized in profit or         881,704.19    1,337,410.12
loss

Current profit or loss on subsidiaries
obtained in business combinations involving
                                                                  -5,613,743.03   -5,104,980.13
entities under common control from the
period-beginning to combination dates, net

Gain or loss on fair-value changes on
held-for-trading financial assets and
liabilities & income from disposal of
held-for-trading financial assets and
                                                  10,663,119.44    8,463,850.00   15,574,400.00
liabilities and available-for-sale financial
assets (exclusive of the effective portion of
hedges that arise in the Company’s ordinary
course of business)

Reversed portions of impairment allowances
for receivables which are tested individually                      9,156,396.52
for impairment

Non-operating income and expense other
                                                  10,640,975.11     -123,367.66   -2,543,083.02
than the above

Less: Income tax effects                          17,224,178.81    5,643,715.91    2,635,263.29

Non-controlling interests effects (net of tax)     3,085,681.16     297,430.55      -961,608.55

Total                                            100,081,584.27   40,119,139.27   12,324,771.80         --


Details of other items that meet the definition of exceptional gain/loss:

□ Applicable √ Not applicable


                                                                                                                    10
 Foshan Electrical and Lighting Co., Ltd.                                                     Annual Report 2021



No such cases for the Reporting Period.

Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item 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.




                                                                                                              11
 Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021




                      Part III Management Discussion and Analysis

I Industry Overview for the Reporting Period


At present, the lighting industry is experiencing a gradual growth slowdown and significant structural

overcapacity. With rigidly increasing operating costs, the profit margins of lighting enterprises have been

squeezed to a certain extent. From the perspective of the global market, with the fluctuations in the RMB-to-USD

exchange rate and the Covid-19 pandemic not entirely under control across the world, the lighting industry is

facing many uncertainties in export, and many export-oriented enterprises are turning to the domestic market,

exacerbating the competition in the domestic market. Under the dual pressures from market demand and fierce

competition, the lighting industry, dominated by micro-, small- and medium-sized enterprises, will see deep

shuffling and accelerated industrial chain integration. Enterprises with advantages in capital and manufacturing

will have the opportunity to expand their market share by integrating high-quality targets with channels,

technologies and prospects, and quickly enhance their scales.

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 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, auto lamps, and

electrical products, as well as provide complete lighting, electrical, and auto lamp solutions. Our products mainly

include LED, traditional lighting products, auto lamps, switches and sockets. 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 LED lamp beads, electronic components, aluminum substrate, plastic

parts, metal materials by way of tendering and bidding. A tendering and bidding supervisory committee consisting


                                                                                                                 12
 Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021



of personnel from key departments has been put in place. 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, predict future market demand and take

into account the safe inventory line 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

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

In terms of domestic sale, the Company adopts the sale mode of dealer distribution and direct supply for

engineering projects. In terms of channels, the Company boasts hardware store, home decoration, engineering,

industrial lighting, e-commerce & retail sales channels. In the factory-installed market, auto lamp products are

provided directly to automobile manufacturers; and in the aftermarket, products are mainly sold by dealers.

For overseas markets, we adopt OEM and OBM models and also sell under our own brands (through agents).

3. Main driving forces for growth




                                                                                                                 13
 Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021



During the Reporting Period, the Covid-19 pandemic was not entirely under control across the world, and the

downward pressure on the economy kept mounting. However, China’s policies of “Carbon Emission Peak and

Carbon Neutrality”, new infrastructure, new urbanization, major construction projects, new energy vehicles, etc.

have brought new development opportunities for the country’s lighting industry and auto lamp segment.

Upholding the overall idea of "stabilizing the fundamentals and expanding new businesses", the Company

continuously strengthened the innovation driver and promoted the change of the marketing model. It tackled

problems of capital operation, optimized the industrial layout, intensified management and improvement, and

vigorously explored the segmented market. In 2021, the Company acquired Nanning Liaowang, which provided

strong support for the Company to rapidly enter the OEM market and make the automobile vehicle lamp business

of the Company stronger and bigger. Meanwhile, 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 the business portfolio 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.

III Core Competitiveness Analysis


The Company's core competitiveness is mainly reflected in the following four aspects:



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

(hardware distribution, home, e-commerce & retail sales, engineering, and industrial lighting 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 120 countries and regions in North America, Europe,

Southeast Asia, Africa and Oceania, and kept improving overseas sales channel. By virtue of its powerful and



                                                                                                                14
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021



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". For 16 consecutive years, the Company has been included in

the list of "China's 500 Most Valuable Brands". In 2021, the value of FSL brand reached RMB22,865 million. 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 accelerated brand building through

high-end mainstream media platform, Internet emerging media and offline terminal advertising respectively,

maximized the brand and product communication effect, formed a comprehensive and diversified publicity

position, and driven the transition of “FSL” from an industrial brand to a popular brand to maintain the brand

vitality and competitiveness. 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.

R&D technical advantage

The Company values the R&D of new products and the development of innovation and R&D teams, and has

established a systematic and scientifically independent science and technology innovation system, and a team of

well-structured, collaborative and efficient talents. It has further increased spending on technology and

independent product innovation and introduced first-class R&D equipment and facilities from home and abroad to

provide high-quality conditions for scientific and technological innovation. The Company is a national high-tech

company, and its testing center has the CNAS-approved qualification. In addition, the Company has built

innovative platforms such as "Guangdong Engineering Technology Development Center", "Guangdong Industrial

Design Center", "Guangdong Enterprise Technology Center", and "Lighting Research Institute". Besides, the

Company has won the titles of "National IP Advantaged Enterprise" and "Guangdong IP Demonstration

Enterprise". The Company has built a "Guangdong Province Doctor Workstation" to explore and intensify efforts

in the cutting-edge technology of LEDs, strengthen key technology research and basic research, and form

technical barriers with proprietary intellectual property rights in lighting, spectroscopic, electrical, IoT, AI and

many other fields. and has been cumulatively granted 922 valid patents. Also, it has led or participated in the

                                                                                                                  15
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021



revision of 66 standards at all levels. The Company actively integrates internal and external resources and

collaborates with Tsinghua University, Fudan University, Sun Yat-sen University, South China University of

Technology, Institute of Deep-Sea Science and Engineering, CAS and other scientific research institutes to

establish in-depth industrial and research cooperation, so as to promote key technological breakthroughs and

transformation of scientific and technological achievements. Meanwhile, the Company has formed a smooth R&D

talent cultivation channel to provide a strong guarantee for the Company to maintain technological leadership and

continuous product innovation.

Scale advantage

As one of the enterprises to first step into the industry of producing and selling lighting products, the Company

forms a capability of mass manufacturing by years of experience accumulation. After years of continuous

investment, the Company has greatly improved its production automation level. 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.

Advantage of a vertical and integrated LED industrial chain

In February 2022, the Company completed the acquisition of NATIONSTAR, held 21.48% shares of

NATIONSTAR, and became a shareholder of NATIONSTAR. The business of NATIONSTAR covers the

upstream LED chip manufacturing and midstream LED packaging in the LED industrial chain. Through this

resource integration, the Company has a complete and refined LED industrial chain covering upstream LED chip

manufacturing, midstream LED packaging and downstream LED application products, thus strengthening the

competitiveness and presence of the Company in the industry.

IV Core Business Analysis

1. Overview


Faced with the complicated and severe situation such as the rising prices of raw materials, the sharp rise of export

logistics cost, the appreciation of RMB and the shortage of key supplies in 2021, the Company, upholding the

overall idea of "stabilizing the fundamentals and expanding new businesses", forged ahead and intensified efforts in

production and operation by continuously strengthening innovation drive, promoting marketing model reform,

optimizing the business portfolio, and promoting management improvement. As a result, the Company achieved a



                                                                                                                  16
 Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021



record high in operating revenue. During the Reporting Period, the Company recorded operating revenue of

RMB4772.6905 million, up by 27.44 % year-on-year (YoY) and a net profit attributable to shareholders of the listed

company of RMB250.092 million, down by 21.09% YoY.

In 2021, the Company mainly focused on the following tasks:

1. Enhanced innovation of R&D technology.

The Company adhered to innovation-driven development, and vigorously enhanced R&D and innovation. Also, it

continued to increase investment in R&D, and invested RMB233 million in R&D in the year, accounting for

4.88% of operating revenue. Throughout the year, the Company has developed a total of 425 new products,

creating sales of about RMB700 million and applied for 283 patents, 207 of which were authorized. Also, four

products were awarded international bid acceptance certificates, and 21 international, industry and group

standards were formulated. Meanwhile, the Company has vigorously promoted the construction of innovation

platforms, and built provincial platforms such as the "Doctor Workstation" and "Corporate T echnology Center".

Additionally, its Testing Center was accredited by US Energy Star, and the innovation platform has played an

increasing important supporting role. The Company also deepened industrial and university research cooperation,

strengthened cooperation with universities and research institutes such as the Institute of Deep-Sea Science and

Engineering of Chinese Academy of Sciences, Tsinghua University and Fudan University, and jointly carried out

research on new materials, new technologies, intelligent control and other topics, promoted the breakthrough and

reserve of key technologies, and constantly enhanced research and development and innovation capabilities. The

Research and Development Center of the Company won the "National Worker Pioneer" in 2021, and was

shortlisted into the top 50 divisions of the Guangdong-Hong Kong-Macao Greater Bay Area High Value Patent

Cultivation Layout Competition.

2. Improved industrial optimization layout.

The Company focused on market demand, vigorously optimized the industrial layout, and actively explored new

businesses. In terms of marine lighting, the Company has developed a series of products for deep-sea lighting,

fish-collecting lighting and aquaculture lighting with the Institute of Deep-Sea Science and Engineering of

Chinese Academy of Sciences and Dalian Ocean University. The Company established a subsidiary in Hainan, set

up and deployed marine lighting and other related business teams to conduct market development and channel

layout. In terms of intelligent lighting, the Company introduced smart office, smart education, smart home system,

5G smart lamppost solutions in light of different application scenarios, and launched a batch of intelligent

                                                                                                                17
 Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021



products together with notable platform companies. In terms of health lighting, the Company, taking the

construction of light health laboratory as an opportunity, focused on the fields of vision protection, rhythm health,

disinfection and sterilization, and introduced a range of new health lighting products. The reading and writing

desk lamp obtained the five-star evaluation of Chinese audio-visual health products and human comfort evaluation

issued by China Association for Medical Devices Industry and the clinical report issued by Zhongshan

Ophthalmic Center, Sun Yat-sen University. In terms of animal and plant lighting, the Company has introduced

programs for animal and plant lighting and disinfection solution in various application scenarios, developed basic

products such as culture fill light lamp, plant growth flying saucer lamp and lamp tube, and Chinese herbal

medicine spectrum programme. In terms of lighting electronic FMCG, the Company has developed 112 products

with intelligent sensing, portable mobile and entertainment functions. In terms of airport light ing, the Company

has continuously advanced the research and development of lighting products in the terminal area and airport

ground transportation area, and developed products of 37 specification under nine major categories. These six

segments have laid a solid foundation for the sustainable development of the Company in the future.

3. Strengthened market development.

The Company adopted a target-oriented approach, made great efforts to promote the development of large

customer projects and independent brands, and increased market volume. Also, it intensified efforts to complete

large customer projects, set up special teams to focus on large customer projects in the fields of animal and plant

lighting, educational lighting, rail transit, etc., with multiple major projects being implemented one after another.

The Company has enhanced cooperation with overseas major customers, exploring more business opportunities. It

vigorously explored overseas markets, opened up many influential new customers, and successfully entered a

number of mainstream supermarkets in Europe and the largest building materials supermarket chain in South

America. Also, the own-branded lighting, electrical and auto lamp products of the Company realized sales in

Southeast Asia, Middle East and Oceania respectively. The Company continued to promote the reform of

marketing model, strictly regulated regional market price system, and solved the problems of development and

bad competition in regional market. It continuously promoted the construction of provincial service centers and

enhanced the market service and development capacities of service centers. Also, the Company promoted the

reform of domestic provincial marketing management system.

4. Intensified operation.

First, the Company made efforts to reduce costs. It accelerated the automation of production and promoted

                                                                                                                   18
 Foshan Electrical and Lighting Co., Ltd.                                                                 Annual Report 2021



automatic production and process flow management, minor changes of process technology and other measures

through automated transformation of lamps, lamp tubes and other assembly lines and application of product line

for intelligent bulb manufacturing, so as to reduce personnel, cut intermediate links, and greatly improve

efficiency production. The Company also reduced material cost by purchasing large quantity for lower price,

bidding for lower price and new material replacement through centralized purchasing. Second, the Company

sought to reduce inventory. It built an inventory management and control mechanism, clarified inventory

management and control tasks, followed up and supervised the inventory each month to reduce inventory. Third,

the Company took measures to control risks. It strengthened contract management, conducted strict credit review

for each amount, and implemented customer asset pledge and established accounts receivable early warning

mechanisms to enhance accounts receivable collection and prevent fund risks.

5. Fortified capital operation.

During the Reporting Period, the Company successfully completed the merger and acquisition of Nanning

Liaowang, which provided strong support for the Company to enter the OEM industrial chain, build up

automotive lighting sector and further expand its business overseas. With the help of the Company, Nanning

Liaowang actively explored new customers, successfully became a new supplier of certain major OEMs, and

accelerated the introduction of medium- and high-end R&D and sale talents. Besides, Nanning Liaowang has

made breakthroughs in the integration of display and luminaire technology, assembly size chain CAE analysis and

other technologies, and constantly strengthened its R&D strength, laying a solid foundation for itself to become a

supplier of more medium- and high-end OEMs more quickly and better. During the Reporting Period, the

Company went through the decision-making process for the major asset restructuring project of acquisition of

equity of NATIONSTAR.

2. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

                                                                                                                  Unit: RMB

                                        2021                                     2020

                                               As % of total                            As % of total
                                                                                                            Change (%)
                       Operating revenue    operating revenue    Operating revenue    operating revenue
                                                   (%)                                      (%)

Total                    4,772,690,469.14                 100%     3,744,914,452.72                100%             27.44%


                                                                                                                          19
 Foshan Electrical and Lighting Co., Ltd.                                                                               Annual Report 2021


By operating division

Lighting products
                            4,772,690,469.14                100.00%      3,744,914,452.72                100.00%                  27.44%
and luminaries

By product category

LED products                2,988,460,170.89                 62.62%      2,826,795,772.25                 75.48%                   5.72%

Traditional lighting
                              597,103,329.41                 12.51%          581,481,348.04               15.53%                   2.69%
products

Auto lamps                    899,064,914.20                 18.84%          185,907,625.69                 4.96%                383.61%

Electrical products           122,634,832.36                  2.57%          105,652,219.59                 2.82%                 16.07%

Other                         165,427,222.28                  3.47%           45,077,487.15                 1.20%                266.98%

By operating segment

Domestic                    3,273,811,238.64                 68.59%      2,264,373,046.87                 60.47%                  44.58%

Overseas                    1,498,879,230.50                 31.41%      1,480,541,405.85                 39.53%                   1.24%

By distribution model

Direct sales                   43,652,588.73                 0.91%            48,371,189.85                 1.29%                 -9.75%

Distribution                4,563,610,658.13                95.62%       3,651,465,775.72                  97.50%                 24.98%

other                        165,427,222.28                  3.47%            45,077,487.15                 1.20%                266.98%


(2) Operating Division, Product Category, Operating Segment and Distribution Model Contributing over
10% of Operating Revenue or Operating Profit


√ Applicable □ Not applicable
                                                                                                                                Unit: RMB

                                                                                 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                                                     16.98%             27.44%               32.24%              -3.01%
                       4,772,690,469.14 3,962,183,323.47
and luminaries

By product category

LED products           2,988,460,170.89 2,524,850,293.04              15.51%                5.72%              9.01%              -2.55%

Traditional                                                           20.55%                2.69%             11.74%              -6.44%
                        597,103,329.41   474,386,396.24
lighting products

Auto lamps              899,064,914.20   747,331,339.98               16.88%            383.61%             404.26%               -3.40%

Electrical                                                            26.80%             16.07%               30.45%              -8.07%
                        122,634,832.36      89,772,637.68
products

Other                   165,427,222.28   125,842,656.53               23.93%            266.98%             225.89%                9.59%


                                                                                                                                          20
 Foshan Electrical and Lighting Co., Ltd.                                                                                  Annual Report 2021


By operating segment

Domestic              3,273,811,238.64 2,639,556,650.24                19.37%              44.58%                 51.57%             -3.72%

Overseas            1,498,879,230.50 1,322,626,673.23                  11.76%                1.24%                 5.41%             -3.49%

By distribution model

Direct sales            43,652,588.73       29,629,037.23              32.13%               -9.75%               -17.71%              6.56%

Distribution        4,563,610,658.13 3,806,711,629.71                  16.59%              24.98%                 30.29%             -3.40%

other                  165,427,222.28    125,842,656.53                23.93%             266.98%                225.89%              9.59%

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                     2021                    2020                  Change (%)

                        Unit sales            Piece                              673,457,301               716,506,189               -6.01%
Lighting products
                        Output                Piece                              687,092,615               714,484,762               -3.83%
and luminaries
                        Inventory             Piece                              112,960,123                99,324,809               13.73%

Any over 30% YoY movements in the data above and why:

□ Applicable √ Not applicable


(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period

□ Applicable √ Not applicable

(5) Breakdown of Cost of Sales

By operating division and product category
                                                                                                                                   Unit: RMB

                                                         2021                                       2020

 Operating division          Item                           As % of total cost                        As % of total cost      Change (%)
                                         Cost of sales                              Cost of sales
                                                                of sales (%)                               of sales (%)

Lighting products
                                        3,962,183,323.47              100.00% 2,996,273,910.80                   100.00%             32.24%
and luminaries

Lighting products
                       Raw materials    3,001,186,699.23               75.75% 2,230,736,822.88                    74.45%             34.54%
and luminaries

Lighting products
                       Labor cost        476,659,230.59                12.03%      447,002,407.48                 14.92%              6.63%
and luminaries



                                                                                                                                           21
 Foshan Electrical and Lighting Co., Ltd.                                                                               Annual Report 2021


Lighting products     Depreciation
                                        358,494,737.12                 9.05%      279,919,016.68                 9.34%            28.07%
and luminaries        and other

Lighting products
                      Other             125,842,656.53                 3.18%       38,615,663.76                 1.29%           225.89%
and luminaries

                                                                                                                                Unit: RMB

                                                        2021                                      2020

Product category            Item                            As % of total cost                      As % of total cost     Change (%)
                                        Cost of sales                             Cost of sales
                                                               of sales (%)                              of sales (%)

LED lighting                           2,067,044,284.57               52.17%                                                      15.46%
                    Raw materials                                                1,790,215,086.03               59.75%
products

LED lighting                            278,057,829.97                 7.02%                                                     -14.81%
                    Labor cost                                                    326,408,017.07                10.89%
products

LED lighting        Depreciation and    179,748,178.50                 4.54%                                                      -9.89%
                                                                                  199,466,678.95                 6.66%
products            other

LED lighting
                    Subtotal           2,524,850,293.04               63.72% 2,316,089,782.05                   77.30%             9.01%
products

Traditional                             326,913,472.47                 8.25%                                                      18.09%
                    Raw materials                                                 276,836,739.94                 9.24%
lighting products

Traditional                                 98,778,080.95              2.49%                                                      17.30%
                    Labor cost                                                     84,211,159.40                 2.81%
lighting products

Traditional         Depreciation and        48,694,842.82              1.23%                                                     -23.32%
                                                                                   63,501,003.52                 2.12%
lighting products other

Traditional
                    Subtotal            474,386,396.24                11.97%      424,548,902.86                14.17%            11.74%
lighting products

Auto lamps          Raw materials       535,110,159.03                13.51%      108,505,008.56                 3.62%           393.17%

Auto lamps          Labor cost              89,481,090.61              2.26%       28,617,438.10                 0.96%           212.68%

                    Depreciation and
Auto lamps                              122,740,090.34                 3.10%       11,079,929.95                 0.37%         1,007.77%
                    other

Auto lamps          Subtotal            747,331,339.98                18.86%      148,202,376.61                 4.95%           404.26%

Electrical
                    Raw materials           72,118,783.16              1.82%       55,179,988.35                 1.84%            30.70%
products

Electrical
                    Labor cost              10,342,229.06              0.26%        7,765,792.91                 0.26%            33.18%
products

Electrical          Depreciation and
                                             7,311,625.46              0.18%        5,871,404.26                 0.20%            24.53%
products            other

Electrical
                    Subtotal                89,772,637.68              2.27%       68,817,185.52                 2.30%            30.45%
products

Other products      Other               125,842,656.53                 3.18%       38,615,663.76                 1.29%           225.89%


                                                                                                                                        22
    Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021


and services




(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period


√ Yes □ No

For details, see “VII YoY Changes to the Scope of the Consolidated Financial Statements” in Part VI of this

Report.

(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 (RMB)                                                                           1,032,503,083.81

Total sales to top five customers as % of total sales of the                                                                21.64%
Reporting Period (%)

Total sales to related parties among top five customers as
                                                                                                                             0.00%
% 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 (RMB)

1            Customer A                                                      442,978,447.77                                  9.28%

2            Customer B                                                      278,031,461.29                                  5.83%

3            Customer C                                                      131,200,529.71                                  2.75%

4            Customer D                                                        96,974,946.12                                 2.03%

5            Customer E                                                        83,317,698.92                                 1.75%

Total        --                                                            1,032,503,083.81                                 21.64%

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 (RMB)                                                                       220,364,648.80



                                                                                                                                 23
    Foshan Electrical and Lighting Co., Ltd.                                                                       Annual Report 2021


Total purchases from top five suppliers as % of total                                                                              6.67%
purchases of the Reporting Period (%)

Total purchases from related parties among top five                                                                                1.29%
suppliers as % of total purchases of the Reporting Period
(%)


Information about top five suppliers:
                                                              Purchase in the Reporting
      No.                       Supplier                                                          As % of total purchases (%)
                                                                   Period (RMB)

1              Supplier A                                                    49,647,217.33                                        1.50%

2              Supplier B                                                    45,804,291.12                                        1.39%

3              Supplier C                                                    42,644,701.72                                        1.29%

4              Supplier D                                                    42,333,486.34                                        1.28%

5              Supplier E                                                    39,934,952.29                                        1.21%

Total          --                                                           220,364,648.80                                        6.67%

Other information about major suppliers:

√ Applicable □ Not applicable

Except for supplier B, none of the other suppliers is a related party of the Company.


3. Expense

                                                                                                                               Unit: RMB

                                     2021                   2020              Change (%)         Reason for any significant change

Selling expense                    170,281,041.34       145,219,700.35               17.26%

                                                                                              Acquisition in the current period of
                                                                                              Nanning Liaowang, which was not
Administrative expense             206,336,111.81       155,365,373.75               32.81%
                                                                                              under common control with the
                                                                                              Company

                                                                                              Lower interest income from bank
Finance costs                        3,120,029.73           -5,623,285.45           155.48%
                                                                                              deposits in the current period

                                                                                              It is mainly due to the continuous
                                                                                              increase in investment in research and
                                                                                              development by the Company, the
                                                                                              expansion of the R&D team, the
R&D expense                        203,681,619.16       108,885,296.71               87.06% increase in R&D projects compared
                                                                                              with the previous period, and the
                                                                                              combination of subsidiary Nanning
                                                                                              Liaowang not under the same control
                                                                                              in the current period.


                                                                                                                                       24
 Foshan Electrical and Lighting Co., Ltd.                                                                                  Annual Report 2021


4. R&D Investments

√ Applicable □ Not applicable
  Names of main                                                                                                Expected impact on the future
                             Project objectives          Project progress     Objectives to be achieved
   R&D projects                                                                                                development of the Company

                                                                            It has the functions of            Accelerate the layout of smart
                       Smart home is based on the                           intelligent lighting control,      lighting sub-sectors, make
                       Internet of Things system,                           intelligent electrical appliance every effort to break through
Research on key
                       which changes the system                             control, security monitoring       differentiation and functional
technologies of
                       from the original single                             system and home theater            product innovation, empower
smart home
                       control to the two-way            R&D completed      system. Improve the safety,        business channels such as
controller and
                       intelligent dialogue between                         convenience, comfort and           smart home, smart FSL, smart
application of LED
                       people and things, things and                        artistry of the home, and          education, smart business and
luminaries
                       things, and realizes an                              realize an environmentally         smart road as a whole, and
                       intelligent ecosystem.                               friendly and energy-saving         foster new business growth
                                                                            living environment.                points.

                       The lamps used for fishing                                                              actively integrate into the
                                                                            Achieve the advantages of
                       boats are mainly traditional                                                            field of health lighting,
Research and                                                                high light efficiency, low
                       metal halide lamps, which                                                               continuously speed up the
application of key                                                          energy consumption, high
                       feature high energy                                                                     rapid transformation of
technologies of                                                             reliability, long life and easy
                       consumption, low light            Ongoing                                               innovation achievements from
high reliability LED                                                        maintenance, and lay a solid
                       utilization rate and short                                                              demand to products, from
luminaries for                                                              foundation for the subsequent
                       service life, and are difficult                                                         theory to market, and
marine lighting                                                             intelligent fishing lamp and
                       to realize intelligent                                                                  cultivate new business growth
                                                                            lamp system.
                       operation;                                                                              points.

Research on            use LED lamps as light
                                                                                                               expand the product line in the
disinfection           sources to realize the
                                                                            achieve safe and healthy           field of health disinfection
technology of          functions of purification,        Ongoing
                                                                            disinfection effect.               lighting, and enhance the
visible                antibacterial and antiviral in
                                                                                                               brand influence.
photocatalyst          light environment space.

                                                                            Improve the high temperature
                                                                                                               Establish and reform an LED
                                                                            resistance, high reliability and
                                                                                                               automobile headlamp and its
                                                                            intelligent control technology
                                                                                                               intelligent control system
                                                                            of LED automobile
Research and                                                                                                   production line through the
                                                                            headlamps, realize the
development of key                                                                                             application of the project
                       Develop intelligent, safe and                        integration of driving,
technologies and                                                                                               products, and upgrade LED
                       reliable LED automobile           To be accepted     communication and parameter
industrialization of                                                                                           headlamp modules, LED
                       lamps for the market.                                acquisition technologies, and
intelligent LED                                                                                                headlamp plastic parts,
                                                                            form LED automobile
automobile lamps                                                                                               painting and distribution
                                                                            headlamps and their
                                                                                                               production lines to enhance
                                                                            intelligent control systems to
                                                                                                               the Company's market
                                                                            realize industrialization and
                                                                                                               competitiveness.
                                                                            successfully push to the


                                                                                                                                                25
 Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


                                                                     market.

                                                                                                       improve the technical ability
                                                                                                       of the Company to equip
                                                                                                       intelligent ADB high beam in
                    Develop an intelligent high
                                                                                                       the middle and high-end
                    beam module, which can
                                                                     Improve the intelligent           models, and enable the
                    effectively use the high
                                                                     development ability of the        Company to better occupy the
24-Pixel intelligent beam mode by switching the
                                                                     Company through the design middle and high-end market.
ADB high beam       high beam mode under            Ongoing
                                                                     and development regarding         After the completion of the
module              different driving modes, and
                                                                     electronic software, system       24-pixel ADB functional
                    improve the driving safety of
                                                                     and optics.                       sample, the Company has an
                    automobiles. Make driving
                                                                                                       ADB framework that can be
                    more comfortable.
                                                                                                       equipped with major OEMs to
                                                                                                       develop and mass-produce
                                                                                                       ADB modules.



Details about R&D personnel:
                                               2021                            2020                            Change (%)

Number of R&D personnel                                       1226                             856                              43.22%

R&D personnel as % of total                               13.20%                          10.81%                                2.39%
employees

Educational background                         ——                            ——                                ——

Bachelor                                                       609                             373                              63.27%

Master                                                          28                                12                         133.33%

Doctor                                                           4                                 0

Junior college and below                                       589                             471                              25.05%

Age structure                                  ——                            ——                                ——

Below 30                                                       521                             423                              23.17%

30~40                                                          447                             266                              68.05%

Over 40                                                        258                             167                              54.49%



Details about R&D investments:
                                               2021                            2020                            Change (%)

R&D investments (RMB)                              232,707,972.02                  161,198,331.61                               44.36%

R&D investments as % of                                    4.88%                           4.30%                                0.58%
operating revenue

Capitalized R&D investments
                                                              0.00                             0.00
(RMB)



                                                                                                                                       26
 Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021


Capitalized R&D investments
                                                       0.00%                   0.00%
as % of total R&D investments

R&D investment calculated in accordance with the Administrative Measures for the Determination of High and
New Tech Enterprises and other relevant provisions, including R&D investment included in cost of sales and
expensed R&D spending in accordance with accounting standards. In 2021, the Company's R&D investment was
RMB232,707,972.02, accounting for 4.88% of the operating revenue, of which the revenue formed after the
external sales of the Company's medium- and small-scale trial production products was included in the main
business revenue, the expenditure of RMB29,026,400 was included in the main cost of sales, and the expenditure
of RMB203,681,600 was included in the R&D expense item.

Reason for any significant change to the composition of R&D personnel and impact:

□ Applicable √ Not applicable

Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:

□ Applicable √ Not applicable

Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:

□ Applicable √ Not applicable

5. Cash Flows

                                                                                                          Unit: RMB

               Item                         2021                    2020                     Change (%)

Subtotal of cash generated from
                                             4,544,248,307.83        3,574,410,231.32                       27.13%
operating activities

Subtotal of cash used in
                                             4,821,273,393.09        3,179,581,899.42                       51.63%
operating activities

Net cash generated from/used in
                                             -277,025,085.26          394,828,331.90                      -170.16%
operating activities

Subtotal of cash generated from
                                             1,914,743,798.27         467,212,335.49                      309.82%
investing activities

Subtotal of cash used in
                                              941,892,466.14          544,306,623.11                        73.04%
investing activities

Net cash generated from/used in
                                              972,851,332.13           -77,094,287.62                   1,361.90%
investing activities

Subtotal of cash generated from
                                              127,386,000.00           48,300,000.00                      163.74%
financing activities

Subtotal of cash used in
                                              554,227,366.75          536,686,783.37                        3.27%
financing activities

Net cash generated from/used in
                                             -426,841,366.75          -488,386,783.37                       12.60%
financing activities


                                                                                                                 27
 Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


Net increase in cash and cash
                                                  263,360,932.74                    -175,350,823.84                           250.19%
equivalents

Explanation of why any of the data above varies significantly:

√ Applicable □ Not applicable

1. Net cash generated from operating activities decreased by170.16% year on year, mainly due to the increase in

cash payments due to the increase in raw material prices and the increase in taxes and levies paid due to the sale of

some shareholdings in the current period.

2. Net cash generated from investing activities increased 1,361.90% year on year, primarily driven by an increase

in disinvestment as a result of the sale of some shareholdings in the current period.

3. Net cash generated from financing activities increased12.60% year on year, primarily due to increased

borrowings obtained in the current period.


Explanation of why net cash generated from/used in operating activities varies significantly from net profit for the

Reporting Period:
√ Applicable □ Not applicable

There is a gap of RMB544,322,520.56 between net cash generated from operating activities of

RMB-277,025,085.26and net profit of RMB267,297,435.30 in the year, mainly due to the increase in cash

payments due to the increase in raw material prices and the increase in taxes and levies paid due to the sale of

some shareholdings in the current period.

V Analysis of Non-Core Businesses

√ Applicable □ Not applicable
                                                                                                                             Unit: RMB

                                Amount           As % of gross profit           Main source/Reason                  Recurrent or not

                                 36,121,053.68                12.36% Dividend income from other equity
                                                                        investments held during the period,
Return on investment                                                                                          Not
                                                                        and gains on forward forex
                                                                        settlement contracts

Gain/loss on changes              4,649,669.44                 1.59% Gain/loss on changes in fair value of
                                                                                                              Not
in fair value                                                           derivative financial instruments

Asset impairments               -30,891,621.47               -10.57% Inventory valuation allowances           Not

Non-operating income             13,186,956.38                 4.51% Income from counter-party default        Not




                                                                                                                                       28
 Foshan Electrical and Lighting Co., Ltd.                                                                                Annual Report 2021


Non-operating                        1,188,471.54                 0.41% Loss on retirement of non-current
                                                                                                                   Not
expense                                                                   assets

                                 16,311,903.24                    5.58% Receipt of continuing government
Other income                                                                                                       Not
                                                                          grants

Credit impairment                 -4,657,215.52                  -1.59%
                                                                          Allowances for doubtful accounts         Not
loss

Asset disposal income            77,713,637.77                   26.58% Disposal of immovable properties           Not


VI Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

                                                                                                                                   Unit: RMB

                         31 December 2021                   1 January 2021            Change in

                                      As % of total                    As % of total percentag       Reason for any significant change
                        Amount                          Amount
                                         assets                           assets       e (%)

                    1,384,218,544.                                                                Sale of some shareholdings in the
Monetary assets                            14.27% 981,249,699.49             11.51%      2.76%
                                 27                                                               current period

                                                                                                  Acquisition of subsidiary Nanning
Accounts            1,452,728,276.                    1,134,233,235.                              Liaowang in the current period which
                                           14.98%                            13.31%      1.67%
receivable                       48                               70                              was not under common control with
                                                                                                  the Company

Contract assets      8,561,303.10           0.09%                            0.00%       0.09%

                                                                                                  Acquisition of subsidiary Nanning
                    1,063,489,341.                                                                Liaowang in the current period which
Inventory                                  10.96% 735,685,116.91             8.63%       2.33%
                                 00                                                               was not under common control with
                                                                                                  the Company

                                                                                                  Change of some of the self-used
Investment
                    43,347,824.34           0.45%                            0.00%       0.45% properties to investment properties in
property
                                                                                                  the current period

Long-term equity    181,545,123.0
                                            1.87% 181,365,016.32             2.13%      -0.26%
investments                       9

                                                                                                  Acquisition of subsidiary Nanning
                    1,323,076,326.                                                                Liaowang in the current period which
Fixed assets                               13.64% 685,707,548.55             8.05%       5.59%
                                 60                                                               was not under common control with
                                                                                                  the Company

Construction in     730,595,319.4                                                                 Increase in infrastructure investment
                                            7.53% 503,941,120.31             5.91%       1.62%
progress                          2                                                               projects in the current period

Right-of-use
                    13,497,139.00           0.14%      3,943,088.30          0.05%       0.09%
assets


                                                                                                                                          29
 Foshan Electrical and Lighting Co., Ltd.                                                                                   Annual Report 2021


                                                                                                        Receipt of bank loan and acquisition of
Short-term             226,779,997.0                                                                    subsidiary Nanning Liaowang in the
                                                    2.34%                            0.00%      2.34%
borrowings                             1                                                                current period which was not under
                                                                                                        common control with the Company

Contract                                                                             0.77%      0.10%
                       84,818,285.22                0.87% 65,777,726.45
liabilities

Lease liabilities       7,862,803.22                0.08%     2,192,806.19           0.03%      0.05%


Indicate by tick mark whether overseas assets account for a high proportion of total assets.
□ Applicable √ Not applicable

2. Assets and Liabilities at Fair Value

√ Applicable □ Not applicable
                                                                                                                                       Unit: RMB

                                     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

2.                  6,332,900.00 -1,683,230.56                                                                         1,176,008.7
Derivative                                                                                                                        4 5,825,678.1
financial                                                                                                                                       8
assets

4.              3,305,501,030 -322,793,550. 1,158,465,60                                9,402,110.68 1,517,248,80
Investments                    .06                  14           6.86                                           5.45
                                                                                                                                      1,474,860,7
in other
                                                                                                                                           85.15
equity
instruments

Subtotal of     3,311,833,930 -324,476,780. 1,158,465,60                                9,402,110.68 1,517,248,80 1,176,008.7 1,480,686,4
financial                      .06                  70           6.86                                           5.45              4        63.33
assets

Total of the    3,311,833,930 -324,476,780. 1,158,465,60                                9,402,110.68 1,517,248,80 1,176,008.7 1,480,686,4
above                          .06                  70           6.86                                           5.45              4        63.33

Financial                   0.00
                                                                                                                                             0.00
liabilities

Contents of other changes:

The increase is mainly due to the acquisition in the current period of Nanning Liaowang, which was not under common control w ith
the Company.


                                                                                                                                                30
 Foshan Electrical and Lighting Co., Ltd.                                                                                               Annual Report 2021


Note: Gain/loss on fair-value changes recorded in equity in the current period was inclusive of value-added taxes
payable arising from the sale of shares of the stocks including Gotion High-tech, Xiamen Bank, etc.
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: RMB

                     Item                                  Ending carrying value                        Reason for restriction
Monetary assets                                   245,575,069.72                              Security deposits for notes and
                                                                                              performance bonds
Notes receivable                                  275,626,604.28                              In pledge for notes pool
Fixed assets                                      277,849,723.49                              As mortgage and guarantee for related
                                                                                              party, see XIV (III) “Guarantees” in Part
Intangible assets                                 11,274,770.33                               X
Long-term prepaid expense                         2,773,669.04
                     Total                        813,099,836.86


VII Investments Made

1. Total Investment Amount

√ Applicable □ Not applicable
Investment amount in the Reporting Period Investment amount in the same period of
                                                                                                                          Change (%)
                     (RMB)                                           last year (RMB)

                               693,880,163.76                                       328,313,442.49                                                 111.35%


2. Major Equity Investments Made in the Reporting Period

√ Applicable □ Not applicable
                                                                                                                                                   Unit: RMB

 Name                                                                                       Status                Investm Whethe
     of              Investm             Shareh Fundin                  Investm              as on                  ent             r     Date of Disclos
            Main               Investe                                                                Predict
investe                ent               olding       g      Partner       ent     Product the date               return involve disclos              ure
           busines               d                                                                      ed
     e               method              percent Resour          s       Duratio    type    of the                 in the d in any ure (if           index
             ses               amount                                                                 return
enterpri                s                 age        ces                     n              balance               current       legal       any)    (if any)
     se                                                                                      sheet                period actions

Fozhao Manufa                                                                      Wholly
                     Newly     200,00
(Haina cturing                           100.00 Self-fu                 Long-te -owned Incorpo 13,141. 13,141.
                     establis 0,000.0                       None                                                               No                   N/A
n)         and                                  % nded                  rm         subsidi rated             64           64
                     hed             0
Technol marketi                                                                    ary


                                                                                                                                                             31
    Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


ogy        ng of
Co.,       luminar
Ltd.       ies,
           lighting
           devices
           ,
           househ
           old
           electric
           al
           applian
           ces,
           hardwa
           re,
           sanitary
           ware,
           electric
           wires,
           electric
           cables,
           and
           distribu
           tion
           switche
           s
           control
           devices

           Auto                                                                                                                       Announ
           lamps,                                                                                                                     cement
           auto                                                                                                                       No.
                                                                                      Owners
           subasse                                                                                                                    2021-0
                                                                                      hip
           mbly,                                                                                                                      38 on
Nannin                                                                                transfer
           automo                                                                                                                     Acquisi
g                                                                                     red,
           tive                                                             Majorit                                                   tion of
Liaowa                                                                                togethe
           electron             493,88                                      y-owne                                                    Nannin
ng                    Acquire                    Self-fu          Long-te             r with       14,590, 14,590,          24 June
           ics                  0,163.7 53.79%             None             d                                        No               g
Auto                  d                          nded             rm                  related      127.06 127.06            2021
           product                   6                                      subsidi                                                   Liaowa
Lamp                                                                                  creditor
           s                                                                ary                                                       ng Auto
Co.,                                                                                  ’s rights
           researc                                                                                                                    Lamp
Ltd.                                                                                  and
           h and                                                                                                                      Co.,
                                                                                      liabiliti
           develop                                                                                                                    Ltd.
                                                                                      es
           ment                                                                                                                       disclose
           design,                                                                                                                    d on
           product                                                                                                                    http://w


                                                                                                                                                32
 Foshan Electrical and Lighting Co., Ltd.                                                   Annual Report 2021


        ion                                                                                          ww.cni
        sale;                                                                                        nfo.co
        mold                                                                                         m.cn
        design
        and
        manufa
        cturing;
        plastic
        parts
        process
        ing;
        import
        and
        export
        busines
        s of
        general
        busines
        s
        project
        commo
        dity
        and
        technol
        ogy
        under
        self-ope
        ration
        and
        agency
        modes

                           693,88
                                                                     14,603, 14,603,
Total         --    --    0,163.7    --     --   --   --   --   --                     --       --      --
                                                                     268.70 268.70
                                6


3. Major Non-Equity Investments Ongoing in the Reporting Period

□ Applicable √ Not applicable

4. Financial Investments

(1) Securities Investments

√ Applicable □ Not applicable

                                                                                                              33
 Foshan Electrical and Lighting Co., Ltd.                                                                                         Annual Report 2021


                                                                                                                                               Unit: RMB

                                                               Gain/Lo
                                                                           Accumu
                                                                ss on
                                                                             lated
                                                               fair-valu               Purchas                Gain/los
                                                   Beginni                 fair-valu              Sold in
                                Initial Measure                   e                     ed in                   s in     Ending
Security Security Security                           ng                       e                   Reporti                         Account Funding
                               investm     ment                changes                 Reporti                Reporti carrying
  type      code        name                       carrying                changes                  ng                             ing title    source
                               ent cost method                    in                     ng                      ng       value
                                                    value                  charged                Period
                                                               Reporti                  Period                 Period
                                                                              to
                                                                  ng
                                                                            equity
                                                                Period

                                                               367,881 803,565                                                    Investm
Domesti
                                                                ,685.17 ,100.63                   1,258,6                         ents in
cally/Ov            Gotion                Fair     1,778,2
                               83,899,1                                                           35,648.                887,464 other         Self-fun
erseas     002074 High-tec                value    18,182.
                                 18.12                                                                   42              ,218.75 equity        ded
listed              h                     method          00
                                                                                                                                  instrum
stock
                                                                                                                                  ents

                                                               -10,221,                                                           Investm
Domesti
                                                                957.98                            63,779,                         ents in
cally/Ov            China                 Fair
                                                   74,001,                                         590.48 3,894,8                 other        Self-fun
erseas     601818 Everbrig                value
                                                    548.46                                                      18.34             equity       ded
listed              ht Bank               method
                                                                                                                                  instrum
stock
                                                                                                                                  ents

                                                                -692,39 353,361                                19,748, 575,955 Investm
Domesti
                                                               8,112.25 ,994.91                   179,873      551.68 ,944.40 ents in
cally/Ov                                  Fair     1,448,2
                    Xiamen     222,593                                                            ,066.55                         other        Self-fun
erseas     601187                         value    27,123.
                    Bank        ,949.49                                                                                           equity       ded
listed                                    method          20
                                                                                                                                  instrum
stock
                                                                                                                                  ents

                                                               1,538,51 1,538,51                                         10,940, Investm
Domesti
                    Nationst                                       1.32        1.32                                       622.00 ents in
cally/Ov                                  Fair
                    ar         9,402,11                                                9,402,11                                   other        Self-fun
erseas     002449                         value        0.00
                    Optoele        0.68                                                    0.68                                   equity       ded
listed                                    method
                    ctronics                                                                                                      instrum
stock
                                                                                                                                  ents

                    Foshan
                    branch                                                                                                        Investm
Domesti
                    of                                                                                                            ents in
cally/Ov                                  Fair
                    Guangd     500,000             500,000                                                               500,000 other         Self-fun
erseas     N/A                            value
                    ong             .00                 .00                                                                  .00 equity        ded
listed                                    method
                    Develop                                                                                                       instrum
stock
                    ment                                                                                                          ents
                    Bank



                                                                                                                                                         34
 Foshan Electrical and Lighting Co., Ltd.                                                                                           Annual Report 2021


Domesti
                                                                                                                                    Held-for
cally/Ov             Lifan                 Fair
                                 1,176,0                  1,176,0 382,769                                                  1,558,7 -trading
erseas     601777 Technol                  value                                                                                                   Other
                                   08.74                   08.74           .44                                              78.18 financia
listed               ogy                   method
                                                                                                                                    l assets
stock

                                                          3,302,1 -332,81 1,158,4 9,402,11 1,502,2 23,643, 1,476,4
                                 317,571
Total                                         --          22,862. 7,104.3 65,606.            0.68 88,305.        370.02 19,563.        --             --
                                 ,187.03
                                                                 40          0      86                    45                   33

Disclosure date of
announcement on Board’s
consent for securities
investments

Disclosure date of
announcement on general
meeting’s consent for
securities investments (if
any)

Note: The increase is mainly due to the acquisition of subsidiary Nanning Liaowang in the current period which
was not under common control with the Company.

(2) Investments in Derivative Financial Instruments

√ Applicable □ Not applicable
                                                                                                                                    Unit: USD’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
Operatin                                    investm Beginni Ending                 ng       ed in                                                    oss in
           with the transacti derivativ                                                               Reportin allowan investm Compan
 g 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
branch                                                                                                                                                48.59
of the                                                    25          29
           Not                   General
Agricult             Not                            600 August March                 600                  600
           related               forward
ural                                                      2020        2021
Bank of
China

Foshan     Not                   General                  28          29
                     Not                            300                              300                  300
branch     related               forward                  October January                                                                             10.40


                                                                                                                                                               35
    Foshan Electrical and Lighting Co., Ltd.                                              Annual Report 2021


of the                                               2020    2021
Industri
al and
Commer
cial
Bank of
China

Foshan                                                                                                 1.45
branch
of the
Industri                                             3       29
            Not                General
al and                Not                      200 Decemb January       200         200
            related            forward
Commer                                               er 2020 2021
cial
Bank of
China

Foshan
branch                                                                                                19.61
of the
Industri                                             30      23
            Not                General
al and                Not                      300 Septemb Februar      300         300
            related            forward
Commer                                               er 2020 y 2021
cial
Bank of
China

Foshan
branch                                                                                                22.24
of the
Industri                                             20
            Not                General                       23 April
al and                Not                      600 October              600         600
            related            forward                       2021
Commer                                               2020
cial
Bank of
China

Foshan                                                                                                 1.10
branch
of Bank                                              15      25
            Not                General
of                    Not                      300 January Februar            300   300
            related            forward
Commu                                                2021    y 2021
nication
s

Foshan      Not                General               21      25                                        0.49
                      Not                      200                            200   200
branch      related            forward               January Februar


                                                                                                          36
 Foshan Electrical and Lighting Co., Ltd.                                          Annual Report 2021


of the                                            2021      y 2021
Industri
al and
Commer
cial
Bank of
China

Foshan                                                                                         -1.18
branch
of the
           Not              General               8 March 29 April
Agricult             Not                    400                        400   400
           related          forward               2021      2021
ural
Bank of
China

Foshan                                                                                         -0.38
branch
of the
Industri                                          25
           Not              General                         29 April
al and               Not                    300 March                  300   300
           related          forward                         2021
Commer                                            2021
cial
Bank of
China

Foshan                                                                                          1.57
branch     Not              General               23 April 27 May
                     Not                    400                        400   400
of Bank related             forward               2021      2021
of China

Foshan
branch                                                                                         15.34
of the
Industri                                                    8
           Not              General               4 June
al and               Not                    800             Decemb     800   800
           related          forward               2021
Commer                                                      er 2021
cial
Bank of
China

Foshan                                                                                          6.06
branch
of the                                                      16
           Not              General               11 June
Industri             Not                    800             Novemb     800   800
           related          forward               2021
al and                                                      er 2021
Commer
cial


                                                                                                   37
 Foshan Electrical and Lighting Co., Ltd.                                                 Annual Report 2021


Bank of
China

Foshan
                                                              22
branch     Not              General                 30 June                                           54.07
                     Not                    2,000             Decemb     2,000   2,000
of Bank related             forward                 2021
                                                              er 2021
of China

Foshan
branch                                                                                                12.27
of the                                              19        23
           Not              General
Agricult             Not                     600 August Novemb            600     600
           related          forward
ural                                                2021      er 2021
Bank of
China

Foshan
branch
of the                                              16        22
           Not              General
Agricult             Not                     180 Septemb March            180            180
           related          forward
ural                                                er 2021 2022
Bank of
China

Foshan
branch
of the                                              22        24
           Not              General
Agricult             Not                     280 Septemb March            280            280
           related          forward
ural                                                er 2021 2022
Bank of
China

Foshan
branch
of the
Industri                                            28
           Not              General                           1 April
al and               Not                     350 Septemb                  350            350
           related          forward                           2022
Commer                                              er 2021
cial
Bank of
China

Foshan
branch
                                                    12
of the     Not              General                           14 April
                     Not                     360 October                  360            360
Agricult related            forward                           2022
                                                    2021
ural
Bank of



                                                                                                          38
 Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


China

Foshan
branch
of the
Industri                                             20
           Not                  General                        1 June
al and                Not                      700 October                             700                           700
           related              forward                        2022
Commer                                               2021
cial
Bank of
China

Foshan
branch
of the
Industri                                             3
           Not                  General                        7 June
al and                Not                      260 Novemb                              260                           260
           related              forward                        2022
Commer                                               er 2021
cial
Bank of
China

Foshan
branch
of the
Industri                                             29
           Not                  General                        5 July
al and                Not                    1,000 Decemb                            1,000                         1,000
           related              forward                        2022
Commer                                               er 2021
cial
Bank of
China

                                                                                                                                     191.6
Total                                       10,930        --      --       2,000     8,930     7,800          0    3,130     0.00%
                                                                                                                                          3

Funding source                            All self-funded

Legal matters involved (if applicable) N/A

Disclosure date of board
                                          28 January 2021
announcement approving derivative
                                          27 August 2021
investment (if any)

Disclosure date of general meeting
announcement approving derivative
investment (if any)

Analysis of risks and control             Risk Analysis of Forward Exchange Settlement Business: 1. Risk of exchange rate
measures associated with derivative       fluctuations. In the case of large fluctuations in the exchange rate, the quoted price of the
investments held in Reporting Period bank’s forward exchange rate may be lower than the Company’s quoted exchange rate to the
(including but not limited to market      customer, which will make the Company unable to lock the quoted exchange rate to the

                                                                                                                                          39
 Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


risk, liquidity risk, credit risk,       customer or the bank’s forward exchange rate may deviate from the exchange rate at the
operational risk, legal risk, etc.)      time of the Company’s actual receipt and payment, and causes exchange losses. 2. Risk of
                                         customer default. The customer’s accounts receivable may be overdue, and the payment for
                                         goods cannot be recovered within the predictable payback period, which will result in the
                                         loss of the Company due to the delayed forward settlement. 3. Risk of payback prediction.
                                         The marketing department shall made corresponding payback prediction based on customer
                                         orders and expected orders. However, during the actual implementation process, customers
                                         may adjust their orders and predictions, which will result in the Company’s incorrect
                                         payback prediction and cause the risk of delayed delivery of forward exchange settlement.
                                         Adopted Risk Control Measures: 1. The Company will strengthen the research and analysis
                                         of the exchange rate. When the exchange rate fluctuates greatly, it will adjust the business
                                         strategy in a timely manner to stabilize the export business and avoid exchange losses to the
                                         utmost. 2. The Management System for Forward Settlement and Sales of Foreign Exchanges
                                         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 its
                                         forward foreign exchange settlement bus iness, 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.

                                         The Company carries out recognition and measurement in accordance with the Accounting
                                         Standard for Business Enterprises No. 22—Recognition and Measurement of Financial
Changes in market prices or fair value
                                         Instruments, the Accounting Standard for Business Enterprises No. 24—Hedges, the
of derivative investments in
                                         Accounting Standard for Business Enterprises No. 37—Presentation of Financial Instrument
Reporting Period (fair value analysis
                                         and other applicable regulations. Fair value is arrived at based on the price provided by
should include measurement method
                                         pricing service providers such as banks or the price obtained. Fair value measurement and
and related assumptions and
                                         recognition are carried out on a monthly basis. Changes in the fair value of forward
parameters)
                                         exchange settlement contracts entered into by the Company are mainly attributable to
                                         difference arising from exchange rate fluctuations.

Major changes in accounting policies N/A



                                                                                                                                         40
 Foshan Electrical and Lighting Co., Ltd.                                                                                      Annual Report 2021


and specific accounting principles
adopted for derivative investments in
Reporting Period compared to last
reporting period

                                         Opinions of the Independent Directors: The forward foreign exchange settlement
                                         transactions conducted by the Company are based on normal production and operation, are
                                         supported by specific businesses, aim to avoid and prevent foreign exchange risks associated
                                         with export businesses, do not involve speculative operations and are consistent with the
Opinion of independent directors on
                                         needs of the Company's operation and development. The Company has established relevant
derivative investments and risk
                                         business management policies and risk control and prevention measures. The risk is
control
                                         controllable. The proposal was passed following a lawful, valid decision-making procedure,
                                         has no negative impact on the Company's normal operation and business development and
                                         does not undermine the interest of the Company and its shareholders. Therefore, the
                                         Company's conducting forward foreign exchange settlement transactions is approved.


5. Use of Funds Raised

□ Applicable √ Not applicable
No such cases in the Reporting Period

VIII Sale of Major Assets and Equity Interests

1. Sale of Major Assets

√ Applicable □ Not applicable
                                                                                        Relatio
                                        Net                 Ratio
                                                                                         nship
                                      profit               of the
                                                                                        betwee              Credito Execute
                                     contrib                 net
                                                                                         n the     Owners     r’s     d as
                                     uted to               profit
                                                                                        transact hip of      rights schedul
                                        the                contrib
                                                                                          ion        the      and      ed or                 Index
                           Transac Compa Effect uted by                       Related
                                                                                         party      asset   liabiliti not; if                 to
Transac                     tion     ny from on the the sale Pricing -party
           Asset Date of                                                                and the involve       es       not,      Disclos disclose
  tion                      price       the      Compa of the principl transact
           sold     sale                                                                Compa       d has   involve    give      ure date      d
 party                     (RMB’ period- ny (see asset to              e     ion or
                                                                                          ny       been all d have reasons                  informa
                           0,000)     begin      note 3)     the                not
                                                                                        (applica transfer been all     and                   tion
                                      to the               Compa
                                                                                        ble for    red or transfer measur
                                     date of                ny’s
                                                                                        related-     not    red or      es
                                        sale                total
                                                                                         party                not     taken
                                     (RMB’                profit
                                                                                        transact
                                      0,000)                (%)
                                                                                         ions)

Central Part of            150,22 2,364.3 The                        Market                                                      27         Announ
                   2021                                     0.00%             Not       N/A        Yes      Yes       N/A
ized      the                 8.83             4 sale                prices                                                      August cement


                                                                                                                                                    41
 Foshan Electrical and Lighting Co., Ltd.                                                                               Annual Report 2021


bidding Compa                                  would                 of the                                                 2021      No.
on the   ny’s                                 not                   stocks                                                           2021-0
second shareho                                 affect                when                                                             56 on
ary      ldings                                the                   reducin                                                          Board
market in                                      Compa                 g the                                                            Resolut
         Gotion                                ny’s                 shareho                                                          ions
         High-te                               busines               ldings                                                           Regardi
         ch Co.,                               s                                                                                      ng the
         Ltd.,                                 continu                                                                                Interim
         China                                 ity or                                                                                 Report
         Everbri                               manage                                                                                 disclose
         ght                                   ment                                                                                   d on
         Bank,                                 stability                                                                              http://w
         and                                   .                                                                                      ww.cni
         Xiamen                                                                                                                       nfo.co
         Bank                                                                                                                         m.cn


Note: In conformity with the new financial instrument standards effective on 1 January 2019, the Company
recorded the investment in Gotion High-tech, Everbright Bank, and Xiamen Bank as non-trading equity instrument
investment at fair value through other comprehensive income. The decrease did not affect the Company's profit in
the current period. The net profit contributed by the asset to the Company from the period-begin to the date of sale
was dividends received in the current period.

2. Sale of Major Equity Interests

□ Applicable √ Not applicable

IX 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: RMB
                  Relationship
                                   Principal           Registered                                 Operating      Operating
      Name          with the                                        Total assets    Net assets                                     Net profit
                                    activity            capital                                   revenue          profit
                   Company

FSL
Chanchang                                          72,782,944.0
                 Subsidiary      Manufacturing                      295,908,457. 167,282,654. 315,044,707. 22,624,286.1 18,959,568.4
Optoelectroni                                      0
                                                                               61            33             95               2                  9
cs Co., Ltd.

Foshan
                 Subsidiary      Manufacturing 500,000.00
Taimei Times                                                        153,402,445. 38,168,506.6 147,525,074. 3,258,273.89 2,474,926.17


                                                                                                                                                42
 Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


Lamps Co.,                                                            48             0            10
Ltd.

FSL
(Xinxiang)                                    35,418,439.7
                Subsidiary   Manufacturing                   64,956,562.4 54,550,766.9 42,482,443.8                     804,842.87
Lighting Co.,                                 6                                                         1,053,970.31
                                                                       9             0             8
Ltd.

FSL Lighting
                                              15,000,000.0
Equipment       Subsidiary   Manufacturing                   20,430,403.8 19,425,794.3 20,296,271.6      657,076.08     131,862.68
                                              0
Co., Ltd.                                                              0             8             4

Nanjing
Fozhao
Lighting                                      41,683,200.0
                Subsidiary   Manufacturing                   147,620,249. 76,488,172.2 34,233,638.0 10,491,331.8
Components                                    0                                                                        7,515,946.18
                                                                      37             2             4              5
Manufacturin
g Co., Ltd.

FSL Zhida
Electric                                      50,000,000.0
                Subsidiary   Manufacturing                   139,272,155. 62,592,379.3 164,800,910.
Technology                                    0                                                         6,120,518.94 5,129,689.55
                                                                      63             3            54
Co., Ltd.

FSL Lighting
                Subsidiary   Manufacturing 195,812.50         803,224.12    -71,781.13                    -79,031.34     -79,031.34
GmbH                                                                                     1,899,067.72

Foshan
Hortilite                                     17,158,000.0
                Subsidiary   Manufacturing                   73,778,585.2 34,394,375.8 81,332,587.1
Optoelectroni                                 0                                                         3,899,949.94 2,888,499.38
                                                                       8             3             8
cs Co.,Ltd.

Fozhao
(Hainan)                                      200,000,000. 153,422,521. 150,013,141.
                Subsidiary   Manufacturing                                               3,383,898.90     20,401.12      13,141.64
Technology                                    00                      40           60
Co., Ltd.

Foshan
Kelian New                   Investment and
                                              170,000,000.
Energy          Subsidiary   technology                      657,056,361. 155,388,149. 20,006,978.0      723,879.33     530,180.08
                                              00
Technology                   development                              77           77              3
Co., Ltd.

Nanning
Liaowang                                      35,055,700.0 2,164,227,57 835,748,803. 707,022,757. 28,145,655.6 28,862,888.6
                Subsidiary   Manufacturing
Auto Lamp                                     0                      7.12          15             31              1              3
Co., Ltd.

Note: the operating income, operating profit and net profit of Nanning Liaowang lamp Co., Ltd. are the annual

amount, which is the amount after it is included in the scope of consolidated financial statements


                                                                                                                                 43
 Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021



Subsidiaries obtained or disposed in the Reporting Period:
√Applicable    □ Not applicable
                                               How the subsidiary was obtained or         Impact on overall operations and
                  Name
                                               disposed of in the Reporting Period                  performance

                                                                                     No significant impact during the Reporting
Fozhao (Hainan) Technology Co., Ltd.        Newly established
                                                                                     Period

                                                                                     Provides the Company with fast access to
                                                                                     the industrial chains of automobile
                                                                                     manufacturers, gives a strong boost to the
                                                                                     Company’s auto lighting division, and
Nanning Liaowang Auto Lamp Co., Ltd.        Acquired
                                                                                     contributed RMB707.0228 million and
                                                                                     RMB14.5901 million to the Company’s
                                                                                     operating revenue and net profit
                                                                                     respectively during the Reporting Period

FSL New Light Source Technology Co.,
                                            De-registered                            No significant impact
Ltd.

Hunan Keda New Energy Investment and
                                            Consolidated                             No significant impact
Development Co., Ltd.

Information about major majority- and minority-owned subsidiaries:

—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;




                                                                                                                                  44
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021



therefore the said subsidiary was included into the scope of the consolidated financial statements since the date of

foundation.

—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 included 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.

—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. As of the end

of the Reporting Period, the company is handling the relevant procedures for liquidation and cancellation.

—Foshan Haolaite was incorporated by the Company and Foshan NationStar, with a registered capital of

RMB17,158,000 contributed by the Company and Foshan NationStar and the corporate business license granted

                                                                                                                  45
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021



on 30 July 2020. The Company owns 51 percent of the equity of Foshan Haolaite, which has been included in the

scope of the consolidated financial statements of the Company since its day of incorporation.

—The 100 percent of the equity of Hunan Keda was transferred from Guangdong Huajian to the Company under

an equity transfer agreement between the Company and Guangdong Huajian signed on 21 December 2020,

whereby Hunan Keda has become a wholly owned subsidiary of the Company. Hunan Keda has been included in

the scope of the consolidated financial statements of the Company since the day the Company assumed actual

control over Hunan Keda. The Company held the 15th meeting of the 9th Board of Directors on 16 August 2021,

where the proposal for Merger of Hunan Keda New Energy Investment and Development Co., Ltd., a

Wholly-owned Subsidiary, by Absorption, was deliberated and adopted. In November 2021, the industrial and

commercial cancellation of Hunan Keda involved in the merger by absorption has been completed. After the

merger by absorption, Foshan Kelian New Energy Technology Co., Ltd. was changed from sub-subsidiary to a

wholly-owned subsidiary of the Company.

—Nanning Liaowang Auto Lamp Co., Ltd. signed an equity agreement with its existing shareholders in July 2021,

and acquired Nanning Liaowang through equity acquisition and capital increase and share expansion. After the

transaction is completed, the Company eventually held 53.79% of the shares of Nanning Liaowang, and Nanning

Liaowang became the controlling subsidiary of the Company. The Company shall include Nanning Liaowang in

the scope of consolidated financial statements from the date when the Company obtains its actual control right.

X Structured Bodies Controlled by the Company

□ Applicable √ Not applicable


XI Prospects


(I) Development trend of the Industry

1. Competitive landscape in the industry

The lighting industry saw a slowdown in growth and increasingly fierce market competition in recent years

following the fast development of the previous years. In addition, the increasing raw material and labor costs have

brought a big pressure on the rapid development and profitability of enterprises. However, as lighting products are

developing in the direction of being more smart, individualized and customized, enterprises with competitive

technology, brand, financial resources and capabilities will survive and prevail through the survival-of-the-fittest

mechanism of market competition, and the industry is expected to experience accelerated mergers, acquisitions

                                                                                                                  46
 Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021



and restructuring. Mergers and acquisitions enable enterprises to expand their business space, increase their

existing market share or create a larger market space in specific market segments, thereby increasing the degree of

concentration of the industry. The lighting industry will have a competitive landscape in which "the big becomes

bigger, the strong becomes stronger."

2. Development trend of the industry

(1) Intelligent lighting market embraces faster development

With the development of communication, control and sensor technologies, the popularization of intelligent

lighting related concepts, and the improvement of consumers' pursuit of quality of life, intelligent lighting will

usher in a period of rapid development. According to the forecast of Qianzhan Industry Research Institute, the

market size of China's intelligent lighting industry will reach RMB43.1 billion in 2022, with an annual growth rate

of about 23%. Intelligent lighting has brought a new experience to people's life and work. Besides saving energy,

it can also adjust people's mood and relieve people's mood. As household appliances enter the era of

interconnection, intelligent lighting solutions will become a new development direction of the industry.

(2) The industry has entered the mature stage and innovation is key to development

After the decade-plus of fast development, the LED industry, under the impact of both internal and external

environment, is experiencing a slow growth in overall market size. The technologies for all links of the industry

chain have gradually become mature. And the industry has entered the mature stage. Enterprises cannot maintain

their competitive advantages and increase their market share simply through the means of price and economy of

scale. They must keep developing new application and new products through innovation so as to expand the

market. The scaling-up and commercialization of new technologies will drive the LED industry to a new stage of

development.

(3) Market segments boast broad development prospects

With the continuous deepening of carbon peaking and carbon neutrality in China, efforts are made to encourage

infrastructure construction and rural revitalization. Besides, the acceleration of smart cities and the maturity of

related technologies will facilitate the development of intelligent lighting, health lighting, marine lighting, 5G

smart lampposts, animal and plant lighting and other fields, and the new business segmentation will bring new

growth opportunities to the industry.

(II) The Company's strategies for future development

The Company will take technology and services as two top-priority fronts, focus on brand and value and center its

                                                                                                                 47
 Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021



efforts on upgrading to medium- to high-end smart manufacturing, transitioning to a provider of products and

integrated solutions and transcending to "smart, healthy, green and human-oriented lighting." The Company will

step up efforts on the application end, further exploit the Internet-of-Things (IoT) ecosphere and niche markets,

develop more new application scenarios and products, continuously improve our core competitiveness and

accelerate the new round of development.

(III) Work Plan for 2022

1. Promote product innovation

(1) The Company will strengthen cooperation with authoritative R&D institutions, universities and leading

enterprises in sub-sectors in the industry, and unswervingly make breakthroughs in product innovation in two

directions: Differentiation and functionality.

(2) The Company will optimize the product structure, comprehensively sort out existing products, focus on the

research and development and production of high-end intelligent products of lamps and lanterns and products in

the new business segmentation, increase the proportion of high value-added products, and accelerate the

transformation from selling products to selling overall solutions and services.

2. Carry out the marketing mode reform

(1) The Company adopts a market-oriented approach and speed up the construction of market-oriented marketing

mechanism. Moreover, the Company will deepen the reform of the provincial management system, promote the

pre-positioning of management, supervision and coordination functions, and strengthen channel coordination. It

will continue to promote the service center model, pay great attention to regional control and price system

reconstruction, and realize the pre-market of service functions.

(2) The Company will tackle difficulties in winning major customers and projects and expand incremental

markets.

(3) The Company will strengthen the publicity and channel construction of overseas independent brands, and

increase the overseas proportion of independent brands.

3. Implement cost control

(1) Through the bidding and price comparison of Sunshine Procurement Platform, the Company conducts

procurement in an intensive, informationized and standardized fashion, improves the screening, access and exit

mechanism of core suppliers, formulates differentiated supplier management strategy, implements new material

substitution, and take multiple measures to reduce the procurement cost.

                                                                                                               48
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021



(2) The Company focuses on improving the intelligent rate of production equipment, labor productivity and

excellent rate of products. With intelligent manufacturing and intelligent logistics as the core, the Company

improves the serialization, standardization and modularization of core components and materials of products,

plans production lines and introduces automation equipment, so as to continuously promote the construction of

intelligent manufacturing and digital workshop in high-lighting parks and realize intensive and flexible large-scale

production.

(3) The Company strengthens inventory management, establishes a dynamic rolling sales forecasting mechanism

according to market demand and actual production, reasonably formulates peak-shifting production plans, and

minimizes inventory backlog.



(IV) Potential risks

1. Risks associated with the uncertainties of the macroeconomy

At present, the global Covid-19 pandemic has not been effectively controlled, global economic growth is still

under great pressure and uncertainty, which may have an adverse impact on the development of the industry.

2. Risk of intensified market competition

The lighting industry is an industry with global competition. In particular, domestic enterprises in the downstream

lighting application sector face not only the competition from international lighting companies with well-known

brands but also the competition from home appliances enterprises, electronics enterprises and IC enterprises in the

midstream and upstream of the LED industry as these enterprises keep expanding into the lighting application

sector. The Company will be facing a market environment with increasingly fierce competition.

3. Risk of fluctuations in raw material prices

The Company's main raw materials include LED lamp beads, electronic components, aluminum substrates, plastic

parts, metal materials, etc., and the price fluctuations of main raw materials will have an impact on the Company's

production costs. If the price of raw materials continues to rise in the future, it may adversely affect the

Company's production and operation.

4. Risk of exchange rate fluctuation

Overseas sales account for around 30% of the Company’s total sales, which are mainly settled in USD. Exchange

rate fluctuations could lead to higher exchange loss, which will have an adverse impact on the Company’s net


                                                                                                                  49
 Foshan Electrical and Lighting Co., Ltd.                                                     Annual Report 2021



profit. A significant appreciation of the RMB will negatively impact the Company's performance.


XII Communications with the Investment Community such as Researches, Inquiries and
Interviews

□ Applicable √ Not applicable

No such cases for the Reporting Period.




                                                                                                              50
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021




                                    Part IV 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 applicable laws, regulations, or rules

issued by the CSRC governing the governance of listed companies.

□ Yes √ No

No such cases in the Reporting Period.

II The Company’s Inde pendence from Its Controlling Shareholder and Actual Controller in
Asset, Personnel, Financial Affairs, Organization and Business


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.


                                                                                                                  51
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021



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

assets of the Company without any behavior such as any controlling shareholder occupies the assets of the

Company.

4. As for the institutions, the Company set up the independent and entire organizations and institutions, and the

construction as well as the operating of the corporate governance institutions is executed strictly executed

according to the Articles of Association, and the production and operating as well as the offices are entirely

independent from the controlling shareholders with any situation of working under one roof with the controlling

shareholders.。

5. As for the finance, the Company set up the independent finance department and builds up the independent and

normative accounting and financial control system according to the requirements of the ASBE, set up the

independent bank account and pays the taxes legally and independently and the Company could make the

financial decisions independently without any situation of the shareholding intervenes the capital usage.


III Horizontal Competition

□ Applicable √ Not applicable

IV Annual and Special General Meetings Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period


      Meeting                Type            Investor       Convened date      Disclosure date   Resolutions of the



                                                                                                                      52
 Foshan Electrical and Lighting Co., Ltd.                                                                                     Annual Report 2021


                                                participation ratio                                                                 meeting

                                                                                                                          Resolutions of the
The 2020 Annual          Annual General
                                                             44.37% 21 May 2021                   22 May 2021             2020 Annual
General Meeting          Meeting
                                                                                                                          General Meeting

                                                                                                                          Resolutions of the 1st
The 1st Extraordinary
                         Extraordinary                                                                                    Extraordinary
General Meeting of                                           43.09% 13 September 2021             14 September 2021
                         General Meeting                                                                                  General Meeting of
2021
                                                                                                                          2021

The 2nd                                                                                                                   Resolutions of the
Extraordinary            Extraordinary                                                                                    2nd Extraordinary
                                                             42.72% 24 November 2021              25 November 2021
General Meeting of       General Meeting                                                                                  General Meeting of
2021                                                                                                                      2021

The 3rd                                                                                                                   Resolutions of the
Extraordinary            Extraordinary                                                                                    3rd Extraordinary
                                                             45.40% 31 December 2021              1 January 2022
General Meeting of       General Meeting                                                                                  General Meeting of
2021                                                                                                                      2021


2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting
Rights

□ Applicable √ Not applicable

V Directors, Supervisors and Senior Manage ment

1. General Information


                                                                                                  Increas Decreas
                                                                 Beginni               Restrict                        Other
                                                                                                  e in the e in the                Ending Reason
                   Incumb                                             ng                 ed                            increas
          Office                               Start of End of               Share                Reporti Reporti                  shareho       for
 Name              ent/For Gender        Age                     shareho               shares                          e/decre
           title                               tenure   tenure               options                ng       ng                     lding       share
                     mer                                          lding                granted                          ase
                                                                                                  Period Period                    (share) changes
                                                                 (share)               (share)                         (share)
                                                                                                  (share) (share)

Wu        Board                                24       23
                   Incumb
Shengh Chairm                Male          51 August August                00                 0          0         0           0            0
                   ent
ui        an                                   2020     2023

          Vice                                          23
                                               24
Zhuang Board       Incumb                               August   11,903,                                                           11,903,
                             Male          70 August                         0                0          0         0           0
Jianyi    Chairm ent                                    2023           509                                                            509
                                               2020
          an

                                               24       23
Lei       Directo Incumb
                             Male          54 August August                00                 0          0         0           0            0
Zihe      r & GM ent
                                               2020     2023


                                                                                                                                                        53
    Foshan Electrical and Lighting Co., Ltd.                                           Annual Report 2021


Zhang                                           24     23
           Directo Incumb
Xianfen                       Male         51 August August          00    0   0   0   0       0
           r         ent
g                                               2020   2023

                                                24     23
Cheng Directo Incumb
                              Male         47 August August     11,550 0   0   0   0   0 11,550
Ke         r         ent
                                                2020   2023

Huang                                           24     23
           Directo Incumb
Zhiyon                        Male         52 August August          00    0   0   0   0       0
           r         ent
g                                               2020   2023

           Indepen                                     23
                                                24
Dou        dent      Incumb                            August
                              Male         62 August                 00    0   0   0   0       0
Linping Directo ent                                    2023
                                                2020
           r

           Indepen                              13     23
Li         dent      Incumb                     Septem August
                              Male         60                        00    0   0   0   0       0
Xiyuan Directo ent                              ber    2023
           r                                    2021

           Indepen                              13     23
Zhang
           dent      Incumb                     Septem August
Rensho                        Male         56                        00    0   0   0   0       0
           Directo ent                          ber    2023
u
           r                                    2021

                                                24     23
Li         Supervi Incumb
                              Male         34 August August          00    0   0   0   0       0
Yizhi      sor       ent
                                                2020   2023

                                                24     23
Zhuang Supervi Incumb
                              Male         36 August August          00    0   0   0   0       0
Junjie     sor       ent
                                                2020   2023

Ye                                              24     23
           Supervi Incumb
Zhengh                        Male         48 August August     77,561 0   0   0   0   0 77,561
           sor       ent
ong                                             2020   2023

                                                24     23
Lin        Supervi Incumb
                              Male         52 August August     22,583 0   0   0   0   0 22,583
Qing       sor       ent
                                                2020   2023

Zhang      Executi                              24     23
                     Incumb
Xuequa veVice                 Male         44 August August     73,052 0   0   0   0   0 73,052
                     ent
n          GM                                   2020   2023

Tang                                            24     23
                     Incumb
Qiongla CFO                   Female       51 August August     75,940 0   0   0   0   0 75,940
                     ent
n                                               2020   2023

                                                24     23
Wei        Vice      Incumb Male           52                   105,22 0   0   0   0   0 105,22
                                                August August

                                                                                                       54
    Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021


Bin        GM         ent                          2020      2023            6                             6

Jiao                                               24        23
           Vice       Incumb
Zhigan                           Male         49 August August          90,399 0      0   0   0   0 90,399
           GM         ent
g                                                  2020      2023

                                                   24        23
Chen       Vice       Incumb
                                 Male         49 August August          66,066 0      0   0   0   0 66,066
Yu         GM         ent
                                                   2020      2023

                                                   24        23
Zhang      Vice       Incumb
                                 Male         47 August August          77,596 0      0   0   0   0 77,596
Yong       GM         ent
                                                   2020      2023

Xu                                                 24        23
           Vice       Incumb
Xiaopin                          Male         51 August August          37,270 0      0   0   0   0 37,270
           GM         ent
g                                                  2020      2023

Huang Board                                                  23
                      Incumb                       19 May
Zhenhu Secreta                   Male         34             August          00       0   0   0   0        0
                      ent                          2021
an         ry                                                2023

           Indepen                                           13
                                                   24
Zhang      dent                                              Septem
                      Former Female           72 August                      00       0   0   0   0        0
Nan        Directo                                           ber
                                                   2020
           r                                                 2021

           Indepen                                           13
                                                   24
           dent                                              Septem
Lu Rui                Former Male             46 August                      00       0   0   0   0        0
           Directo                                           ber
                                                   2020
           r                                                 2021

           Chairm
           an of
                                                             27
Li         the                                     24
                                                             Decem
Huasha Supervi Former Male                    58 August                      00       0   0   0   0        0
                                                             ber
n          sory                                    2020
                                                             2021
           Commi
           ttee

                                                                        12,540,                       12,540,
Total            --         --     --    --             --         --             0   0   0   0   0             --
                                                                           752                           752


Indicate by tick mark whether any director, supervisor or senior management resigned during the Reporting

Period.

√ Yes □ No

In July 2021, independent directors Ms. Zhang Nan and Mr. Lu Rui resigned for personal reasons. In December

2021, Chairman of the Supervisory Committee Mr. Li Huashan resigned for reasons of job adjustment.


                                                                                                                     55
 Foshan Electrical and Lighting Co., Ltd.                                                                Annual Report 2021



Change of directors, supervisors and senior management:

√Applicable □ Not applicable
     Name            Office title    Type of change       Date of change                    Reason for change

Huang Zhenhuan Board Secretary Appointed              19 May 2021          Appointed by the Board of Directors

                  Independent
Li Xiyuan                           Elected           13 September 2021    Elected by general meeting
                  Director

                  Independent
Zhang Renshou                       Elected           13 September 2021    Elected by general meeting
                  Director

                  Independent
Zhang Nan                           Resigned          13 September 2021    Personal reasons
                  Director

                  Independent
Lu Rui                              Resigned          13 September 2021    Personal reasons
                  Director

                  Chairman of the
Li Huashan        Supervisory       Resigned          27 December 2021     Job adjustment
                  Committee


2. 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. Wu Shenghui: Han nationality, was born in July 1970. He is a member of the CPC and has no right of

permanent residence in a foreign country. He finished a part-time postgraduate program. Previously, he has served

as Senior Staff Member and then Principal Staff Member of Guuangdong Provincial Commission for Discipline

Inspection, Assistant Manager and then Manager of the Human Resources Department and then Manager of the

Department of Party and Mass Work and Personnel of Guangdong Rising Holdings Group Co., Ltd., and CP C

Committee Secretary, then Full-Time Deputy Secretary and then Director of Shenzhen Zhongjin Lingnan

Nonfemet Company Limited. He became CPC Committee Member and Secretary of the Company in April 2020

and became President of the Board of Directors of the Company in May 2020.

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 serves as a vice chairman of the Company since December 2015.


                                                                                                                         56
 Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021



Mr. Lei Zihe: Han nationality, was born in August 1967. He is a member of the CPC and has no right of

permanent residence in a foreign country. He finished a postgraduate program and bears a professional title of

Senior Engineer. Previously, he has served as Assistant Manager of the Quality Management Department, then

Manager of the Technical Department, then Director of the No. 1 Device Factory, and then Manager of the Second

Marketing Department of Foshan Optoelectronic Devices Company, Assistant to the General Manager and then

Secretary of the Board of Directors of Foshan NationStar Optoelectronic Technology Co., Ltd., CPC Committee

Member, then Vice General Manager and General Manager of the RGB Device Division, then Director, and then

Executive General Manager of Foshan NationStar Optoelectronics Co., Ltd., and President of the Board of

Directors of Foshan NationStar Semiconductor Technology Co., Ltd.. He became CPC Committee Member and

Deputy Secretary of the Company in April 2020 and became Director and General Manager of the Company in

May 2020.

Mr. Zhang Xianfeng: Han nationality, was born in July 1970. He is a member of the CPC and has no right of

permanent residence in a foreign country. He finished a MBA program at Renmin University of China and bears

professional titles of Senior Political Mentor and Economist. Previously, he has served as Assistant Departmental

Manager and then Departmental Manager of China Guangdong International Economic and Technological

Cooperation (Group) Company, Assistant Director and then Director of the General Office of Guangdong

Xinguang International Group Co., Ltd., Assistant Manager of the Human Resources Department, then Assistant

Manager of the Department of Party and Mass Work and Personnel, then Assistant Director of the CPC

Committee's General Office, and then Manager of the Department of Party and Mass Work of Guangdong Rising

Holdings Group Co., Ltd.. He became CPC Committee Member and Deputy Secretary of the Company in June

2020, became Chairman of the Labor Union of the Company in July 2020, and became Director of the Company

in August 2020.

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 Vice-Minister and the Minister of the Financing Plan

Department and Vice Minister of Audit Department in Guangdong Rising Holdings Group Co., Ltd., Vice GM of

Hubei Ashennan Expressway Development Co., Ltd., the Executive Deputy GM of Hubei Gdrising Han-E

Expressway Co., Ltd. and Hubei Han-Cai Expressway Co., Ltd., the Director of Guangdong Rising Finance Co.,

Ltd and Rising Investment Development Limited. And now acts as the Full-time Director accredited to the

Company by Capital Operation Department of Guangdong Rising Holdings Group Co., Ltd., Director of

                                                                                                               57
 Foshan Electrical and Lighting Co., Ltd.                                                   Annual Report 2021



Guangdong Fenghua Advanced Technology Holding Co., Ltd and Foshan NationStar Optoelectronics Co., Ltd. He

serves as a Director of the Company since December 2015.

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, the GM Assistant and Vice GM in Guangdong Electronics Information Industry Group

Ltd. He now acts as a member of CPC, Deputy Secretary of CPC and Chairman of Labor Union in Guangdong

Electronics Information Industry Group Ltd. And he serves as a Director of the Company since December 2015.

Li Xiyuan: Male, born in March 1961, member of the Communist Party of China, no permanent residence abroad,

doctoral degree, professor-level senior engineer. He has served as deputy director of the Construction

Management Office of the Northern Section of Beijing-Zhuhai Expressway in Guangdong Province, Deputy

Director of Infrastructure Management Department of Guangdong Provincial Communication Group Co., Ltd.,

General Manager of Guangdong Gaintop Highway Engineering Construction Group Co., Ltd., General Manager

and Chairman of Guangdong Provincial Expressway Development Co., Ltd., Chairman of Guangdong Road and

Bridge Construction Development Co., Ltd., Director of Guangdong Construction Engineering Group Co., Ltd.,

Guangdong Province Navigation Group Co., Ltd., Guangdong Namyue Group Co., Ltd. and Guangdong

Provincial Railway Construction Investment Group Co., Ltd. He is currently an external director of Guangzhou

Port Group Co., Ltd. and an independent director of Dongguan Development (Holdings) Co., Ltd. He has been an

independent director of the Company since September 2021.

Zhang Renshou: Male, born in May 1965, Ph.D., professor, doctoral supervisor, no permanent residence abroad,

doctoral degree. He has served as lecturer and associate professor of Guangzhou Foreign Language Training

Center of Ministry of Petroleum Industry and China University of Petroleum, Editor of Development Research

Center of People's Government of Guangdong Province, Professor of Accounting Department of School of

Management of Guangzhou University and independent director of Jiangmen Rural Commercial Bank Company

Limited. He also serves as: Member of the Expert Group of the Budget Committee of Guangzhou Municipal

People's Congress, Member of the Expert Group of the Economic Committee of Guangzhou Municipal People's

Congress, Member of the 8th Committee of Guangdong Social Sciences Association, Member of the Academic

Committee of Research Center for Guangdong Local Public Finance, Professional Advisory Committee Member

of Guangdong Statistics Bureau, Member of the Academic Committee of Guangdong Coastal Economic Belt

                                                                                                              58
 Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021



Development Research Center, President of Guangdong South China Economic Development Research

Association, Major Administrative Decision Demonstration Expert and Innovation and Entrepreneurship

Development Expert of Shaoguan Municipal People's Government of Guangdong Province, and Special

Researcher of Guangzhou Taxation Bureau of State Taxation Administration of the People's Republic of China.

He has been an independent director of the Company since September 2021.

Mr. Dou Linping: Han nationality, was born in August 1959. He is of Chinese nationality and has no right of

permanent residence in a foreign country. He received a bachelor's degree and bears a professional title of Senior

Engineer. Previously, he has served as Director of the Office of Design Standards and then Vice Director of

Beijing Luminaries Research Institution, Deputy Secretary-General and Managing Director of China Association

of Lighting Industry, and Managing Director and Secretary-General of China Illuminating Engineering Society. At

present, he serves as Vice Director-General of China Solid State Lighting Alliance and Independent Director of

Hengdian Group TOSPO Lighting Co., Ltd. and Beijing New Space Technology Co., Ltd.. He serves as an

independent director of the Company since August 2020.


2. Working Experience of the Supervisors

Mr. Li Yizhi: Han nationality, was born in March 1987. He is a member of the CPC. He received a bachelor's

degree ,intermediate accountant and is an Association of Chartered Certified Accountants (ACCA) certified

accountant. Previously, he has worked at the Guangzhou Office of WUYIGE Certified Public Accountants LLP

(special general partnership) as an Audit Assistant, at the Guandong Office of Pan-China Certified Public

Accountants LLP (special general partnership) as a Project Manager, at the Shenzhen Office of

PricewaterhouseCoopers Zhong Tian LLP (special general partnership) as an auditor, and at the Guangdong

Office of China Central Public Accounting Firm (special general partnership) as a Project Manager. At present, he

serves as Supervisor of the Finance Department (Settlement Center) of Guangdong Rising Holdings Group Co.,

Ltd.. He serves as a supervisor of the Company since August 2020.

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 Prosperity Lighting Equipment Co., Ltd. And he serves as a supervisor of the Company since December

2015.

Mr. Ye Zhenghong: Born in June 1973, a member of the Communist Party of China with a college degree. He


                                                                                                                59
 Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021



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 from April 2019 to June 2020; and acted as the vice GM of FSL Zhida Electric

Technology Co., Ltd. from November 2016 to February 2020, and acted as the GM of FSL Zhida Electric

Technology Co., Ltd. from March 2020 to March 2021; and has acted as the Chairman of the Board of FSL Zhida

Electric Technology Co., Ltd. since April 2021; the Chairman of the 5th Supervisory Committee and the Employee

Supervisor of the 6th, 7th, 8th and 9th 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 workshop director and factory director of

the fluorescent lamp factory from March 2002 to September 2009; as the director of Technology Department from

October 2009 to September 2020 ; as the Technical Director of the R&D and Technology Department since October

2020; in July 2015, elected as a discipline committee member of the company’s CPC committee. And he serves as

an Employee Supervisor of the Company since September 2016.


3. Working experience of the Senior Management Staff

Mr. Lei Zihe: Han nationality, was born in August 1967. He is a member of the CPC and has no right of

permanent residence in a foreign country. He finished a postgraduate program and bears a professional title of

Senior Engineer. Previously, he has served as Assistant Manager of the Quality Management Department, then

Manager of the Technical Department, then Director of the No. 1 Device Factory, and then Manager of the

Second Marketing Department of Foshan Optoelectronic Devices Company, Assistant to the General Manager

and then Secretary of the Board of Directors of Foshan NationStar Optoelectronic Technology Co., Ltd., CPC

Committee Member, then Vice General Manager and General Manager of the RGB Device Division, then

Director, and then Executive General Manager of Foshan NationStar Optoelectronics Co., Ltd., and President of

the Board of Directors of Foshan NationStar Semiconductor Technology Co., Ltd.. He became CPC Committee


                                                                                                                60
 Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021



Member and Deputy Secretary of the Company in April 2020 and became Director and General Manager of the

Company in May 2020.

Mr. Zhang Xuequan: Born in December 1977, a member of the Communist Party of China, MBA of Lingnan

College of Sun Yat-Sen University. He joined the Company in 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 from February 2016

to December 2018. 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 the Company since March 2020.

Mr. Zhang Yong: Born in June 1974, a member of the Communist Party of China and a senior engineer with a

bachelor degree. He joined in the Company in July 1997. 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; served as the chairman of the Labor Union of the Company

from September 2013 to May 2019; acted as the Deputy Party Secretary from July 2015 to 27 December 2021; and

has been a vice GM of the Company since August 2016.

Mr. Wei Bin: Born in May 1969, a member of the Communist Party of China and a Senior engineer of electronic

engineering technology with a Master’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 January 2006

to November 2008, acted as the Department Director of the Technology Department from November 2008 to

August 2009 and acted as Vice GM of the Company from September 2009.

                                                                                                               61
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021



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 the Company in 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.

Ms. Tang Qionglan: born in March 1970, member of the Communist Party of China, bachelor degree, China

Certified Public Accountant, 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.. and serves as the

Chief Financial Officer of the Company since January 2016.

Mr. Jiao Zhigang: Born in May 1972, a member of the Communist Party of China with a bachelor’s degree. He

entered the Company in 1994. 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; acted as

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. 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, also as the General Manager of Guangdong Fenghua Semiconductor Technology Co., Ltd.,

and Deputy Director of Headquarters Operations Center; as the General Manager of Guangdong Fenghua Advanced

Technology Holding Co., Ltd. Lihua Branch from March 2015 to January 2016; won the first prize of scientific and

technological progress of Zhaoqing in 2008; won the title of the “Ninth Batch of Top Talents of Zhaoqing” in 2010;

served as Deputy General Manager of the Company since January 2016.

Huang Zhenhuan: Born in December 1987, he holds a master's degree in finance, is a financial economist, and

has obtained the qualification certificate of Secretary of the Board of Directors issued by Shenzhen Stock

Exchange. He used to be the sponsor of Assets Department, Assistant General Manager of Investment Department

and General Manager of Finance Department of Guangzhou Guangyong State-owned Asset Sales Co., Ltd.,

General Manager of Guangzhou Guangyong Equity Investment Fund Management Co., Ltd., General Manager of

Corporate Finance Department III (Industry Center) of Minsheng Bank Guangzhou Branch, Investment Director

                                                                                                                  62
 Foshan Electrical and Lighting Co., Ltd.                                                                     Annual Report 2021



of Guangdong Rising Financial Holding Co., Ltd., and Senior Director of Capital Operation Department of

Guangdong Rising Holdings Group Co., Ltd. He has served as Board Secretary of the Company since May 2021.


Offices held concurrently in shareholding entities:

√Applicable □Not applicable
                                                    Office held in the                                         Remuneration or
    Name                    Shareholding entity        shareholding         Start of tenure   End of tenure   allowance from the
                                                            entity                                            shareholding entity

                                                    Full-time director
                                                    accredited to the
                Guangdong Rising Holdings Group
Cheng Ke                                            listed company by                                         Yes
                Co., Ltd.
                                                    capital operation
                                                    department

                                                    Deputy Secretary
                Guangdong Electronics Information   of CPC, Chairman
Huang Zhiyong                                                                                                 Yes
                Industry Group Ltd.                 of the Labor
                                                    Union

                                                    Head of the
                                                    Financial
                Guangdong Rising Holdings Group
Li Yizhi                                            Department                                                Yes
                Co., Ltd.
                                                    (Settlement
                                                    Center)

                Prosperity Lamps & Components       Chairman of the
Zhuang Jianyi                                                                                                 Yes
                Limited                             Board

                Prosperity Lamps & Components
Zhuang Junjie                                       Director                                                  Yes
                Limited


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

                                                         Professor at
                                                         the
Zhang Renshou Guangzhou University                                                                             Yes
                                                         Accounting
                                                         Department

                CHINA SOLED STATE LIGHTING               Vice
Dou Linping                                                                                                    Yes
                ALLIANCE                                 Chairman



                                                                                                                                  63
 Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021



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

3. Remuneration of Directors, Supervisors and Senior Management


Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors

and senior management:

The Remuneration & Appraisal Committee under the Board of Directors decided the 2020 remunerations for the

leadership team members in accordance with the Measures for Managing the Remuneration of the Leadership

Team Members, the particulars on completing current main financial indexes & operating goals, as well as the

fulfillment of job responsibilities by them, before submitting the remuneration plan to the Board of Directors for

approval.

The total remuneration (before tax) actually paid to the directors, supervisors and senior management staff for

2021 were RMB16.6599 million.


Remuneration of directors, supervisors and senior management for the Reporting Period
                                                                                                        Unit: RMB'0,000

                                                                                   Total before-tax
                                                                                                             Any
                                                                 Incumbent/Forme    remuneration
     Name             Office title          Gender    Age                                                remuneration
                                                                        r             from the
                                                                                                      from related party
                                                                                      Company

Wu Shenghui       Board Chairman Male                         51 Incumbent                   150.35 No

                  Vice Board
Zhuang Jianyi                        Male                     70 Incumbent                            Yes
                  Chairman

Lei Zihe          Director & GM      Male                     54 Incumbent                   142.51 No

Zhang Xianfeng    Director           Male                     51 Incumbent                   111.85 No

Cheng Ke          Director           Male                     47 Incumbent                            Yes

Huang Zhiyong     Director           Male                     52 Incumbent                            Yes

                  Independent
Li Xiyuan                            Male                     60 Incumbent                            No
                  Director

                  Independent
Zhang Renshou                        Male                     56 Incumbent                        4.2 No
                  Director

Dou Linping       Independent        Male                     62 Incumbent                       14.4 No


                                                                                                                        64
 Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


                     Director

Li Yizhi             Supervisor          Male                       34 Incumbent                        Yes

Zhuang Junjie        Supervisor          Male                       36 Incumbent                        Yes

Ye Zhenghong         Supervisor          Male                       48 Incumbent                 47.7 No

Lin Qing             Supervisor          Male                       52 Incumbent                41.92 No

                     ExecutiveVice
Zhang Xuequan                            Male                       44 Incumbent                141.3 No
                     GM

Zhang Yong           Vice GM             Male                       47 Incumbent               139.69 No

Wei Bin              Vice GM             Male                       52 Incumbent               133.53 No

Chen Yu              Vice GM             Male                       49 Incumbent               140.99 No

Tang Qionglan        CFO                 Female                     51 Incumbent               130.27 No

Jiao Zhigang         Vice GM             Male                       49 Incumbent               131.97 No

Xu Xiaoping          Vice GM             Male                       51 Incumbent               151.36 No

Huang Zhenhuan Board Secretary           Male                       34 Incumbent                30.67 No

                     Independent
Zhang Nan                                Female                     72 Former                    10.2 No
                     Director

                     Independent
Lu Rui                                   Male                       46 Former                    10.2 No
                     Director

                     Chairman of the
Li Huashan           Supervisory         Male                       58 Former                  132.88 No
                     Committee

Total                           --                  --       --                 --           1,665.99           --


VI Performance of Duty by Directors in the Reporting Period

1. Board Meetings Convened during the Reporting Period


               Meeting                       Convened date            Disclosure date              Resolution

                                                                                        Announcement on Resolutions
The 8th Meeting of the 9th Board
                                     27 January 2021          28 January 2021           of the 8th Meeting of the 9th
of Directors
                                                                                        Board of Directors

                                                                                        Announcement on Resolutions
The 9th Meeting of the 9th Board
                                     7 April 2021             9 April 2021              of the 9th Meeting of the 9th
of Directors
                                                                                        Board of Directors

                                                                                        Announcement on Resolutions
The 10th Meeting of the 9th
                                     14 April 2021            15 April 2021             of the 10th Meeting of the 9th
Board of Directors
                                                                                        Board of Directors

The 11th Meeting of the 9th          23 April 2021            26 April 2021             Announcement on Resolutions


                                                                                                                         65
 Foshan Electrical and Lighting Co., Ltd.                                             Annual Report 2021


Board of Directors                                                      of the 11th Meeting of the 9th
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 12th Meeting of the 9th
                                19 May 2021         20 May 2021         of the 12th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 13th Meeting of the 9th
                                21 May 2021         22 May 2021         of the 13th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 14th Meeting of the 9th
                                23 June 2021        24 June 2021        of the 14th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 15th Meeting of the 9th
                                16 August 2021      17 August 2021      of the 15th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 16th Meeting of the 9th
                                25 August 2021      27 August 2021      of the 16th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 17th Meeting of the 9th
                                28 September 2021   30 September 2021   of the 17th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 18th Meeting of the 9th
                                13 October 2021     14 October 2021     of the 18th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 19th Meeting of the 9th
                                27 October 2021     28 October 2021     of the 19th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 20th Meeting of the 9th
                                29 October 2021     30 October 2021     of the 20th Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 21st Meeting of the 9th
                                8 November 2021     9 November 2021     of the 21st Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 22nd Meeting of the 9th
                                16 November 2021    17 November 2021    of the 22nd Meeting of the 9th
Board of Directors
                                                                        Board of Directors

                                                                        Announcement on Resolutions
The 23rd Meeting of the 9th
                                23 November 2021    24 November 2021    of the 23 rd Meeting of the 9th
Board of Directors
                                                                        Board of Directors

The 24th Meeting of the 9th                                             Announcement on Resolutions
                                15 December 2021    16 December 2021
Board of Directors                                                      of the 24th Meeting of the 9th



                                                                                                          66
 Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


                                                                                                        Board of Directors

                                                                                                        Announcement on Resolutions
The 25th Meeting of the 9th
                                    29 December 2021                  30 December 2021                  of the 25th Meeting of the 9th
Board of Directors
                                                                                                        Board of Directors


2. Attendance of Directors at Board Meetings and General Meetings


                                    Attendance of directors at board meetings and general meetings

                     Total number                          Board                                          The director
                                                                           Board
                       of board           Board          meetings                           Board        failed to attend
                                                                          meetings                                           General
                     meetings the        meetings       attended by                      meetings the          two
     Director                                                             attended                                           meetings
                     director was      attended on        way of                      director failed     consecutive
                                                                          through a                                          attended
                      eligible to           site       telecommunica                      to attend     board meetings
                                                                           proxy
                        attend                             tion                                             (yes/no)

Wu Shenghui               18                 3              15               0                0                No                4

Zhuang Jianyi             18                 0              18               0                0                No                4

Lei Zihe                  18                 3              15               0                0                No                4

Zhang Xianfeng            18                 3              15               0                0                No                4

Cheng Ke                  18                 3              15               0                0                No                4

Huang Zhiyong             18                 3              15               0                0                No                1

Dou Linping               18                 2              16               0                0                No                4

Li Xiyuan                     9              1               8               0                0                No                2

Zhang Renshou                 9              1               8               0                0                No                1


3. Objections Raised by Directors on Matters of the Company


Indicate by tick mark whether any directors raised any objections on any matter of the Company.

□ Yes √ No

No such cases in the Reporting Period.

4. Other Information about the Performance of Duty by Directors


Indicate by tick mark whether any suggestions from directors were adopted by the Company.

√ Yes □ No

Suggestions from directors adopted or not adopted by the Company:

During the Reporting Period, the directors of the Company worked to fulfill their functions and duties, actively


                                                                                                                                         67
 Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021



attended Board of Directors meetings and Shareholders’ General Meetings, offered advices and suggestions and

performed their rights, functions, duties, and obligations as defined in the Company Law, the Securities Law and

the Articles of Association. They fulfilled their role as a director, upheld the legitimate rights and interests of the

Company and its shareholders, promoted further improvement in corporate governance and effectively facilitated

regulatory compliance of the Company's operation. During the Reporting Period, the directors of the Company

actively performed their functions and duties, made full use of their professional knowledge, worked diligently to

fulfill their duties and offered many invaluable advices and suggestions on the Company's management

decision-making and major matters based on their in-depth understanding of the Company's operations. They

made resolutions on the Company's significant matters such as profit distribution, capital operation, asset disposal,

and related-party transactions. They played their due role in improving the Company's supervision mechanism,

promoting improvement in the Company's risk control capacity and upholding the legitimate rights and interests

of the Company and its shareholders.

VII Performance of Duty by Specialized Committees under the Board in the Reporting Period

                                   Meetings                          Contents       Opinion and                      Objection (if
  Committee        Members                        Convened date                                   Other activities
                                   convened                          reviewed         advice                             any)

                                                                  2020 Financial
                                                                  Audit and
                                                                  Internal
                                                                  Control Audit
                                                                  Report; 2021
                                                                  Financial
                                                                  Budget Report;
                                                  23 March 2021                    Approved
                Zhang                                             and 2020
                Renshou, Li                                       Annual Work
The Audit       Xiyuan, Dou                                       Report and
                                              3
Committee       Linping, Cheng                                    2021 Work
                Ke, and Huang                                     Plan of the
                Zhiyong                                           Audit
                                                                  Department

                                                                  Work Report of
                                                                  the Audit
                                                  16 August       Department for
                                                                                   Approved
                                                  2021            Q1 2021;
                                                                  Proposal on
                                                                  Formulating


                                                                                                                                     68
 Foshan Electrical and Lighting Co., Ltd.                                                  Annual Report 2021


                                                              the Internal
                                                              Audit System

                                                              Work Report of
                                                              the Audit
                                                              Department for
                                                              H1 2021; and
                                                5 November    Proposal on
                                                                                Approved
                                                2021          Renewing the
                                                              Engagement of
                                                              Auditing
                                                              Agency for
                                                              2021

                                                              Proposal on
                                                              Appraisal P lan
                                                12 November   for 2020
                                                                                Approved
                                                2021          Remunerations
                                                              for Leadership
                                                              Team Members

                                                              Proposal on
                                                              Adjustment to
                Zhang
                                                              Allowances for
The             Renshou, Li
                                                              Independent
Remuneration    Xiyuan, Dou
                                            2                 Directors; and
and Appraisal   Linping, Zhang
                                                              Proposal on
Committee       Xianfeng, and
                                                              Termination of
                Cheng Ke                        24 December
                                                              the               Approved
                                                2021
                                                              Establishment
                                                              of Equity
                                                              Incentive
                                                              System for
                                                              Middle and
                                                              Senior
                                                              Management

                                                              Proposal on
                                                              Appointment
                Li Xiyuan,                      13 May 2021                     Approved
                                                              of Board
                Zhang
                                                              Secretary
The             Renshou, Dou
Nomination      Linping, Lei                                  Proposal on
                                            2
                                                              Nomination of
Committee       Zihe, and
                                                16 August     Li Xiyuan and
                Zhang                                                           Approved
                                                2021          Zhang Renshou
                Xianfeng
                                                              as Candidate
                                                              Independent


                                                                                                           69
 Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


                                                                 Directors


VIII 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.

IX Employees

1. Number, Functions and Educational Backgrounds of Employees


Number of in-service employees of the Company at the
                                                                                                                5,740
period-end

Number of in-service employees of main subsidiaries at the
                                                                                                                3,547
period-end

Total number of in-service employees at the period-end                                                          9,287

Total number of employees with remuneration in this Reporting
                                                                                                                9,287
Period

Number of retirees to whom the Company or its main
                                                                                                                 242
subsidiaries need to pay retirement pension

                                                             Functions

                            Function                                          Number of employees

Production                                                                                                      6,618

Sales                                                                                                            861

Technical                                                                                                        940

Financial                                                                                                         74

Administrative                                                                                                   794

Total                                                                                                           9,287

                                                    Educational backgrounds

                    Educational background                                    Number of employees

Master and above                                                                                                  65

Bachelor                                                                                                        1,134

Junior college                                                                                                  1,357

Technical secondary school and high school                                                                      1,717



                                                                                                                    70
 Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021


Below high school                                                                                                5,014

Total                                                                                                            9,287


Note: “Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension” in the

table above refer to retirees of subsidiary Nanning Liaowang, and the payments to them mainly comprise living

allowances, festival allowances, etc. The amount paid by Nanning Liaowang stands at RMB645,900 per year.

This is a historical issue coming from before the Company’s acquisition of Nanning Liaowang. Starting from 1

January 2021, the number of the retirees and the annually paid amount have ceased to increase.

2. Employee Remuneration Policy


Adhering to the principle of "giving priority to efficiency, giving consideration to fairness, creating and sharing

together", the Company takes value creation as the guide, constructs four sets of salary systems of management,

R&D, sales and production, determines salary grades according to different positions and their characteristics, and

inclines salary distribution to core talents and key positions, so as to maximize the enthusiasm of employees.

3. Employee Training Plans


The Company pays attention to personnel training and employee career development and has established the

Starlight Lecture Hall. In light of the Company's development needs and post nature, the Company has built up a

complete training plan, and carried out a series of trainings such as R&D, marketing, production and management

by combining offline and offline learning platforms. Also, it organized training camps for internal lecturers, and

established a training system with multiple levels, channels, fields and ways to promote employees' skills

upgrading, ability advancement and quality improvement.

4. Labor Outsourcing

□ Applicable √ Not applicable

X Profit Distributions to 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

                                                                                                                     71
 Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021



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 (2021-2023), 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 changing the cash dividend policy, the
conditions and procedures involved are in compliance with Yes
applicable regulations and transparent



Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for 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 shareholders are positive.

□ Applicable √ Not applicable

Final dividend plan for the Reporting Period:

√Applicable □ Not applicable
Bonus shares for every 10 shares (share)                                                                            0




                                                                                                                    72
 Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


Dividend for every 10 shares (RMB) (tax inclusive)                                                                                    1.00

Additional shares to be converted from capital
                                                                                                                                         0
reserve for every 10 shares (share)

Total shares as the basis for the profit distribution
                                                        1,348,994,647
proposal (share)

Cash dividends (RMB) (tax inclusive)                    134,899,464.70

Cash dividends in other forms (such as share
                                                                                                                           249,744,793.06
repurchase) (RMB)

Total cash dividends (including those in other
                                                                                                                           384,644,257.76
forms) (RMB)

Distributable profit (RMB)                                                                                                2,738,229,003.27

Total cash dividends (including those in other
                                                        100%
forms) as % of total profit distribution

                                                           Cash dividend policy

Where it is difficult to determine the development stage of the Company but it has plans for considerable spending, in profit
distribution, cash dividends shall reach at least 20% 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 RMB241,148,689.36 of the
Company as the parent for 2021, plus the beginning retained profits of RMB1,591,884,733.49, minus the distributed profits of
RMB135,847,668.70 for 2020, plus RMB1,041,043,249.12 of cumulative fair value changes which had been previously recognized
in other comprehensive income but were transferred to retained profits in the current period as a result of the sale of shareholdings
in the current period, equal the ending profits distributable to shareholders of RMB2,738,229,003.27 for 2021. The Board of
Directors has proposed to allocate profits for 2021 as follows: based on the share capital of 1,348,994,647 shares (the total share
capital of 1,361,994,647 shares minus the remaining 13,000,000 A-shares repurchased in the share repurchase account at the
disclosure date of the 2021 Annual Report, a cash dividend of RMB1 (tax inclusive and dividends for B-share holders to be paid in
the Hong Kong dollars) per 10 shares is to be distributed to the shareholders. The retained profits will be carried forward into the
next year. Where any change occurs to the total shares entitled to the final dividend due to any new issue, grant of equity incentives,
etc. when the final dividend plan is implemented, the dividend per share shall remain the same while the total payout amount shall
be adjusted accordingly.

Note: “Cash dividends in other forms (such as share repurchase)” in the table above is arrived at based on the

funds (exclusive of transaction costs) used to repurchase A- and B-shares during 2021 using the RMB:HKD

exchange rate at 17 December 2021, the last trading day of the valid period of the repurchase.


XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees

□ Applicable √ Not applicable

No such cases in the Reporting Period.



                                                                                                                                         73
 Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


XII Formulation and Imple mentation of Internal Control System during the Reporting
Period

1. Internal control formulation and implementation


During the Reporting Period, the Company, in accordance with the Basic Standards for Internal Control and its

supporting guidelines, as well as the actual situation, further revised and improved the relevant internal control

systems, adjusted the internal organizational structure and job responsibilities, and established a relatively

effective internal control system, so as to effectively prevent and discover deviations in the process of operation

and management in time, and provide guarantee for the legal compliance and asset safety of operation and

management.

The Board of Directors of the Company has an Audit Committee, which is responsible for reviewing the internal

control of the Company, supervising the effective implementation of internal control and self-evaluation of

internal control, and cooperating with internal control audit and other related matters. The internal audit

department of the Company is responsible for the internal audit supervision of the Company, including

supervising and inspecting the implementation of the internal control system of the Company, regularly or

irregularly conducting routine audits or special audits on finance, internal control, major projects and their

businesses, and putting forward suggestions for improving internal control to control and prevent risks. If the

Audit Department finds major defects in internal control in the process of supervision and inspection, it has the

right to report directly to the Audit Committee of the Board of Directors and the Board of Supervisors.

According to the identification of major defects in the Company's internal control, there were no major defects in

the internal control of financial reports and non-financial reports in 2021.

2. Material Internal Control Weaknesses Identified for the Reporting Period

□ Yes √ No

XIII Management and Control of Subsidiaries by the Company during the Reporting Period

                                                                 Problems
    Name of                                                                                       Settlement        Follow-up
                   Integration plan     Integration progress   encountered in Solutions taken
    company                                                                                        progress       settlement plan
                                                                 integration

Nanning           The company         After the Company
Liaowang Auto     empowers            empowered Nanning        None            None             None             None
Lamp Co., Ltd.    Nanning             Liaowang in terms of


                                                                                                                                74
 Foshan Electrical and Lighting Co., Ltd.                                                                               Annual Report 2021


(Nanning           Liaowang in          talents, capital,
Liaowang)          talents, capital,    technology,
                   technology,          management and
                   management,          informationization,
                   informationizatio Nanning Liaowang
                   n and other          introduced a group of
                   aspects to help      middle and high-end
                   Nanning              talents, made
                   Liaowang             breakthroughs in some
                   develop faster.      important technology
                                        research and
                                        development, reduced
                                        financial expenses,
                                        optimized internal
                                        management and
                                        improved
                                        informationization
                                        level.


XIV Self-Evaluation Report or Inde pendent Auditor’s Report on Internal Control

1. Internal Control Self-Evaluation Report


Disclosure date of the internal control
                                            1 April 2022
self-evaluation report

Index to the disclosed internal control
                                            See www.cninfo.com.cn for the Internal Control Self-Evaluation Report 2021
self-evaluation report
Evaluated entities’ combined assets as
                                                                                                                                 100.00%
% of consolidated total assets
Evaluated      entities’        combined
operating    revenue        as    %    of                                                                                        100.00%
consolidated operating revenue

                                        Identification standards for internal control weaknesses

                                            Weaknesses in internal control over financial Weaknesses in internal control not related to
                  Type
                                                              reporting                                  financial reporting
                                            Defect    with    one    of   the    following Defect     with   one   of     the   following
                                            characteristics should be recognized as a characteristics should be recognized as a
                                            serious defect: 1. the defect involved with the serious   defect: 1.   being punished for
                                            malpractices of the Directors, the Supervisors seriously violating the national laws, the
Nature standard
                                            and the Senior Executives; 2. the controlled administrative laws and regulations and the
                                            environment is invalid; 3. the CPA discovered normative documents; 2. the Company
                                            any significant misstatement from the current suffers a serious economic loss due to any
                                            financial report while the internal control serious errors made in decision-making


                                                                                                                                        75
 Foshan Electrical and Lighting Co., Ltd.                                                                                 Annual Report 2021


                                      could not discover the mistake during the caused by serious lack of decision-making
                                      operating process; 4. the supervision from the procedures on significant events or unfair
                                      Corporate Audit Committee and the internal decision-making;                 3.      the          Company’s
                                      audit institution on the internal control. If reputation has been unrepairably damaged by
                                      there met with one of the situation of the any conduct in violation of laws and
                                      following, should be recognized as an regulations which produces a far-reaching
                                      important defect: 1. the recognized important negative impact and draws the public’s
                                      defect is not solved during the reasonable attention widely; 4. the major business
                                      period; 2. corrects the published financial involved with the production and operating
                                      report; 3. the function of the internal audit of of the Company lack of the system control or
                                      the Company is invalid; 4. the control of the system control is invalid; 5. the results of
                                      whether execute           the    selection and the the internal control assessment turn out to
                                      application      of     the     accounting    policies include any serious defects and such defects
                                      according     to       the      Generally    Accepted fail to be rectified effectively within 12
                                      Accounting Principles is invalid.                     months.    Defects     with     the         following
                                                                                            characteristics should be recognized as
                                                                                            important defects: 1. owing to partly lack of
                                                                                            the decision-making process on significant
                                                                                            events       and        the           undemocratic
                                                                                            decision-making process which caused the
                                                                                            decision-making      mistake        that     led   the
                                                                                            Company face with certain economic losses;
                                                                                            2. the negative influences owning to the
                                                                                            unlawful acts and the irregularities h involve
                                                                                            with wide range and cause public concern
                                                                                            among the partial regions which bring
                                                                                            certain harms to the reputation of the
                                                                                            Company; 3. the system of the major
                                                                                            business involved with the production and
                                                                                            operating of the Company is incomplete or
                                                                                            partially invalid; 4. the results of the internal
                                                                                            control assessment turn out to include any
                                                                                            serious defects and such defects fail to be
                                                                                            rectified effectively within 6 months.
                                      Based on the data of the 2020 consolidated According to the quantitative criterion of the
                                      statements, the         quantitative    criterion   of internal control defects of the financial
                                      confirming the important degree of the report, the quantitative criterion of the
                                      misstatement (including the false negatives) internal control defects assessment of the
                                      from of the consolidated statements of the non-financial report                  confirmed         by    the
Quantitative standard
                                      listed companies is as follows: serious defect: Company is as follows: serious defect:
                                      misstatement ≥1.0% of the total assets misstatement ≥1.0% of the total assets
                                      amount; important defects: 0.5% of the total amount; important defects: 0.5% of the total
                                      assets amount ≤misstatement<1.0% of the assets amount ≤misstatement<1.0% of the
                                      total   assets        amount;     common      defects: total assets   amount;       common          defects:


                                                                                                                                                76
 Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021


                                             misstatement < 0.5% of the total assets misstatement < 0.5% of the total assets
                                             amount.                                       amount.
Number of material weaknesses in
internal    control     over     financial                                                                                           0
reporting
Number of material weaknesses in
internal control not related to financial                                                                                            0
reporting
Number of serious weaknesses in
internal    control     over     financial                                                                                           0
reporting
Number of serious weaknesses in
internal control not related to financial                                                                                            0
reporting


2. 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                         1 April 2022

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
Material 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




                                                                                                                                     77
 Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021


XV Rectifications of Proble ms Identified by Self-inspection in the Special Action for Listed
Company Governance


According to the requirements of the regulatory authorities, the Company carried out special self-examination

activities on corporate governance from 2018 to 2020, and conducted self-examination item by item in various

aspects according to the Company Law, Securities Law, Stock Listing Rules of the Shenzhen Stock Exchange and

other relevant laws and regulations, normative documents and the Articles of Association of the Company. Upon

self-examination, it was found that the Board of Directors and the Supervisory Committee did not change in time

upon expiration of term of office, and some directors, supervisors and senior management personnel of the

Company sometimes did not attend or attend the shareholders' meeting as nonvoting attendees.

Rectification: On 24 August 2020, the Company held the first extraordinary general meeting in 2020 and elected

the 9th Board of Directors and Board of Supervisors. The term of office of directors and supervisors was three

years until 24 August 2023, and the change of Board of Directors and Board of Supervisors was completed.

Subsequently, the Company will strictly implement the Company Law, Securities Law and other laws and

regulations and the Articles of Association, continue to enhance shareholder communication before the re-election

of the Board of Directors and the Supervisory Committee, and complete the re-election of the Board of Directors

and the Supervisory Committee in compliance with applicable regulations. At the same time, when the

shareholders' meeting is held, all directors, supervisors and senior management personnel of the Company are

required to attend or attend the meeting as non-voting attendees. If the directors, supervisors and senior

management personnel cannot attend or attend the meeting as non-voting attendees, they shall submit a written

leave report to the Board of Directors.




                                                                                                               78
 Foshan Electrical and Lighting Co., Ltd.                                                                                     Annual Report 2021




                          Part V Environmental and Social Responsibility

I Major Environme ntal Issues

Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the
environmental protection authorities.

√ Yes □ No
  Name of
                Major and                                                  Discharge       Pollutant                        Total
Company or                      Discharge        Outlet       Outlet                                   Total Actual                  Excessive
               Characterist                                               Concentrati Discharge                        Discharge
 Subsidiary                      Method         Quantity   Distribution                                 Discharge                    Discharge
               ic Pollutants                                                     on        Standards                   Approved
 Company

                                                                                          Emission
Foshan
                                                                                          Standards
Electrical
                               Discharged                                                 for Air
and
                               in an                                      SO2: 289        Pollutants   SO2: 9.208 SO2: 39.937
Lighting       SO2                          1              In the plant          3
                                                                                                                                    None
                               organized                                  mg/m            in Glass     t/y            t/y
Co., Ltd.
                               manner                                                     Industry
Gaoming
                                                                                          (DB44/2159
Branch
                                                                                          -2019)

                                                                                          Emission
Foshan
                                                                                          Standards
Electrical
                               Discharged                                                 for Air
and
                               in an                                      Oxynitride: Pollutants       Oxynitride: Oxynitride:
Lighting       Oxynitride                   1              In the plant               3
                                                                                                                                    None
                               organized                                  550mg/m         in Glass     50.576 t/y     83.549 t/y
Co., Ltd.
                               manner                                                     Industry
Gaoming
                                                                                          (DB44/2159
Branch
                                                                                          -2019)

               Xylene,
               SO2,
               nitrogen                                                                   Integrated
Liuzhou        oxide,                                                     Discharged Emission
                               Discharged
Guige          benzene,                                                   upon            Standards
                               in an
Lighting       toluene,                     1              In the plant reaching          of Air       No limit       No limit      None
                               organized
Technology particulate                                                    applicable      Pollutants
                               manner
Co., Ltd.      matter,                                                    standards       (GB16297-
               volatile                                                                   1996)
               organic
               matter

Liuzhou        Volatile        Discharged                                 Discharged Integrated
                                            2              In the plant                                No limit       No limit      None
Guige          organic         in an                                      upon            Emission

                                                                                                                                                 79
 Foshan Electrical and Lighting Co., Ltd.                                                                                    Annual Report 2021


Lighting          compounds un-organize                                 reaching          Standards
Technology                     d manner                                 applicable        of Air
Co., Ltd.                                                               standards         Pollutants
                                                                                          (GB16297-
                                                                                          1996)



Construction and operation of pollution control facilities:
                                          Date of       Date of
                             Total                                                                           Design       Actual     Operation
                                       Construction Operation
 No.        Facility      Investment                                 Operator            Processes          Capacity      Capacity       Hours
                                       (MM/YYY (MM/YYYY                                                        3             3
                         (RMB0,000)                                                                          (m /h)        (m /h)        (h/d)
                                            Y)             )

                                                                                   Semi-dry flue
          Desulfurizat
                                                                                   gas
          ion,
                                                                                   desulphurization
          denitration,                  November       December    Independent
  1                           500                                                  (SDFGD) +                 60,000       60,000          24
          and dust                         2015          2015       operations
                                                                                   electric
          removal
                                                                                   precipitation +
          system
                                                                                   SCR denitration

  2       RTO                 360       November March 2017        Independent Dry filter+RTO                10000         10000          24
          oxidation                        2016                     operations catalytic
          furnace                                                                  combustion

  3       Activated           60       March 2019 November         Independent Filter cotton+                60712         60712          24
          carbon                                    2019            operations activated carbon
          adsorption                                                               adsorption
          device                                                                   device+22.5m
                                                                                   vent



Assessment of the environmental impact of construction projects and other administrative licenses of
environmental protection:
                  Document Name of Administrative License of
   No.                                                                     Approver                    Date of Approval       Approval No.
                            Environmental Protection

                 Approval for Environmental Impact Report on      Environmental Protection
      1          New Project of Foshan Electrical and Lighting    Bureau of Gaoming                  3 November 2004                 /
                 Co., Ltd. Gaoming Branch                         District, Foshan City

                 Environmental Protection Acceptance Opinions Environmental Protection
      2          on Phase I of Foshan Electrical and Lighting     Bureau of Gaoming                    28 August 2008     MHY [2008] No. 26
                 Co., Ltd. Gaoming Branch                         District, Foshan City

                 Acceptance Opinions on Flue Gas Emission         Environmental Protection
      3          Continuous Monitoring System of Foshan           Bureau of Gaoming                   22 February 2010     MHY [2010] No. 8
                 Electrical and Lighting Co., Ltd. Gaoming        District, Foshan City



                                                                                                                                                 80
Foshan Electrical and Lighting Co., Ltd.                                                                   Annual Report 2021


          Branch

          Approval for Environmental Impact Report on
                                                           Environmental Protection
          Energy-saving Lamp Expansion Project of                                                        MHGYB [2013] No.
   4                                                       Bureau of Gaoming           30 August 2013
          Foshan Electrical and Lighting Co., Ltd.                                                              030
                                                           District, Foshan City
          Gaoming Branch

                                                           Environmental Transport
          Letter of Environmental Protection Acceptance
                                                           and Urban Management
          Opinions on Energy-saving Lamp Expansion                                                             MGY
   5                                                       Bureau of Gaoming          19 February 2014
          Project of Foshan Electrical and Lighting Co.,                                                    [2014] No. 2
                                                           District (Environmental
          Ltd. Gaoming Branch
                                                           Protection)

          Approval from Environmental Protection
          Bureau of Gaoming District, Foshan City, of      Environmental Protection
   6      Environmental Impact Report on Expansion         Bureau of Gaoming          13 February 2015   MHS [2015] No. 14
          Project of Foshan Electrical and Lighting Co.,   District, Foshan City
          Ltd. Gaoming Branch

          Approval from Environmental Protection
          Bureau of Gaoming District, Foshan City, of      Environmental Protection
   7      Kiln Expansion and Flue Gas Control and          Bureau of Gaoming          26 November 2015 MHS [2015] No. 157
          Remediation Project of Foshan Electrical and     District, Foshan City
          Lighting Co., Ltd. Gaoming Branch

          Letter from Environmental Protection Bureau of
          Gaoming District, Foshan City of
                                                           Environmental Protection
          Environmental Protection Acceptance Opinions
   8                                                       Bureau of Gaoming          24 December 2015 MHY [2015] No. 83
          on Kiln Expansion and Flue Gas Control and
                                                           District, Foshan City
          Remediation Project of Foshan Electrical and
          Lighting Co., Ltd. Gaoming Branch

          Approval from Environmental Protection
          Bureau of Gaoming District, Foshan City, of
                                                           Environmental Protection
          Environmental Impact Report on New LED
   9                                                       Bureau of Gaoming          30 September 2017 MHS [2017] No. 138
          Luminaries R&D Production Base Construction
                                                           District, Foshan City
          Project of Foshan Electrical and Lighting Co.,
          Ltd. Gaoming Branch

          Approval from Environmental Protection
          Bureau of Gaoming District, Foshan City, of
                                                           Environmental Protection
          Environmental Impact Report on Glass Kiln
  10                                                       Bureau of Gaoming           14 January 2019   MHS [2019] No. 11
          (Change) Construction Project of Foshan
                                                           District, Foshan City
          Electrical and Lighting Co., Ltd. Gaoming
          Branch

          Letter from Foshan Municipal Ecology and
                                                           Ecology and Environment
  11      Environment Bureau of Environmental                                         12 September 2019 FMHY [2019] No. 126
                                                           Bureau of Foshan City
          Protection Acceptance Opinions on Solid Waste


                                                                                                                             81
 Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


           Pollution Prevention and Control Facility for
           New LED Luminaries R&D Production Base
           Construction Project (Phase I) of Foshan
           Electrical and Lighting Co., Ltd.

                                                                Ecology and Environment                          91440600784850061B
   12      Sewage Discharge License                                                              1 June 2020
                                                                Bureau of Foshan City                                   001U

           Reply on the Environmental Impact Report of
           Liuzhou Guige Lighting Technology Co., Ltd. Liuzhou             Environmental
   13                                                                                         25 September 2015 LHS Zi [2015] No. 134
           with an Annual Output of 1.35 Million Sets of Protection Bureau
           Auto Parts (Motor Vehicle Lamps)

           Reply    on    Completion        Acceptance     of
                                                                Liuzhou   Liudong       New
           Environmental Protection Facilities of Liuzhou
                                                                Area       Administrative                         LDSPHB Zi [2019]
   14      Guige Lighting Technology Co., Ltd. with an                                         28 October 2019
                                                                Examination and Approval                               No. 70
           Annual Output of 1.35 Million Sets of Auto
                                                                Bureau
           Parts (Motor Vehicle Lamps) (Solid Waste)

                                                                Liuzhou   Liudong       New
                                                                Area       Administrative                        914502000836092085
   15      Sewage Discharge License                                                              18 July 2020
                                                                Examination and Approval                                001V
                                                                Bureau



Contingency plan for environmental emergencies

The Company formulated the Contingency Plan for Environmental Emergencies of Foshan Electrical and

Lighting Co., Ltd. Gaoming Branch (Including Risk Assessment Report and Material Survey of Environmental

Emergencies in August 2017, had it reviewed by experts on 13 September 2017, and had it filed with the Foshan

Municipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2017-094-L) on 24

October 2017.

This document was revised in August 2020, reviewed by experts again on 7 September 2020, and filed with the

Foshan Municipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2020-056-M) on 25

September 2020.

In June 2018, Liuzhou Guige Lighting Technology Co., Ltd. completed the preparation of the Emergency Plan for

Environmental Emergencies of Liuzhou Guige Lighting Technology Co., Ltd. (including the Risk Assessment

Report for Environmental Emergencies and the Investigation Report for Emergency Resources for Environmental

Emergencies), which was reviewed by experts and released, and filed with Liudong Branch of Liuzhou

Environmental Protection Bureau on 29 August 2018 (No. 450203-2018-022-1). In August 2021, the Emergency

Plan for Environmental Emergencies of Liuzhou Guige Lighting Technology Co., Ltd. (including the Risk

                                                                                                                                     82
 Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021



Assessment Report for Environmental Emergencies and the Investigation Report for Emergency Resources for

Environmental Emergencies) was updated and compiled, passed the expert review and released, and on 27

December 2021, the Emergency Plan was filed with the Ecological Environment Bureau of Liudong New Area,

Liuzhou City (No. 450203-2021-0019-L).


Environmental self-monitoring plan

Foshan Electrical and Lighting Co., Ltd. Gaoming Branch developed an environmental self-monitoring plan,

numbered: FSLFMF001, at the beginning of the year. It entrusted a third-party environmental testing agency, GD

Veizhong Testing Technique Co., Ltd. (Veizhong Testing), to perform the annual inspection of the exhaust outlet.

All the inspection results were lower than the standard limits. Meanwhile, it accepted the annual supervision and

monitoring by local environmental protection departments. All the monitoring results were lower than the

standard limits.

Liuzhou Guige Lighting Technology Co., Ltd. has put in place the Self-monitoring Plan of Liuzhou Guige

Lighting Technology Co., Ltd. It entrusted a third-party environmental testing agency, Guangxi Zhongzhen

Testing Technology Co., Ltd., to perform the annual inspection of the exhaust outlet. All the inspection results

were lower than the standard limits. Meanwhile, it accepted the annual supervision and monitoring by local

environmental protection departments. All the monitoring results were lower than the standard limits.


Administrative punishments received with respect to environmental issues in the Reporting Period:
                                                                                  Impact on the
        The                Reason for
                                              Incompliance         Punishment         Company’s         Rectification
Company/subsidiary         punishment
                                                                                      operations

N/A                  N/A                    N/A              N/A                N/A                N/A

Other environment-related information that should be disclosed:

None.

Measures taken during the Reporting Period to reduce carbon emissions and the impact:

√Applicable □Not applicable

During the Reporting Period, the Company reduced electricity consumption under the same output value by

selecting high-efficiency and energy-saving equipment. The Company insists on constantly publicizing

environmental protection knowledge to employees, improving their awareness of environmental protection, and



                                                                                                                         83
 Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021



realizing the sustainable development goal of harmonious coexistence between enterprises and the environment

through the joint efforts of all employees.

Other relevant information:

None.

II Social Responsibility


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 ma

nagement on information disclosure and investor relations. We treat all our investors fairly and justly, en

sure their rights to know about, participate in and vote on the significant events of the Company, and sa

feguard 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 impro

ve 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 em

ployees as well as realize the common development of the employees and the Company. We also pay at

tention to the health of our employees, attach importance to production safety and labor protection, and i

mprove the working and living conditions for our employees so as to formulate harmonious and stable l

abor 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, mar

ket rules and the fair competition principle. We also improve our product quality and after-sales services



                                                                                                                    84
 Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021



 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 p

roprietary information, encourage and push them to continuously improve the quality of their products an

d 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. Production Safety, Environmental Protection and Sustainable Development

The Company sees production safety, environmental protection and energy conservation as an important p

art of its strategy of sustainable development. It implements accountability systems in relation environme

ntal protection and production safety in strict accordance with the applicable laws and regulations. In add

ition, it is ISO9001-(a quality management system), IATF16949-(a quality management system), ISO1400

1-(an environment management system), ISO45001-(a management system for occupational health and saf

ety) and ISO50001-(an energy management system) certified. In 2018, upon the review and publication b

y the Ministry of Industry and Information Technology, the Company was certified as one of the second

 batch of National Demonstration Entity of Green Factory.

6. Public relations and welfare

We attach importance to the realization of our social value and see creating a prosperous society as a c

ommitment that we should take on, trying to boost the local economy through our own development. W

e have been granted by the local government the title of “Foshan Over-100-Million Tax Payer” for man

y years due to our contributions in boosting the harmonious development of the Company and the comm

unity.

III Efforts in Poverty Alleviation and Rural Revitalization


During the Reporting Period, the Company actively responded to the call to consolidate the achievements of

poverty alleviation and revitalize the countryside, and carried out the work of helping farmers with consumption

to facilitate rural revitalization. During the Reporting Period, the Company actively purchased characteristic

agricultural products from Wuhua County, Meizhou City, with a purchase amount of nearly RMB1 million.




                                                                                                               85
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021




                                       Part VI Significant Events

I Fulfillme nt of Commitme nts

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    Term of
                                           Type of                                                                    Fulfillme
 Commitment             Promisor                          Details of commitment           commitme      commitme
                                     commitment                                                                          nt
                                                                                          nt making        nt

                                                     Electronics Group and Hong
                                                     Kong Rising Investment have
                                                     made 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
Commitments
                                                     Company for now, if the
made in             Electronics
                                    About            products or business of them or
acquisition         Group and                                                             4
                                    avoidance of     their relevant enterprises
documents or        Hong Kong                                                             December      Long-term     Ongoing
                                    horizontal       become the same with or
shareholding        Rising                                                                2015
                                    competition      similar to those of the Company
alteration          Investment
                                                     or its subsidiaries in the future,
documents
                                                     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


                                                                                                                                  86
Foshan Electrical and Lighting Co., Ltd.                                                               Annual Report 2021


                                                   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 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.

                                                   1. Rising Group will take active
                                                   measures to avoid any business
                                                   or activity that competes or may
                                                   compete with the principal
                                                   business of the Company and its
                                                   auxiliary enterprises, and urge
                                                   the Promisor to control
                                                   enterprises to avoid any
                                                   business or activity that
                                                   competes or may compete with

                                    About          the principal business of the

                                    avoidance of   Company and its auxiliary
                                                                                       4
                                    horizontal     enterprises. 2. If Rising Group
                  Rising Group                                                         November   Long-term   Ongoing
                                    competition    and its controlled enterprises
                                                                                       2021
                                                   are given the opportunity to
                                                   engage in new business that
                                                   constitutes or may constitute
                                                   horizontal competition with the
                                                   principal businesses of the
                                                   Company and its auxiliary
                                                   enterprises, Rising Group will
                                                   make every effort to make the
                                                   business opportunity first
                                                   available to the Company or its
                                                   auxiliary enterprises on
                                                   reasonable and fair terms and


                                                                                                                        87
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


                                                        conditions on the premise that
                                                        conditions permit and in the
                                                        interest of the listed company.

                                                       Electronics Group 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
                                                       their position as the controlling
                                                       shareholder and actual controller;
                                                       2. make sure that they or their
                                                       other controlled subsidiaries,
                                                       branch offices, jointly-run or
                                                       associated companies (the
                                    About reduction
                Electronics Group                      "Relevant Enterprises" for short)
                                    and regulation                                            4 December
                and Hong Kong                          will try their best to avoid or                     Long-term   Ongoing
                                    of related-party                                          2015
                Rising Investment                      reduce related-party transactions
                                    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


                                                                                                                                 88
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


                                            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.

                                            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 companies (the
                                            "Relevant Enterprises" for short)
                                            will try their best to avoid or
                                            reduce related-party transactions
                                            with the Company or the               4 November
                Rising Group                                                                   Long-term   Ongoing
                                            Company’s subsidiaries; 3. strictly 2021
                                            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.

                Electronics Group           In order to ensure the
                                    About                                         4 December Long-term     Ongoing
                and Hong Kong               independence of the Company in

                                                                                                                     89
Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021


                Rising Investment independence   business, personnel, asset,            2015
                                                 organization and finance,
                                                 Electronics Group 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
                                                 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


                                                                                                              90
Foshan Electrical and Lighting Co., Ltd.                                         Annual Report 2021


                                           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
                                           products. (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


                                                                                                91
Foshan Electrical and Lighting Co., Ltd.                                                            Annual Report 2021


                                           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 financial decisions
                                           independently and that they will
                                           not illegally intervene in the
                                           Company’s use of its funds.

                                           To maintain the independence of
                                                                                 4 November
                Rising Group               the Company, Rising Group has                      Long-term   Ongoing
                                                                                 2021
                                           made the following commitments:


                                                                                                                    92
Foshan Electrical and Lighting Co., Ltd.                                          Annual Report 2021


                                           1. It will ensure the personnel
                                           independence of the Company. It
                                           promises to ensure personnel
                                           independence with the Company,
                                           and GM, deputy GMs, CFO,
                                           Company Secretary and other
                                           senior management personnel of
                                           the Company will not hold
                                           positions other than directors and
                                           supervisors in the enterprises
                                           wholly owned, controlled or
                                           actually controlled by it and its
                                           subsidiaries (hereinafter referred
                                           to as "subsidiaries"), and will not
                                           receive salaries from it or its
                                           subsidiaries. The Company’s
                                           financial personnel do not hold
                                           concurrent positions in it or its
                                           subsidiaries. 2. It will ensure the
                                           asset independence and integrity
                                           of the Company: (1) It promises
                                           that the Company will have
                                           independent and complete assets.
                                           And (2) It promises that it and its
                                           subsidiaries will not illegally
                                           occupy the Company’s funds and
                                           assets in any way. 3. It will ensure
                                           the financial independence of the
                                           Company: (1) It promises that the
                                           Company will have an
                                           independent financial department
                                           and financial accounting system.
                                           (2) It promises that the Company
                                           will have a standardized and
                                           independent financial accounting
                                           system. (3) It promises that the
                                           Company will have independent
                                           bank accounts and not share bank
                                           accounts with it. (4) It promises
                                           that the Company’s financial
                                           personnel do not hold concurrent
                                           positions in it or its subsidiaries.
                                           And (5) It promises that the
                                           Company can make financial


                                                                                                 93
Foshan Electrical and Lighting Co., Ltd.                                                                 Annual Report 2021


                                                   decisions independently and that
                                                   they will not illegally intervene in
                                                   the Company’s use of its funds. 4.
                                                   It will ensure the independence of
                                                   the Company in organization: (1)
                                                   It promises that the Company can
                                                   operate independently with an
                                                   independent and complete
                                                   organization structure. (2) It
                                                   promises that the office and
                                                   production and business premises
                                                   of the Company are separated
                                                   from those of Rising Group. And
                                                   (3) It promises that the Board of
                                                   Directors, the Board of
                                                   Supervisors and various
                                                   functional departments of the
                                                   Company operate independently,
                                                   and there is no subordinate
                                                   relationship with the functional
                                                   departments of Rising Group. And
                                                   5 It will ensure the independence
                                                   of the Company in business: (1) It
                                                   promises that the Company will
                                                   have independence in business.
                                                   And (2) It promises 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.

                  FSL                               1. They shall conduct
                                                    supervision and restraint on the
                                                    production and operation
                                                    activities of themselves and
Commitments
                                    About           their relevant enterprises so that
made in                                                                                   27
                                    avoidance of    besides the enterprise above
shareholding                                                                              October   Long-term   Ongoing
                                    horizontal      that is in horizontal competition
alteration                                                                                2021
                                    competition     with NATIONSTAR for now, if
documents
                                                    the products or business of them
                                                    or their relevant enterprises
                                                    become the same with or
                                                    similar to those of


                                                                                                                          94
Foshan Electrical and Lighting Co., Ltd.                                                                  Annual Report 2021


                                                    NATIONSTAR or its
                                                    subsidiaries in the future, they
                                                    shall take the following
                                                    measures: (1) If NATIONSTAR
                                                    thinks necessary, they and their
                                                    relevant enterprises shall reduce
                                                    and wholly transfer their
                                                    relevant assets and business;
                                                    and (2) If NATIONSTAR 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 FSL are also
                                                    applicable to their directly or
                                                    indirectly controlled
                                                    subsidiaries. They are obliged
                                                    to urge and make sure that other
                                                    subsidiaries execute what’s
                                                    prescribed in the relevant
                                                    document and faithfully honor
                                                    all the relevant commitments. 3.
                                                    If they or their directly or
                                                    indirectly controlled
                                                    subsidiaries break the aforesaid
                                                    commitments and thus cause a
                                                    loss for NATIONSTAR, they
                                                    shall compensate
                                                    NATIONSTAR on a rational
                                                    basis.

                  FSL                               1. FSL and enterprises under its     7 October   Long-term   Ongoing
                                                    control (except NATIONSTAR           2021
                                                    and its subsidiaries) will reduce
                                                    and standardize related
Commitments                         About           transactions with
made in                             reduction and   NATIONSTAR and its
                                                    subsidiaries.
shareholding                        regulation of
alteration                          related-party   2. In case of any inevitable or

documents                           transactions    reasonably justified related
                                                    party transactions, FSL and
                                                    enterprises under its control
                                                    (exceFpt NATIONSTAR and its



                                                                                                                           95
Foshan Electrical and Lighting Co., Ltd.                                                                 Annual Report 2021


                                                    subsidiaries) will strictly abide
                                                    by the market principles,
                                                    conduct related party
                                                    transactions with
                                                    NATIONSTAR fairly and
                                                    reasonably based on the general
                                                    principles of equality, mutual
                                                    benefit, equal value and
                                                    compensation, and perform
                                                    legal procedures in accordance
                                                    with laws, regulations,
                                                    normative documents and
                                                    relevant regulations of
                                                    NATIONSTAR.

                  FSL                               In order to promote the             7 October   Long-term   Ongoing
                                                    standardized management of          2021
                                                    NATIONSTAR, legally and
                                                    compliantly exercise
                                                    shareholders' rights and fulfill
                                                    corresponding obligations, and
                                                    take practical and effective
                                                    measures to ensure the
                                                    independence of
                                                    NATIONSTAR in personnel,
                                                    assets, finance, institutions and
                                                    business, the Promisor
                                                    promises:

                                                    (I) It will ensure the
                                                    independence of
                                                    NATIONSTAR in personnel

                                                    1. FSL promises that GM,
                                    About           deputy GMs, CFO, Company
                                                    Secretary and other senior
                                    maintaining
                                                    management personnel of
                                    independence    NATIONSTAR will not hold
                                                    any positions in FSL and other
                                    of the listed   enterprises under its control
                                    company         (except NATIONSTAR and its
                                                    controlled enterprises, the same
                                                    below) other than director and
                                                    supervisor, and not receive
                                                    salaries from in FSL and other
                                                    enterprises under its control;

                                                    2. It will ensure
                                                    NATIONSTAR’s absolute
                                                    independence from FSL and
                                                    enterprises under its control in
                                                    labor, human resource and
                                                    salary management.

                                                    (II) It will ensure the
                                                    independence of
                                                    NATIONSTAR in asset

                                                    1. FSL promises that
                                                    NATIONSTAR will have
                                                    independent and complete


                                                                                                                          96
Foshan Electrical and Lighting Co., Ltd.                                       Annual Report 2021


                                           operating assets related to
                                           operation;

                                           2. FSL promises that the funds,
                                           assets and other resources of
                                           NATIONSTAR will not be
                                           illegally occupied.

                                           (III) It will ensure the
                                           independence of
                                           NATIONSTAR in finance

                                           1. It promises that
                                           NATIONSTAR will have an
                                           independent financial
                                           department, and independent
                                           financial accounting system and
                                           financial accounting rules.

                                           2. It promises that
                                           NATIONSTAR will have
                                           independent bank accounts and
                                           not share bank accounts with
                                           FSL and other enterprises under
                                           its control;

                                           3. It promises that the financial
                                           personnel of NATIONSTAR do
                                           not work part-time and receive
                                           salaries in FSL and other
                                           enterprises under its control;

                                           4. It promises that
                                           NATIONSTAR will
                                           independently pay its tax
                                           according to law;

                                           And (5) It promises that
                                           NATIONSTAR can make
                                           financial decisions
                                           independently and that it will
                                           not illegally intervene in
                                           NATIONSTAR’s use of its
                                           funds.

                                           (IV) It will ensure the
                                           independence of
                                           NATIONSTAR in organization

                                           It promises that the listed
                                           company has a sound corporate
                                           governance structure as a
                                           joint-stock company with an
                                           independent and complete
                                           organization structure.

                                           (V) It will ensure the
                                           independence of
                                           NATIONSTAR in business

                                           It promise that NATIONSTAR
                                           remains independent in
                                           procurement, production, sales
                                           and intellectual property rights,
                                           and that NATIONSTAR will
                                           have the assets, personnel,
                                           qualifications and capabilities
                                           for it to operate independently
                                           as well as the ability of
                                           independent, sustainable

                                                                                              97
Foshan Electrical and Lighting Co., Ltd.                                                                     Annual Report 2021


                                                      operation in the market.

Commitments       FSL               About             1. FSL does not disclose the
made during                         absence of        relevant insider information of
asset                               insider trading   this trading or make use of the
restructuring                                         insider information for insider
                                                      trading; 2. As of the issuance
                                                      date of the Report on Major
                                                      Asset Purchase and Related
                                                      Party Trading of Foshan
                                                                                                     From the
                                                      Electrical and Lighting Co.,
                                                                                                     time when
                                                      Ltd. (Draft), FSL has not been
                                                                                                     the
                                                      placed on file for investigation
                                                                                                     Company
                                                      or criminal investigation due to
                                                                                                     plans the
                                                      suspected insider trading related
                                                                                                     major
                                                      to this trading, and has not been
                                                                                                     asset
                                                      subject to administrative            27
                                                                                                     restructuri
                                                      punishment by the CSRC or            October                 Ongoing
                                                                                                     ng to the
                                                      criminal responsibility              2021
                                                                                                     date when
                                                      investigated by judicial organs
                                                                                                     the major
                                                      according to law for insider
                                                                                                     asset
                                                      trading related to any major
                                                                                                     restructuri
                                                      asset restructuring, and has not
                                                                                                     ng is
                                                      been prohibited from engaging
                                                                                                     completed
                                                      in any major asset restructuring
                                                                                                     .
                                                      of listed companies according
                                                      to Article 13 of the Interim
                                                      Provisions on Strengthening the
                                                      Supervision of Abnormal Stock
                                                      Trading Related to Major Asset
                                                      Restructuring of Listed
                                                      Companies in the last 36
                                                      months.

                                                      1. FSL is not subject to any
                                    About
                                                      securities and futures crimes as
                                    compliance                                                       To 6
                                                      stipulated in Article 6 of Several
                                    with Several                                                     months
                                                      Provisions on the Reduction of
                                    Provisions on                                                    after the
                                                      Shares by Shareholders,
                                    the Reduction                                          27        implement
                                                      Directors and Supervisors of
                  FSL               of Shares by                                           October   ation of      Ongoing
                                                      Listed Companies. During the
                                    Shareholders,                                          2021      major
                                                      period when the CSRC or the
                                    Directors and                                                    asset
                                                      judicial organ filed a case for
                                    Supervisors of                                                   restructuri
                                                      investigation, and less than six
                                    Listed                                                           ng
                                                      months after the administrative
                                    Companies
                                                      penalty decision and criminal

                                                                                                                             98
Foshan Electrical and Lighting Co., Ltd.                                                                  Annual Report 2021


                                                  judgment were made, there was
                                                  no situation that the shares of
                                                  NATIONSTAR could not be
                                                  reduced due to violation of the
                                                  rules of stock exchanges and
                                                  public censure by stock
                                                  exchanges for less than three
                                                  months. 2. If the commitment
                                                  maker still holds shares in
                                                  NATIONSTAR after this
                                                  transaction, the commitment
                                                  maker shall be subject to the
                                                  following regulations:
                                                  (1) Within the six months
                                                  following the completion of this
                                                  transaction, if the commitment
                                                  maker intends to reduce by way
                                                  of centralized bidding at the
                                                  stock exchange the shares
                                                  obtained in this transaction, the
                                                  commitment maker shall report
                                                  to the stock exchange and
                                                  disclose the shareholding
                                                  reduction plan (which will be
                                                  kept for record by the stock
                                                  exchange) 15 trading days
                                                  before the first sale.
                                                  (2) Within the six months
                                                  following the completion of this
                                                  transaction, if the commitment
                                                  maker intends to reduce by way
                                                  of centralized bidding at the
                                                  stock exchange within three
                                                  months the shares obtained in
                                                  this transaction, the total shares
                                                  reduced shall not exceed 1% of
                                                  NATIONSTAR’s total shares.

                                                  1. As of the date of issuance of               Within the
                                                  the letter of commitment, the                  three
                                                  listed company has not received      27        years
                                    About legal
                  FSL                             any criminal punishment or           October   preceding      Expired
                                    compliance
                                                  administrative punishment            2021      the date of
                                                  related to the securities market               issuance
                                                  in the last three years, and has               of the


                                                                                                                          99
Foshan Electrical and Lighting Co., Ltd.                                              Annual Report 2021


                                           not been subject to any major       letter of
                                           civil lawsuit or arbitration        commitme
                                           related to economic disputes.       nt
                                           The listed company has no           (inclusive)
                                           other major acts of dishonesty
                                           publicly condemned by any
                                           stock exchange in the last 12
                                           months; the listed company has
                                           been in good faith, and has not
                                           failed to repay large debts on
                                           schedule, failed to fulfill its
                                           commitments, been taken
                                           administrative supervision
                                           measures by the CSRC, or been
                                           disciplined by any stock
                                           exchange. 2. Up to the date of
                                           this Letter of Commitment, the
                                           listed company has not been
                                           investigated by the judicial
                                           organ for suspected crimes or
                                           by the CSRC for suspected
                                           violations of laws and
                                           regulations, nor has it been
                                           investigated for suspected
                                           involvement in insider trading
                                           in relation to major asset
                                           restructuring with pending
                                           conclusion, in the last three
                                           years.
                                           3. Up to the date of this Letter
                                           of Commitment, the existing
                                           directors, supervisors and senior
                                           management of the listed
                                           company had held offices in the
                                           company in a way that is in
                                           compliance with the applicable
                                           laws, administrative
                                           regulations, regulatory
                                           documents and the company’s
                                           Articles of Association. No
                                           current or former government
                                           officials, party cadres at
                                           universities have had full-time
                                           or part-time jobs in the


                                                                                                    100
Foshan Electrical and Lighting Co., Ltd.                                                                  Annual Report 2021


                                                      company in an illegal manner.

                                                      1. FSL has provided relevant
                                                      information and documents
                                                      (including but not limited to
                                                      original written materials,
                                                      duplicate materials or oral
                                                      testimony, etc.) related to this
                                                      trading to the intermediaries
                                                      providing professional services
                                                      of auditing, valuation, legal and
                                                      financial consultancy for this
                                                      trading. FSL promises that the
                                                      copies or photocopies of the
                                                      documents and materials
                                                      provided are consistent with the
                                                      originals, and that the signatures
                                    About the         and seals of the documents and
                                    truthfulness,     materials are authentic, and the
                                    accuracy and      signatories of the documents
                                    completeness      have been legally authorized
                                                                                           27
                                    of the            and effectively signed the
                  FSL                                                                      October   Long-term   Ongoing
                                    information       documents; that the provided
                                                                                           2021
                                    provided          information and documents are
                                    during this       authentic, accurate and
                                    major asset       complete and that there are no
                                    restructuring     false records, misleading
                                                      statements or material
                                                      omissions. FSL also promises to
                                                      bear individual and joint and
                                                      several liability. 2. The
                                                      commitment maker promises
                                                      that the information provided is
                                                      true, accurate and complete.
                                                      Where any investor suffers a
                                                      loss as a result of any
                                                      misrepresentation, misleading
                                                      statement or material omission
                                                      in the information provided, the
                                                      commitment maker shall be
                                                      liable for compensation
                                                      according to law.

                  Director and      About             1. They promise not to transfer
                                                                                           27
                  senior            measures to       benefits to other units or                     Long-term   Ongoing
                                                                                           October
                  management        fill up returns   individuals free of charge or

                                                                                                                           101
Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021


                  office of FSL     for risks       under unfair conditions, and not     2021
                                    arising from    to harm the interests of the
                                    diluting        Company in any other ways; 2.
                                    immediate       They promise to restrain
                                    return in       position-related consumption
                                    major asset     behavior; 3. They promise not
                                    restructuring   to use the Company's assets to
                                                    engage in investment and
                                                    consumption activities
                                                    unrelated to the performance of
                                                    duties; 4. They promise that the
                                                    future remuneration system
                                                    formulated by the Board of
                                                    Directors or the Remuneration
                                                    and Assessment Committee will
                                                    be linked to the implementation
                                                    of the Company's measures to
                                                    fill up returns; 5. If the
                                                    Company formulates an equity
                                                    incentive plan in the future,
                                                    they will actively promote the
                                                    exercise conditions of the future
                                                    equity incentive plan to be
                                                    linked with the implementation
                                                    of the Company's measures to
                                                    fill up returns; 6. From the date
                                                    of issuance of these
                                                    commitments to the completion
                                                    of this major asset restructuring
                                                    of the Company, if the CSRC
                                                    makes other new regulatory
                                                    provisions on measures to fill
                                                    up returns and the relevant
                                                    commitments, and these
                                                    commitments cannot meet these
                                                    provisions of the CSRC, they
                                                    promise to issue supplementary
                                                    commitments in accordance
                                                    with the latest regulations of the
                                                    CSRC at that time. 7. They
                                                    promise to earnestly fulfill the
                                                    compensation measures
                                                    formulated by the Company and
                                                    any commitments it made. If


                                                                                                              102
Foshan Electrical and Lighting Co., Ltd.                                                                     Annual Report 2021


                                                    they violate any of these
                                                    commitments and cause losses
                                                    to the Company or investors,
                                                    they are willing to bear
                                                    corresponding legal
                                                    responsibilities to the Company
                                                    or investors according to law.

                                                    1. They promise that there will
                                                    be no share reduction plan from
                                                    the date of issuance of this
                                                    Letter of Commitments to the
                                                    completion of this trading, and
                                                    they will not reduce its FSL
                                                    shares (if any) in any other way.
                                                    2. If FSL implements ex-rights
                                                    behaviors such as share
                                                    conversion, share offering and
                                                    share allotment from the date of
                                                    issuance of this Letter of
                                                    Commitments to the completion
                                                    of this trading, the newly added
                                                    shares obtained by them will
                                                    also be subject to the above
                                    About
                                                    commitments related to not
                  Director and      non-reduction
                                                    reducing share holdings. 3.           28          Until this
                  senior            of FSL shares
                                                    Where FSL or any other                September   trading is   Ongoing
                  management        during major
                                                    investor suffers a loss as a result   2021        completed
                  office of FSL     asset
                                                    of my violation of the aforesaid
                                    restructuring
                                                    commitment, I shall be liable
                                                    for compensation to FSL and
                                                    investors according to law.
                                                    They promise that they have the
                                                    right to enter into this Letter of
                                                    Commitments, and once this
                                                    Letter of Commitments is
                                                    entered into by them, it will
                                                    constitute an effective, legal and
                                                    binding responsibility upon
                                                    them, and this Letter of
                                                    Commitments will remain valid
                                                    and irrevocable. They promise
                                                    to strictly fulfill all
                                                    commitments in this Letter of
                                                    Commitments. In case of


                                                                                                                             103
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


                                                      violation of this Letter of
                                                      Commitments, they will bear
                                                      relevant legal responsibilities.

                                                      1. They do not disclose the
                                                      relevant insider information of
                                                      this trading or make use of the
                                                      insider information for insider
                                                      trading; 2. They have not been
                                                      placed on file for investigation
                                                      or criminal investigation due to
                                                      suspected insider trading related                From the
                                                      to this trading, and have not                    time when
                                                      been subject to administrative                   the
                                                      punishment by the CSRC or                        Company
                                                      criminal responsibility                          plans the
                                                      investigated by judicial organs                  major
                  Director and                        according to law for insider                     asset
                                    About                                                  27
                  senior                              trading related to major asset                   restructuri
                                    absence of                                             October                    Ongoing
                  management of                       restructuring, and has not been                  ng to the
                                    insider trading                                        2021
                  FSL                                 prohibited from engaging in any                  date when
                                                      major asset restructuring of                     the major
                                                      listed companies according to                    asset
                                                      Article 13 of the Interim                        restructuri
                                                      Provisions on Strengthening the                  ng is
                                                      Supervision of Abnormal Stock                    completed
                                                      Trading Related to Major Asset                   .
                                                      Restructuring of Listed
                                                      Companies in the last 36
                                                      months. 3. In case of violation
                                                      of the above commitments, they
                                                      will bear all losses caused to the
                                                      listed company and its
                                                      shareholders.

                                                      1. As of the date of issuance of                 Within
                                                      the Letter of Commitments,                       three
                                                      they have and abide by the                       years
                                                      qualifications and obligations                   preceding
                  Directors and
                                                      stipulated in the Company Law        28          the date of
                  senior            About legal
                                                      of the People's Republic of          September   the            Expired
                  management of     compliance
                                                      China and other laws,                2021        issuance
                  FSL
                                                      regulations, normative                           of the
                                                      documents and the Articles of                    letter of
                                                      Association of the Company,                      commitme
                                                      and their employments are                        nt

                                                                                                                                104
Foshan Electrical and Lighting Co., Ltd.                                                                 Annual Report 2021


                                                    made through legal procedures.                 (inclusion
                                                    They do not hold any                           )
                                                    concurrent positions prohibited
                                                    by relevant laws, regulations,
                                                    normative documents, Articles
                                                    of Association, relevant
                                                    regulatory authorities and
                                                    part-time units (if any). 2. As of
                                                    the date of issuance of the
                                                    Letter of Commitments, they
                                                    have not violated the relevant
                                                    provisions of the Company Law
                                                    of the People's Republic of
                                                    China, have not been subject to
                                                    any criminal punishment in the
                                                    last 36 months, have not been
                                                    subject to administrative
                                                    punishment by the CSRC, have
                                                    not been subject to any public
                                                    censure by any stock exchange
                                                    in the last 12 months and have
                                                    not been subject to any
                                                    outstanding or foreseeable
                                                    major litigation or arbitration
                                                    cases related to economic
                                                    disputes in the last 36 months.
                                                    3. As of the date of issuance of
                                                    the Letter of Commitments,
                                                    they have been in good faith,
                                                    have no other major acts of
                                                    dishonesty and have not failed
                                                    to repay large debts on
                                                    schedule, failed to fulfill their
                                                    commitments, been taken
                                                    administrative supervision
                                                    measures by the CSRC, or been
                                                    disciplined by any stock
                                                    exchange in the last 36 months.

                                    About the       1. They have provided relevant
                  Directors and     truthfulness,   information and documents
                                                                                         27
                  senior            accuracy and    (including but not limited to
                                                                                         October   Long-term    Ongoing
                  management of     completeness    original written materials,
                                                                                         2021
                  FSL               of the          duplicate materials or oral
                                    information     testimony, etc.) related to this


                                                                                                                          105
Foshan Electrical and Lighting Co., Ltd.                                                 Annual Report 2021


                                    provided        trading to the intermediaries
                                    during this     providing professional services
                                    major asset     of auditing, assessment, legal
                                    restructuring   and financial consultancy for
                                                    this trading. They promise that
                                                    the copies or photocopies of the
                                                    documents and materials
                                                    provided are consistent with the
                                                    originals, and that the signatures
                                                    and seals of the documents and
                                                    materials are authentic, and the
                                                    signatories of the documents
                                                    have been legally authorized
                                                    and effectively signed the
                                                    documents; that the provided
                                                    information and documents are
                                                    authentic, accurate and
                                                    complete and that there are no
                                                    false records, misleading
                                                    statements or material
                                                    omissions. They also promise to
                                                    bear individual and joint and
                                                    several liability. 2. They
                                                    promise that the information
                                                    provided is true, accurate and
                                                    complete. In case of any losses
                                                    caused to investors due to any
                                                    false presentations, misleading
                                                    statements or material
                                                    omissions in the information
                                                    provided, they will be liable for
                                                    compensation according to law.
                                                    3. Where the information
                                                    provided or disclosed by them
                                                    in this trading is suspected of
                                                    false records, misleading
                                                    statements or material
                                                    omissions, and they are filed for
                                                    investigation by the judicial
                                                    organ or by the CSRC, the
                                                    shares with interests in the
                                                    listed company will not be
                                                    transferred until the
                                                    investigation conclusion is


                                                                                                       106
Foshan Electrical and Lighting Co., Ltd.                                                                 Annual Report 2021


                                                      formed.

                                                      1. They promise not to interfere
                                                      in the operation and
                                                      management activities of the
                                                      listed company beyond their
                                                      authority and not to encroach on
                                                      the interests of the listed
                                                      company. 2. From the date of
                                                      issuance of these commitments
                                                      to the completion of this trading
                                                      of the listed company, if the
                                                      CSRC makes new regulatory
                                                      requirements on measures to fill
                                                      up returns and commitments of
                                                      relevant personnel, and the
                                                      above commitments cannot
                                                      meet these new regulatory
                  Rising Group,                       requirements of the CSRC, they
                  Rising Capital,                     promise to issue supplementary
                  Electronics                         commitments according to the
                  Group,            About             latest regulations of the CSRC
                  Hongkong Wah      effective         at that time. 3. They promise to    27
                  Shing, Hong       performance       earnestly fulfill the measures to   October   Long-term   Ongoing
                  Kong Rising       of measures to    fill up returns formulated by the   2021
                  Investment and    fill up returns   listed company and any
                  Shenzhen                            commitments made by them. If
                  Rising                              they violate these commitments
                  Investment                          and causes losses to the listed
                                                      company or investors, they are
                                                      willing to bear the
                                                      compensation responsibility for
                                                      the listed company or investors
                                                      according to law. As one of the
                                                      subjects responsible for the
                                                      measures to fill up returns, if
                                                      they violate the above
                                                      commitments or refuses to
                                                      fulfill the above commitments,
                                                      they agree that the securities
                                                      regulatory agencies such as the
                                                      CSRC and the SZSE will
                                                      punish them or take relevant
                                                      regulatory measures in
                                                      accordance with the relevant


                                                                                                                          107
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


                                                    regulations and rules they
                                                    formulated or issued.

                                                    1. They promise that there will
                                                    be no share reduction plan from
                                                    the date of issuance of this
                                                    Letter of Commitments to the
                                                    completion of this trading, and
                                                    they will not reduce its FSL
                                                    shares in any other way (except
                                                    the transfer or transfer between
                                                    Rising      Group         and       its
                  Rising Group,
                                                    wholly-owned subsidiaries). 2.
                  Rising Capital,
                                                    If FSL implements ex-rights
                  Electronics
                                    About           behaviors        such     as    share
                  Group,
                                    non-reduction   conversion, share offering and                        Until the
                  Hongkong Wah                                                                28
                                    of FSL shares   share allotment from the date of                      completio
                  Shing, Hong                                                                 September                Ongoing
                                    during major    issuance    of     this   Letter    of                n of this
                  Kong Rising                                                                 2021
                                    asset           Commitments to the completion                         trading
                  Investment and
                                    restructuring   of this trading, the newly added
                  Shenzhen
                                                    shares obtained by them will
                  Rising
                                                    also be subject to the above
                  Investment
                                                    commitments related to not
                                                    reducing share          holdings.   3.
                                                    Where      FSL     or     any   other
                                                    investor suffers a loss as a result
                                                    of our violation of the aforesaid
                                                    commitment, we shall be liable
                                                    for compensation to FSL and
                                                    investors according to law.



                                                    1. They shall conduct
                                                    supervision and restraint on the
                                                    production and operation
                                                    activities of themselves and
                                                    their relevant enterprises so that
                  Rising Group,     About
                                                    besides the enterprise above              27
                  Rising Capital,   avoidance of
                                                    that is in horizontal competition         October     Long-term    Ongoing
                  and Hongkong      horizontal
                                                    with FSL for now, if the                  2021
                  Wah Shing         competition
                                                    products or business of them or
                                                    their relevant enterprises
                                                    become the same with or
                                                    similar to those of FSL or its
                                                    subsidiaries in the future, they



                                                                                                                                 108
Foshan Electrical and Lighting Co., Ltd.                                                                  Annual Report 2021


                                                     shall take the following
                                                     measures: (1) If FSL thinks
                                                     necessary, they and their
                                                     relevant enterprises shall reduce
                                                     and wholly transfer their
                                                     relevant assets and business;
                                                     and (2) If FSL 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 FSL are also
                                                     applicable to their directly or
                                                     indirectly controlled
                                                     subsidiaries. They are obliged
                                                     to urge and make sure that other
                                                     subsidiaries execute what’s
                                                     prescribed in the relevant
                                                     document and faithfully honor
                                                     all the relevant commitments. 3.
                                                     If they or their directly or
                                                     indirectly controlled
                                                     subsidiaries break the aforesaid
                                                     commitments and thus cause a
                                                     loss for FSL, they shall
                                                     compensate FSL on a rational
                                                     basis.

                                                     They have made a commitment
                                                     that during their direct or
                                                     indirect holding of FSL’s
                                                     shares, they shall 1. strictly
                                                     abide by the regulatory
                                    About
                  Rising Group,                      documents of the CSRC and the
                                    regulation and                                         27
                  Rising Capital,                    SZSE, FSL’s Articles of
                                    reduction of                                           October   Long-term   Ongoing
                  and Hongkong                       Association, etc. and not harm
                                    related-party                                          2021
                  Wah Shing                          the interests of the Company or
                                    transactions
                                                     other shareholders of FSL in
                                                     their production and operation
                                                     activities by taking advantage
                                                     of their position as the
                                                     controlling shareholder and


                                                                                                                           109
Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021


                                                    actual controller; 2. make sure
                                                    that they or their other
                                                    controlled subsidiaries, branch
                                                    offices, jointly-run or associated
                                                    companies (the "Relevant
                                                    Enterprises" for short) will try
                                                    their best to avoid or reduce
                                                    related-party transactions with
                                                    FSL or FSL’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 FSL,
                                                    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 FSL, its
                                                    subsidiaries or FSL’s other
                                                    shareholders, they shall be
                                                    obliged to compensate.

                                    Explanation     As of the issuance date of the
                                                                                                   Within the
                                    about not       Report on Major Asset
                                                                                                   three
                                    prohibited      Purchase and Related Party
                                                                                                   years
                  Shenzhen          from            Trading of Foshan Electrical
                                                                                                   preceding
                  Rising            participating   and Lighting Co., Ltd. (Draft),
                                                                                         27        the date of
                  Hongkong Wah      in of any       they have not been placed on
                                                                                         October   issuance       Expired
                  Shing, and        major asset     file for investigation or criminal
                                                                                         2021      of the
                  Hongkong Wah      restructuring   investigation due to suspected
                                                                                                   letter of
                  Shing             of listed       insider trading related to this
                                                                                                   commitme
                                    companies as    trading, and has not been
                                                                                                   nt
                                    stipulated in   subject to administrative
                                                                                                   (inclusive)
                                    Article 13 of   punishment by the CSRC or


                                                                                                                            110
Foshan Electrical and Lighting Co., Ltd.                                                                     Annual Report 2021


                                    the Interim      criminal responsibility
                                    Provisions on    investigated by judicial organs
                                    Strengthening    according to law for insider
                                    the              trading related to any major
                                    Supervision of   asset restructuring in the last 36
                                    Abnormal         months. The relevant entities of
                                    Stock Trading    this trading are not prevented
                                    Related to       from participating in any major
                                    Major Asset      asset restructuring of listed
                                    Restructuring    companies according to Article
                                    of Listed        13 of the Interim Provisions on
                                    Companies        Strengthening the Supervision
                                                     of Abnormal Stock Trading
                                                     Related to Major Asset
                                                     Restructuring of Listed
                                                     Companies.

                                                     1. They have not been
                                                     investigated by the judicial
                                                     organ for suspected crimes or
                                                     by the CSRC for suspected
                                                     violations of laws and
                                                     regulations, and there is no
                                                     administrative punishment                      Within the
                                                     (except those obviously                        three
                  Shenzhen
                                                     unrelated to the securities                    years
                  Rising
                                                     market) or criminal punishment                 preceding
                  Investment,
                                                     in the last three years; 2. They     27        the date of
                  Hong Kong         About legal
                                                     have not failed to repay large       October   issuance       Expired
                  Rising            compliance
                                                     debts on schedule, failed to         2021      of the
                  Investment, and
                                                     fulfill their commitments, been                letter of
                  Hongkong Wah
                                                     taken administrative                           commitme
                  Shing
                                                     supervision measures by the                    nt
                                                     CSRC, or been disciplined by                   (inclusive)
                                                     any stock exchange, have not
                                                     been publicly condemned by
                                                     any stock exchange, have no
                                                     other major acts of dishonesty
                                                     and have no any other bad
                                                     record in the last three years.

                  Directors,        Explanation      As of the issuance date of the                 Within the
                  supervisors and   about not        Report on Major Asset                27        three
                  senior            prohibited       Purchase and Related Party           October   years          Expired
                  management        from             Trading of Foshan Electrical         2021      preceding
                  personnel of      participating    and Lighting Co., Ltd. (Draft),                the date of

                                                                                                                             111
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


                  Shenzhen          in of any         they have not been placed on                   issuance
                  Rising            major asset       file for investigation or criminal             of the
                  Investment,       restructuring     investigation due to suspected                 letter of
                  Hong Kong         of listed         insider trading related to this                commitme
                  Rising            companies as      trading, and has not been                      nt
                  Investment, and   stipulated in     subject to administrative                      (inclusive)
                  Hongkong Wah      Article 13 of     punishment by the CSRC or
                  Shing             the Interim       criminal responsibility
                                    Provisions on     investigated by judicial organs
                                    Strengthening     according to law for insider
                                    the               trading related to any major
                                    Supervision of    asset restructuring in the last 36
                                    Abnormal          months. The relevant entities of
                                    Stock Trading     this trading are not prevented
                                    Related to        from participating in any major
                                    Major Asset       asset restructuring of listed
                                    Restructuring     companies according to Article
                                    of Listed         13 of the Interim Provisions on
                                    Companies         Strengthening the Supervision
                                                      of Abnormal Stock Trading
                                                      Related to Major Asset
                                                      Restructuring of Listed
                                                      Companies.

                                                      If NATIONSTAR is subject to
                                                      administrative penalties such as
                                                      accountability and fines by
                                                      relevant competent departments
                                    About
                                                      after the completion of this
                                    compensation
                                                      trading due to the illegal acts of
                  Rising Group,     for possible
                                                      NATIONSTAR before the                27
                  Electronics       violations of
                                                      completion of this acquisition,      October   Long-term      Ongoing
                  Group, and        laws and
                                                      they promise to fully bear the       2021
                  Rising Capital    regulations by
                                                      losses of NATIONSTAR or
                                    NATIONSTA
                                                      FSL, as well as the expenses
                                    R
                                                      and fees under punishment or
                                                      recourse, to ensure that
                                                      NATIONSTAR or FSL will not
                                                      suffer any economic losses.

                                    About             1. During the preliminary
                  Rising Group,     explanation of    negotiation between the listed                 Until the
                                                                                           27
                  Electronics       confidentiality   company and the counterparty                   completio
                                                                                           October                  Ongoing
                  Group, and        measures and      on this trading, necessary and                 n of this
                                                                                           2021
                  Rising Capital    confidentiality   sufficient confidentiality                     trading
                                    system            measures were taken to limit the

                                                                                                                              112
Foshan Electrical and Lighting Co., Ltd.                                                 Annual Report 2021


                                    adopted for    scope of knowledge of relevant
                                    this trading   sensitive information.
                                                   According to the requirements
                                                   of the SZSE, the listed company
                                                   has completed the submission
                                                   and online reporting of the
                                                   memorandum of trading
                                                   process, relevant materials of
                                                   insider information insiders.
                                                   The listed company has hired
                                                   independent financial advisers,
                                                   legal advisers, audit institutions,
                                                   valuation institutions and other
                                                   intermediaries, and signed
                                                   confidentiality agreements or
                                                   appointment agreements with
                                                   confidentiality clauses with the
                                                   above intermediaries, clearly
                                                   stipulating the scope of
                                                   confidential information and the
                                                   confidentiality responsibilities
                                                   of each intermediary.
                                                   2. In communicating with the
                                                   transaction counterparties, the
                                                   listed company made clear to
                                                   them that they shall be strictly
                                                   confidential about the relevant
                                                   information, shall not leak the
                                                   information to others, and shall
                                                   not trading in shares of the
                                                   listed company with the
                                                   information.
                                                   3. When discussing the
                                                   problems, solutions,
                                                   suggestions, ideas and solutions
                                                   with respect to the transaction,
                                                   the transaction counterparties
                                                   did not leak the restructuring
                                                   information to any other
                                                   irrelevant entities or
                                                   individuals.
                                                   4. Before the listed company
                                                   discloses information in relation
                                                   to the transaction, the


                                                                                                       113
Foshan Electrical and Lighting Co., Ltd.                                                               Annual Report 2021


                                                    transaction counterparties
                                                    strictly abided by the
                                                    confidentiality obligation and
                                                    did not conduct any insider
                                                    trading using the information.

                                                    1. They promise that the
                                                    information provided is true,
                                                    accurate and complete, and
                                                    there are no false records,
                                                    misleading statements or
                                                    material omissions. 2. They
                                                    have provided relevant
                                                    information and documents
                                                    (including but not limited to
                                                    original written materials,
                                                    duplicate materials or oral
                                                    testimony, etc.) related to this
                                                    trading to the intermediaries.
                                                    They promise that the copies or
                                                    photocopies of the documents
                                    About the
                                                    and materials provided are
                                    truthfulness,
                                                    consistent with the originals,
                                    accuracy and
                                                    and that the signatures and seals
                  Rising Group,     completeness
                                                    of the documents and materials      27
                  Electronics       of the
                                                    are authentic, and the              October   Long-term   Ongoing
                  Group, and        information
                                                    signatories of the documents        2021
                  Rising Capital    provided
                                                    have been legally authorized
                                    during this
                                                    and effectively signed the
                                    major asset
                                                    documents; that there are no
                                    restructuring
                                                    false records, misleading
                                                    statements or material
                                                    omissions. 3. They promise that
                                                    the explanations and
                                                    confirmations issued by them
                                                    are true, accurate and complete,
                                                    and there are no false records,
                                                    misleading statements or
                                                    material omissions. 4. During
                                                    this trading, they will disclose
                                                    the information about this
                                                    trading in a timely manner in
                                                    accordance with relevant laws
                                                    and regulations, the CSRC and
                                                    the SZSE, and ensure the


                                                                                                                        114
Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021


                                                    authenticity, accuracy and
                                                    completeness of such
                                                    information. 5. They shall bear
                                                    legal responsibility for the
                                                    authenticity, accuracy and
                                                    completeness of the
                                                    information, documents,
                                                    materials, explanations and
                                                    confirmations provided. In case
                                                    of any violation or losses
                                                    caused to the listed company,
                                                    investors, parties to the trading
                                                    and intermediaries participating
                                                    in this trading, they will be
                                                    liable for compensation
                                                    according to law. 6. Where the
                                                    information provided or
                                                    disclosed by them in this
                                                    trading is suspected of false
                                                    records, misleading statements
                                                    or material omissions, and they
                                                    are filed for investigation by the
                                                    judicial organ or by the CSRC,
                                                    the shares with interests in the
                                                    listed company will not be
                                                    transferred until the
                                                    investigation conclusion is
                                                    formed.

                                    Statement       As of the issuance date of the
                                    about not       Report on Major Asset
                                    prohibited      Purchase and Related Party
                                                                                                   Within the
                                    from            Trading of Foshan Electrical
                                                                                                   three
                                    participating   and Lighting Co., Ltd. (Draft),
                                                                                                   years
                                    in of any       the counterparties of this
                                                                                                   preceding
                  Rising Group,     major asset     restructuring have not been
                                                                                         27        the date of
                  Electronics       restructuring   placed on file for investigation
                                                                                         October   issuance       Expired
                  Group, and        of listed       or criminal investigation due to
                                                                                         2021      of the
                  Rising Capital    companies as    suspected insider trading related
                                                                                                   letter of
                                    stipulated in   to this trading, and has not been
                                                                                                   commitme
                                    Article 13 of   subject to administrative
                                                                                                   nt
                                    the Interim     punishment by the CSRC or
                                                                                                   (inclusive)
                                    Provisions on   criminal responsibility
                                    Strengthening   investigated by judicial organs
                                    the             according to law for insider


                                                                                                                            115
Foshan Electrical and Lighting Co., Ltd.                                                                 Annual Report 2021


                                    Supervision of   trading related to any major
                                    Abnormal         asset restructuring in the last 36
                                    Stock Trading    months. The relevant entities of
                                    Related to       this trading do not disclose the
                                    Major Asset      insider information of this
                                    Restructuring    restructuring or use the insider
                                    of Listed        information of this restructuring
                                    Companies        to conduct trading. In case of
                                                     any violations to the above
                                                     commitments, the relevant
                                                     subjects of this trading will bear
                                                     corresponding compensation
                                                     liabilities.

                                                     Electronics Group promises that
                                                     the 100% equity of Sigma it
                                                     held is clear in ownership and is
                                                     not subject to any dispute or
                                                     potential dispute, and there is
                                                     no situation affecting its legal
                                                     existence; the above shares are
                                                     not subject to any other pledges,
                                                     guarantees or third-party
                                                     interests or restrictions and
                                    About the
                                                     there is no pending or potential
                                    clarity of the
                                                     litigation, arbitration and any      27
                  Electronics       underlying
                                                     other administrative or judicial     October   Long-term   Ongoing
                  Group             assets of this
                                                     procedure that may lead to the       2021
                                    major asset
                                                     seizure, freezing, expropriation
                                    restructuring
                                                     or restriction of transfer of the
                                                     above-mentioned equity by the
                                                     relevant judicial or
                                                     administrative organs. There is
                                                     no entrusted shareholding or
                                                     trust shareholding, restriction or
                                                     prohibition of transfer of the
                                                     above-mentioned equity
                                                     controlled by Electronics
                                                     Group.

                                                     Rising Group promises that
                                    About the
                                                     46,260,021 shares of
                                    clarity of the                                        27
                                                     NATIONSTAR it held is clear
                  Rising Group      underlying                                            October   Long-term   Ongoing
                                                     in ownership and is not subject
                                    assets of this                                        2021
                                                     to any dispute or potential
                                    major asset
                                                     dispute, and there is no situation

                                                                                                                          116
Foshan Electrical and Lighting Co., Ltd.                                                                   Annual Report 2021


                                    restructuring    affecting its legal existence; the
                                                     above shares are not subject to
                                                     any other pledges, guarantees or
                                                     third-party interests or
                                                     restrictions and there is no
                                                     pending or potential litigation,
                                                     arbitration and any other
                                                     administrative or judicial
                                                     procedure that may lead to the
                                                     seizure, freezing, expropriation
                                                     or restriction of transfer of the
                                                     above-mentioned equity by the
                                                     relevant judicial or
                                                     administrative organs There is
                                                     no entrusted shareholding or
                                                     trust shareholding, restriction or
                                                     prohibition of transfer of the
                                                     above-mentioned equity
                                                     controlled by Rising Group.

                                                     Rising Capital promises that
                                                     5,791,924 shares of
                                                     NATIONSTAR it held is clear
                                                     in ownership and is not subject
                                                     to any dispute or potential
                                                     dispute, and there is no situation
                                                     affecting its legal existence; and
                                                     there is no pending or potential
                                    About the
                                                     litigation, arbitration and any
                                    clarity of the
                                                     other administrative or judicial     27
                                    underlying
                  Rising Capital                     procedure that may lead to the       October   Long-term    Ongoing
                                    assets of this
                                                     seizure, freezing, expropriation     2021
                                    major asset
                                                     or restriction of transfer of the
                                    restructuring
                                                     above-mentioned equity by the
                                                     relevant judicial or
                                                     administrative organs. There is
                                                     no entrusted shareholding or
                                                     trust shareholding, restriction or
                                                     prohibition of transfer of the
                                                     above-mentioned equity
                                                     controlled by Rising Capital.

                                    About            They are not subject to any
                  Rising Group                                                            27        Until the
                                    compliance of    securities and futures crimes as
                  and Rising                                                              October   completio    Ongoing
                                    this major       stipulated in Article 6 of Several
                  Capital                                                                 2021      n of this
                                    asset            Provisions on the Reduction of

                                                                                                                           117
Foshan Electrical and Lighting Co., Ltd.                                                                       Annual Report 2021


                                    restructuring     Shares by Shareholders,                           trading
                                    with Several      Directors and Supervisors of
                                    Provisions on     Listed Companies. During the
                                    the Reduction     period when the CSRC or the
                                    of Shares by      judicial organ filed a case for
                                    Shareholders,     investigation, and less than six
                                    Directors and     months after the administrative
                                    Supervisors of    penalty decision and criminal
                                    Listed            judgment were made, there was
                                    Companies         no situation that the shares of
                                                      NATIONSTAR could not be
                                                      reduced due to violation of the
                                                      rules of stock exchanges and
                                                      public censure by stock
                                                      exchanges for less than three
                                                      months. 2. In case of any
                                                      violation or losses caused to
                                                      NATIONSTAR, investors,
                                                      parties to the trading and
                                                      intermediaries participating in
                                                      this trading, they will be liable
                                                      for compensation according to
                                                      law.

                                                     1. Rising Capital has not been
                                                     investigated by the judicial organ
                                                     for suspected crimes or by the
                                                     CSRC for suspected violations of
                                                     laws and regulations, and there is
                                                     no administrative punishment
                                                     (except those obviously unrelated                 Within five
                                                     to the securities market) or                      years
                                                     criminal punishment in the last                   preceding
                                                     five years; 2. Rising Capital has                 the date of
                                   About legal                                            27 October
                Rising Capital                       not failed to repay large debts on                the issuance Expired
                                   compliance                                             2021
                                                     schedule, failed to fulfill its                   of the letter
                                                     commitments, been taken                           of
                                                     administrative supervision                        commitment
                                                     measures by the CSRC, or been                     (inclusive)
                                                     disciplined by any stock
                                                     exchange, has not been publicly
                                                     condemned by any stock
                                                     exchange, has no other major acts
                                                     of dishonesty and has no any
                                                     other bad record in the last five


                                                                                                                              118
Foshan Electrical and Lighting Co., Ltd.                                                               Annual Report 2021


                                           years. 3. The main management
                                           personnel of Rising Capital have
                                           not received administrative
                                           punishment or criminal
                                           punishment related to the
                                           securities market, and have not
                                           involved in major civil litigation
                                           or arbitration related to economic
                                           disputes in the last five years. 4.
                                           The main management personnel
                                           of Rising Capital have not failed
                                           to repay large debts on schedule,
                                           failed to fulfill their commitments,
                                           been taken administrative
                                           supervision measures by the
                                           CSRC or been disciplined by any
                                           stock exchange in the last five
                                           years.

                                           1. Electronics Group has not been
                                           investigated by the judicial organ
                                           for suspected crimes or by the
                                           CSRC for suspected violations of
                                           laws and regulations, and there is
                                           no administrative punishment
                                           (except those obviously unrelated
                                           to the securities market) or
                                           criminal punishment in the last
                                                                                               Within five
                                           five years; 2. Electronics Group
                                                                                               years
                                           has not failed to repay large debts
                                                                                               preceding
                                           on schedule, failed to fulfill its
                                                                                               the date of
                                           commitments, been taken                27 October
                Electronics Group                                                              the issuance Expired
                                           administrative supervision             2021
                                                                                               of the letter
                                           measures by the CSRC, or been
                                                                                               of
                                           disciplined by any stock
                                                                                               commitment
                                           exchange, has not been publicly
                                                                                               (inclusion)
                                           condemned by any stock
                                           exchange, has no other major acts
                                           of dishonesty and has no any
                                           other bad record in the last five
                                           years. 3. On 20 November 2019,
                                           Guangdong Regulatory Bureau of
                                           the CSRC issued an
                                           administrative penalty decision
                                           ([2019] No. 13), giving Liu Ke,


                                                                                                                      119
Foshan Electrical and Lighting Co., Ltd.                                                               Annual Report 2021


                                           then director of Guang Dong
                                           Fenghua Advanced Technology
                                           (Holding) Co., Ltd. (now
                                           chairman of Electronics Group), a
                                           warning and a fine of RMB30,000
                                           over the case of illegal
                                           information disclosure of Guang
                                           Dong Fenghua Advanced
                                           Technology (Holding) Co., Ltd.
                                           Except as aforesaid, the main
                                           management personnel of
                                           Electronics Group have not
                                           received administrative
                                           punishment or criminal
                                           punishment related to the
                                           securities market, and have not
                                           involved in major civil litigation
                                           or arbitration related to economic
                                           disputes in the last five years; 4.
                                           Except as aforesaid, the main
                                           management personnel of
                                           Electronics Group have not failed
                                           to repay large debts on schedule,
                                           failed to fulfill their commitments,
                                           been taken administrative
                                           supervision measures by the
                                           CSRC or been disciplined by any
                                           stock exchange in the last five
                                           years.

                                           1. Rising Group has not been
                                           investigated by the judicial organ
                                           for suspected crimes or by the
                                           CSRC for suspected violations of                    Within five
                                           laws and regulations, and there is                  years
                                           no administrative punishment                        preceding
                                           (except those obviously unrelated                   the date of
                                                                                  27 October
                Rising Group               to the securities market) or                        the issuance Expired
                                                                                  2021
                                           criminal punishment in the last                     of the letter
                                           five years; 2. Rising Group has                     of
                                           not failed to repay large debts on                  commitment
                                           schedule, failed to fulfill its                     (inclusion)
                                           commitments, been taken
                                           administrative supervision
                                           measures by the CSRC, or been


                                                                                                                      120
Foshan Electrical and Lighting Co., Ltd.                                                                Annual Report 2021


                                                 disciplined by any stock
                                                 exchange, has not been publicly
                                                 condemned by any stock
                                                 exchange, has no other major acts
                                                 of dishonesty and has no any
                                                 other bad record in the last five
                                                 years. 3. According to the
                                                 announcement of Guangdong
                                                 Discipline Inspection and
                                                 Supervision Network on October
                                                 18, 2021, Yu Gang, a member of
                                                 the Party Committee and deputy
                                                 general manager of Rising Group,
                                                 is suspected of serious
                                                 disciplinary violations and is
                                                 currently undergoing disciplinary
                                                 review and supervision by the
                                                 Supervision Committee of
                                                 Guangdong Provincial
                                                 Commission for Discipline
                                                 Inspection. As of the date of
                                                 issuance of this Letter of
                                                 Commitments, there is no result
                                                 of disciplinary review and
                                                 supervision. Except as aforesaid,
                                                 the main management personnel
                                                 of Rising Group have not received
                                                 administrative punishment or
                                                 criminal punishment related to the
                                                 securities market, and have not
                                                 involved in major civil litigation
                                                 or arbitration related to economic
                                                 disputes in the last five years. 4.
                                                 The main management personnel
                                                 of Rising Group have not failed to
                                                 repay large debts on schedule,
                                                 failed to fulfill their commitments,
                                                 been taken administrative
                                                 supervision measures by the
                                                 CSRC or been disciplined by any
                                                 stock exchange in the last five
                                                 years.

                  Electronics       About the     1. As of the date of issuance of      27        Until the
                                                                                                              Ongoing
                  Group             release of    the Letter of Commitments,            October   completio


                                                                                                                        121
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


                                    credit      Sigma has signed the Maximum        2021   n of this
                                    guarantee   Guarantee Contract (Contract               trading
                                                No.: XYYBZ (BY) No.
                                                201906280001-1) and the
                                                Maximum Pledge Contract for
                                                Stocks of Listed Companies
                                                (Contract No.: XXYZZ (BY)
                                                No. 201906280001-2) with
                                                Guangzhou Branch of Industrial
                                                Bank Co., Ltd. Sigma will
                                                provide the maximum guarantee
                                                and pledge guarantee for the
                                                debt of Electronics Group, with
                                                the guarantee amount of
                                                RMB400 million (in words:
                                                RMB Four Hundred Million),
                                                and the guarantee will be valid
                                                from June 28, 2019 to June 27,
                                                2022. Electronics Group
                                                promises that on the date of
                                                issuance of this Letter of
                                                Commitment, all the loans
                                                involved in the Maximum
                                                Guarantee Contract and the
                                                Maximum Pledge Contract for
                                                Stocks of Listed Companies
                                                have been repaid, there is no
                                                debt based on the guarantee
                                                under the above contracts, and
                                                39,876,500 shares of
                                                NATIONSTAR held by Sigma
                                                have been released from ple dge.
                                                At the same time, Electronics
                                                Group further makes an
                                                irrevocable commitment that it
                                                will not add any new loans to
                                                Guangzhou Branch of Industrial
                                                Bank Co., Ltd. as a borrower
                                                before the expiration date of the
                                                Maximum Guarantee Contract
                                                and the Maximum Pledge
                                                Contract for Stocks of Listed
                                                Companies, so as to ensure that
                                                Sigma will not actually assume


                                                                                                                122
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


                                                      any guarantee responsibilities
                                                      due to the above guarantee
                                                      contracts. 2. Electronics Group
                                                      promises that it will not arrange
                                                      for Sigma to add any form of
                                                      guarantee before the completion
                                                      of the delivery of Sigma's
                                                      equity in this trading. 3. In case
                                                      of any violations of the above
                                                      commitments, Electronics
                                                      Group shall solve and eliminate
                                                      the above situation within ten
                                                      days, and bear corresponding
                                                      legal responsibilities to Sigma
                                                      and FSL.

                                                      They promise that they will not
                                                      disclose the relevant insider
                                                      information of this trading or
                                                      make use of the insider
                                                      information for insider trading;
                                                      2. As of the issuance date of the
                                                      Report on Major Asset
                                                      Purchase and Related Party
                                                      Trading of Foshan Electrical
                                                      and Lighting Co., Ltd. (Draft),                From the
                                                      they have not been placed on                   date of the
                  Key                                 file for investigation or criminal             issuance
                  management                          investigation due to suspected                 of the
                  personnel of      About             insider trading related to this      27        letter of
                  Rising Group,     absence of        trading, and have not been           October   commitme       Ongoing
                  Electronics       insider trading   subject to administrative            2021      nt until
                  Group, and                          punishment by the CSRC or                      the
                  Rising Capital                      criminal responsibility                        completio
                                                      investigated by judicial organs                n of this
                                                      according to law for insider                   trading
                                                      trading related to any major
                                                      asset restructuring, and have not
                                                      been prohibited from engaging
                                                      in any major asset restructuring
                                                      of listed companies according
                                                      to Article 13 of the Interim
                                                      Provisions on Strengthening the
                                                      Supervision of Abnormal Stock
                                                      Trading Related to Major Asset


                                                                                                                              123
Foshan Electrical and Lighting Co., Ltd.                                                                     Annual Report 2021


                                                     Restructuring of Listed
                                                     Companies in the last 36
                                                     months; 3. In case of violation
                                                     of the above commitments, they
                                                     will bear all losses caused to the
                                                     listed company and its
                                                     shareholders.

                                                                                                    Within
                                                     NATIONSTAR and Sigma have
                                                                                                    five years
                                                     not been investigated by
                                                                                                    preceding
                                                     judicial organs for suspected
                                                                                                    the date of
                                    About            crimes or by the CSRC for
                                                                                          27        the
                  NATIONSTAR        explanation      suspected violations of laws and
                                                                                          October   issuance       Expired
                  and Sigma         on legal         regulations, and have not been
                                                                                          2021      of the
                                    compliance       subject to major administrative
                                                                                                    letter of
                                                     punishment or criminal
                                                                                                    commitme
                                                     punishment in the last five
                                                                                                    nt
                                                     years.
                                                                                                    (inclusive)

                                                     NATIONSTAR has provided
                                                     the necessary, true, accurate,
                                                     complete and effective
                                                     documents, materials or oral
                                                     statements and explanations for
                                                     this trading at this stage, and
                                                     there is no concealment,
                                                     falsehood or material omission.
                                                     The copies or photocopies of
                                    About
                                                     the documents provided are
                                    statement and
                                                     consistent with the original
                                    commitment
                                                     materials or originals. The
                                    of                                                    27
                                                     signatures and seals on the
                  NATIONSTAR        truthfulness,                                         October   Long-term      Ongoing
                                                     documents and materials
                                    accuracy and                                          2021
                                                     provided are authentic, and
                                    completeness
                                                     NATIONSTAR has fulfilled the
                                    of information
                                                     legal procedures required for
                                    provided
                                                     such signatures and seals and
                                                     obtained legal authorization. All
                                                     the facts stated and explained
                                                     are consistent with the facts that
                                                     happened. As this transaction
                                                     proceeds, the Company shall
                                                     provide needed information and
                                                     documents as required by
                                                     applicable laws, regulations,

                                                                                                                             124
Foshan Electrical and Lighting Co., Ltd.                                                                Annual Report 2021


                                                     rules and requirements of
                                                     CSRC and the stock exchange,
                                                     and continue to guarantee the
                                                     truthfulness, accuracy,
                                                     completeness and validity of the
                                                     information and documents
                                                     provided. The Company
                                                     promises and guarantees the
                                                     truthfulness, accuracy and
                                                     completeness of the information
                                                     provided or disclosed with
                                                     respect to this transaction. It
                                                     guarantees that there are no
                                                     misrepresentations, misleading
                                                     statements or material
                                                     omissions. And it shall be
                                                     individually and jointly liable
                                                     for that.

                                                     Among 79,753,050 shares of
                                                     tradable shares with unlimited
                                                     selling conditions of
                                                     NATIONSTAR held by Sigma,
                                                     39,876, 500 shares were
                                                     pledged for Guangdong
                                                     Electronics Information
                                                     Industry Group Ltd. As of the
                                                     date of issuance of this
                                                     commitment, the pledge of the
                                    About the
                                                     above shares has been released.
                                    clarity of the
                                                     However, the Maximum Pledge
                                    ownership of                                         27
                                                     Contract for Stocks of Listed
                  Sigma             the underlying                                       October   Long-term   Ongoing
                                                     Companies (No.: XXYZZ (BY)
                                    assets of this                                       2021
                                                     No. 201906280001-2) signed
                                    major asset
                                                     by Sigma and Guangzhou
                                    restructuring
                                                     Branch of Industrial Bank Co.,
                                                     Ltd. has not been dissolved.
                                                     Guangdong Electronics
                                                     Information Industry Group
                                                     Ltd. has promised that it will
                                                     not add any new loans to
                                                     Guangzhou Branch of Industrial
                                                     Bank Co., Ltd. as a borrower
                                                     during the validity period of the
                                                     guarantee, and that it will not


                                                                                                                         125
Foshan Electrical and Lighting Co., Ltd.                                                                     Annual Report 2021


                                                     substantially assume any
                                                     guarantee responsibility due to
                                                     the Maximum Pledge Contract
                                                     for Stocks of Listed Companies.
                                                     Except as aforesaid, the asset
                                                     ownership of Sigma is clear,
                                                     there is no dispute or potential
                                                     dispute, and there is no situation
                                                     affecting the legal existence.
                                                     There is no entrusted
                                                     shareholding or trust
                                                     shareholding, restriction or
                                                     prohibition of transfer of the
                                                     above-mentioned equity
                                                     controlled by Rising Group.

                                                     1. Sigma promises that all its
                                                     registered capital has been paid
                                                     in. 2. Sigma promises that all
                                    About no         existing shareholders contribute
                                                                                          27
                                    ownership        their own funds to hold shares,
                  Sigma                                                                   October   Long-term      Ongoing
                                    dispute in       there is no situation such as
                                                                                          2021
                                    equity           holding shares on behalf of
                                                     them, and there is no dispute or
                                                     potential dispute between
                                                     shareholders over their shares.

                                                     As of the date of issuance of
                                                     this statement, Sigma and its
                                                     wholly-owned and controlled
                                                     subsidiaries have no
                                                     outstanding or foreseeable
                                                     major lawsuits, arbitrations and               Before the
                                    About
                                                     administrative penalties that                  date of the
                                    explanation
                                                     have a significant adverse           27        issuance
                                    on litigation
                  Sigma                              impact on this trading. As of the    October   of the         Expired
                                    and
                                                     date of issuance of this note, the   2021      letter of
                                    administrative
                                                     directors, supervisors and senior              commitme
                                    punishment
                                                     management personnel of                        nt
                                                     Sigma have no pending or
                                                     foreseeable major lawsuits,
                                                     arbitrations and administrative
                                                     penalties that have a significant
                                                     adverse impact on this trading.

                  Sigma             About            1. Sigma has provided relevant       27        Long-term      Ongoing



                                                                                                                             126
Foshan Electrical and Lighting Co., Ltd.                                                                  Annual Report 2021


                                    statement and    information and documents            October
                                    commitment       (including but not limited to        2021
                                    of               original written materials,
                                    truthfulness,    duplicate materials or oral
                                    accuracy and     testimony, etc.) related to this
                                    completeness     trading to the intermediaries
                                    of information   providing professional services
                                    provided         of auditing, valuation, legal and
                                                     financial consultancy for this
                                                     trading. Sigma promises that the
                                                     copies or photocopies of the
                                                     documents and materials
                                                     provided are consistent with the
                                                     originals, and that the signatures
                                                     and seals of the documents and
                                                     materials are authentic, and the
                                                     signatories of the documents
                                                     have been legally authorized
                                                     and effectively signed the
                                                     documents; that the provided
                                                     information and documents are
                                                     authentic, accurate and
                                                     complete and that there are no
                                                     false records, misleading
                                                     statements or material
                                                     omissions. Sigma also promises
                                                     to bear individual and joint and
                                                     several liability. 2. Sigma
                                                     promises that the information
                                                     provided is true, accurate and
                                                     complete. In case of any losses
                                                     caused to investors due to any
                                                     false presentations, misleading
                                                     statements or material
                                                     omissions in the information
                                                     provided, Sigma will be liable
                                                     for compensation according to
                                                     law.

                  Directors,                         They have not been investigated                Within
                  supervisors and                    by judicial organs for suspected               five years
                                                                                          27
                  senior            About legal      crimes or by the CSRC for                      preceding
                                                                                          October                 Expired
                  management        compliance       suspected violations of laws and               the date of
                                                                                          2021
                  personnel of                       regulations, and have not been                 the
                  NATIONSTAR                         subject to major administrative                issuance


                                                                                                                            127
Foshan Electrical and Lighting Co., Ltd.                                                               Annual Report 2021


                  and Sigma                      punishment or criminal                       of the
                                                 punishment in the last five                  letter of
                                                 years.                                       commitme
                                                                                              nt

Commitments
                                                 FSL’s profit distributed in cash
made to
                                    About cash   shall not be less than 30% of the   27 May
minority          FSL                                                                         Long-term      Ongoing
                                    dividends    distributable profit realized in    2009
shareholders of
                                                 the year.
the Company

Whether the
commitments
                  Yes
were timely
performed


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

II 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.

III Irregularities in the Provision of Guarantees

□ Applicable √ Not applicable

No such cases in the Reporting Period.

IV Explanations Given by the Board of Directors Regarding the Inde pendent Auditor's
“Modified Opinion” on the Financial Statements of the Latest Period


□ Applicable √ Not applicable

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 Period


□ Applicable √ Not applicable




                                                                                                                       128
Foshan Electrical and Lighting Co., Ltd.                                                                   Annual Report 2021


VI YoY Changes to Accounting Policies, Estimates and Correction of Material Accounting
Errors

√Applicable □ Not applicable
Refer to Part X Financial Statements-V Important Accounting Policies and Estimations-44. Changes in Main
Accounting Policies and Estimates for details.

VII YoY Changes to the Scope of the Consolidated Financial Statements

√Applicable □ Not applicable

Compared with the previous period, the consolidated scope of financial statements in this period is increased,
including two subsidiaries of Nanning Liaowang lamp Co., Ltd. and fozhao (Hainan) Technology Co., Ltd., as
well as five subsidiaries of Liuzhou Guige Photoelectric Technology Co., Ltd., Liuzhou Guige Fuxuan
Technology Co., Ltd., Chongqing Guinuo photoelectric technology Co., Ltd., Qingdao Guige photoelectric Co.,
Ltd. and Indonesia Liaowang lamp Co., Ltd, Reduce two subsidiaries of Foshan Electric lighting new light source
technology Co., Ltd. and Hunan Keda new energy investment and Development Co., Ltd. for details, see note VIII
"change of consolidation scope" and note IX "equity in other entities".

VIII 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
                                                                  162
(RMB’0,000)

How many consecutive years the domestic independent auditor
                                                                  6
has provided audit service for the Company

Names of the certified public accountants from the domestic
                                                                  Feng Wei, Li Qiongqian
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 1
service for the Company


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 RMB500,000.

                                                                                                                         129
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


IX Possibility of Delisting after Disclosure of this Report

□ Applicable √ Not applicable

X Insolvency and Reorganization

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XI Major Legal Matters

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XII Punishme nts and Rectifications

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XIII Credit Quality of the Company as well as Its Controlling Shareholder 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.

XIV Major Related-Party Transactions

1. Continuing Related-Party Transactions

√Applicable □ Not applicable
                                                                                                            Obtaina
                                                                     As % of
                                                                                                              ble
                                                                      total     Approv
           Relation                              Transact                                                   market                 Index to
                                                             Total   value of     ed      Over the Method
             ship     Type of Specific Pricing     ion                                                      price for              disclose
 Related                                                     value     all      transacti approve   of                  Disclos
           with the transacti transacti principl price(R                                                    same-ty                   d
  party                                                     (RMB’0 same-ty on line d line or settleme                  ure date
           Compan       on      on         e     MB’0,0                                                       pe                  informa
                                                             ,000)     pe       (RMB’0     not     nt
              y                                    00)                                                      transacti                tion
                                                                     transacti ,000)
                                                                                                            ons(RM
                                                                       ons
                                                                                                            B’0,000



                                                                                                                                          130
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


                                                                                                               )

                           Purchasi
                           ng
                                                                                                Bank
Foshan                     products
             Under                                                                              transfer
NationSta                  and        Purchas
             same                                                                               s or                  28      www.c
r                          receivin e       of Market 4,264.4    4,264.4                                   4,264.4
             actual                                                        1.55%   12,000 Not   bank                  January ninfo.c
Optoelect                  g labor material price       7             7                                    7
             controll                                                                           accepta               2021    om.cn
ronics                     service s
             er                                                                                 nce
Co., Ltd.                  from
                                                                                                notes
                           related
                           party

                           Purchasi
Guangdo                    ng
                                                                                                Bank
ng                         products
             Under                                                                              transfer
Fenghua                    and        Purchas
             same                                                                               s or                  28      www.c
Advanced                   receivin e       of Market
             actual                                     785.86   785.86    0.28%    1,500 Not   bank       785.86     January ninfo.c
Technolo                   g labor material price
             controll                                                                           accepta               2021    om.cn
gy                         service s
             er                                                                                 nce
Holding                    from
                                                                                                notes
Co., Ltd.                  related
                           party

                           Purchasi
             Shareho ng
                                                                                                Bank
             lder that products
Prosperity                                                                                      transfer
             holds         and        Purchas
Lamps &                                                                                         s or                  28      www.c
             over 5% receivin e             of Market
Compone                                                 265.44   265.44    0.10%    1,300 Not   bank       265.44     January ninfo.c
             shares        g labor material price
nts                                                                                             accepta               2021    om.cn
             of      the service s
Limited                                                                                         nce
             Compan from
                                                                                                notes
             y             related
                           party

             Acting-i
                           Purchasi
             n-conce
                           ng
             rt party                                                                           Bank
Hangzhou                   products
             of a 5%                                                                            transfer
Times                      and        Purchas
             greater                                                                            s or
Lighting                   receivin e       of Market
             sharehol                                   64.65     64.65    0.02%         Not    bank       64.65              N/A
and                        g labor material price
             der      of                                                                        accepta
Electrical                 service s
             the                                                                                nce
Co., Ltd.                  from
             Compan                                                                             notes
                           related
             y
                           party




                                                                                                                                    131
Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


                          Purchasi
                          ng
Guangdo                                                                                        Bank
                          products
ng             Under                                                                           transfer
                          and        Purchas
Electronic same                                                                                s or                  28      www.c
                          receivin e           of Market
Technolo actual                                            115.19   115.19   1.83%   300 Not   bank       115.19     January ninfo.c
                          g labor    equipme price
gy             controll                                                                        accepta               2021    om.cn
                          service nt
Research er                                                                                    nce
                          from
Institute                                                                                      notes
                          related
                          party

                          Purchasi
Jiangmen                  ng
                                                                                               Bank
Dongjian                  products
               Under                                                                           transfer
g                         and
               same                  Receivin                                                  s or
Environm                  receivin               Market
               actual                g labor               26.94     26.94 21.83%       Not    bank       26.94              N/A
ental                     g labor                price
               controll              service                                                   accepta
Technolo                  service
               er                                                                              nce
gy       Co,              from
                                                                                               notes
Ltd.                      related
                          party

                          Purchasi
                          ng
Foshan                                                                                         Bank
                          products
Fulong         Under                                                                           transfer
                          and
Environm same                        Receivin                                                  s or
                          receivin               Market
ental          actual                g labor               2.55       2.55   2.06%      Not    bank       2.55               N/A
                          g labor                price
Technolo controll                    service                                                   accepta
                          service
gy      Co., er                                                                                nce
                          from
Ltd.                                                                                           notes
                          related
                          party

Zhuhai
Doumen
                          Purchasi
District
                          ng
Yongxing                                                                                       Bank
                          products
sheng          Under                                                                           transfer
                          and
Environm same                        Receivin                                                  s or
                          receivin               Market
ental          actual                g labor               0.57       0.57   0.46%      Not    bank       0.57               N/A
                          g labor                price
Industrial controll                  service                                                   accepta
                          service
Wastes         er                                                                              nce
                          from
Recycling                                                                                      notes
                          related
Compreh
                          party
ensive
Treatment


                                                                                                                                   132
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


Co., Ltd.

                           Purchasi
                           ng
Guangdo                                                                                     Bank
                           products
ng           Under                                                                          transfer
                           and
Electronic same                       Receivin                                              s or
                           receivin              Market
Technolo actual                       g labor             0.27       0.27    0.03%    Not   bank       0.27               N/A
                           g labor               price
gy           controll                 service                                               accepta
                           service
Research er                                                                                 nce
                           from
Institute                                                                                   notes
                           related
                           party

             Acting-i
                           Purchasi
             n-conce
                           ng
             rt party                                                                       Bank
                           products
             of a 5%                                                                        transfer
Prosperity                 and        Purchas
             greater                                                                        s or
Electrical                 receivin e of         Market
             sharehol                                     139.46   139.46    0.05%    Not   bank       139.46             N/A
(China)                    g labor    material price
             der      of                                                                    accepta
Co., Ltd.                  service s
             the                                                                            nce
                           from
             Compan                                                                         notes
                           related
             y
                           party


                           Purchasi
                           ng
                                                                                            Bank
Guangdo                    products
             Under                                                                          transfer
ng Yixin                   and
             same                     Receivin                                              s or
Changche                   receivin              Market 1,648.9    1,648.9                             1,648.9
             actual                   g labor                                26.22%   Not   bank                          N/A
ng                         g labor               price    6             6                              6
             controll                 service                                               accepta
Construct                  service
             er                                                                             nce
ion Group                  from
                                                                                            notes
                           related
                           party

                           Purchasi
                           ng
                                                                                            Bank
Guangdo                    products
             Under                                                                          transfer
ng                         and
             same                     Receivin                                              s or
Zhongnan                   receivin              Market 6,043.0    6,043.0                             6,043.0
             actual                   g labor                                26.66%   Not   bank                          N/A
Construct                  g labor               price    4             4                              4
             controll                 service                                               accepta
ion Co.,                   service
             er                                                                             nce
Ltd.                       from
                                                                                            notes
                           related
                           party




                                                                                                                                133
Foshan Electrical and Lighting Co., Ltd.                                                                                  Annual Report 2021


                           Purchasi
                           ng
                                                                                                      Bank
                           products
Shenzhen Under                                                                                        transfer
                           and
yuepeng      same                     Receivin                                                        s or
                           receivin              Market
Construct actual                      g labor                 23.42   23.42       0.10%        Not    bank       23.42              N/A
                           g labor               price
ion Co.,     controll                 service                                                         accepta
                           service
Ltd          er                                                                                       nce
                           from
                                                                                                      notes
                           related
                           party

                           Selling
Guangdo
                           products                                                                   Bank
ng     New
             Under         and                                                                        transfer
Electronic
             same          providin                                                                   s or                  28      www.c
s                                     Selling    Market 3,751.6       3,751.6                                    3,751.6
             actual        g labor                                                0.79%   3,800 Not   bank                  January ninfo.c
Informati                             products price      2                   2                                  2
             controll service                                                                         accepta               2021    om.cn
on
             er            to                                                                         nce
Import&E
                           related                                                                    notes
xport Ltd.
                           party

                           Selling
             Shareho
                           products                                                                   Bank
             lder that
Prosperity                 and                                                                        transfer
             holds
Lamps &                    providin                                                                   s or                  28      www.c
             over 5%                  Selling    Market 2,544.2       2,544.2                                    2,544.2
Compone                    g labor                                                0.53%   3,600 Not   bank                  January ninfo.c
             shares                   products price      5                   5                                  5
nts                        service                                                                    accepta               2021    om.cn
             of      the
Limited                    to                                                                         nce
             Compan
                           related                                                                    notes
             y
                           party

                           Selling
Guangdo                    products                                                                   Bank
ng Rising Under            and                                                                        transfer
Rare         same          providin                                                                   s or                  28      www.c
                                      Selling    Market
Metals-E actual            g labor                        810.10       810.1      0.17%   1,500 Not   bank       810.10     January ninfo.c
                                      products price
O            controll service                                                                         accepta               2021    om.cn
Materials er               to                                                                         nce
Ltd.                       related                                                                    notes
                           party

Guangdo                    Selling                                                                    Bank
             Under
ng Yixin                   products                                                                   transfer
             same                                                                                                           28      www.c
Changche                   and        Selling    Market                                               s or
             actual                                       308.96      308.96      0.06%   3,000 Not              308.96     January ninfo.c
ng                         providin products price                                                    bank
             controll                                                                                                       2021    om.cn
Construct                  g labor                                                                    accepta
             er
ion Group                  service                                                                    nce


                                                                                                                                          134
Foshan Electrical and Lighting Co., Ltd.                                                                       Annual Report 2021


                       to                                                                  notes
                       related
                       party

                       Selling
                       products                                                            Bank
Guangdo
              Under    and                                                                 transfer
ng
              same     providin                                                            s or
Zhongnan                          Selling   Market
              actual   g labor                       186.31   186.31   0.04%        Not    bank       186.31             N/A
Construct                         products price
              controll service                                                             accepta
ion Co.,
              er       to                                                                  nce
Ltd.
                       related                                                             notes
                       party

                       Selling
                       products                                                            Bank
Shenzhen Under         and                                                                 transfer
Zhongjin same          providin                                                            s or                  28      www.c
                                  Selling   Market
Lingnan       actual   g labor                       310.44   310.44   0.07%   1,000 Not   bank       310.44     January ninfo.c
                                  products price
Nonfemet controll service                                                                  accepta               2021    om.cn
Co. Ltd.      er       to                                                                  nce
                       related                                                             notes
                       party

                       Selling
Guangdo                products                                                            Bank
ng            Under    and                                                                 transfer
Heshun        same     providin                                                            s or
                                  Selling   Market
Property actual        g labor                       7.35       7.35   0.00%        Not    bank       7.35               N/A
                                  products price
Managem controll service                                                                   accepta
ent    Co., er         to                                                                  nce
Ltd.                   related                                                             notes
                       party

                       Selling
Guangdo
                       products                                                            Bank
ng
              Under    and                                                                 transfer
Zhongjin
              same     providin                                                            s or
Lingnan                           Selling   Market
              actual   g labor                       4.97       4.97   0.00%        Not    bank       4.97               N/A
Junpeng                           products price
              controll service                                                             accepta
Intelligent
              er       to                                                                  nce
Equipmen
                       related                                                             notes
t Co., Ltd.
                       party

Guangdo Under          Selling                                                             Bank
ng            same     products Selling     Market                                         transfer
                                                     22.57     22.57   0.00%        Not               22.57              N/A
Zhongjin actual        and        products price                                           s or
Lingnan       controll providin                                                            bank


                                                                                                                               135
Foshan Electrical and Lighting Co., Ltd.                                                                Annual Report 2021


Equipmen er              g labor                                                     accepta
t                        service                                                     nce
Technolo                 to                                                          notes
gy     Co.,              related
Ltd.                     party

Guangdo                  Selling
ng                       products                                                    Bank
Zhongjin Under           and                                                         transfer
Lingnan       same       providin                                                    s or
                                    Selling   Market
Engineeri actual         g labor                       10.86   10.86   0.00%   Not   bank       10.86             N/A
                                    products price
ng            controll service                                                       accepta
Technolo er              to                                                          nce
gy     Co.,              related                                                     notes
Ltd.                     party

                         Selling
                         products                                                    Bank
Guangdo                  and                                                         transfer
ng Rising Actual         providin                                                    s or
                                    Selling   Market
Holdings controll g labor                              3.02     3.02   0.00%   Not   bank       3.02              N/A
                                    products price
Group         er         service                                                     accepta
Co., Ltd.                to                                                          nce
                         related                                                     notes
                         party

              Acting-i
              n-conce Selling
              rt party products                                                      Bank
              of a 5% and                                                            transfer
Prosperity
              greater    providin                                                    s or
Electrical                          Selling   Market
              sharehol g labor                         2.70      2.7   0.00%   Not   bank       2.70              N/A
(China)                             products price
              der    of service                                                      accepta
Co., Ltd.
              the        to                                                          nce
              Compan related                                                         notes
              y          party



Guangdo                  Selling
ng                       products                                                    Bank
Electronic Under         and                                                         transfer
s             same       providin                                                    s or
                                    Selling   Market
Informati actual         g labor                       0.80      0.8   0.00%   Not   bank       0.80              N/A
                                    products price
on            controll service                                                       accepta
Industry      er         to                                                          nce
Group                    related                                                     notes
Ltd.                     party


                                                                                                                        136
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


                       Selling
Guangzho               products                                                           Bank
u Huajian Under        and                                                                transfer
Engineeri same         providin                                                           s or                  28      www.c
                                  Selling   Market
ng            actual   g labor                       0.61      0.61   0.00%   3,600 Not   bank       0.61       January ninfo.c
                                  products price
Construct controll service                                                                accepta               2021    om.cn
ion           er       to                                                                 nce
Co.,Ltd.               related                                                            notes
                       party

                       Selling
                       products                                                           Bank
              Under    and                                                                transfer
Primatron
              same     providin                                                           s or
ix Nanho                          Selling   Market
              actual   g labor                       0.09      0.09   0.00%        Not    bank       0.09               N/A
Technolo                          products price
              controll service                                                            accepta
gy Ltd.
              er       to                                                                 nce
                       related                                                            notes
                       party

                       Selling
                       products                                                           Bank
Guangdo
              Under    and                                                                transfer
ng Rising
              same     providin                                                           s or
South                             Selling   Market
              actual   g labor                       1.44      1.44   0.00%        Not    bank       1.44               N/A
Construct                         products price
              controll service                                                            accepta
ion Co.,
              er       to                                                                 nce
Ltd.
                       related                                                            notes
                       party

                       Selling
                       products                                                           Bank
NationSta
              Under    and                                                                transfer
r
              same     providin                                                           s or
Optoelect                         Selling   Market
              actual   g labor                       164.30   164.3   0.03%        Not    bank       164.30             N/A
ronics                            products price
              controll service                                                            accepta
(Germany
              er       to                                                                 nce
) Co., Ltd.
                       related                                                            notes
                       party

Guangdo                Selling                                                            Bank
ng            Under    products                                                           transfer
Heshun        same     and                                                                s or
                                  Selling   Market
Property actual        providin                      61.92    61.92   0.01%        Not    bank       61.92              N/A
                                  products price
Managem controll g labor                                                                  accepta
ent      Co., er       service                                                            nce
Ltd.                   to                                                                 notes


                                                                                                                              137
Foshan Electrical and Lighting Co., Ltd.                                                                                      Annual Report 2021


                          related
                          party

                                                                        21,573.
Total                                                --         --                    --       31,600   --      --      --          --          --
                                                                              13

Large-amount sales return in detail               N/A

                                                  In January 2021, the Company estimated the total value of its continuing transactions with
                                                  related parties Foshan NationStar Optoelectronics Co., Ltd., Guangdong Fenghua Advanced
                                                  Technology Holding Co., Ltd., Rising Investment Development Limited and its
                                                  majority-owned subsidiaries, Prosperity Lamps & Components Limited and its
                                                  majority-owned subsidiaries, Guangdong Electronic Technology Research Institute,
Give the actual situation in the
                                                  Guangdong New Electronics Information Import&Export Ltd., Guangdong Huajian
Reporting Period (if any) where an
                                                  Enterprise Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Real
estimate had been made for the total
                                                  Estate Group Co., Ltd. and its majority-owned subsidiaries, Guangzhou Rising Non-ferrous
value   of    continuing          related-party
                                                  Metal Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Property
transactions by type to occur in the
                                                  Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Investment Group
Reporting Period
                                                  and its majority-owned subsidiaries, Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. and its
                                                  majority-owned subsidiaries. Concerning the purchases from its related parties, the actual
                                                  amount in 2021 was RMB133.8082 million, accounting for 73. 93% of the estimate for 2021.
                                                  As for the sales to its related parties, the actual amount in 2021 was RMB81.92 31million,
                                                  accounting for 34.86% of the estimate for 2021.

Reason for any significant difference
between the transaction price and the N/A
market reference price (if applicable)


2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests

√ Applicable □ Not applicable

                                                                        Book      Estimated
                                        Content                       value of     value of                      Transacti
                                                                                             Transacti
          Related              Related of related                        the          the                         on gains
 Related                                                  Pricing                             on price Settlemen             Date of Disclosur
         relationsh             party    party                       transferre   transferre                     and losses
  party                                                   policy                             (RMB’0, t method              disclosure e index
             ip                 name transactio                       d assets     d assets                      (RMB’0,
                                                                                               000)
                                           n                         (RMB’0,     (RMB’0,                          000)
                                                                        000)         000)

                                         The            Refer to                                                                         Title of
                                         Company the                                                                                     announce
             Rising                      acquired       valuation                                                                        ment:
Guangdo
             Group is                    46,260,02 in the                                                                                Report on
ng Rising                  Equity                                                 50,099.60                                  28
             the actual                  1 shares       Valuation                                                                        Related-p
Holdings                   acquisitio                                27,824.28 -55,974.6 53,245.28 Cash                  0 October
             controller                  of             Report on                                                                        arty
Group                      n                                                               3                                 2021
             of the                      NationSta the                                                                                   Transacti
Co., Ltd.
             Company                     r              Valuation                                                                        on
                                         Optoelect Project in                                                                            regarding
                                         ronics         which                                                                            Major


                                                                                                                                                     138
Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021


                               held by     Foshan                                                      Assets
                               Rising      Electrical                                                  Restructu
                               Group       and                                                         ring
                                           Lighting                                                    (Draft);
                                           Co., Ltd.                                                   published
                                           Plans to                                                    on:
                                           Purchase                                                    Cninfo
                                           52,051,94                                                   (http://w
                                           5 Shares                                                    ww.cninf
                                           of Foshan                                                   o.com.cn/
                                           Nationsta                                                   ).
                                           r
                                           Optoelect
                                           ronics
                                           Co., Ltd.
                                           Held by
                                           Guangdo
                                           ng Rising
                                           Holdings
                                           Group
                                           Co., Ltd.
                                           and
                                           Guangdo
                                           ng Rising
                                           Finance
                                           Holding
                                           Co., Ltd.
                                           issued by
                                           China
                                           United
                                           Internatio
                                           nal
                                           Appraisal
                                           Consultin
                                           g Co.,
                                           Ltd., and
                                           shall be
                                           determine
                                           d by both
                                           parties
                                           through
                                           negotiatio
                                           n

Guangdo Rising      Equity     The         Refer to     3,483.70 6,272.65-   6,666.5 Cash   0 28       Title of


                                                                                                                  139
Foshan Electrical and Lighting Co., Ltd.                            Annual Report 2021


ng Rising Capital is acquisitio Company the             7,008.23   October   announce
Capital   a            n       acquired    valuation               2021      ment:
Investme wholly-o              5,791,924 in the                              Report on
nt Co.,   wned                 shares of Valuation                           Related-p
Ltd.      subsidiary           NationSta Report on                           arty
          of Rising            r           the                               Transacti
          Group                Optoelect Valuation                           on
                               ronics      Project in                        regarding
                               held by     which                             Major
                               Rising      Foshan                            Assets
                               Group       Electrical                        Restructu
                                           and                               ring
                                           Lighting                          (Draft);
                                           Co., Ltd.                         published
                                           Plans to                          on:
                                           Purchase                          Cninfo
                                           52,051,94                         (http://w
                                           5 Shares                          ww.cninf
                                           of Foshan                         o.com.cn/
                                           Nationsta                         ).
                                           r
                                           Optoelect
                                           ronics
                                           Co., Ltd.
                                           Held by
                                           Guangdo
                                           ng Rising
                                           Holdings
                                           Group
                                           Co., Ltd.
                                           and
                                           Guangdo
                                           ng Rising
                                           Finance
                                           Holding
                                           Co., Ltd.
                                           issued by
                                           China
                                           United
                                           Internatio
                                           nal
                                           Appraisal
                                           Consultin
                                           g Co.,


                                                                                        140
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


                                                 Ltd., and
                                                 shall be
                                                 determine
                                                 d by both
                                                 parties
                                                 through
                                                 negotiatio
                                                 n

                                                                                                                          Title of
                                                                                                                          announce
                                    The                                                                                   ment:
                                    Company                                                                               Report on
                                    acquired                                                                              Related-p
                                    100% of                                                                               arty
Guangdo                             equity of                                                                             Transacti
             Electronic                          Value of
ng                                  Sigma                                                                                 on
             s Group is                          shares of
Electronic                          (holding                                                                              regarding
             a                                   NationSta
s                         Equity    79,753,05                          86,372.55                                28        Major
             wholly-o                            r
Informati                 acquisitio 0 shares                 47,969.53 -96,501.1 91,798.02 Cash            0   October   Assets
             wned                                Optoelect
on                        n         of                                         9                                2021      Restructu
             subsidiary                          ronics
Industry                            NationSta                                                                             ring
             of Rising                           held by
Group                               r                                                                                     (Draft);
             Group                               Sigma
Ltd.                                Optoelect                                                                             published
                                    ronics)                                                                               on:
                                    held by                                                                               Cninfo
                                    Electronic                                                                            (http://w
                                    s Group                                                                               ww.cninf
                                                                                                                          o.com.cn/
                                                                                                                          ).

Reasons for considerable differences
between the transaction price and the book None
value or estimated value (if applicable)

                                                 In 2021, NationStar Optoelectronics was not included in the Company’s consolidated
                                          financial statements. The Company has made a prepayment of around RMB450 million
Impact on the Company's operating results
                                          to the former shareholders of NationStar Optoelectronics for the acquisition of a 30%
and financial conditions
                                          interest from them, which has resulted in a significant impact on the cash flows of the
                                                 Company in 2021.

The actual performance during the
Reporting Period if the related-party
transaction is conditioned on the                N/A
performance.




                                                                                                                                     141
Foshan Electrical and Lighting Co., Ltd.                                                                                 Annual Report 2021


3. Related Transactions Regarding Joint Investments in Third Parties


□ Applicable √ Not applicable

No such cases in the Reporting Period.

4. Amounts Due to and from Related Parties


√ Applicable □ Not applicable

Non-operating amounts due to and from related parties or not

□ Yes √ No

No such cases in the Reporting Period.

5. Transactions with Related Finance Companies

√ Applicable □ Not applicable

Deposit business

                                        Daily                                                      Actual amount
                                                                             Beginning
                                      maximum          Interest rate                       Total deposited       Total        Ending balance
 Related party    Relationship                                                balance
                                        limits              range                                in            withdrawn      (RMB’0,000)
                                                                          (RMB’0,000)
                                     (RMB’0,000)                                          (RMB’0,000)       (RMB’0,000)

                 Controlled    by
Guangdong
                 the          same
Rising Finance                              30,000 1.75%-3.30%                 30,082.70       331,309.03        331,913.98        29,477.75
                 controlling
Co., Ltd.
                 shareholder

Note: Due to a business combination under common control in December 2020, the Company recorded into the beginning balance
the RMB827,000 that was deposited by subsidiary Foshan Kelian New Energy Technology Co., Ltd. in Guangdong Rising Finance
Co., Ltd., which has been transferred out in January 2021.



Credit or other finance business
                                                                                               Total amount              Actual amount
        Related party                 Related relationship             Type of business
                                                                                              (RMB’0,000)               (RMB’0,000)

Guangdong Rising Finance Controlled              by   the    same
                                                                    Credit                                40,000                             0
Co., Ltd.                      controlling shareholder


6. Transactions with Related Parties by Finance Company Controlled by the Company

□ Applicable √ Not applicable



                                                                                                                                          142
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


7. Other Major Related-Party Transactions


√ Applicable □ Not applicable

1. Upon review and approval at the Shareholders' General Meeting for 2020, the Company will use its equity fund of

no more than RMB300 million to purchase shares of no more than 5% of the current total share capital of Foshan

NationStar Optoelectronics Co., Ltd. (NationStar) in the secondary market (including but not limited to the ways

permitted by laws and regulations like call auction and bulk commodity trading), when appropriate. On 16 June

2021, the Company purchased 1,014,900 shares of NationStar at the cost of RMB9,402,100.

2. The Company bid for the Phase II office building project of the production base at Gaoming Headquarters in

March 2021. Upon bidding, review, and announcement, the consortium composed of Guangdong Yixin

Changcheng Construction Group Co., Ltd. (primary) and Guangdong Architectural Design & Research Institute Co.,

Ltd. (member) won the project at RMB175,025,600. Guangdong Yixin Changcheng Construction Group Co., Ltd. is

a tier-2 wholly owned subsidiary of Guangdong Rising Holdings Group Co., Ltd. which is the controller shareholder

of the Company. The Company had a connected transaction regarding the "General Contracting of Design and

Construction of Phase II Office Building Project of Production Base at Gaoming Headquarters of Foshan Electrical

and Lighting Co., Ltd. (FSL)" won by the consortium of Guangdong Yixin Changcheng Construction Group Co.,

Ltd., in accordance with relevant regulations.

3. The Company bid for the general contracting of design and construction of the decoration engineering project of

Foshan Kelian Building in April 2021. Upon bidding, review, and announcement, the consortium composed of

Guangdong Zhongnan Construction Co., Ltd. (primary) and Guangdong Architectural Design & Research Institute

Co., Ltd. (member) won the project at the offer of RMB189,070,200. Guangdong Zhongnan Construction Co., Ltd.

is a tier-2 wholly owned subsidiary of Guangdong Rising Holdings Group Co., Ltd. which is the controller

shareholder of the Company. The Company had a connected transaction regarding the "General Contracting of

Design and Construction of Decoration Engineering Project of Foshan Kelian Building" won by the consortium of

Guangdong Zhongnan Construction Co., Ltd., in accordance with relevant regulations.

4. In June, 2021, the Company conducted a public tender for the renovation project of Staff Apartments 1, 2, 3, 4 and

Shop No. 18 in Gaoming Headquarters Production Base. After performing the corresponding procedures of bid

opening, evaluation and publicity, the winning bidder was determined to be Guangdong Zhongnan Construction

Real Estate Development General Company (hereinafter referred to as "Zhongnan Construction"), with a total bid

amount of RMB25,709,006. Zhongnan Construction is a second-level wholly-owned subsidiary of Guangdong

                                                                                                                 143
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021



Rising Holdings Group Co., Ltd. (Rising Group), the controlling shareholder of the Company. According to Article

10.1.3 of the Stock Listing Rules of the Shenzhen Stock Exchange, Zhongnan Construction won the bid for the

"Decoration Project of Staff Apartments 1, 2, 3, 4 and Shop No. 18 in Gaoming Headquarters Production Base of

Foshan Electrical and Lighting Co., Ltd." to form a related party transaction.


Index to the current announcement about the said related-party transaction disclosed:
                  Title of announcement                       Disclosure date             Disclosure website

Announcement on the Related-Party Transaction
regarding Purchase of Some Shares of Nationstar 26 April 2021                    www.cninfo.com.cn
Optoelectronics

Announcement on a Related-Party Transaction Due to
                                                     6 May 2021                  www.cninfo.com.cn
Public Bidding

Announcement on a Related-Party Transaction Due to
                                                     9 July 2021                 www.cninfo.com.cn
Public Bidding

Announcement on a Related-Party Transaction Due to
                                                     17 August 2021              www.cninfo.com.cn
Public Bidding


XV 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.




                                                                                                                   144
Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021


2. Major guarantees


√ Applicable □ Not applicable
                                                                                                                      Unit: RMB'0,000

        Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)

              Disclosure
                                                                                                                              Guarante
              date of the                                                                  Counter
                                          Actual       Actual                                                     Having       e for a
              guarantee      Line of                                Type of    Collateral guarant Term of
  Obligor                               occurrence    guarantee                                                  expired or    related
                 line       guarantee                              guarantee    (if any)    ee (if   guarantee
                                           date        amount                                                       not       party or
              announcem                                                                     any)
                                                                                                                                not
                 ent



Total approved line for                              Total actual amount of
such guarantees in the                               such guarantees in the
Reporting Period (A1)                                Reporting Period (A2)

Total approved line for                              Total actual balance of
such guarantees at the                               such guarantees at the
end of the Reporting                                 end of the Reporting
Period (A3)                                          Period (A4)

                               Guarantees provided by the Company as the parent for its subsidiaries

              Disclosure
                                                                                                                              Guarante
              date of the                                                                  Counter
                                          Actual       Actual                                                     Having       e for a
              guarantee      Line of                                Type of    Collateral guarant Term of
  Obligor                               occurrence    guarantee                                                  expired or    related
                 line       guarantee                              guarantee    (if any)    ee (if   guarantee
                                           date        amount                                                       not       party or
              announcem                                                                     any)
                                                                                                                                not
                 ent



Total approved line for                              Total actual amount of
such guarantees in the                               such guarantees in the
Reporting Period (B1)                                Reporting Period (B2)

Total approved line for                              Total actual balance of
such guarantees at the                               such guarantees at the
end of the Reporting                                 end of the Reporting
Period (B3)                                          Period (B4)

                                             Guarantees provided between subsidiaries

              Disclosure                                                                                                      Guarante
                                                                                           Counter
              date of the                 Actual       Actual                                                     Having       e for a
                             Line of                                Type of    Collateral guarant Term of
  Obligor     guarantee                 occurrence    guarantee                                                  expired or    related
                            guarantee                              guarantee    (if any)    ee (if   guarantee
                 line                      date        amount                                                       not       party or
                                                                                            any)
              announcem                                                                                                         not


                                                                                                                                      145
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


                  ent

Liuzhou                               26 January        5,000.00                   None   None               Not      Not
Guige                                        2021
Optoelectro
                                                                                                 2019/12/3
nics          24 June                                              Joint-liabili
                                                                                                 0-2024/12
Technology 2021                                                    ty
                                                                                                 /30
Co.,
Ltd.(Note:1
)

Liuzhou                               10 Novemb         1,000.00                   None   None               Yes      Not
Guige                                      er 2020
Optoelectro
                                                                                                 2019/12/3
nics          24 June     15,000.00                                Joint-liabili
                                                                                                 0-2024/12
Technology 2021                                                    ty
                                                                                                 /30
Co.,
Ltd.(Note:1
)

Liuzhou                               10 Decemb         1,000.00                   None   None               Yes      Not
Guige                                      er 2020
Optoelectro
                                                                                                 2019/12/3
nics          24 June                                              Joint-liabili
                                                                                                 0-2024/12
Technology 2021                                                    ty
                                                                                                 /30
Co.,
Ltd.(Note:1
)

Nanning                               1 February        4,770.00                   Yes    None               Not      Not
Liaowang                                     2021                                                2019/12/3
              24 June                                              Joint-liabili
Auto Lamp                                                                                        0-2024/12
              2021                                                 ty;mortgage
Co., Ltd.                                                                                        /30
(Note 2)

Nanning                               26 August          850.00 Joint-liabili None        None               Yes      Not
Liaowang                                     2020                  ty                            2019/12/3
              24 June     20,000.00
Auto Lamp                                                                                        0-2024/12
              2021
Co., Ltd.                                                                                        /30
(Note 2)

Nanning                               16 Septem         2,000.00 Joint-liabili None       None               Yes      Not
Liaowang                                ber 2020                   ty                            2019/12/3
              24 June
Auto Lamp                                                                                        0-2024/12
              2021
Co., Ltd.                                                                                        /30
(Note 2)

Total approved line for                              Total actual amount of                                              14,620
such guarantees in the                               such guarantees in the


                                                                                                                             146
Foshan Electrical and Lighting Co., Ltd.                                                                     Annual Report 2021


Reporting Period (C1)                                 Reporting Period (C2)

Total approved line for                               Total actual balance of                                              9,770
such guarantees at the                                such guarantees at the
end of the Reporting                                  end of the Reporting
Period (C3)                                           Period (C4)

Total guarantee amount (total of the three kinds of guarantees above)

Total guarantee line approved in                      Total actual guarantee                                              14,620
the         Reporting       Period                    amount in the Reporting
(A1+B1+C1)                                            Period (A2+B2+C2)

                                                      Total actual guarantee                                               9,770
Total approved guarantee line at
                                                      balance at the end of the
the end of the Reporting Period
                                                      Reporting         Period
(A3+B3+C3)
                                                      (A4+B4+C4)

Total actual guarantee amount (A4+B4+C4) as %
                                                                                                                          1.68%
of the Company’s net assets

Of which:

Balance of guarantees provided for shareholders,
actual controller and their related parties (D)

Balance of debt guarantees provided directly or
indirectly for obligors with an over 70% debt/asset
ratio (E)

Amount by which the total guarantee amount
exceeds 50% of the Company’s net assets (F)

Total of the three amounts above (D+E+F)

Joint responsibilities possibly borne or already
borne in the Reporting Period for undue guarantees
(if any)

Provision of external guarantees in breach of the
prescribed procedures (if any)

Note :Chongqing Guinuo Lighting Technology Co., Ltd. (“Chongqing Guinuo”), Qingdao Guige Lighting Technology Co., Ltd.
(“Qingdao Lighting”) and Liuzhou Guige Lighting Technology Co., Ltd. (“Liuzhou Lighting”) are all wholly-owned subsidiaries of
Nanning Liaowang Auto Lamp Co., Ltd. (“Nanning Liaowang”). The aforesaid guarantees all occurred before the Company’s
acquisition of Nanning Liaowang, and have been disclosed in the Company’s Announcement on the Acquisition of Nanning
Liaowang Auto Lamp Co., Ltd. dated 24 June 2021. As of 31 December 2021, guarantees between Nanning Liaowang and its
subsidiaries are set out in “3. Other” under “XIV Commitments and contingencies” of Part X.

Note 1: Nanning Liaowang provided guarantees for Liuzhou Lighting.
Note 2: Qingdao Lighting, Liuzhou Lighting and Chongqing Guinuo provided guarantees for Nanning Liaowang.




                                                                                                                              147
Foshan Electrical and Lighting Co., Ltd.                                                                                              Annual Report 2021


3. Cash Entrusted to Other Entities for Management

(1) Cash Entrusted for Wealth Management


√ Applicable □ Not applicable

Overview of cash entrusted for wealth management during the Reporting Period
                                                                                                                                             Unit: RMB'0,000

                                                                                                                                            Provision for
                                                                                                             Unrecovered                impairment on
         Type               Funding source                 Amount                 Undue amount
                                                                                                            overdue amount                  unrecovered
                                                                                                                                       overdue amount

Bank         financial
                          Self-owned funds                          40,000                   32,191                              0                               0
products

Others                    Self-owned funds                          30,000                         0                             0                               0

Total                                                               70,000                   32,191                              0                               0

High-risk wealth management transactions with a significant single amount, or with low security and low liquidity:

√ Applicable □ Not applicable
                                                                                                                                      Unit: RMB’0,000
                                                                                                                                                        Index
                                                                                                                                                          to
                                                                                                                                                        transa
                                                                                  Annua                                 Allow Prescr
                                                                                                   Actual Receip                               Plan     ction
                  Type of                                                          lized Expect                         ance         ibed
                                      Source                             Deter                     gain/lo t/paym                               for     summ
           Type   wealth                       Begin            Use of             yield    ed                           for     proced
Truste                       Princi     of             Endin             minati                     ss in     ent of                           more      ary
            of    manag                         ning            princi             rate    yield                        impair        ure
   e                          pal     princi           g date             on of                    Report such                                 transa    and
         trustee ement                          date             pal                for     (if                         ment execut
                                       pal                                yield                       ing     gain/lo                          ction    other
                  product                                                         refere any)                             (if        ed or
                                                                                                   Period          ss                          or not infor
                                                                                   nce                                  any)          not
                                                                                                                                                        matio
                                                                                                                                                         n (if
                                                                                                                                                        any)

                                                                         Repay
                                                                         ment
                  Not
Guang                                                                    of
                  princip
zhou                                           27                        princi
                  al-prot             Self-o           3                                                      To be
Rural                                          Dece                      pal
         Bank     ected     20,000 wned                Januar Other               3.80% 14.58 10.41 receiv                       Yes          Yes
Comm                                           mber                      with
                  with                funds            y 2022                                                 ed
ercial                                         2021                      yield
                  floatin
Bank                                                                     upon
                  g yield
                                                                         maturi
                                                                         ty


                                                                                                                                                            148
Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


                                                                        Repay
                                                                        ment
                Not
                                                                        of
                princip
Bank                                        29                          princi
                al-prot            Self-o             5                                                 To be
of                                          Dece                        pal
         Bank   ected     10,000 wned                 Januar Other                3.60%    6.9     1.48 receiv    Yes    Yes
Guang                                       mber                        with
                with               funds              y 2022                                            ed
zhou                                        2021                        yield
                floatin
                                                                        upon
                g yield
                                                                        maturi
                                                                        ty

                                                                        Repay
                                                                        ment
                Not
Guang                                                                   of
                princip
zhou                                        30                          princi
                al-prot            Self-o             6                                                 To be
Rural                                       Dece                        pal
         Bank   ected      1,000 wned                 Januar Other                3.80%   0.73          receiv    Yes    Yes
Comm                                        mber                        with
                with               funds              y 2022                                            ed
ercial                                      2021                        yield
                floatin
Bank                                                                    upon
                g yield
                                                                        maturi
                                                                        ty

Jimo            Non-gu
Branc           arantee                    13                  Credit   Withdr
                                                 30                                              To be
h of            d                  Self-fu Septe               or's     awal
        Bank            791                      June                          3.00% 36.00 35.99 recove           Yes    Yes
Industr         floatin            nded mber                   rights   at any
                                                 2022                                            red
ial             g                          2021                assets   time
Bank            income

Nanni
ng
Branc
h               Non-gu
Busine          arantee                    13                  Credit   Withdr
                                                 30                                                     To be
ss              d                  Self-fu Septe               or's     awal
        Bank            400                      June                          3.00% 3.50        3.37   recove    Yes    Yes
Depart          floatin            nded mber                   rights   at any
                                                 2022                                                   red
ment            g                          2021                assets   time
of              income
Industr
ial
Bank

Total                     32,191     --          --       --     --          --    --     61.71 51.25        --     --     --   --

Situation where the principal is expectedly irrecoverable or an impairment may be incurred:

□ Applicable √ Not applicable


(2) Entrusted Loans

□ Applicable √ Not applicable

No such cases in the Reporting Period.

                                                                                                                                     149
Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021


4. Other Significant Contracts

□ Applicable √ Not applicable

No such cases in the Reporting Period.

XVI Other Significant Events


√ Applicable □ Not applicable

1. Major asset restructuring

The Company held the 19th meeting of the ninth Board of Directors and the Third Extraordinary General Meeting of

Shareholders for the year 2021 on 27 October 2021 and 31 December 2021, respectively, where the “Report on

Major Asset Purchase and Related Party Trading of Foshan Electrical and Lighting Co., Ltd. (Draft) and Its

Summary” and other proposals related to this trading was deliberated and adopted. It was agreed that the Company

will purchase 100% equity of Foshan Sigma Venture Capital Co., Ltd. (hereinafter referred to as "Sigma") held by

Electronics Group (Sigma holds 79,753,050 shares of NationStar Optoelectronics) and 52,051,945 tradable shares

of NationStar Optoelectronics held by Rising Holdings Group and Rising Capital in total. As of 25 February 2022,

the Company has paid all the transfer price, and the transfer of the underlying assets involved in this major asset

restructuring has been completed, and the Company has become the controlling shareholder of NationStar

Optoelectronics.

2. Share repurchase

The Third Extraordinary Shareholders’ General Meeting for 2020 of the Company reviewed and passed the

Proposal on Repurchasing Some A and B Shares of the Company on 18 December 2020. The Company formulated

and disclosed the repurchase report in line with relevant regulations. See the Report on Repurchasing Some A and B

Shares of the Company published on Cninfo (www.cninfo.com.cn) on 24 December 2020. As of 18 December 2021,

the Company accumulatively repurchased 31,952,995 A-Shares and 18,398,512 B-Shares, respectively, by way of

centralized bidding, representing 3.60% of the total share capital. RMB201,955,600 (excluding the transaction cost)

and HKD58,588,200 (excluding the transaction cost) were spent for the repurchase of the A and B Shares,

respectively. The implementation period of this share repurchase has expired.

The Company held the 26th Meeting of the Ninth Board of Directors on 14 January 2022, where the Proposal on

Retirement of Some Shares in the Company's Repurchase Special Securities Account was deliberated and approved.

The Board of Directors agreed to use the repurchased 13 million A shares for the equity incentive plan. After

                                                                                                               150
Foshan Electrical and Lighting Co., Ltd.                                                     Annual Report 2021



deducting the 13 million A shares used for the equity incentive plan, the remaining 18,952,995 A shares and

18,398,512 B shares would be retired, totalling 37,351,507 shares. On 8 February 2022, the above-mentioned

shares were retired, and the total share capital of the Company was changed from 1,399,346,154 shares to

1,361,994,647 shares.

3. Sales of shares of other listed companies

In 2021, the Company sold 28,139,100 shares of Gotion High-tech at the price of RMB45.21 per share totaling

RMB1,260,021,700 (with taxes and fees not deducted yet). Upon the decrease, it held 17,316,375 shares of Gotion

High-tech, representing 1.35% of the total share capital. In 2021, the Company sold 26,242,300 shares of Xiamen

Bank at the price of RMB6.88 per share totaling RMB180,074,800 (with taxes and fees not deducted yet). Upon the

decrease, it held 83,471,876 shares of Xiamen Bank, representing 3.17% of the total share capital. In 2021, the

Company sold 18,546,754 shares of Everbright Bank at the price of RMB3.44 per share totaling RMB63,851,100

(with taxes and fees not deducted yet). Upon the decrease, it no longer held shares of Everbright Bank. In

conformity with the new financial instrument standards effective on 1 January 2019, the Company recorded the

investment in Gotion High-tech, Xiamen Bank and Everbright Bank as non-trading equity instrument investment at

fair value through other comprehensive income. The decrease did not affect the Company's profit in the current

period.

XVII Significant Events of Subsidiaries


√ Applicable □ Not applicable

1. Deregistration of New Light Source

On 17 July 2020, the Company held the 41st Meeting of the Eighth Board of Directors, where the Proposal on

Deregistration of Wholly Owned Subsidiaries was deliberated and approved, and the Board of Directors agreed to

deregister Foshan Electrical and Lighting Co., Ltd., a wholly owned subsidiary. In September 2021, the Company

received the Notice of Approval for Deregistration Registration issued by Foshan Municipal Market Supervision

Administration, and the deregistration registration procedures of New Light Source have been completed. New

Light Source has been excluded in the scope of the consolidated financial statements since the day the company

registration cancellation procedure was completed.

2. Merger of Hunan Keda by absorption

The Company held the 15th meeting of the ninth Board of Directors on 16 August 2021, where the Proposal for

                                                                                                           151
Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021



Merger of the Wholly-owned Subsidiary Hunan Keda New Energy Investment and Development Co., Ltd. by

Absorption, was deliberated and adopted. In order to streamline corporate management, reduce management costs

and improve operational efficiency, the Board of Directors agreed that the Company should merge Hunan Keda

New Energy Investment and Development Co., Ltd., a wholly-owned subsidiary by absorption. Upon completion of

this merger by absorption, Hunan Keda's independent legal personality will be cancelled, and all assets, creditor's

rights and debts, business, personnel and all other rights and obligations of Hunan Keda will be inherited by the

Company according to law. In November 2021, the Company received the Notice of Approval for Deregistration

Registration ((GX) DJNZH Zi [2021] No. 20795) issued by Changsha High-tech Industrial Development Zone

Management Committee, approving deregistration registration of Hunan Keda. The industrial and commercial

deregistration of Hunan Keda involved in this merger by absorption has been completed.

3. Expropriation of land and above-ground housing of Nanjing Fozhao

The Company held the 24th Meeting of the Ninth Board of Directors on 15 December 2021, where the Proposal on

Expropriation of Land and Above-ground Housing of the Wholly-owned Subsidiary Nanjing Fozhao Lighting

Equipment Manufacturing Co., Ltd., was deliberated and adopted. The Board of Directors agreed that Nanjing

Lishui District People's Government expropriates the land use rights and above-land housing of Nanjing Fozhao

Lighting Equipment Manufacturing Co., Ltd. (hereinafter referred to as "Nanjing Fozhao"), a wholly-owned

subsidiary of the Company, at a compensation amount of RMB183,855,895, and Nanjing Fozhao signed an

expropriation and compensation agreement with Lishui County House Dismantling, Moving & Resettling

Development Co., Ltd., the implementing unit of the housing expropriation. As of 31 December 2021, Nanjing

Fozhao has received 30% of the compensation, that is, RMB55,160,000.00, and the land use right certificate and

house ownership certificate of the assets involved have been cancelled. As of the date of this report, the site

handover is still in progress.

4. Cancellation of FSL LIGHTING GmbH

On October 22, 2021, FSL held an office meeting of the general manager, where the proposal for cancellation of

its wholly-owned subsidiary FSL LIGHTING GmbH was deliberated and adopted. As of the end of the reporting

period, the Company is handling the relevant procedures for liquidation and cancellation.




                                                                                                               152
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021




                 Part VII 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

                                  13,169,19                                                                          13,169,19
1. Restricted shares                               0.94%                                              0          0                    0.94%
                                            6                                                                                  6

1.1 Shares held by state

1.2 Shares held by
                                            1      0.00%                                     2,415,538 2,415,538 2,415,539            0.17%
state-owned legal persons

1.3 Shares held by other                                                                     -2,415,53 -2,415,53
                                  4,241,563        0.30%                                                             1,826,025        0.13%
domestic investors                                                                                    8          8

Among which: Shares held by                                                                  -2,415,53 -2,415,53
                                  3,753,972        0.27%                                                             1,338,434        0.10%
domestic legal persons                                                                                8          8

                   Shares held
                                    487,591        0.03%                                                              487,591         0.03%
by domestic natural persons

1.4 Shares held by foreign
                                  8,927,632        0.64%                                                             8,927,632        0.64%
investors

Among which: Shares held by
foreign legal persons

                 Shares held by
                                  8,927,632        0.64%                                                             8,927,632        0.64%
foreign natural persons

                                  1,386,176,                                                                         1,386,176
2. Unrestricted shares                            99.06%                                                                             99.06%
                                        958                                                                               ,958

2.1         RMB-denominated 1,073,038,                                                                               1,073,038
                                                  76.68%                                                                             76.68%
ordinary shares                         507                                                                               ,507

2.2    Domestically        listed 313,138,4                                                                          313,138,4
                                                  22.38%                                                                             22.38%
foreign shares                           51                                                                                51

2.3 Overseas listed foreign


                                                                                                                                            153
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


shares

2.4 Other

                             1,399,346,                                                             1,399,346
3. Total shares                            100.00%                                   0          0               100.00%
                                   154                                                                   ,154


Reasons for share changes:

□ Applicable √ Not applicable

Approval of share changes:

□ Applicable √ Not applicable

Transfer of share ownership:

□ 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

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

3. Existing Staff-Held Shares

□ Applicable √ Not applicable




                                                                                                                     154
Foshan Electrical and Lighting Co., Ltd.                                                                                           Annual Report 2021


III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

                                                                                                                                              Unit: share

                                                                                                                      Number of
                                        Number of                                                                     preferred
                                                                                Number of
                                        ordinary                                                                      shareholders with
                                                                                preferred
Number of                               shareholders at                                                               resumed voting
                                                                                shareholders with
ordinary                      69,896 the month-end                   69,546                                       0 rights at the                      0
                                                                                resumed voting
shareholders                            prior to the                                                                  month-end prior
                                                                                rights (if any) (see
                                        disclosure of this                                                            to the disclosure
                                                                                note 8)
                                        Report                                                                        of this Report (if
                                                                                                                      any) (see note 8)

                                                 5% or greater shareholders or top 10 shareholders

                                                                           Increase/d                                  Shares in pledge, marked or
                                            Shareholdi Total shares ecrease in Restricted                                           frozen
        Name of             Nature of                                                                  Unrestricted
                                                 ng          held at the        the         shares
       shareholder         shareholder                                                                 shares held
                                            percentage period-end          Reporting        held                          Status             Shares
                                                                               Period

Hongkong          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

Guangdong
Electronics
                         State-owned
Information                                        8.77% 122,694,246                                    122,694,246     In pledge            32,532,815
                         legal person
Industry        Group
Ltd.

Guangdong Rising
                         State-owned                                       83,130,89
Holdings Group                                     5.94%     83,130,898                                  83,130,898
                         legal person                                      8
Co., Ltd.

Essence
International            Foreign    legal
                                                   2.54%     35,586,037 2,535,909                        35,586,037
Securities      (Hong person
Kong) Co., Ltd.

Central         Huijin
                         State-owned
Asset Management                                   2.37%     33,161,800 -717,100                         33,161,800
                         legal person
Co., Ltd.



                                                                                                                                                      155
Foshan Electrical and Lighting Co., Ltd.                                                                                   Annual Report 2021


Rising Investment
                       Foreign       legal
Development                                      1.82%    25,482,252                               25,482,252
                       person
Limited

China Merchants
                       State-owned
Securities (Hong                                 1.03%    14,448,307 484,913                       14,448,307
                       legal person
Kong) Co., Ltd

                       Foreign natural
Zhuang Jianyi                                    0.85%    11,903,509               8,927,632        2,975,877
                       person

DBS VICKERS
(HONG KONG)            Foreign legal
                                                 0.70%     9,744,456 -8,893,199                     9,744,456
LTD A/C                person
CLIENTS

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, Hongkong Wah Shing Holding Company Limited, Guangdong
                                             Rising Holdings Group Co., Ltd., Guangdong Electronics Information Industry Group Ltd. and
                                             Rising Investment Development Limited are acting-in-concert parties; and Prosperity Lamps &
Related or acting-in-concert parties
                                             Components Limited and Zhuang Jianyi are acting-in-concert parties. Apart from that, it is
among the shareholders above
                                             unknown whether there is among the top 10 shareholders any other related parties or
                                             acting-in-concert parties as defined in the Administrative Measures for the Acquisition of
                                             Listed Companies.

Above shareholders involved in
entrusting/being       entrusted     with
                                             Naught
voting rights and giving up voting
rights

                                             As of 18 December 2021, the implementation period of this share repurchase has expired. As
Special      account       for      share
                                             of the period-end, the Company had repurchased a total of 31,952,995 A-Shares and
repurchases (if any) among the top
                                             18,398,512 B-shares of the Company through centralized bidding. The repurchased shares
10 shareholders (see note 10)
                                             account for 3.60% of the Company's total share capital.

                                                         Top 10 unrestricted shareholders

                                                                                                                        Type of shares
          Name of shareholder                             Unrestricted shares at the Period-end
                                                                                                                   Type           Shares

                                                                                                                RMB-deno
Hongkong Wah           Shing Holding                                                                            minated
                                                                                                  188,496,430                    188,496,430
Company Limited                                                                                                 ordinary
                                                                                                                stock

                                                                                                                RMB-deno
Prosperity Lamps & Components
                                                                                                  146,934,857 minated            146,934,857
Limited
                                                                                                                ordinary

                                                                                                                                           156
Foshan Electrical and Lighting Co., Ltd.                                                                                Annual Report 2021


                                                                                                             stock

                                                                                                             RMB-deno
Guangdong Electronics Information                                                                            minated
                                                                                              122,694,246                     122,694,246
Industry Group Ltd.                                                                                          ordinary
                                                                                                             stock

                                                                                                             RMB-deno
Guangdong Rising Holdings Group                                                                              minated
                                                                                                83,130,898                     83,130,898
Co., Ltd.                                                                                                    ordinary
                                                                                                             stock

                                                                                                           Domesticall
Essence       International     Securities
                                                                                                35,586,037 y     listed        35,586,037
(Hong Kong) Co., Ltd.
                                                                                                             foreign stock

                                                                                                             RMB-deno
Central Huijin Asset Management                                                                              minated
                                                                                                33,161,800                     33,161,800
Co., Ltd.                                                                                                    ordinary
                                                                                                             stock

                                                                                                             Domesticall
Rising      Investment    Development
                                                                                                25,482,252 y         listed    25,482,252
Limited
                                                                                                             foreign stock

                                                                                                           Domesticall
China Merchants Securities (Hong
                                                                                                14,448,307 y     listed        14,448,307
Kong) Co., Ltd
                                                                                                             foreign stock

                                                                                                           Domesticall
DBS VICKERS (HONG KONG)
                                                                                                 9,744,456 y     listed         9,744,456
LTD A/C CLIENTS
                                                                                                             foreign stock

                                                                                                             RMB-deno
                                                                                                             minated
Zhang Shaowu                                                                                     9,300,050                      9,300,050
                                                                                                             ordinary
                                                                                                             stock

Related or acting-in-concert parties Among the top 10 unrestricted ordinary shareholders, Hong Kong Wah Shing Holding
among the top 10 unrestricted Company Limited, Guangdong Rising Holdings Group Co., Ltd., Guangdong Electronics
ordinary shareholders, as well as Information Industry Group Ltd., and Rising Investment Development Limited are
between the top 10 unrestricted acting-in-concert parties; Apart from that, it is unknown whether there is among the top 10
ordinary shareholders and the top 10 shareholders any other related parties or acting-in-concert parties as defined in the
ordinary shareholders                        Administrative Measures for the Acquisition of Listed Companies.

Top      10    ordinary       shareholders
involved in securities margin trading None
(if any) (see note 4)

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

                                                                                                                                      157
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021



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/perso Date of establishment                                         Principal activity
       shareholder                                                           code
                            n in charge

                                                                                              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                                                                              international       bids,      contractor
Holdings Group Co.,     Liu Weidong         23 December 1999         91440000719283849E       service      for survey, consulting,
Ltd.                                                                                          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).

                                                                                              Development, production and sale
                                                                                              of electronics, IT products and
                                                                                              electrical appliances, operation of
                                                                                              electronic      information networks
Guangdong Electronics
                                                                                              and computers, electronic computer
Information Industry    Liu Ke              19 October 2000          91440000725458764N
                                                                                              technology service, and equipment
Group Ltd.
                                                                                              and venue rental service; sale of
                                                                                              electronic computers and fittings,
                                                                                              electronic     components, electron
                                                                                              devices, and electrical machinery


                                                                                                                                       158
Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021


                                                                                                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 (Limited to
                                                                                                branch       operation);        .technical
                                                                                                services.

Rising Investment
                        Yao Shu                 11 July 2001          764105                    Investment and asset management
Development Limited

                        At the end of the Reporting Period, Guangdong Rising Holdings Group Co., Ltd. and its parties acting in
                          concert. directly or indirectly held the following stakes in other listed companies at home or abroad:
Shareholdings          of 1. a 42.87% stake of 129,372,517 shares in Rising Nonferrous (stock code: 600259);
controlling shareholder
                          2. a 33.72% stake of 1,230,807,848 shares in Zhongjin Lingnan Nonfemet (stock code: 000060);
in other listed companies
                          3. a 20.50% stake of 183,495,085 shares in Fenghua Advanced (stock code: 000636);
at home or abroad in
                          4. a 21.48% stake of 132,819,895 shares in NationStar Optoe lectronics (stock code: 002449);
reporting period
                          5. a 25.72% stake of 226,147,494 A shares and H shares in Dongjiang Environment (stock code: 002672);

                        6. a 6.14% stake of 91,507,138,699 shares in China Telecom (stock code: 601728、00728. HK).


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/perso                                                          Principal activity
                                                      establishment            code
                                  n in charge

                                                                                               Asset management and operation,
Guangdong Rising Holdings                                                                      equity management and operation,
                             Liu Weidong            23 December 1999 719283849
Group Co., Ltd.                                                                                investment         operation,          and
                                                                                               management and re-investment of


                                                                                                                                       159
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


                                                                                              investment earnings; other business
                                                                                              authorized by the state-owned assets
                                                                                              administration of the Guangdong
                                                                                              Province;    contractor    service   for
                                                                                              overseas     projects    and    domestic
                                                                                              projects calling for international bids,
                                                                                              contractor     service    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 Holdings Group Co., Ltd. and its parties acting
                            in concert. directly or indirectly held the following stakes in other listed companies at home or abroad:

Shareholdings of the actual 1. a 42.87% stake of 129,372,517 shares in Rising Nonferrous (stock code: 600259);
controller in other listed 2. a 33.72% stake of 1,230,807,848 shares in Zhongjin Lingnan Nonfemet (stock code: 000060);
companies    at   home   or 3. a 20.50% stake of 183,495,085 shares in Fenghua Advanced (stock code: 000636);
abroad in this Reporting 4. a 21.48% stake of 132,819,895 shares in NationStar Optoelectronics (stock code: 002449);
Period                   5. a 25.72% stake of 226,147,494 A shares and H shares in Dongjiang Environment (stock code:
                            002672);
                            6. a 6.14% stake of 91,507,138,699 shares in China Telecom (stock code: 601728、 00728. HK).

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:




                                                                                                                                    160
Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021




Note: The diagram above shows how the actual controller owned the Company as at 31 December 2021. So far,

the total share capital of the Company has decreased from 1,399,346,154 shares to 1,361,994,647 shares due to the

retirement in February 2022 of 37,351,507 shares repurchased by the Company. As of the disclosure date of this

Report, the combined interest of the Company held by the actual controller is 30.82%.

Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset

management.

□ Applicable √ Not applicable

4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or the Largest
Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held by
Them

□ Applicable √ Not applicable




                                                                                                             161
Foshan Electrical and Lighting Co., Ltd.                                                                                      Annual Report 2021


5. 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          &
                                     Zhuang Jianyi                  28 April 1978          HKD2 million           lighting equipment, etc., and
Components Limited
                                                                                                                  design,      installation       and
                                                                                                                  after-sales service of lighting
                                                                                                                  solutions


6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers

□ Applicable √ Not applicable

IV Specific Implementation of Share Repurchases in the Reporting Period


Progress on any share repurchases

 Applicable □ Not applicable
                                                                                                                                     Number of
                                                                                                                                       shares
                                                                                                                                  repurchased as
                                                                                                                 Number of
                    Number of                            Amount of all                                                                % of the
Disclosure time                        As % of total                             Term of                           shares
                    shares to be                         repurchased                             Usage                               underlying
    of plan                             share capital                         repurchase                         repurchased
                    repurchased                              shares                                                              stocks involved
                                                                                                                   (share)
                                                                                                                                    in the equity
                                                                                                                                    incentive plan
                                                                                                                                       (if any)

                  According to                          The total          Not exceeding All B shares
                  the lower limit                       amount of          12 months        repurchased
                  of the total                          funds for          since this       shall be
                  amount of                             repurchasing A repurchase plan cancelled
                  A-share                               shares is not      has been         according to
3 December
                  repurchase of       3.54%-6.66%       less than          reviewed and     law. The               50,351,507                  None
2020
                  RMB200                                RMB200             approved on      repurchased A
                  million and the                       million            the              shares are
                  upper limit of                        (inclusive) and shareholders’      planned to be
                  the price of                          not more than      meeting of the no less than 9
                  repurchased                           RMB350             Company          million shares


                                                                                                                                                   162
Foshan Electrical and Lighting Co., Ltd.                                         Annual Report 2021


               shares of                   million            and no more
               RMB8.52/shar                (inclusive). The   than 13.99
               e, it is                    total amount of    million shares
               estimated that              funds for          for the equity
               the number of               repurchasing B     incentive plan,
               A-share                     shares is not      and no less than
               repurchased                 less than          14.4741
               shares is about             HKD100             million shares
               23.4741                     million            and no more
               million shares.             (inclusive) and    than 27.0898
               According to                not more than      million shares
               the upper limit             HKD200             are planned to
               of the total                million            be cancelled.
               amount of                   (inclusive),
               A-share                     which is
               repurchase of               converted
               RMB350                      according to
               million, it is              the central
               estimated that              parity of HKD
               the number of               to RMB
               A-share                     exchange rate
               repurchases is              on 2 December
               41.0798                     2020: HKD1 =
               million shares.             RMB0.84635,
               According to                equivalent to
               the lower limit             RMB not less
               of the total                than
               amount of                   RMB84.635
               B-share                     million
               repurchase of               (inclusive) and
               HKD100                      not more than
               million                     RMB169.27
               (equivalent to              million
               RMB84.635                   (inclusive).
               million) and
               the upper limit
               of the price of
               repurchased
               shares of
               HKD3.84/share
               , it is estimated
               that the number
               of B-share
               repurchase is


                                                                                               163
Foshan Electrical and Lighting Co., Ltd.                                       Annual Report 2021


               26.0416
               million shares.
               According to
               the maximum
               amount of
               B-share
               repurchase of
               HKD200
               million
               (equivalent to
               RMB169.27
               million), it is
               estimated that
               the number of
               B-share
               repurchase is
               52.0833
               million shares.

Progress on reducing the repurchased shares by means of centralized bidding:

□ Applicable √ Not applicable




                                                                                             164
Foshan Electrical and Lighting Co., Ltd.                           Annual Report 2021




                                      Part VIII Preferred Shares


□ Applicable √ Not applicable

No preference shares in the Reporting Period.




                                                                                 165
Foshan Electrical and Lighting Co., Ltd.                         Annual Report 2021




                                       Part IX Corporate Bonds

□ Applicable √ Not applicable




                                                                               166
Foshan Electrical and Lighting Co., Ltd.                                                                Annual Report 2021




                                        Part X Financial Statements

I Auditor’s Report

Type of the independent auditor’s opinion                  Unmodified unqualified opinion

Date of signing this report                                 30 March 2022

Name of the independent auditor                             Zhongzheng Tiantong Certified Public Accountants LLP

No. of independent auditor’s report                        ZZTT (2022) Auditor’s Report No. 0700003

Names of certified public accountants                       Feng Wei, Li Qiongqian



                                             Independent Auditor’s Report

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 2021,
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 2021, 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 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) Business combination not under the same control


                                                                                                                      167
Foshan Electrical and Lighting Co., Ltd.                                                            Annual Report 2021


1. Description

As stated in the notes to the consolidated financial statements "VIII. Changes in the Scope of Consolidation (I)" and
"XVII. Notes to Major Items in the Financial Statements of the Parent Company (III)", FSL acquired 53.79% equity
of Nanning Liaowang Auto Lamp Co., Ltd. (hereinafter referred to as "Nanning Liaowang") in August 2021 by
acquiring the equity of the original shareholders and making additional investment. In view of the fact that the
judgment of the acquisition date and the determination of the fair value of identifiable assets and liabilities on the
acquisition date involve more management's estimation and judgment, we determined the business combination not
under the same control as a key audit item.

2. Response to audit

In view of the business combination of FSL not under the same control, we have implemented the following main
procedures:

  (1) Learning and testing the design and implementation of internal control system related to investment activities in
an effort to confirm the effectiveness of internal control operation. (2) Inquiring the management to learn the
commercial substance of this equity transaction matter and assess its rationality. (3) Obtaining and consulting the
equity transfer agreement, resolutions of shareholders' meeting and board of directors related to equity acquisition,
equity payment documents, control right transfer procedures and other documents, and Check whether the relevant
legal procedures are completed, and comprehensively judge the rationality of the management's determination of
the purchase date. (4) Obtaining the asset evaluation report produced by a third-party evaluation institution, evaluate
the competence, professionalism and objectivity of the appraiser, and review the accuracy and rationality of the
parameters used during the evaluation process. (5) Check the accuracy of accounting treatment related to purchase
date and consolidated cost.(6) Evaluating the adequacy and appropriateness of the disclosure of the equity
acquisition in the financial statements.

(II) Revenue recognition

1. Description
As stated in the notes to the consolidated financial statements "V. Important Accounting Policies and Accounting
Estimates (39)" and "VII. Notes to Major Items of the Consolidated Financial Statements (61)", FSL achieved
operating revenue of RMB4,772,690,469.14 in 2021, an increase of RMB1,027,776,016.42 or 27.44% over the
previous period. As operating revenue is one of the key performance indicators of FSL, there is an inherent risk that
revenue will be manipulated to achieve the target or expected level. Thus, we determined that revenue is recognized
as a key audit item.

2. Response to audit

In terms of revenue recognition of FSL, we performed the following main procedures: (1) Learning and testing the
design and implementation of FSL’s key internal controls related to revenue recognition in an effort to confirm the
effectiveness of internal control operation. (2) Sales contracts will be sample-checked to identify terms and
conditions on the transfer of the control of commodities and assess whether the Company complies with the new
accounting standards in terms of the time of recognition of revenue. (3) Collecting FSL's revenue transactions to
check the invoices, shipping documents and customs clearance documents and assess whether the revenues are
recorded in the appropriate accounting periods. (4) Obtaining letters of confirmation from customers to check the
exactness and completeness of the data about the balances of accounts receivable. (5) Checking the industrial and
commercial registration information of customers through public information platforms, including a list of the
related parties of each customer for checking the related-party relationship between FSL and customers. (6)

                                                                                                                   168
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


Carrying out cut-off test on revenue, selecting samples of revenue recognition tradings before and after the balance
sheet date, obtaining relevant data such as outbound delivery orders, and evaluating whether revenue is recognized
in an appropriate period. (7) Analyzing the revenue and gross profit according to the product type, and judging
whether there is abnormal fluctuation in the current income amount. (8) Obtaining the record of return and exchange
to check whether there is any major abnormal return and exchange. (9) Checking the record of the revenue
transactions in the current period for exactness and completeness by using other audit procedures such as checking
the payment collections and sales returns subsequent to the current period and the letters of reconciliation between
FSL and customers.

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 2021 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 financial 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 fraud 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 fraud
is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,

                                                                                                                  169
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


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 policies 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 financial 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 therefore 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)

                                                                        Feng Wei

                                                                      Chinese CPA:
               Beijing China
                                                                      Li Qiongqian

                                                                      30 March 2022


                                                                                                                    170
Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021




II Financial Statements

Currency unit for the financial statements and the notes thereto: RMB

1. Consolidated Balance Sheet

Prepared by Foshan Electrical and Lighting Co., Ltd.
                                                         31 December 2021

                                                                                                         Unit: RMB

                    Item                               31 December 2021               31 December 2020

Current assets:

  Monetary assets                                                  1,384,218,544.27                981,249,699.49

  Settlement reserve

  Interbank loans granted

  Held-for-trading financial assets                                 328,248,125.61                 407,619,201.36

  Derivative financial assets

  Notes receivable                                                  594,208,093.58                 140,972,143.00

  Accounts receivable                                              1,452,728,276.48               1,134,233,235.70

  Accounts receivable financing

  Prepayments                                                        20,119,957.02                  11,994,745.05

  Premiums receivable

  Reinsurance receivables
  Receivable      reinsurance     contract
reserve

  Other receivables                                                 34,082,909.41                   20,194,968.19

    Including: Interest receivable

                  Dividends receivable

  Financial assets       purchased under
resale agreements

  Inventories                                                      1,063,489,341.00                735,685,116.91

  Contract assets                                                     8,561,303.10

  Assets held for sale                                               23,831,992.10

  Current portion of non-current assets

  Other current assets                                               85,693,988.74                 175,090,368.85

Total current assets                                               4,995,182,531.31               3,607,039,478.55


                                                                                                               171
Foshan Electrical and Lighting Co., Ltd.                      Annual Report 2021


Non-current assets:

  Loans and advances to customers

  Investments in debt obligations

  Investments in other debt obligations

  Long-term receivables

  Long-term equity investments              181,545,123.09       181,365,016.32

  Investments in other equity
                                           1,474,860,785.15    3,305,501,030.06
instruments

  Other non-current financial assets

  Investment property                        43,347,824.34

  Fixed assets                             1,323,076,326.60      685,707,548.55

  Construction in progress                  730,595,319.42       503,941,120.31

  Productive living assets

  Oil and gas assets

  Right-of-use assets                        13,497,139.00

  Intangible assets                         271,673,951.80       170,693,873.30

  Development costs

  Goodwill                                   16,211,469.82

  Long-term prepaid expense                 125,238,940.05        13,411,226.23

  Deferred income tax assets                 54,211,287.28        40,253,777.17

  Other non-current assets                  470,151,830.75        11,423,843.62

Total non-current assets                   4,704,409,997.30    4,912,297,435.56

Total assets                               9,699,592,528.61     8,519,336,914.11

Current liabilities:

  Short-term borrowings                     226,779,997.01

  Borrowings from the central bank

  Interbank loans obtained

  Held-for-trading financial liabilities

  Derivative financial liabilities

  Notes payable                             826,164,918.71       480,971,214.80

  Accounts payable                         1,554,585,231.38    1,059,674,020.99

  Advances from customers                     8,106,923.79         1,285,357.28

  Contract liabilities                       84,818,285.22        65,777,726.45

  Financial assets sold under repurchase
agreements


                                                                             172
Foshan Electrical and Lighting Co., Ltd.                            Annual Report 2021


  Customer deposits          and     interbank
deposits
  Payables     for     acting    trading   of
securities

  Payables for underwriting of securities

  Employee benefits payable                        88,925,889.20        82,485,090.47

  Taxes payable                                    82,011,059.45        18,876,657.51

  Other payables                                  298,811,112.73        76,668,330.66

    Including: Interest payable

                    Dividends payable                  15,646.07
  Handling charges and commissions
payable

  Reinsurance payables

  Liabilities directly associated with
assets held for sale
  Current      portion      of     non-current
                                                   27,279,273.54
liabilities

  Other current liabilities                         8,038,471.15         5,503,702.07

Total current liabilities                        3,205,521,162.18    1,791,242,100.23

Non-current liabilities:

  Insurance contract reserve

  Long-term borrowings

  Bonds payable

    Including: Preferred shares

                    Perpetual bonds

  Lease liabilities                                 7,862,803.22

  Long-term payables

  Long-term employee benefits payable

  Provisions                                        7,671,948.69

  Deferred income                                  14,414,666.71

  Deferred income tax liabilities                 187,691,340.19       414,670,609.97

  Other non-current liabilities                        22,653.46         1,244,064.84

Total non-current liabilities                     217,663,412.27       415,914,674.81

Total liabilities                                3,423,184,574.45    2,207,156,775.04

Owners’ equity:

  Share capital                                  1,399,346,154.00    1,399,346,154.00



                                                                                   173
Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021


  Other equity instruments

    Including: Preferred shares

                  Perpetual bonds

  Capital reserves                                                    12,071,920.14                               15,157,514.90

  Less: Treasury stock                                               250,600,874.54

  Other comprehensive income                                         984,638,432.01                           2,349,388,533.61

  Specific reserve

  Surplus reserves                                                   741,353,347.96                             741,567,039.55

  General reserve

  Retained earnings                                                 2,913,749,608.77                          1,758,462,062.48

Total equity attributable to owners of the                          5,800,558,588.34
                                                                                                              6,263,921,304.54
Company as the parent

Non-controlling interests                                            475,849,365.82                               48,258,834.53

Total owners’ equity                                               6,276,407,954.16                          6,312,180,139.07

Total liabilities and owners’ equity                               9,699,592,528.61                           8,519,336,914.11


Legal representative: Wu Shenghui                                              Chief Financial Officer: Tang Qionglan


Person-in-charge of the Company’s accounting organ: Liang Yuefei


2. Balance Sheet of the Company as the Parent

                                                                                                                        Unit: RMB

                     Item                           31 December 2021                            31 December 2020

Current assets:

  Monetary assets                                                   1,017,365,290.91                            896,261,882.77

  Held-for-trading financial assets                                  304,385,804.11                             407,619,201.36

  Derivative financial assets

  Notes receivable                                                    72,114,026.44                             137,477,199.21

  Accounts receivable                                               1,058,935,664.33                          1,030,713,074.22

  Accounts receivable financing

  Prepayments                                                          9,292,256.82                                9,581,302.45

  Other receivables                                                  511,056,231.24                             462,284,585.09

    Including: Interest receivable

                  Dividends receivable

  Inventories                                                        617,905,747.50                             615,106,650.81




                                                                                                                              174
Foshan Electrical and Lighting Co., Ltd.                      Annual Report 2021


  Contract assets                             8,561,303.10

  Assets held for sale

  Current portion of non-current assets

  Other current assets                       36,097,001.14       139,275,518.71

Total current assets                       3,635,713,325.59    3,698,319,414.62

Non-current assets:

  Investments in debt obligations

  Investments in other debt obligations

  Long-term receivables

  Long-term equity investments             1,243,081,889.11      536,949,311.73

  Investments in other equity
                                           1,474,860,785.15    3,305,501,030.06
instruments

  Other non-current financial assets

  Investment property                        43,347,824.34

  Fixed assets                              576,386,630.08       628,174,755.88

  Construction in progress                  120,514,314.18        54,652,119.14

  Productive living assets

  Oil and gas assets

  Right-of-use assets                         9,827,757.94

  Intangible assets                         123,089,721.51       122,391,701.60

  Development costs

  Goodwill

  Long-term prepaid expense                  31,897,595.21        11,651,100.48

  Deferred income tax assets                 31,373,123.07        31,403,727.94

  Other non-current assets                  460,618,564.04         7,548,885.47

Total non-current assets                   4,114,998,204.63    4,698,272,632.30

Total assets                               7,750,711,530.22    8,396,592,046.92

Current liabilities:

  Short-term borrowings                     127,596,999.82

  Held-for-trading financial liabilities

  Derivative financial liabilities

  Notes payable                             445,480,718.92       484,230,566.21

  Accounts payable                          949,520,447.82     1,108,208,382.75

  Advances from customers                     6,857,142.86




                                                                             175
Foshan Electrical and Lighting Co., Ltd.                          Annual Report 2021


  Contract liabilities                           64,120,388.15        53,572,800.70

  Employee benefits payable                      51,520,068.31        62,075,512.08

  Taxes payable                                  57,207,865.54         7,819,839.48

  Other payables                                223,535,108.76       171,916,835.73

    Including: Interest payable

                    Dividends payable

  Liabilities directly associated with
assets held for sale
  Current      portion      of   non-current
                                                  2,800,876.97
liabilities

  Other current liabilities                       5,920,593.62         4,483,279.11

Total current liabilities                      1,934,560,210.77    1,892,307,216.06

Non-current liabilities:

  Long-term borrowings

  Bonds payable

    Including: Preferred shares

                    Perpetual bonds

  Lease liabilities                               7,026,880.97

  Long-term payables

  Long-term employee benefits payable

  Provisions

  Deferred income

  Deferred income tax liabilities               173,532,376.03       414,670,609.97

  Other non-current liabilities

Total non-current liabilities                   180,559,257.00       414,670,609.97

Total liabilities                              2,115,119,467.77    2,306,977,826.03

Owners’ equity:

  Share capital                                1,399,346,154.00    1,399,346,154.00

  Other equity instruments

    Including: Preferred shares

                    Perpetual bonds

  Capital reserves                               22,568,665.93         7,426,635.62

  Less: Treasury stock                          250,600,874.54

  Other comprehensive income                    984,695,765.83     2,349,389,658.23

  Specific reserve



                                                                                 176
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


  Surplus reserves                                                   741,353,347.96                              741,567,039.55

  Retained earnings                                                 2,738,229,003.27                           1,591,884,733.49

Total owners’ equity                                               5,635,592,062.45                           6,089,614,220.89

Total liabilities and owners’ equity                               7,750,711,530.22                           8,396,592,046.92


Legal representative: Wu Shenghui                                              Chief Financial Officer: Tang Qionglan


Person-in-charge of the Company’s accounting organ: Liang Yuefei


3. Consolidated Income Statement

                                                                                                                        Unit: RMB

                     Item                                   2021                                       2020

1. Revenue                                                          4,772,690,469.14                           3,744,914,452.72

  Including: Operating revenue                                      4,772,690,469.14                           3,744,914,452.72

              Interest income

              Insurance premium income

              Handling        charge       and
commission income

2. Costs and expenses                                               4,591,588,279.47                           3,438,752,837.39

  Including: Cost of sales                                          3,962,212,033.47                           2,996,273,910.80

              Interest expense

              Handling        charge       and
commission expense

              Surrenders

              Net insurance claims paid

              Net amount provided as
insurance contract reserve
              Expenditure       on      policy
dividends
              Reinsurance            premium
expense

              Taxes and surcharges                                     45,957,443.96                              38,631,841.23

              Selling expense                                        170,281,041.34                              145,219,700.35

              Administrative expense                                  206,336,111.81                             155,365,373.75

              R&D expense                                            203,681,619.16                              108,885,296.71

              Finance costs                                             3,120,029.73                              -5,623,285.45
                 Including:            Interest
                                                                        5,790,716.89
expense

                                                                                                                              177
Foshan Electrical and Lighting Co., Ltd.                             Annual Report 2021


                              Interest income       16,201,526.00        37,650,815.03

Add: Other income                                   16,311,903.24        28,989,528.20

       Return on investment (“-” for loss)        36,121,053.68        44,236,204.90
            Including: Share of profit or loss
                                                      2,260,497.27        2,351,681.39
of joint ventures and associates
              Income from the derecognition
of financial assets at amortized cost (“-”
for loss)

       Exchange gain (“-” for loss)

       Net gain on exposure hedges (“-”
for loss)

       Gain on changes in fair value (“-”
                                                      4,649,669.44        4,785,700.00
for loss)

       Credit impairment loss (“-” for loss)       -4,657,215.52      -16,109,592.36

       Asset impairment loss (“-” for loss)       -30,891,621.47       -7,581,307.74

       Asset disposal income (“-” for loss)       77,713,637.77         9,090,874.79

3. Operating profit (“-” for loss)               280,349,616.81       369,573,023.12

Add: Non-operating income                           13,186,956.38         2,164,694.19

Less: Non-operating expense                           1,188,471.54        3,854,417.99

4. Profit before tax (“-” for loss)              292,348,101.65       367,883,299.32

Less: Income tax expense                            25,050,666.35        45,714,707.53

5. Net profit (“-” for net loss)                 267,297,435.30       322,168,591.79

  5.1 By operating continuity

    5.1.1 Net profit from continuing
                                                   267,297,435.30       322,168,591.79
operations (“-” for net loss)

    5.1.2 Net profit from discontinued
operations (“-” for net loss)

  5.2 By ownership
     5.2.1 Net profit attributable            to
                                                   250,091,965.87       316,914,185.34
owners of the Company as the parent
     5.2.1 Net profit attributable            to
                                                    17,205,469.43         5,254,406.45
non-controlling interests

6. Other comprehensive income, net of tax          -323,678,183.01    1,573,128,185.42
  Attributable to owners of the Company
                                                   -323,706,852.48    1,573,128,185.42
as the parent
     6.1 Items that will not be reclassified
                                                   -323,650,643.28    1,573,146,670.33
to profit or loss

        6.1.1       Changes       caused   by



                                                                                    178
Foshan Electrical and Lighting Co., Ltd.                                                                       Annual Report 2021


remeasurements        on     defined    benefit
schemes
        6.1.2      Other       comprehensive
income that will not be reclassified to
profit or loss under the equity method
        6.1.3 Changes in the fair value of
                                                                     -323,650,643.28                             1,573,146,670.33
investments in other equity instruments
        6.1.4 Changes in the fair value
arising from changes in own credit risk

        6.1.5 Other

     6.2 Items that will be reclassified to
                                                                           -56,209.20                                    -18,484.91
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      Other       comprehensive
income arising from the reclassification of
financial assets
        6.2.4 Credit impairment allowance
for investments in other debt obligations

        6.2.5 Reserve for cash flow hedges

        6.2.6 Differences arising from the
translation             of              foreign
                                                                           -56,209.20                                    -18,484.91
currency-denominated                   financial
statements

        6.2.7 Other

  Attributable to non-controlling interests                                28,669.47

7. Total comprehensive income                                         -56,380,747.71                             1,895,296,777.21

  Attributable to owners of the Company
                                                                      -73,614,886.61                             1,890,042,370.76
as the parent

  Attributable to non-controlling interests                            17,234,138.90                                 5,254,406.45

8. Earnings per share

  8.1 Basic earnings per share                                                 0.1854                                       0.2349

  8.2 Diluted earnings per share                                               0.1836                                       0.2327

Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before the
combinations was RMB0.00, with the amount for last year being RMB0.00.


Legal representative: Wu Shenghui                                               Chief Financial Officer: Tang Qionglan




                                                                                                                                179
Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021


Person-in-charge of the Company’s accounting organ: Liang Yuefei


4. Income Statement of the Company as the Parent

                                                                                                      Unit: RMB

                     Item                                  2021                        2020

1. Operating revenue                                                3,718,308,372.46           3,490,267,102.53

Less: Cost of sales                                                 3,154,039,179.53           2,860,949,556.76

        Taxes and surcharges                                          33,093,843.08               32,375,835.55

        Selling expense                                              147,260,099.98              126,810,307.11

        Administrative expense                                       148,755,543.99              129,489,381.94

        R&D expense                                                  141,658,884.16               96,789,792.55

        Finance costs                                                    -176,513.65              -4,922,225.34

          Including: Interest expense                                  1,265,956.56

                        Interest income                               15,062,071.87               36,942,203.37

Add: Other income                                                      9,664,951.38               27,001,177.15

        Return on investment (“-” for loss)                         78,883,660.55               87,972,948.71
            Including: Share of profit or
                                                                       2,260,497.27                2,351,681.39
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 (“-”
                                                                       4,266,900.00                4,785,700.00
for loss)
         Credit impairment loss (“-” for
                                                                       -5,389,224.73             -10,299,990.56
loss)
         Asset impairment loss (“-” for
                                                                      -13,439,357.01              -6,366,924.12
loss)
         Asset disposal income (“-” for
                                                                      76,410,098.79                9,090,874.79
loss)

2. Operating profit (“-” for loss)                                 244,074,364.35              360,958,239.93

Add: Non-operating income                                             11,385,484.38                1,892,869.67

Less: Non-operating expense                                              552,333.59                2,969,626.09

3. Profit before tax (“-” for loss)                                254,907,515.14              359,881,483.51

Less: Income tax expense                                              13,758,825.78               32,625,529.64

4. Net profit (“-” for net loss)                                   241,148,689.36              327,255,953.87



                                                                                                             180
Foshan Electrical and Lighting Co., Ltd.                         Annual Report 2021


  4.1     Net    profit    from   continuing
                                               241,148,689.36       327,255,953.87
operations (“-” for net loss)

  4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income, net of
                                               -323,650,643.28    1,573,146,670.33
tax
  5.1 Items that will not be reclassified
                                               -323,650,643.28    1,573,146,670.33
to profit or loss
       5.1.1     Changes       caused    by
remeasurements        on defined benefit
schemes
       5.1.2 Other comprehensive income
that will not be reclassified to profit or
loss under the equity method
       5.1.3 Changes in the fair value of
                                               -323,650,643.28    1,573,146,670.33
investments in other equity instruments
       5.1.4 Changes in the fair value
arising from changes in own credit risk

       5.1.5 Other

  5.2 Items that will be reclassified to
profit or loss
       5.2.1 Other comprehensive income
that will be reclassified to profit or loss
under the equity method
       5.2.2 Changes in the fair value of
investments in other debt obligations
       5.2.3 Other comprehensive income
arising from the reclassification of
financial assets
       5.2.4 Credit impairment allowance
for investments in other debt obligations

       5.2.5 Reserve for cash flow hedges

       5.2.6 Differences arising from the
translation               of         foreign
currency-denominated               financial
statements

       5.2.7 Other

6. Total comprehensive income                   -82,501,953.92    1,900,402,624.20

7. Earnings per share

      7.1 Basic earnings per share

      7.2 Diluted earnings per share



                                                                                181
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


Legal representative: Wu Shenghui                                              Chief Financial Officer: Tang Qionglan


Person-in-charge of the Company’s accounting organ: Liang Yuefei


5. Consolidated Cash Flow Statement

                                                                                                                        Unit: RMB

                          Item                             2021                                        2020

1. Cash flows from operating activities:

  Proceeds from sale of commodities
                                                                    4,285,672,614.47                           3,342,410,171.83
and rendering of services
  Net increase in customer deposits and
interbank deposits
  Net increase in borrowings from the
central bank
  Net increase in loans from other
financial institutions
  Premiums          received        on    original
insurance contracts

  Net proceeds from reinsurance

  Net        increase       in     deposits    and
investments of policy holders
  Interest,        handling        charges     and
commissions received
  Net increase            in     interbank    loans
obtained
  Net      increase        in    proceeds     from
repurchase transactions
  Net proceeds from acting trading of
securities

  Tax rebates                                                         87,549,907.00                              112,333,842.35

  Cash generated from other operating
                                                                     171,025,786.36                              119,666,217.14
activities
Subtotal      of     cash        generated    from
                                                                    4,544,248,307.83                           3,574,410,231.32
operating activities
  Payments          for        commodities     and
                                                                    3,427,906,318.91                           2,077,887,848.58
services
  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

                                                                                                                              182
Foshan Electrical and Lighting Co., Ltd.                             Annual Report 2021


  Net increase         in     interbank   loans
granted
  Interest,        handling     charges     and
commissions paid

  Policy dividends paid

  Cash paid to and for employees                   831,530,484.58       690,837,445.67

  Taxes paid                                       331,339,000.56       203,087,061.81

  Cash used in other operating activities          230,497,589.04       207,769,543.36
Subtotal of cash used in operating                4,821,273,393.09
                                                                      3,179,581,899.42
activities
Net    cash        generated    from/used    in   -277,025,085.26
                                                                        394,828,331.90
operating activities

2. Cash flows from investing activities:

  Proceeds from disinvestment                     1,700,278,266.95      405,000,000.00

  Return on investment                              44,567,889.06        52,397,663.37
  Net proceeds from the disposal of
fixed assets, intangible assets and other          114,907,595.26         9,814,672.12
long-lived assets
  Net proceeds from the disposal of
subsidiaries and other business units
  Cash generated from other investing
                                                    54,990,047.00
activities
Subtotal      of     cash     generated   from
                                                  1,914,743,798.27      467,212,335.49
investing activities
  Payments for the acquisition of fixed
assets, intangible assets and other                326,012,276.21       232,678,180.62
long-lived assets

  Payments for investments                         484,531,545.66       311,628,442.49

  Net increase in pledged loans granted

  Net payments for the acquisition of
                                                   131,348,644.27
subsidiaries and other business units

  Cash used in other investing activities

Subtotal of cash used in investing
                                                   941,892,466.14       544,306,623.11
activities
Net    cash        generated    from/used    in
                                                   972,851,332.13       -77,094,287.62
investing activities

3. Cash flows from financing activities:

  Capital contributions received                                            300,000.00
      Including: Capital contributions by
                                                                            300,000.00
non-controlling interests to subsidiaries


                                                                                    183
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


  Borrowings raised                                                  127,386,000.00                               48,000,000.00
  Cash generated from other financing
activities
Subtotal        of     cash        generated     from
                                                                     127,386,000.00                               48,300,000.00
financing activities

  Repayment of borrowings                                            113,682,766.67                              277,807,744.88

  Interest and dividends paid                                        139,734,157.74                              258,879,038.49

      Including:            Dividends     paid    by
subsidiaries to non-controlling interests

  Cash used in other financing activities                            300,810,442.34
Subtotal of cash used in financing
                                                                     554,227,366.75                              536,686,783.37
activities
Net      cash        generated       from/used     in
                                                                    -426,841,366.75                             -488,386,783.37
financing activities
4. Effect of foreign exchange rates
                                                                       -5,623,947.38                              -4,698,084.75
changes on cash and cash equivalents
5. Net increase in cash and cash
                                                                     263,360,932.74                             -175,350,823.84
equivalents
Add: Cash             and      cash     equivalents,
                                                                     875,728,218.57                            1,051,079,042.41
beginning of the period
6. Cash and cash equivalents, end of the
                                                                    1,139,089,151.31                             875,728,218.57
period


Legal representative: Wu Shenghui                                              Chief Financial Officer: Tang Qionglan


Person-in-charge of the Company’s accounting organ: Liang Yuefei


6. Cash Flow Statement of the Company as the Parent

                                                                                                                        Unit: RMB

                            Item                           2021                                        2020

1. Cash flows from operating activities:

  Proceeds from sale of commodities
                                                                    3,675,366,946.16                           3,158,187,056.43
and rendering of services

  Tax rebates                                                         87,497,039.45                              112,333,842.35

  Cash generated from other operating
                                                                      90,141,698.38                              100,553,598.15
activities
Subtotal        of     cash        generated     from
                                                                    3,853,005,683.99                           3,371,074,496.93
operating activities
  Payments            for     commodities        and
                                                                    3,127,675,269.69                           2,140,803,641.40
services



                                                                                                                              184
Foshan Electrical and Lighting Co., Ltd.                           Annual Report 2021


  Cash paid to and for employees                 598,949,378.79       531,803,255.67

  Taxes paid                                     264,570,561.48       151,834,032.77

  Cash used in other operating activities        158,324,765.43       187,443,912.27
Subtotal of cash used in operating              4,149,519,975.39
                                                                     3,011,884,842.11
activities
Net    cash        generated   from/used   in   -296,514,291.40
                                                                      359,189,654.82
operating activities

2. Cash flows from investing activities:

  Proceeds from disinvestment                   1,700,278,266.95      407,744,500.00

  Return on investment                            45,162,968.14        95,949,228.67
  Net proceeds from the disposal of
fixed assets, intangible assets and other        114,426,514.66         9,787,055.02
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
                                                1,859,867,749.75      513,480,783.69
investing activities
  Payments for the acquisition of fixed
assets, intangible assets and other              116,516,470.65       183,152,607.04
long-lived assets

  Payments for investments                      1,123,715,946.11      328,313,442.49
  Net payments for the acquisition of
subsidiaries and other business units

  Cash used in other investing activities
Subtotal of cash used in investing
                                                1,240,232,416.76      511,466,049.53
activities
Net    cash        generated   from/used   in
                                                 619,635,332.99         2,014,734.16
investing activities

3. Cash flows from financing activities:

  Capital contributions received

  Borrowings raised                              127,386,000.00

  Cash generated from other financing
activities
Subtotal      of     cash   generated   from
                                                 127,386,000.00
financing activities

  Repayment of borrowings                                             277,807,744.88

  Interest and dividends paid                    135,847,668.70       258,879,038.49

  Cash used in other financing activities        250,814,566.13


                                                                                  185
Foshan Electrical and Lighting Co., Ltd.                                                                                                 Annual Report 2021


Subtotal of cash used in financing                                                    386,662,234.83
                                                                                                                                               536,686,783.37
activities
Net      cash   generated        from/used        in                                 -259,276,234.83
                                                                                                                                               -536,686,783.37
financing activities
4. Effect of foreign exchange rates
                                                                                          -5,283,585.19                                          -4,630,938.55
changes on cash and cash equivalents
5. Net increase in cash and cash                                                       58,561,221.57
                                                                                                                                               -180,113,332.94
equivalents
Add: Cash        and        cash       equivalents,                                   803,264,792.72
                                                                                                                                               983,378,125.66
beginning of the period
6. Cash and cash equivalents, end of the                                              861,826,014.29
                                                                                                                                               803,264,792.72
period


Legal representative: Wu Shenghui                                                                     Chief Financial Officer: Tang Qionglan


Person-in-charge of the Company’s accounting organ: Liang Yuefei


7. Consolidated Statements of Changes in Owners’ Equity

2021
                                                                                                                                                        Unit: RMB

                                                                                          2021

                                                 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. Balance as at                                         15,157            2,349,             741,56                 1,758,           6,263, 48,258 6,312,
                       ,346,
the end of the                                            ,514.9           388,53                7,039.              462,06           921,30 ,834.5 180,13
                      154.0
prior year                                                      0            3.61                     55               2.48             4.54            3     9.07
                            0
Add:
Adjustment for
change           in
accounting
policy
  Adjustment
for correction of
previous error
  Adjustment
for       business

                                                                                                                                                                   186
Foshan Electrical and Lighting Co., Ltd.                                                    Annual Report 2021


combination
under common
control
     Other
adjustments

                         1,399
2. Balance as at                           15,157             2,349,   741,56   1,758,   6,263, 48,258 6,312,
                         ,346,
the beginning of                           ,514.9             388,53   7,039.   462,06   921,30 ,834.5 180,13
                         154.0
the year                                        0               3.61      55      2.48     4.54      3     9.07
                             0
3.           Increase/                                                                   -463,3 427,59 -35,77
                                                     250,60 -1,364,             1,155,
decrease in the                            -3,085,                     -213,6            62,716 0,531. 2,184.
                                                     0,874. 750,10              287,54
period (“-” for                          594.76                       91.59               .20     29       91
                                                         54     1.60              6.29
decrease)

     3.1        Total                                         -323,7            250,09   -73,61 17,234 -56,38
comprehensive                                                 06,852            1,965.   4,886. ,138.9 0,747.
income                                                           .48               87        61      0       71
     3.2      Capital                                                                    -253,9 410,35 156,45
                                                     250,60
increased         and                      -3,085,                     -213,6            00,160 6,392. 6,231.
                                                     0,874.
reduced            by                      594.76                       91.59               .89     39       50
                                                         54
owners
       3.2.1                                                                             -250,6
                                                     250,60                                              -250,6
Ordinary shares                                                                          00,874
                                                     0,874.                                              00,874
increased by                                                                                .54
                                                         54                                                 .54
owners
       3.2.2
Capital
increased by
holders of other
equity
instruments
       3.2.3
Share-based
payments
included in
owners’ equity

                                                                                         -3,299, 410,35 407,05
                                           -3,085,                     -213,6
       3.2.4 Other                                                                       286.35 6,392. 7,106.
                                           594.76                       91.59
                                                                                                    39       04

                                                                                -135,8   -135,8          -135,8
 3.3            Profit
                                                                                47,668   47,668          47,668
distribution
                                                                                   .70      .70             .70
      3.3.1
Appropriation to


                                                                                                            187
Foshan Electrical and Lighting Co., Ltd.                        Annual Report 2021


surplus reserves
    3.3.2
Appropriation to
general reserve
    3.3.3
                                                     -135,8   -135,8       -135,8
Appropriation to
                                                     47,668   47,668       47,668
owners          (or
                                                        .70      .70          .70
shareholders)

    3.3.4 Other

  3.4 Transfers                            -1,041,   1,041,
within owners’                            043,24    043,24
equity                                       9.12      9.12
    3.4.1
Increase         in
capital (or share
capital)      from
capital reserves
    3.4.2
Increase         in
capital (or share
capital)      from
surplus reserves
    3.4.3     Loss
offset by surplus
reserves
    3.4.4
Changes          in
defined benefit
schemes
transferred      to
retained
earnings
    3.4.5 Other
comprehensive
                                           -1,041,   1,041,
income
                                           043,24    043,24
transferred      to
                                             9.12      9.12
retained
earnings

    3.4.6 Other

  3.5      Specific
reserve
    3.5.1
Increase in the


                                                                              188
Foshan Electrical and Lighting Co., Ltd.                                                                                                          Annual Report 2021


period
      3.5.2 Used
in the period

     3.6 Other

                       1,399                                                                                                                 5,800, 475,84 6,276,
4. Balance as at                                       12,071 250,60 984,63                        741,35                 2,913,
                        ,346,                                                                                                               558,58 9,365. 407,95
the end of the                                         ,920.1 0,874. 8,432.                          3,347.              749,60
                       154.0                                                                                                                  8.34         82      4.16
period                                                       4          54         01                     96               8.77
                             0

2020

                                                                                                                                                           Unit: RMB

                                                                                              2020

                                              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

                       1,399
1. Balance as at                                      231,60                 776,26               836,55                1,700,             4,944,               4,970,8
                        ,346,                                                                                                                       26,674,
the end of the                                        8,173.                 0,348.               9,645.                426,91             201,23               75,664.
                       154.0                                                                                                                         428.08
prior year                                                  07                     19                    36               5.63               6.25                   33
                             0
Add:
Adjustment for
change            in
accounting
policy
     Adjustment
for     correction
of        previous
error
     Adjustment
for       business
combination
under common
control
     Other
adjustments

                       1,399
2. Balance as at                                      231,60                 776,26               836,55                1,700,             4,944,               4,970,8
                        ,346,                                                                                                                       26,674,
the     beginning                                     8,173.                 0,348.               9,645.                426,91             201,23               75,664.
                       154.0                                                                                                                         428.08
of the year                                                 07                     19                    36               5.63               6.25                   33
                             0


                                                                                                                                                                    189
Foshan Electrical and Lighting Co., Ltd.                                           Annual Report 2021


3.         Increase/
                                           -216,4   1,573,   -94,99   58,035   1,319,             1,341,3
decrease in the                                                                         21,584,
                                           50,658   128,18   2,605.   ,146.8   720,06             04,474.
period (“-” for                                                                       406.45
                                              .17     5.42      81         5     8.29                 74
decrease)

     3.1       Total                                1,573,            316,91   1,890,             1,895,2
                                                                                        5,254,4
comprehensive                                       128,18            4,185.   042,37             96,777.
                                                                                         06.45
income                                                5.42               34      0.76                 21
     3.2    Capital
                                           -216,4            -94,99            -311,4             -295,11
increased        and                                                                    16,330,
                                           50,658            2,605.            43,263             3,263.9
reduced           by                                                                    000.00
                                              .17               81                .98                   8
owners
       3.2.1
Ordinary shares                                                                         16,330, 16,330,
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

                                           -216,4            -94,99            -311,4             -311,44
       3.2.4
                                           50,658            2,605.            43,263             3,263.9
Other
                                              .17               81                .98                   8

                                                                      -258,8   -258,8             -258,87
 3.3           Profit
                                                                      79,038   79,038             9,038.4
distribution
                                                                         .49      .49                   9
      3.3.1
Appropriation
to          surplus
reserves
      3.3.2
Appropriation
to          general
reserve

      3.3.3                                                           -258,8   -258,8             -258,87
Appropriation                                                         79,038   79,038             9,038.4
to owners (or                                                            .49      .49                   9


                                                                                                      190
Foshan Electrical and Lighting Co., Ltd.                                           Annual Report 2021


shareholders)

    3.3.4 Other

  3.4 Transfers
within owners’
equity
    3.4.1
Increase        in
capital (or share
capital)      from
capital reserves
    3.4.2
Increase        in
capital (or share
capital)      from
surplus reserves
    3.4.3 Loss
offset          by
surplus reserves
    3.4.4
Changes         in
defined benefit
schemes
transferred     to
retained
earnings
    3.4.5 Other
comprehensive
income
transferred     to
retained
earnings

    3.4.6 Other

  3.5 Specific
reserve
    3.5.1
Increase in the
period
    3.5.2 Used
in the period

  3.6 Other

4. Balance as at 1,399                     15,157   2,349,   741,56   1,758,   6,263,             6,312,1
                                                                                        48,258,
the end of the ,346,                       ,514.9   388,53   7,039.   462,06   921,30             80,139.
                                                                                        834.53
period               154.0                      0     3.61      55      2.48     4.54                 07


                                                                                                      191
Foshan Electrical and Lighting Co., Ltd.                                                                                             Annual Report 2021


                            0


Legal representative: Wu Shenghui                                                                  Chief Financial Officer: Tang Qiongla n


Person-in-charge of the Company’s accounting organ: Liang Yuefei


8. Statements of Changes in Owners’ Equity of the Company as the Parent

2021
                                                                                                                                             Unit: RMB

                                                                                        2021

                                            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. Balance as at 1,399,3                                                                                                 1,591,8
                                                                  7,426,63              2,349,38              741,567,                       6,089,614,
the end of the 46,154.                                                                                                   84,733.
                                                                      5.62              9,658.23                039.55                          220.89
prior year                      00                                                                                              49
Add: Adjustment
for        change    in
accounting
policy
     Adjustment for
correction           of
previous error
     Other
adjustments

2. Balance as at 1,399,3                                                                                                 1,591,8
                                                                  7,426,63              2,349,38              741,567,                       6,089,614,
the beginning of 46,154.                                                                                                 84,733.
                                                                      5.62              9,658.23                039.55                          220.89
the year                        00                                                                                              49
3.           Increase/
                                                                                        -1,364,6                         1,146,3
decrease in the                                                   15,142,0 250,600,                           -213,691                       -454,022,1
                                                                                        93,892.4                         44,269.
period (“-” for                                                    30.31    874.54                               .59                           58.44
                                                                                                  0                             78
decrease)

     3.1          Total                                                                                                  241,14
                                                                                        -323,650                                             -82,501,95
comprehensive                                                                                                            8,689.3
                                                                                         ,643.28                                                   3.92
income                                                                                                                           6
     3.2      Capital
increased           and                                           15,142,0 250,600,                           -213,691                       -235,672,5
reduced             by                                               30.31    874.54                               .59                           35.82
owners



                                                                                                                                                        192
Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021


     3.2.1
Ordinary shares                                       250,600,                                          -250,600,8
increased by                                           874.54                                                74.54
owners
     3.2.2
Capital increased
by holders of
other equity
instruments
     3.2.3
Share-based
payments
included in
owners’ equity

                                           15,142,0                         -213,691                     14,928,33
     3.2.4 Other
                                             30.31                               .59                          8.72

                                                                                       -135,84
  3.3          Profit                                                                                   -135,847,6
                                                                                       7,668.7
distribution                                                                                                 68.70
                                                                                             0
    3.3.1
Appropriation to
surplus reserves
    3.3.2
                                                                                       -135,84
Appropriation to                                                                                        -135,847,6
                                                                                       7,668.7
owners            (or                                                                                        68.70
                                                                                             0
shareholders)

    3.3.3 Other

  3.4      Transfers                                             -1,041,0              1,041,0
within      owners’                                             43,249.1              43,249.
equity                                                                  2                  12
    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


                                                                                                               193
Foshan Electrical and Lighting Co., Ltd.                                                                                     Annual Report 2021


    3.4.4
Changes           in
defined      benefit
schemes
transferred       to
retained earnings
    3.4.5      Other
comprehensive                                                                       -1,041,0                      1,041,0
income                                                                              43,249.1                      43,249.
transferred       to                                                                        2                          12
retained earnings

    3.4.6 Other

  3.5       Specific
reserve
    3.5.1
Increase in the
period
    3.5.2 Used in
the period

  3.6 Other

4. Balance as at 1,399,3                                                                                          2,738,2
                                                              22,568,6 250,600, 984,695,               741,353,                     5,635,592,
the end of the 46,154.                                                                                            29,003.
                                                                 65.93     874.54     765.83             347.96                         062.45
period                         00                                                                                      27

2020

                                                                                                                                     Unit: RMB

                                                                                    2020

                                         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. Balance as at 1,399,
                                                           166,211,             776,242            836,559 1,523,507                4,701,868,3
the end of the 346,15
                                                            779.15              ,987.90             ,645.36   ,818.11                    84.52
prior year               4.00

Add:
Adjustment for
change           in
accounting
policy
  Adjustment
for correction of
previous error


                                                                                                                                               194
Foshan Electrical and Lighting Co., Ltd.                                               Annual Report 2021


     Other
adjustments

2. Balance as at 1,399,
                                           166,211,   776,242   836,559 1,523,507            4,701,868,3
the beginning of 346,15
                                            779.15    ,987.90   ,645.36      ,818.11               84.52
the year                4.00
3.         Increase/
                                           -158,78    1,573,1
decrease in the                                                 -94,992, 68,376,91           1,387,745,8
                                            5,143.5   46,670.
period (“-” for                                                605.81         5.38               36.37
                                                 3        33
decrease)

     3.1        Total                                 1,573,1
                                                                           327,255,9         1,900,402,6
comprehensive                                         46,670.
                                                                              53.87                24.20
income                                                    33
     3.2      Capital
                                           -158,78
increased        and                                            -94,992,                     -253,777,74
                                            5,143.5
reduced           by                                             605.81                             9.34
                                                 3
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

                                           -158,78
                                                                -94,992,                     -253,777,74
       3.2.4 Other                          5,143.5
                                                                 605.81                             9.34
                                                 3

     3.3       Profit                                                      -258,879,         -258,879,03
distribution                                                                 038.49                 8.49
      3.3.1
Appropriation
to            surplus
reserves
      3.3.2
                                                                           -258,879,         -258,879,03
Appropriation
                                                                             038.49                 8.49
to owners (or


                                                                                                     195
Foshan Electrical and Lighting Co., Ltd.                                           Annual Report 2021


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 reserves
    3.4.4
Changes         in
defined benefit
schemes
transferred     to
retained
earnings
    3.4.5 Other
comprehensive
income
transferred     to
retained
earnings

    3.4.6 Other

  3.5 Specific
reserve
    3.5.1
Increase in the
period
    3.5.2 Used
in the period

  3.6 Other

4. Balance as at 1,399,                              2,349,3
                                           7,426,6             741,567 1,591,884         6,089,614,2
the end of the 346,15                                89,658.
                                            35.62              ,039.55   ,733.49               20.89
period               4.00                                23


                                                                                                 196
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


Legal representative: Wu Shenghui                                    Chief Financial Officer: Tang Qionglan


Person-in-charge of the Company’s accounting organ: Liang Yuefei




III Company profile

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. Wu Shenghui
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,
electro technical products and vehicle lamp products .
The business term of the Company is long-term, which was calculated from the date of issuance of License of
Business Corporation.
The Financial Report was approved and authorized for issue by the Board of Directors on 30 March 2022.


The consolidation scope of the financial statement during the Reporting Period including the Company and FSL
Chanchang Optoelectronics Co., Ltd. ( referred to as “Chanchang 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
Lighting Lamps & Components Co., Ltd. ( referred to as “Lamps & Components Company”), FSL Zhida Electric
Technology Co., Ltd ( referred to as “Zhida Company”), FSL LIGHTING GMBH (referred to as “FSL
LIGHTING”), Foshan Hortilite Optoelectronics Co.,Ltd. (referred to as “Hortilite Company”), Fozhao (Hainan)
Technology Co., Ltd. (referred to as “Hainan Technology”), Foshan Kelian New Energy Technology Co., Ltd.
(referred to as “Foshan Kelian”) and Nanning Liaowang Auto Lamp Co., Ltd. (referred to as “Nanning
Liaowang”), in total 11 subsidiaries and Liuzhou Guige Lighting Technology Co., Ltd. (referred to as “Liuzhou
Lighting”), Liuzhou Guige Foreshine Technology Co., Ltd. (referred to as “Liuzhou Foreshine”), Chongqing


                                                                                                                197
Foshan Electrical and Lighting Co., Ltd.                                                        Annual Report 2021


Guinuo Lighting Technology Co., Ltd. (referred to as “Chongqing Guinuo”), Qingdao Guige Lighting Technology
Co., Ltd. (referred to as “Qingdao Lighting”) and Indonesia Liaowang Auto Lamp Co., Ltd. (referred to as
“Indonesia Liaowang”) in total five sub-subsidiary.
Compared with the previous period, the consolidation scope of the current financial statements added two
subsidiaries of Nanning Liaowang and Hainan Technology, and five sub-subsidiaries of Liuzhou Guige Lighting,
Liuzhou Guige Foreshine, Chongqing Guinuo, Qingdao Lighting and Indonesia Liaowang, and deleted two
subsidiaries, Foshan Electric Lighting New Light Source Technology Co., Ltd. (referred to as "New Light Source")
and Hunan Keda New Energy Investment and Development Co., Ltd. (referred to as "Hunan Keda"). For details,
please refer to Note VIII "Changes in the Scope of Consolidation" and Note IX "Interests in Other Subjects".

IV Basis for Preparation of Financial Statements

1. Preparation Basis

The financial statements of the Company are based on the continuing operation, and are confirmed and measured
according to the actual transactions and events, the Accounting Standards for Business Enterprises - Basic
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 expected credit loss of accounts receivables (Note 12.
Accounts Receivable), depreciation of fixed assets and amortization of intangible assets (Note 24. Fixed Assets
and Note 30. Intangible Assets), and recognition of revenue (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.

                                                                                                               198
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


2. Fiscal Year

A fiscal year starts on January 1st and ends on December 31st according to the Gregorian calendar.

3. Operating Cycle

An operating cycle for the Company is 12 months, which is also the classification criterion for the liquidity of 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 reserve 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 cost 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 business 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,

                                                                                                                    199
Foshan Electrical and Lighting Co., Ltd.                                                            Annual Report 2021


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.

6. Methods for Preparing Consolidated Financial Statements

1. Principle of Determining the Scope of Consolidation
The scope of consolidation of the consolidated financial statements of the Company is determined on the basis of
control. Control means that the 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 financial 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 financial 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.


                                                                                                                   200
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations

A joint arrangement refers to an arrangement jointly controlled by two participants or above and be divided into
joint operations and joint ventures.
When the Company is the joint venture party of the joint operations, should recognize the following items related
to the interests share of the joint operations:
(1) Recognize the assets individually held and the assets jointly held by recognizing according to the holding
share;
(2) Recognize the liabilities undertook individually and the liabilities jointly held by recognizing according to the
holding share;
(3) Recognize the revenues occurred from selling the output share of the joint operations enjoy by the Company;
(4) Recognize the revenues occurred from selling the assets of the joint operations according to the holding share;
(5) Recognize the expenses individually occurred and the expenses occurred from the joint operations according
to the holding share of the Company.
When the Company is the joint operation party of the joint ventures, should recognize the investment of the joint
ventures as the long-term equity investment and be measured according g to the said methods of the notes of the
long-term equity investment of the financial statement.

8. Recognition Standard for Cash and Cash Equivalents

In the 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 initial 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

                                                                                                                 201
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


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 liabilities
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 financial 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 financial 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 financial assets measured
at amortized cost: the business mode of the Company to manage such financial assets targets at collecting the


                                                                                                                    202
Foshan Electrical and Lighting Co., Ltd.                                                            Annual Report 2021


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 financial 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 recognized
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 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.
(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


                                                                                                                   203
Foshan Electrical and Lighting Co., Ltd.                                                              Annual Report 2021


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 identifiable 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 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 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 since 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 recognition and are in the second
stage, the Company will measure bad debt provision by the amount equivalent to the expected credit losses for the


                                                                                                                      204
Foshan Electrical and Lighting Co., Ltd.                                                            Annual Report 2021


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 financial 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.
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
revised book balance of financial assets and amortized in the remaining period of the revised financial assets.
8. Transfer of financial assets


                                                                                                                   205
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


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 Expected Credit Loss is Made Individually
  Definition or amount criteria for an account     Making separate expected credit loss for accounts receivable with a significant
   receivable with a significant single amount                                      single amount
Making separate expected credit loss for accounts For an account receivable with a significant single amount, the impairment test
receivable with a significant single amount       shall be carried out on it separately. If there is any objective evidence of
                                                  impairment, the impairment loss is recognized and the expected credit loss is made
                                                  according to the difference between the present value of the account receivable’s
                                                  future cash flows and its carrying amount.

2. Accounts Receivable for which the Expected Credit Loss is Withdrawn by Credit Risk Characteristics
                  Group name                                         Withdrawal method of expected credit loss

Common transaction group                          Aging analysis method

Internal transaction group                        Other methods


In the groups, those adopting aging analysis method to withdraw expected credit loss:
                                Aging                                         Withdrawal proportion of expected credit loss

Within 1 year (including 1 year)                                                                    3%


1 to 2 years                                                                                        10%


2 to 3 years                                                                                        30%


3 to 4 years                                                                                        50%




                                                                                                                                     206
Foshan Electrical and Lighting Co., Ltd.                                                                             Annual Report 2021



4 to 5 years                                                                                        80%


Over 5 years                                                                                       100%


3. Accounts Receivable with an Insignificant Single Amount but for which the Expected Credit Loss is Made
Independently
Reason of individually withdrawing expected credit loss      There are definite evidences indicate the obvious difference of thee

                                                                                         return ability

Withdrawal method for expected credit loss                Recognizing the impairment loss and withdrawing the expected credit

                                                          loss according to the difference between the present value of the account

                                                          receivable’s future cash flows and its carrying amount.



13. Accounts Receivable Financing

Not applicable

14. Other Receivables

Recognition method and accounting treatment for expected credit losses of other 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.

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
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.

                                                                                                                                    207
Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021


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. Contract Assets

The Company presents the right possessed to collect consideration from customers unconditionally (only
depending on the passing of time) as accounts receivable, and the right to charge the consideration through
transferring any commodity to clients which depends on other factors except the passing of time as contract assets.
As for the recognition method and accounting treatment for expected losses of contract assets, please refer to Note
12. Accounts Receivable.

17. Contract Cost

Not applicable

18. Assets Held for Sale

1. Assets Held for Sale
When a company relies mainly on selling (including the exchanges of non-monetary assets with 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
non-related parties fails to be completed within one year, and there is sufficient evidence that the Company still

                                                                                                                208
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


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 sale
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
separately from other liabilities. The non-current assets held for sale or the assets in the disposal group held for


                                                                                                                 209
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


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.
Joint control refers to the control that is common to an arrangement in accordance with the relevant agreement,
and the relevant activities of the arrangement must be agreed upon by the participant who has shared the control.
Significant influence refers to the Company has the power to participate in decision-making on the financial and
operating policies of the investee, but can’t control or jointly control the formulation of these policies with other
parties.
1. Investment Cost Recognition for Long-term Equity Investments
(1) For the merger of enterprises under the same control, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment,
and the direct relevant expenses occurred for the merger of enterprises shall be included into the profits and losses
of the current period.
(2) For the merger of enterprises not under the same control, The combination costs shall be the fair values, on the
acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the
Company in exchange for the control on the acquiree, and all relevant direct costs incurred to the acquirer for the
business combination. Where any future event that is likely to affect the combination costs is stipulated in the
combination contract or agreement, if it is likely to occur and its effects on the combination costs can be measured
reliably, the Company shall record the said amount into the combination costs.
(3) The cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid. The cost consists of the expenses directly relevant to the obtainment of the long-term
equity investment, taxes and other necessary expenses.
(4) The cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair

                                                                                                                    210
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


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 included in the capital reserve. When the share of the net profit or loss of the
investee is recognized, the net profit of the investee shall be adjusted and recognized according to the fair value of
the identifiable assets of the investee when the investment is made. If the accounting policies and accounting
periods adopted by the investee are inconsistent with the Company, the financial statements of the investee shall
be adjusted according to the accounting policies and accounting periods of the Company and the investment
income and other comprehensive income shall be recognized accordingly. For the transactions between the
Company and associates and joint ventures, if the assets made or sold don’t constitute business, the unrealized
gains and losses of the internal transactions are offset by the proportion attributable to the Company, and the
investment gains and losses are recognized accordingly. However, the loss of unrealized internal transactions
incurred by the Company and the investee attributable to the impairment loss of the transferred assets shall not be
offset. If the assets made to associates or joint ventures constitute business, and the investor makes long-term
equity investment but does not obtain the control, the fair value of the investment shall be taken as the initial
investment cost of the new long-term equity investment, and the difference between initial investment and the
book value of the investment is fully recognized in profit or loss for the current period. If the assets sold by the
Company to joint ventures or associates constitute business, the difference between the consideration and the book
value of the business shall be fully credited to the current profits and losses. If the assets purchased by Company


                                                                                                                  211
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


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 included in the shareholders’ equity shall be treated
in the same basis of the investee directly disposing related assets or liabilities by corresponding proportion. The
owner’s equity recognized by the change of the owner’s equity of the investee other than the net profit or loss,
other comprehensive income and profit distribution is carried forward proportionally into the current profits and
losses.
For long-term equity investment accounted by the cost method and residual equity after disposal still accounted by
the cost method, other comprehensive income accounted by equity method or recognized by financial instrument
and accounted and recognized by measurement criteria before the acquisition of the control over the investee is
treated in the same basis of the investee directly disposing related assets or liabilities, and carried forward
proportionately into the current profits and losses. Other changes of owner’s equity in net assets of the investee
accounted and recognized by the equity method other than the net profit or loss, other comprehensive income and
profit distribution are carried forward proportionally into the current profits and losses.
3. Impairment Provisions for Long-term Equity Investments
For the relevant testing method and provision making method, see Notes 31. Impairment of Long-term Assets.

23. Investment Property

Measurement model for investment property
Cost method measurement


                                                                                                                  212
Foshan Electrical and Lighting Co., Ltd.                                                              Annual Report 2021


Method for depreciation or amortization

The Company's investment real estates include leased land use rights, leased buildings, and land use rights held and
ready to be transferred after appreciation. Investment real estate is initially measured according to cost, and then
measured by cost model.

1. Recognition of investment real estate

Investment real estate can only be recognized if it meets the following conditions at the same time: (1) Economic
benefits related to investment real estate are likely to flow into enterprises. (2) The cost of the investment real estate
can be measured reliably.

2. Initial measurement of investment real estate

(1) The cost of purchased investment real estate includes the purchase price, relevant taxes and fees and other
expenses directly attributable to the asset.

(2) The cost of self-construction of investment real estate consists of the necessary expenses incurred before the
construction of the asset reaches the predetermined serviceable condition.

(3) The cost of investment real estate acquired by other means shall be determined in accordance with relevant
accounting standards.

(4) Subsequent expenditures related to investment real estate, if they meet the confirmation conditions of investment
real estate, shall be included in the cost of investment real estate; those that do not meet the recognition conditions
are included in the current profits and losses when they occur.




                                                                                                                      213
Foshan Electrical and Lighting Co., Ltd.                                                                Annual Report 2021


3. Subsequent measurement of investment real estate

The Company adopts the cost model to carry out subsequent measurement of investment real estate on the balance
sheet date. According to the relevant provisions of Accounting Standard for Business Enterprises No.4-Fixed Assets
and Accounting Standard for Business Enterprises No.6-Intangible Assets, the investment real estate is amortized or
depreciated according to the life average method within the expected useful life.

4. Conversion of investment real estate

The Company has conclusive evidence that the use of real estate has changed, and the investment real estate is
converted into other assets, or other assets are converted into investment real estate, and the book value before the
conversion of real estate is taken as the recorded value after the conversion.

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. The Company's fixed assets
are initially measured at cost. Specifically, the costs of purchased fixed assets include the purchase price, relevant
taxes and fees, and other expenditures incurred before the fixed assets reach the pre-determined serviceable
condition that can be directly attributable to the assets. The costs of self-built fixed assets contain the necessary
expenditures incurred before the assets built reach their pre-determined serviceable condition. If the amount paid for
the purchase of fixed assets witnesses postponed payment due to that the normal credit conditions are exceeded and
is actually financing in nature, the costs of such fixed assets shall be determined on the basis of the present value of
the purchase price. The difference between the actual amount paid and the present value of the purchase price,
except for the difference that should be capitalized, shall be recognized as profit and loss of the current period during
the credit period.

(2) Depreciation Method

                                                                             Expected net salvage
 Category of fixed assets             Method                  Useful life                             Annual deprecation
                                                                                    value
Housing and building        Average       method   of
                                                        3—30 years         1%-5%                   31.67%-3.17%
                            useful life
Machinery equipments        Average       method   of
                                                        2—10 years         1%-5%                   47.50%-9.50%
                            useful life
Transportation vehicle      Average       method   of
                                                        5—10 years         1%-5%                   19.00%-9.50%
                            useful life
                            Average       method   of
Electronic equipment                                    2—8 years          1%-5%                   47.50%-11.88%
                            useful life



                                                                                                                           214
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


(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;
(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 ProgressPlease refer to Note 31 Impairment of Long-term Assets,
for details of impairment test methods and impairment provision methods 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 assets
eligible for capitalization to meet the intended useable or sellable status.
The borrowing costs shall cease to be capitalized when the purchased or produced assets that meet the conditions
of capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligible


                                                                                                                  215
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


for capitalization meet the intended useable or sellable status can be included in the current profits and losses
when incurred.
3. Calculation method of capitalized amount of borrowing costs
During the period of capitalization, the capitalization amount of interests (including amortization of discounts or
premiums) for each accounting period is determined in accordance with the following provisions:
(1) For special borrowings for the acquisition or construction of assets eligible for capitalization, the interest
expenses actually incurred in the current period of borrowings shall be recognized after deducting the interest
income obtained by depositing the unused borrowing funds into the bank or investment income obtained from
temporary investment.
(2) Where the general borrowing is occupied for the acquisition or construction of assets eligible for capitalization,
the Company multiplies the weighted average of the asset expenditure of the accumulated asset expenditure
exceeding the special borrowing by the capitalization rate of the general borrowing to calculate the amount of
interest that should be capitalized for general borrowings. The capitalization rate is determined based on the
weighted average interest rate of general borrowings.

27. Living Assets

Not applicable

28. Oil and Gas Assets

Not applicable

29. Right-of-use Assets

On the start date of the lease term, the Company recognizes its right to use the leasehold property in the lease term
as right-of-use assets, including: The initial measurement amount of the lease obligation; the lease payment paid
on or before the start date of the lease term. If there is a lease incentive, the amount related to the lease incentive
taken should be deducted. the initial direct cost incurred by the lessee; the estimated cost that the lessee will use to
pull down and remove the leasehold property, and restore the site of the leasehold property or restore the
leasehold property to the state agreed in the lease clauses. Then, the Company will depreciate the right-of-use
assets with the straight-line method. If it is reasonably certain that the ownership of the leasehold property will be
obtained at the end of the lease term, the Company will depreciate the leasehold property over its remaining
service life. If it is not reasonably certain that the ownership of the leasehold property will be obtained at the end
of the lease term, the Company will depreciate the leased asset(s) over the lease term or the remaining service life,
whichever is shorter. When the Company re-calculates the lease obligation using the present value (PV) of the
changed lease payment and correspondingly adjusts the book value of the right-of-use assets, if the book value is
already reduced to zero, yet the lease obligation still needs to be reduced further, the Company will include the
remaining amount in the current profit or loss.

30. Intangible Assets

(1) Pricing Method, Useful Life and Impairment Test

1. Recognition Criteria of Intangible Assets

                                                                                                                    216
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


Intangible assets are identifiable non-monetary assets that are owned or controlled by the Company without
physical form. The intangible assets are recognized when all the following conditions are met: (1) Conform to the
definition of intangible assets; (2) Expected future economic benefits related to the assets are likely to flow into
the Company; (3) The costs of the assets can be measured reliably.
2. Initial Measurement of Intangible Assets
Intangible assets are initially measured at cost. Actual costs are determined by the following principles:
(1) The cost of the acquisition of intangible assets, including the purchase price, relevant taxes and other expenses
directly attributable to the intended use of the asset. The payment of purchase price of intangible assets exceeding
normal credit terms is deferred, and the cost of intangible assets having financing nature in essence shall be
recognized based on the present value of the purchase price. The difference between the actual payment price and
the present value of the purchase price shall be recorded into the current profits and losses in the credit period
except that can be capitalized in accordance with the Accounting Standard for Business Enterprises No. 17 -
Borrowing Cost.
(2) The cost of investing in intangible assets shall be recognized according to the value agreed upon in the
investment contract or agreement, except that the value of the contract or agreement is unfair.
3. Subsequent Measurement of Intangible Assets
The Company shall determine the useful life when it obtains intangible assets. The useful life of intangible assets
is limited, and the years of the useful life or output that constitutes the useful life or similar measurement units
shall be estimated. The intangible assets are regarded as intangible assets with uncertain useful life if the term that
brings economic benefits to the Company is unforeseeable
Intangible assets with limited useful life shall be amortized by straight line method from the time when the
intangible assets are available until can’t be recognized as intangible assets; intangible assets with uncertain useful
life shall not be amortized. The Company reviews the estimated useful life and amortization method of intangible
assets with limited useful life at the end of each year, and reviews the estimated useful life of intangible assets
with uncertain useful life in each accounting period. For intangible assets that evidence shows the useful life is
limited, the useful life shall be estimated and the intangible assets shall be amortized in the estimated useful life.
4. Recognition Criteria and Withdrawal Method of Intangible Asset Impairment Provision
The impairment test method and withdrawal method for impairment provision of intangible assets are detailed in
Note 31: Long-term asset impairment under Note V.

(2) Accounting Policy for Internal Research and Development Expenditures

The expenditures in internal research and development projects of the Company are classified into expenditures in
research stage and expenditures in development stage. The expenditures in research stage are included in the
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.


                                                                                                                    217
Foshan Electrical and Lighting Co., Ltd.                                                            Annual Report 2021


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
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

                                                                                                                   218
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


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.
The amortization period of various expenses is as follows:

                           Item                                               Amortization Period

Expenditure on improvement of rented fixed
                                                                                     3-5 years
assets

Fixed repair expenditure                                                              5 years

Mould                                                                                 3 years

Wrap-around boxes                                                                     2 years




33. Contract Liabilities

The Company’s obligation of transferring commodities to customers due to consideration received or receivable
from clients. If the client has paid the contract consideration or the Company has obtained the unconditional right
of collection before the Company transfers commodities to the customer, the Company shall present the accounts
received or receivable as contract liabilities at the earlier time between the time when the client actually conducts
payment and the deadline of payment. Contract assets and contract liabilities under the same contract shall be
presented based on the net amount, while those not under the same contract shall not be offset.

34. Payroll

(1) Accounting Treatment of Short-term Compensation

Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services 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 included 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
and losses when happen.



                                                                                                                    219
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


(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

On the start date of the lease term, the Company recognizes the PV of the unpaid lease payment as a lease
obligation, except for the short-term and low-value asset leases. It will regard the interest rate implicit in lease as
the rate of discount, when calculating the PV of the lease payment. The incremental lending rate of the lessee will
be deemed as the rate of discount, if the interest rate implicit in lease cannot be confirmed. The Company
calculates the interest charge of the lease obligation in each period in the lease term at a fixed periodic interest rate
and includes it in the current profit or loss, unless such interest charge is stipulated to be included in the
underlying asset cost. Variable lease payments that are not included in the measurement of the lease obligation
should be included in the current profit or loss when they are actually incurred, unless such payments are
stipulated to be included in the underlying asset cost.
The Company will re-calculate the lease obligation using the PV of the changed lease payment, if the actual fixed
payment, the estimated payable of the residual value of the guarantee, the index or rate used to confirm the lease
payment, or the assessment result of the call option, the renewal option, or the termination option, or the actual
exercise changes, after the start date of the lease term.

36. Provisions

1. Recognition of Provisions
The obligation such as external guaranty, pending litigation or arbitration, product quality assurance, layoff plan,
loss contract, restructuring and disposal of fixed assets, pertinent to a contingencies shall be recognized as 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


                                                                                                                     220
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


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 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

The Accounting Policy Adopted for Recognition and Measurement of Revenue
1. Accounting policies adopted in revenue recognition and measurement
The Company recognizes revenue when it has satisfied its performance obligations under the contract, i.e., when the
customer has obtained control of relevant goods or services. Obtaining control of relevant goods or services means
being able to direct the use of them and obtain substantially all of the benefits from them.
Where the contract contains two or more performance obligations, the Company, at the inception date of the contract,
allocates the transaction price to each performance obligation in accordance with the relative proportion of the
stand-alone selling price of the goods or services promised by each performance obligation. The Company measures
revenue on the basis of the transaction price allocated to each performance obligation.
Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for
transferring goods or services to a customer, excluding amounts collected on behalf of third parties and amounts
expected to be returned to the customer. The Company determines the transaction price in accordance with the terms
of the contract, with past business practices taken into account. When determining the transaction price, it considers
the impact of variable consideration, the existence of a significant financing component in the contract, non-cash
consideration, consideration payable to a customer and other factors. The transaction price is recognized only to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not
occur when the relevant uncertainty is resolved. Where a contract contains a significant financing component, the
Company determines the transaction price on the basis of the amount presumably payable in cash when the
customer obtains control of the goods or services, and uses the actual interest method to amortize the difference

                                                                                                                  221
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


between the transaction price and the contract consideration during the contract period.
A performance obligation is satisfied over time if one of the following conditions is met; otherwise, it is treated as
satisfied at a point in time:
(1) The customer simultaneously receives and consumes the benefits provided by the Company's performance as the
Company performs.
(2) The customer can control the goods as they are created during the Company's performance.
(3) The goods produced by the Company's performance have no alternative use, and the Company has the right to
collect payment for performance completed to date during the entire contract period.
Where a performance obligation is to be satisfied over time, the Company recognizes revenue in accordance with
the progress of performance during that period, except when the progress cannot be reasonably determined. In
determining the progress of performance, the Company takes into account the nature of the goods or services and
adopts the output methods or the input methods.
Where the performance progress cannot be reasonably determined, and the costs incurred are expected to be
recovered, the Company recognizes revenue according to the amount of the costs incurred until the progress can be
reasonably determined.
Where the performance obligation is to be satisfied at a certain point in time, the Company recognizes revenue at the
point when the customer obtains control of the relevant goods or services. When judging whether the customer has
obtained control of goods or services, the Company considers the following indicators:
(1) The Company has a present right to receive payment for the goods or services, i.e., the customer has a present
obligation to pay for the goods or services.
(2) The Company has transferred the legal ownership of the goods to the customer, i.e., the customer has obtained
the legal ownership of the goods.
(3) The Company has transferred physical possession of the goods to the customer, i.e., the customer has taken
physical possession of the goods.
(4) The Company has transferred significant risks and rewards of ownership of the goods to the customer, i.e., the
customer has obtained significant risks and rewards of ownership of the goods.
(5) The customer has accepted the goods or services.
2. Specific methods
(1) Recognition of domestic sales revenue: Under the conventional settlement mode, the Company has delivered
goods that have passed inspection to the purchaser as required by the purchaser; the amount of revenue has been
determined, a sales invoice has been issued and the payment has been received or is expected to be recovered. Under
the consignment sales settlement mode, the Company recognizes sales revenue when the product is issued and the
settlement notice is issued after the customer inspection is qualified.
(2) Recognition of export sales revenue: The Company has produced goods according to the requirements stipulated
in the sales contract, and completed the export declaration procedures after the goods have passed inspection; the
freight company has shipped the goods, the amount of revenue has been determined, an export sales invoice has
been issued, and the payment has been received or is expected to be recovered.


Differences in accounting policies for the recognition of revenue caused by different business models for the same
type of business




                                                                                                                  222
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


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 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);

                                                                                                                   223
Foshan Electrical and Lighting Co., Ltd.                                                              Annual Report 2021


(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 differences 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
are not met simultaneously: 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.



                                                                                                                      224
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


42. Lease

(1) Accounting Treatment of Operating Lease

As the lessee:
On the start date of the lease term, the Company deems the right-of-use assets and lease obligations of all the
operating leases, except for the simplified short-term lease and low-value leases. See Note 29. Right-of-use Assets
and 35. Lease Liabilities for the general accounting treatment of the Company as the lessee.
Lease change
A lease change refers to a change in the scope, consideration, and term of lease outside the original contract
clauses, including the addition or termination of the one or several rights to use lease assets, and the extension or
reduction of the lease term specified in the contract.
When the lease changes and the following conditions are met, the Company will regard the lease charge as a
separate lease for accounting treatment:
(1) The lease change expands the scope of lease through the increase of one or several rights to use the lease
assets;
(2) The increased consideration and the separate price of the expanded part of the scope of lease are the same,
upon adjustment, according to the contract.
If the lease change is not deemed as a separate lease for accounting treatment, the Company will re-amortize the
consideration of the changed contract, re-confirm the lease term, and re-calculate the PV of the lease obligation
using the changed lease payment and the revised rate of discount, on the date when the lease change takes effect.
The Company will correspondingly reduce the book value of the right-of-use assets and include the profit or loss
of the lease terminated in part or whole in the current profit or loss, if the lease change narrows the scope of lease
or shortens the lease term. The Company will correspondingly adjust the book value of the right-of-use assets, if
other lease changes result in the re-calculation of the lease obligation.
Short-term and low-value asset leases
The Company chooses not to confirm the right-of-use assets and lease obligations of the short-term and low-value
asset leases, and include the relevant lease payment in each period in the lease term in the current profit or loss or
the underlying asset cost on a straight-line basis. A short-term lease refers to the lease whose lease term does not
exceed 12 months and that does not include the call option on the start date of the lease term. A low-value asset
lease refers to the lease where the value will be low when the single lease asset is the new asset. For the leasehold
property that is underleased or expected to be underleased, the original lease does not belong to low-value asset
lease.
As the lessor:
The Company classifies lease into finance and operating leases on the start date of the lease term. A finance lease
refers to the lease where almost all the risks and remuneration, related to the ownership of the leasehold property,
is transferred, no matter whether the ownership is finally transferred or not. An operating lease refers to all leases
other than finance leases.
The lease receivable of the operating lease in each period in the lease term is deemed as a rental on a straight-line
basis. The Company capitalizes the initial direct cost related to the operating finance, amortize and include it in
the current profit or loss on the basis same as the recognition of rentals in the lease term. Variable lease payments
that are not included in the lease receivable are included in the current profit or loss when they are actually
incurred. If an operating lease changes, the Company will regard it as a new lease for accounting treatment from

                                                                                                                  225
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


the effective date of the change. The advance receipt or the lease receivable related to the lease prior to the change
is recognized as the payment receivable of the new lease.

(2) Accounting Treatments of Financial Lease

As the lessee:
For financing leased assets, on the beginning date of the lease term, the lower of the fair value of the leased asset and
the present value of the minimum lease payment amount on the lease commencement date is taken as the recorded
value of the leased asset, the minimum lease payment amount is regarded as the recorded value of long-term
payables, and the difference is regarded as unrecognized financing expense, which is apportioned by the effective
interest rate method in each period of the lease term. The contingent rentals are included in the profit or loss for the
current period upon actual incurrence thereof.
As the lessor:
The Company confirms the finance lease receivable of the finance lease and finally confirms the finance leasehold
property on the start date of the lease term. It recognizes the net investment in the lease as the entry value of the
finance lease, when initially calculating the finance lease receivable. The net investment in the lease is the sum of
the net value of the unguaranteed residual value and the lease receivable not received on the start date of the lease
term at the interest rate implicit in lease. The Company calculates and confirms the interest income at a fixed
periodic interest rate in each period in the lease term.

43. Other Significant Accounting Policies and Estimates

Naught


44. Changes in Main Accounting Policies and Estimates

(1) Change of Accounting Policies

√ Applicable □ Not applicable

     Contents of and reasons for the changes to
                                                                Approval procedure                           Remarks
                 accounting policies

On December 7, 2018, the Ministry of Finance
(MOF) issued the Notice on Revision and Issuance
of the Accounting Standard for Business Enterprises
No. 21: Lease (C.K. [2018] No. 45). According to
                                                                                              See   44.    Changes      in    important
the requirements of the Ministry of Finance, those
                                                                                              accounting   policy     and    accounting
enterprises that are listed both at home and abroad Deliberated and approved by the 16th
                                                                                              estimates (3) for details about the
and those enterprises that are listed overseas and meeting        of the   Nine    Board of
                                                                                              influence of implementing the new
adopt    the   International      Financial   Reporting Directors of the company
                                                                                              lease standards on items of financial
Standards or the Accounting Standards for Business
                                                                                              statements at period-beginning..
Enterprises for preparation of financial statements
should implement it from 1 January 2019; the other
enterprises that adopt the Accounting Standards for
Business Enterprises should implement it from 1


                                                                                                                                    226
Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021


January 2021. The Company started to implement
the new lease standards from 1 January 2021 and
followed the relevant transitional requirements.


(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 Leases since 2021

√ Applicable □ Not applicable

Whether items of balance sheets at the beginning of the year need adjustment
√ Yes □ No
Consolidated Balance Sheet
                                                                                                        Unit: RMB

              Item                    31 December 2020              1 January 2021           Adjusted

Current assets:

   Monetary assets                                 981,249,699.49          981,249,699.49

   Settlement reserve

   Interbank loans granted

   Held-for-trading financial
                                                   407,619,201.36          407,619,201.36
assets

   Derivative financial assets

   Notes receivable                                140,972,143.00          140,972,143.00

   Accounts receivable                         1,134,233,235.70           1,134,233,235.70

   Accounts           receivable
financing

   Prepayments                                      11,994,745.05            11,994,745.05

   Premiums receivable

   Reinsurance receivables

   Receivable        reinsurance
contract reserve

   Other receivables                                20,194,968.19            20,194,968.19

     Including:         Interest
receivable

                      Dividends
receivable



                                                                                                              227
Foshan Electrical and Lighting Co., Ltd.                                         Annual Report 2021


  Financial assets purchased
under resale agreements

  Inventories                               735,685,116.91     735,685,116.91

  Contract assets

  Assets held for sale

  Current        portion        of
non-current assets

  Other current assets                      175,090,368.85     175,090,368.85

Total current assets                       3,607,039,478.55   3,607,039,478.55

Non-current assets:

  Loans and advances to
customers

  Investments         in     debt
obligations

  Investments in other debt
obligations

  Long-term receivables

  Long-term                 equity
                                            181,365,016.32     181,365,016.32
investments

  Investments in other equity
                                           3,305,501,030.06   3,305,501,030.06
instruments

  Other non-current financial
assets

  Investment property

  Fixed assets                              685,707,548.55     685,707,548.55

  Construction in progress                  503,941,120.31     503,941,120.31

  Productive living assets

  Oil and gas assets

  Right-of-use assets                                            3,943,088.30         3,943,088.30

  Intangible assets                         170,693,873.30     170,693,873.30

  Development costs

  Goodwill

  Long-term                prepaid
                                             13,411,226.23      13,411,226.23
expense

  Deferred income tax assets                 40,253,777.17      40,253,777.17

  Other non-current assets                   11,423,843.62      11,423,843.62



                                                                                               228
Foshan Electrical and Lighting Co., Ltd.                                         Annual Report 2021


Total non-current assets                   4,912,297,435.56   4,916,240,523.86        3,943,088.30

Total assets                               8,519,336,914.11   8,523,280,002.41        3,943,088.30

Current liabilities:

   Short-term borrowings

   Borrowings        from      the
central bank

   Interbank loans obtained

   Held-for-trading financial
liabilities

   Derivative             financial
liabilities

   Notes payable                            480,971,214.80     480,971,214.80

   Accounts payable                        1,059,674,020.99   1,059,674,020.99

   Advances from customers                    1,285,357.28       1,285,357.28

   Contract liabilities                      65,777,726.45      65,777,726.45

   Financial assets sold under
repurchase agreements

   Customer      deposits      and
interbank deposits

   Payables for acting trading
of securities

   Payables for underwriting
of securities

   Employee benefits payable                 82,485,090.47      82,485,090.47

   Taxes payable                             18,876,657.51      18,876,657.51

   Other payables                            76,668,330.66      76,668,330.66

      Including:           Interest
payable

                       Dividends
payable

   Handling      charges       and
commissions payable

   Reinsurance payables

   Liabilities             directly
associated with assets held
for sale

   Current         portion      of                                1,750,282.11        1,750,282.11


                                                                                               229
Foshan Electrical and Lighting Co., Ltd.                                         Annual Report 2021


non-current liabilities

   Other current liabilities                  5,503,702.07       5,503,702.07

Total current liabilities                  1,791,242,100.23   1,792,992,382.34        1,750,282.11

Non-current liabilities:

   Insurance contract reserve

   Long-term borrowings

   Bonds payable

      Including:        Preferred
shares

                     Perpetual
bonds

   Lease liabilities                                             2,192,806.19         2,192,806.19

   Long-term payables

   Long-term            employee
benefits payable

   Provisions

   Deferred income

   Deferred         income       tax
                                            414,670,609.97     414,670,609.97
liabilities

   Other               non-current
                                              1,244,064.84       1,244,064.84
liabilities

Total non-current liabilities               415,914,674.81     418,107,481.00         2,192,806.19

Total liabilities                          2,207,156,775.04   2,211,099,863.34        3,943,088.30

Owners’ equity:

   Share capital                           1,399,346,154.00   1,399,346,154.00

   Other equity instruments

      Including:        Preferred
shares

                     Perpetual
bonds

   Capital reserves                          15,157,514.90      15,157,514.90

   Less: Treasury stock

   Other            comprehensive
                                           2,349,388,533.61   2,349,388,533.61
income

   Specific reserve

   Surplus reserves                         741,567,039.55     741,567,039.55



                                                                                               230
Foshan Electrical and Lighting Co., Ltd.                                                Annual Report 2021


  General reserve

  Retained earnings                        1,758,462,062.48         1,758,462,062.48

Total equity attributable to
owners of the Company as                   6,263,921,304.54         6,263,921,304.54
the parent

Non-controlling interests                     48,258,834.53            48,258,834.53

Total owners’ equity                      6,312,180,139.07         6,312,180,139.07

Total liabilities and owners’
                                           8,519,336,914.11         8,523,280,002.41          3,943,088.30
equity



Balance Sheet of the Company as the Parent
                                                                                                  Unit: RMB

             Item                   31 December 2020          1 January 2021           Adjusted

Current assets:

  Monetary assets                           896,261,882.77           896,261,882.77

  Held-for-trading financial
                                            407,619,201.36           407,619,201.36
assets

  Derivative financial assets

  Notes receivable                          137,477,199.21           137,477,199.21

  Accounts receivable                      1,030,713,074.22         1,030,713,074.22

  Accounts             receivable
financing

  Prepayments                                  9,581,302.45             9,581,302.45

  Other receivables                         462,284,585.09           462,284,585.09

     Including:          Interest
receivable

                       Dividends
receivable

  Inventories                               615,106,650.81           615,106,650.81

  Contract assets

  Assets held for sale

  Current         portion      of
non-current assets

  Other current assets                      139,275,518.71           139,275,518.71

Total current assets                       3,698,319,414.62         3,698,319,414.62

Non-current assets:



                                                                                                        231
Foshan Electrical and Lighting Co., Ltd.                                         Annual Report 2021


   Investments         in       debt
obligations

   Investments in other debt
obligations

   Long-term receivables

   Long-term                  equity
                                            536,949,311.73     536,949,311.73
investments

   Investments in other equity
                                           3,305,501,030.06   3,305,501,030.06
instruments

   Other non-current financial
assets

   Investment property

   Fixed assets                             628,174,755.88     628,174,755.88

   Construction in progress                  54,652,119.14      54,652,119.14

   Productive living assets

   Oil and gas assets

   Right-of-use assets                                           3,943,088.30         3,943,088.30

   Intangible assets                        122,391,701.60     122,391,701.60

   Development costs

   Goodwill

   Long-term                 prepaid
                                             11,651,100.48      11,651,100.48
expense

   Deferred income tax assets                31,403,727.94      31,403,727.94

   Other non-current assets                   7,548,885.47       7,548,885.47

Total non-current assets                   4,698,272,632.30   4,702,215,720.60        3,943,088.30

Total assets                               8,396,592,046.92   8,400,535,135.22        3,943,088.30

Current liabilities:

   Short-term borrowings

   Held-for-trading financial
liabilities

   Derivative               financial
liabilities

   Notes payable                            484,230,566.21     484,230,566.21

   Accounts payable                        1,108,208,382.75   1,108,208,382.75

   Advances from customers

   Contract liabilities                      53,572,800.70      53,572,800.70



                                                                                               232
Foshan Electrical and Lighting Co., Ltd.                                         Annual Report 2021


   Employee benefits payable                 62,075,512.08      62,075,512.08

   Taxes payable                              7,819,839.48       7,819,839.48

   Other payables                           171,916,835.73     171,916,835.73

      Including:          Interest
payable

                        Dividends
payable

   Liabilities            directly
associated with assets held
for sale

   Current          portion     of
                                                                  1,750,282.11        1,750,282.11
non-current liabilities

   Other current liabilities                   4,483,279.11       4,483,279.11

Total current liabilities                  1,892,307,216.06   1,894,057,498.17        1,750,282.11

Non-current liabilities:

   Long-term borrowings

   Bonds payable

      Including:        Preferred
shares

                    Perpetual
bonds

   Lease liabilities                                             2,192,806.19         2,192,806.19

   Long-term payables

   Long-term            employee
benefits payable

   Provisions

   Deferred income

   Deferred         income      tax
                                            414,670,609.97     414,670,609.97
liabilities

   Other               non-current
liabilities

Total non-current liabilities               414,670,609.97     416,863,416.16         2,192,806.19

Total liabilities                          2,306,977,826.03   2,310,920,914.33        3,943,088.30

Owners’ equity:

   Share capital                           1,399,346,154.00   1,399,346,154.00

   Other equity instruments




                                                                                               233
Foshan Electrical and Lighting Co., Ltd.                                                               Annual Report 2021


     Including:       Preferred
shares

                  Perpetual
bonds

  Capital reserves                             7,426,635.62                   7,426,635.62

  Less: Treasury stock

  Other        comprehensive
                                           2,349,389,658.23               2,349,389,658.23
income

  Specific reserve

  Surplus reserves                          741,567,039.55                  741,567,039.55

  Retained earnings                        1,591,884,733.49               1,591,884,733.49

Total owners’ equity                      6,089,614,220.89               6,089,614,220.89

Total liabilities and owners’
                                           8,396,592,046.92               8,400,535,135.22                   3,943,088.30
equity


(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any New
Standards Governing Leases since 2021

□ Applicable √ Not applicable

45. Other

Naught


46. Fair value measurement
1. Scope of assets and liabilities measured by fair value:
The assets and liabilities of the Company measured by fair value include: Tradable financial assets and investments
in other equity instruments.
2. The alternative valuation techniques include: Market approach, income approach and cost approach.
3. Initial measurement of fair value
Fair value refers to the price that market participants can receive from selling an asset or pay for transferring a
liability in an orderly trading on the measurement date, that is, the exit price.
According to the nature of the trading and the characteristics of related assets or liabilities, the Company shall judge
whether the fair value at the time of initial recognition is equal to the trading price. Generally, the fair value is equal
to the trading price except for the following circumstances:
(1) The trading takes place between related parties. However, the Company has evidence that the related party
trading was conducted under market conditions.
(2) Trading is forced.
(3) The unit of measurement represented by the trading price is different from the unit of measurement of related
assets or liabilities measured at fair value.
(4) The trading market is not the principal market (or the most advantageous market) for the related assets or


                                                                                                                       234
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


liabilities.
Unless otherwise specified, if the trading price is not equal to the fair value, the difference shall be included in the
profits and losses of the current period.

47. Other Comprehensive Income
Other comprehensive earnings refer to various gains and losses that are not recognized in the current profits and
losses according to the Accounting Standard for Business Enterprises. It is presented in the following two
categories:
1. Other comprehensive earnings that cannot be reclassified into profits and losses in future accounting periods
mainly include the changes caused by re-measuring the net liabilities or net assets of the set income plan, the share
of other comprehensive earnings that cannot be reclassified into profit and loss in the future accounting period of the
invested entity calculated by the equity method, the changes in the fair value of other equity instruments investment,
and the changes in the fair value of the enterprise's own credit risk.
2. Other comprehensive earnings that will be reclassified into profits and losses when the prescribed conditions are
met in future periods mainly include the share of other comprehensive earnings reclassified into profit and loss when
the prescribed conditions are met in the future accounting period of the investee calculated according to the equity
method, the changes in fair value of other creditor's rights investments, the reclassification of financial assets into
other comprehensive earnings, the provision for credit impairment of other creditor's rights investments, the gains or
losses arising from cash flow hedging instruments that belong to effective hedging, and the translation differences in
foreign currency financial statements, etc.

48. Profit Distribution Method
The profits of the Company are distributed in the following order according to the Articles of Association:
1. To make up for the losses of previous years;
2. To withdraw the statutory surplus reserve, which may not be withdrawn when the accumulated withdrawal
amount exceeds 50% of the registered capital;
3. To withdraw any provident fund after the resolution of the Shareholders’ General Meeting;
4. The remaining profits shall be distributed according to the resolutions of the Shareholders withdrawal amount

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% , 13%
                                           service

Urban maintenance and construction tax     Turnover tax payable                         7%, 5%

Enterprise income tax                      Taxable income                               10%, 15%, 25%

Educational surtax                         Turnover tax payable                         3%

Local educational surtax                   Turnover tax payable                         2%



Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate


                                                                                                                            235
Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021


                            Name                                               Income tax rate

The Company, Zhida Company, Chanchang Company, Nanning
Liaowang, Chongqing Guinuo, Liuzhou Lighting, Liuzhou    15%
Foreshine

FSL Lighting GmbH                                        15%

Indonesia Liaowang                                       10%

Other subsidiaries                                       25%


2. Tax Preference

The Company passed the re-examination for High-tech Enterprises in 2020, 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 provisions in Corporate Income Tax Law of the
People’s Republic of China and the Administration Measures for Identification of High-tech Enterprises
promulgated in 2007, the Company paid the corporate income tax based on a tax rate of 15% within three years
since 1 January 2020.
Zhida Company and Chanchang Company passed the examination for High-tech Enterprises respectively in
December 2019 and December 2021, and thus Zhida Company and Chanchang Company paid the corporate
income tax based on a tax rate of 15% within three years respectively since 1 January 2019 and 1 January 2021 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.
3. According to the Decision on Tax Matters approved by the Local Taxation Bureau of Nanning High-tech
Industrial Development Zone (NGDSSB [2015] No. 1), Nanning Liaowang will enjoy the preferential tax reduction
and exemption of enterprise income tax in the western development from 1 January 2015, and the enterprise income
tax will be levied at a reduced rate of 15%.
4. After being examined and filed by the competent tax authorities, Chongqing Guinuo will enjoy the preferential
tax reduction and exemption of enterprise income tax in the western development from 1 January 2019, and the
enterprise income tax will be levied at a reduced rate of 15%.
5. According to the letter (LFGH Zi [2020] No. 196) issued by Liuzhou Development and Reform Commission on
17 August 2020, Liuzhou Guige Photoelectric is determined to be in line with the encouraged industries in the
western region, and the enterprise income tax will be paid at a reduced rate of 15% from 1 January 2020.
6. According to the letter (GKGH [2021] No. 237) jointly issued by the Science and Technology Department of
Guangxi Zhuang Autonomous Region, Finance Department of Guangxi Zhuang Autonomous Region and Guangxi
Zhuang Autonomous Region Tax Service, State Taxation Administration on 30 November 2021, Liuzhou Guige
Fuxuan is recognized as a high-tech enterprise (the certificate has not been obtained yet), and the preferential tax
rate of income tax for high-tech enterprises is 15%.




                                                                                                                236
Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021


3. Other

Pay in accordance with the relevant provisions of the tax law

VII. Notes to Main Items of Consolidated Financial Statements

1. Monetary Assets

                                                                                                         Unit: RMB

                    Item                          Ending balance                     Beginning balance

Cash on hand                                                         16,733.10                           14,800.25

Bank deposits                                               1,053,051,643.16                       883,112,636.02

Other monetary assets(Note 1)                                   330,829,702.26                      96,541,013.22

Unexpired interest(Note 2)                                          320,465.75                       1,581,250.00

Total                                                       1,384,218,544.27                       981,249,699.49

  Of which: Total amount deposited
                                                                 26,786,097.33                       1,127,886.79
overseas

Other notes

Note 1: Other monetary assets were security deposits for notes and performance bonds, as well as investments
placed with security firm and the balance with e-commerce platforms, of which the security deposits for notes and
performance bonds were restricted assets (see “81. Assets with Restricted Ownership or Right of Use” in Note
“VII Notes to Consolidated Financial Statements”).
Note 2: Unexpired interest did not belong to cash and cash equivalents.

2. Trading Financial Assets

                                                                                                         Unit: RMB

                    Item                          Ending balance                     Beginning balance

Financial assets at fair value through profit
                                                                328,248,125.61                     407,619,201.36
or loss

Including:

Debt instrument investments

Equity instrument investments                                      1,558,778.18

Wealth management products                                      322,422,447.43                     401,286,301.36

Others                                                             4,266,900.00                      6,332,900.00

Including:

Total                                                           328,248,125.61                     407,619,201.36




                                                                                                               237
Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021


3. Derivative Financial Assets

Naught


4. Notes Receivable

(1) Notes Receivable Listed by Category

                                                                                                                           Unit: RMB

                    Item                                   Ending balance                             Beginning balance

Bank acceptance bill                                                       594,208,093.58                             140,972,143.00

Total                                                                      594,208,093.58                             140,972,143.00

Note: The ending balance of notes receivable increased by 321.51% to RMB453,235,950.58 compared with the beginning of the
period, which was mainly due to the combination of Nanning Liaowang not under the same control of RMB517,137,558.88 in the
current period.

Note:
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) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting Period

Naught


(3) Notes Receivable Pledged at the Period-end

                                                                                                                           Unit: RMB

                                  Item                                             Amount pledged at the period-end

Bank acceptance bill                                                                                                  275,626,604.28

Total                                                                                                                 275,626,604.28


(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: RMB

                                              Amount of recognition termination at the      Amount of not recognition termination at
                    Item
                                                             period-end                                 the period-end

Bank acceptance bill                                                       431,082,830.83

Total                                                                      431,082,830.83




                                                                                                                                  238
Foshan Electrical and Lighting Co., Ltd.                                                                               Annual Report 2021


(5) Notes Transferred to Accounts Receivable because Drawer of the Notes Fails to Executed the Contract
or Agreement

Naught


(6) The Actual Write-off Notes Receivable

Naught


5. Accounts Receivable

(1) Accounts Receivable Disclosed by Category

                                                                                                                                  Unit: RMB

                                          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
                        26,084,5               23,840,3               2,244,165 15,257,66                9,569,331               5,688,330.8
withdrawn bad debt                    1.68%                91.40%                               1.27%                  62.72%
                          22.39                   56.97                     .42      2.85                      .99                           6
provision separately

Of which:

Accounts receivable
                        1,523,45               72,968,0               1,450,484 1,185,342                56,797,28               1,128,544,9
withdrawn bad debt                  98.32%                   4.79%                             98.73%                   4.79%
                        2,180.67                  69.61                 ,111.06    ,187.03                    2.19                    04.84
provision by group

Of which:

(1) General business    1,523,45               72,968,0               1,450,484 1,185,342                56,797,28               1,128,544,9
                                    98.32%                   4.79%                             98.73%                   4.79%
portfolio               2,180.67                  69.61                 ,111.06    ,187.03                    2.19                    04.84

(2) Internal business
portfolio

                        1,549,53               96,808,4               1,452,728 1,200,599                66,366,61               1,134,233,2
Total                              100.00%                   6.25%                           100.00%                    5.53%
                        6,703.06                  26.58                 ,276.48    ,849.88                    4.18                    35.70

Note: The ending balance of accounts receivable increased by 28.08% to RMB318,495,040.78 compared w ith the beginning of the
period, which was mainly due to the combination of Nanning Liaowang not under the same control in the current period. On the
purchase date, the book balance of accounts receivable of Nanning Liaowang was RMB261,213,859.26, and the expected credit loss
balance was RMB27,802,323.36.
Individual withdrawal of bad debt provision:

                                                                                                                                  Unit: RMB

            Name                                                           Ending balance


                                                                                                                                           239
Foshan Electrical and Lighting Co., Ltd.                                                                             Annual Report 2021


                                  Carrying amount          Bad debt provision         Withdrawal proportion       Withdrawal reason

                                                                                                               Involved in the lawsuit,
                                                                                                               the Company won the
Customer A                                11,220,827.14                8,976,661.72                   80.00% lawsuit in the second
                                                                                                               instance, which had not
                                                                                                               yet executed completely

                                                                                                               Existing pending
Customer B                                 9,111,336.51                9,111,336.51                  100.00%
                                                                                                               litigation matters

                                                                                                               Existing pending
Customer C                                 4,702,051.28                4,702,051.28                  100.00%
                                                                                                               litigation matters

                                                                                                               Existing pending
Customer D                                  526,858.54                  526,858.54                   100.00%
                                                                                                               litigation matters

                                                                                                               The customer had
                                                                                                               executed bankruptcy
Customer E                                  523,448.92                  523,448.92                   100.00% liquidation in December
                                                                                                               2020, thus the accounts
                                                                                                               were unrecoverable.

Total                                     26,084,522.39            23,840,356.97                --                           --



Withdrawal of bad debt provision by group:
                                                                                                                                  Unit: RMB

                                                                               Ending balance
               Name
                                            Carrying amount                  Bad debt provision               Withdrawal proportion

Credit risk group                                   1,523,452,180.67                     72,968,069.61                              4.79%

Total                                               1,523,452,180.67                     72,968,069.61                  --

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 accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging

                                                                                                                                  Unit: RMB

                                  Aging                                                         Ending balance

Within 1 year (including 1 year)                                                                                       1,417,722,342.04

1 to 2 years                                                                                                                 62,047,044.50

2 to 3 years                                                                                                                 22,972,772.35

Over 3 years                                                                                                                 46,794,544.17

3 to 4 years                                                                                                                 24,800,747.87

4 to 5 years                                                                                                                 12,031,839.07

Over 5 years                                                                                                                  9,961,957.23


                                                                                                                                         240
Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021


Total                                                                                                                  1,549,536,703.06


(2) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting Period

The amount of expected credit loss accrued in the current period is RMB4,202,667.10, and the amount of expected
credit loss recovered or reversed in the current period is RMB0.00, which is RMB98.71 different from the amount
of credit impairment loss accrued in the current period of RMB4,202,568.39, which is caused by the translation
difference of foreign currency statement of Indonesia Liaowang at the end of the period.

(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period

                                                                                                                              Unit: RMB

                                Item                                                            Amount
No. 1                                                                                                                     1,036,835.71

No. 2                                                                                                                       247,740.00
No. 3                                                                                                                       117,554.16

No. 4                                                                                                                         86,000.00
No. 5                                                                                                                         40,908.20

No. 6                                                                                                                         23,972.28

No. 7                                                                                                                         10,000.00

Other retails accounts                                                                                                           167.71



Of which, verification of significant accounts receivable:
                                                                                                                              Unit: RMB

                                                                                                                  Whether occurred
                                                                                                                        because of
 Name of the entity            Nature               Amount                Reason                Procedure
                                                                                                                       related-party
                                                                                                                       transactions

                                                                   After litigation and   The         approval
                                                                   compulsory             procedure is carried
No. 1                    Payment for goods            1,036,835.71 execution, the other   out according to the Not
                                                                   party has no           Company’s rules for
                                                                   enforceable property managing bad debt.

                                                                                          The         approval
                                                                                          procedure is carried
No. 2                    Payment for goods              247,740.00 Unrecoverable          out according to the Not
                                                                                          Company’s rules for
                                                                                          managing bad debt.

                                                                                          The         approval
No. 3                    Payment for goods              117,554.16 Unrecoverable                                 Yes
                                                                                          procedure is carried


                                                                                                                                       241
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


                                                                                         out according to the
                                                                                         Company’s rules for
                                                                                         managing bad debt.

Total                          --                    1,402,129.87             --                     --                       --

Note:
The approval procedure for the verification of accounts receivable during the Reporting Period had been performed in accordance
with provisions of the bad debt management system of the Company.


(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party

                                                                                                                               Unit: RMB

                              Ending balance of accounts        Proportion to total ending balance        Ending balance of bad debt
        Name of units
                                       receivable                   of accounts receivable (%)                    provision
No. 1                                         166,366,875.25                              10.74%                          4,991,006.26
No. 2                                         131,241,873.99                               8.47%                          3,937,256.22

No. 3                                          89,015,269.51                               5.74%                          2,670,458.09
No. 4                                          52,487,287.78                               3.39%                          1,574,618.63

No. 5                                          26,525,457.91                               1.71%                              795,763.74

Total                                         465,636,764.44                              30.05%


(5) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable

Naught


(6) Derecognition of Accounts Receivable due to the Transfer of Financial Assets

Naught


6. Accounts Receivable Financing

Naught


7. Prepayment

(1) Listed by Aging

                                                                                                                               Unit: RMB

                                             Ending balance                                      Beginning balance
           Aging
                                    Amount                    Proportion                 Amount                       Proportion

Within 1 year                        14,144,142.09                         70.30%            9,193,885.82                          76.65%


                                                                                                                                       242
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


1 to 2 years                          3,949,733.77                     19.63%                  355,870.31                    2.97%

2 to 3 years                            231,355.67                     1.15%                1,081,261.45                     9.01%

Over 3 years                          1,794,725.49                     8.92%                1,363,727.47                     11.37%

Total                                20,119,957.02             --                          11,994,745.05              --


Note: The ending balance of prepayments increased by 67.74% to RMB8,125,211.97 compared with the beginning of the period,
which was mainly due to the combination of Nanning Liaowang not under the same control in the current period.


(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target

                                                                                                                           Unit: RMB

                            Relationship with the                               Proportion to total
        Name of units                                 Ending balance                                     Prepayment time
                                  Company                                       prepayments (%)

No. 1                         Non-related party             2,456,719.58                       12.21%       2020-2021
No. 2                         Non-related party             1,482,752.68                        7.37%          2021
No. 3                         Non-related party             1,327,340.00                        6.60%          2021
No. 4                         Non-related party             1,281,260.12                        6.37%          2021
No. 5                         Non-related party             1,250,000.00                        6.21%          2021
Total                                                       7,798,072.38                       38.76%




8. Other Receivables

                                                                                                                           Unit: RMB

                    Item                                Ending balance                                Beginning balance

Other receivables                                                       34,082,909.41                                 20,194,968.19

Total                                                                   34,082,909.41                                 20,194,968.19


(1) Interest Receivable

Naught


(2) Dividends Receivable

Naught


(3) Other Receivables

1) Other Receivables Classified by Account Nature

                                                                                                                           Unit: RMB



                                                                                                                                 243
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


                    Nature                               Ending carrying amount                         Beginning carrying amount

Staff borrow and petty cash                                                     4,018,439.87                                7,866,311.07

Performance bond                                                                9,165,300.58                                4,166,580.10

Rent, water & electricity fees                                                  2,564,557.87                                3,389,778.15

VAT export tax refunds                                                          4,674,335.06                                  195,141.85

Other                                                                        22,642,922.70                                  7,020,439.45

Total                                                                        43,065,556.08                                 22,638,250.62


Note: The ending balance of other receivables increased by 68.77% to RMB13,887,941.22 compared with the beginning of the period,
which was mainly due to the combination of Nanning Liaowang not under the same control in the current period. the book balanc e of
other receivables of Nanning Liaowang was RMB28,872,830.21, and the expected credit loss balance was RMB6,349,173.76.


2) Information of Withdrawal of Bad Debt Provision

                                                                                                                               Unit: RMB

                                   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
                                         499,462.41                 1,943,820.02                                            2,443,282.43
2021

Balance of 1 January
2021 in the Current                  ——                       ——                             ——                      ——
Period

Withdrawal of the
                                     -1,297,178.88                  1,487,369.36                                              190,190.48
Current Period

Other changes (note)                  1,607,681.38                     452,034.40                   4,289,457.98            6,349,173.76

Balance of 31 December
                                         809,964.91                 3,883,223.78                    4,289,457.98            8,982,646.67
2021

Note: It is the expected credit loss balance of other receivables of Nanning Liaowang on the purchase date, of which the thir d stage is
the current accounts involved in litigation, and Nanning Liaowang has fully accrued the expected credit loss.
Changes of carrying amount with significant amount changed of loss provision in the current period
□Applicable √Not applicable


Disclosure by aging
                                                                                                                               Unit: RMB

                                 Aging                                                            Ending balance

Within 1 year (including 1 year)                                                                                           26,998,830.90



                                                                                                                                     244
Foshan Electrical and Lighting Co., Ltd.                                                                   Annual Report 2021


1 to 2 years                                                                                                     9,016,668.21

2 to 3 years                                                                                                     4,127,817.63

Over 3 years                                                                                                     2,922,239.34

3 to 4 years                                                                                                     1,004,374.23

4 to 5 years                                                                                                     1,239,473.81

Over 5 years                                                                                                       678,391.30

Total                                                                                                           43,065,556.08


3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period

The amount of expected credit loss accrued in the current period is RMB190,190.49, and the amount of expected credit loss
recovered or reversed in the current period is RMB0.00, which is RMB325.92 different from the amount of credit impairment loss
accrued in the current period of RMB189,864.57, which is caused by the translation difference of foreign currency statement of
Indonesia Liaowang at the end of the period.


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: RMB

                                                                                     Proportion to total
                                                                                     ending balance of     Ending balance of
 Name of the entity          Nature            Ending balance          Aging
                                                                                      other receivables    bad debt provision
                                                                                            (%)
No. 1                 Intercourse accounts         7,060,000.00 Within 1 year                     16.39%           211,800.00

No. 2                 VAT export tax
                                                   4,674,335.06 Within 1 year                     10.85%           140,230.05
                      refunds
No. 3                 Intercourse accounts         4,289,457.98 1-2 years                         9.96%          4,289,457.98

No. 4                 Social insurance             2,242,142.33 Within 1 year                     5.21%             67,264.27
No. 5                 Performance bond             1,946,000.00 2-3 years                         4.52%            583,800.00

Total                           --                20,211,935.37             --                    46.93%         5,292,552.30


6) Accounts Receivable Involving Government Grants

Naught


7) Derecognition of Other Receivables due to the Transfer of Financial Assets

Naught

                                                                                                                            245
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


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 needs to comply with disclosure requirements for real estate industry

No


(1) Category of Inventory

                                                                                                                                Unit: RMB

                                      Ending balance                                                Beginning balance

                                        Falling price                                                 Falling price
                                        reserves of                                                    reserves of
                                        inventory or                                                   inventory or
         Item
                   Carrying amount      depreciation       Carrying value        Carrying amount       depreciation       Carrying value
                                        reserves of                                                    reserves of
                                           contract                                                        contract
                                      performance cost                                              performance cost

Raw materials        247,709,680.24        5,172,760.57     242,536,919.67        177,234,228.73           2,901,800.45    174,332,428.28

Goods in process      66,382,820.07                              66,382,820.07     40,969,288.80                            40,969,288.80

Inventory goods      597,575,545.42      41,900,565.60      555,674,979.82        387,194,563.02       13,992,901.12       373,201,661.90

Goods in transit      93,671,492.20        3,530,794.31          90,140,697.89

Semi-finished
                     100,723,505.66         377,760.65      100,345,745.01        145,960,270.11           1,013,387.91    144,946,882.20
goods

Low priced and
easily worn            3,231,115.87                               3,231,115.87       2,234,855.73                            2,234,855.73
articles

Others                 5,177,062.67                               5,177,062.67

Total              1,114,471,222.13      50,981,881.13 1,063,489,341.00           753,593,206.39       17,908,089.48       735,685,116.91


(2)Falling Price Reserves of Inventory and Depreciation Reserves of Contract Performance Cost

                                                                                                                                Unit: RMB

                                                      Increase                                  Decrease
                      Beginning
         Item                                                                      Reversal or                            Ending balance
                       balance          Withdrawal           Other (note)                                   Other
                                                                                    write-off

Raw materials          2,901,800.45        2,974,237.10           1,105,571.99       1,808,848.97                            5,172,760.57



                                                                                                                                       246
Foshan Electrical and Lighting Co., Ltd.                                                                             Annual Report 2021


Inventory goods      13,992,901.12        27,507,871.77       11,399,695.96        10,999,903.25                          41,900,565.60

Semi-finished
                      1,013,387.91          409,446.80                              1,045,074.06                             377,760.65
goods

Goods in transit                            191,990.59         3,491,750.59          152,946.87                            3,530,794.31

Others                                                         1,899,338.66         1,899,338.66

Total                17,908,089.48        31,083,546.26       17,896,357.20        15,906,111.81                          50,981,881.13

Note: refer to the increase generated from the consolidation of Nanning Liaowang not under the same control in
the Reporting Period.


         Item         Basis for withdrawal of falling price    Reasons for reversal or write-off of falling              Note
                             reserves of inventory                     price reserves of inventory
                      The lower one between the inventory            Sales or scrap of raw materials
Raw materials
                          cost and net realizable value
                      The lower one between the inventory               Sales or scrap of products
Inventory goods
                          cost and net realizable value
Goods in transit      The lower one between the inventory               Sales or scrap of products
                          cost and net realizable value

Reasons for the provision for inventory depreciation: Provisions are set for the stagnancy of a few raw materials;
some inventory products become temporarily idle due to classification.

(3) Notes to the Ending Balance of Inventories Including Capitalized Borrowing Expense

Naught


(4) Amortization Amount of Contract Performance Cost during the Reporting Period

Naught


10. Contract Assets

                                                                                                                                Unit: RMB

                                              Ending balance                                         Beginning balance
            Item               Carrying         Depreciation                           Carrying       Depreciation
                                                                  Carrying value                                         Carrying value
                                amount            reserves                              amount           reserves

Contract assets               8,826,085.67           264,782.57     8,561,303.10

Total                         8,826,085.67           264,782.57     8,561,303.10


11. Held-for-Sale Assets

                                                                                                                                Unit: RMB


                                                                                                                                      247
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


                     Ending carrying      Depreciation      Ending carrying                            Estimated              Estimated
         Item                                                                      Fair value
                           amount            reserves             value                            disposal expense      disposal time

Houses, buildings
                                                                                                                       31 December
and land involved       23,831,992.10                          23,831,992.10      183,855,895.00      55,718,333.95
                                                                                                                       2022
in expropriation

Total                   23,831,992.10                          23,831,992.10      183,855,895.00      55,718,333.95              --

Other notes:


Note: For details, see Note 20 "Demolition Matters of Nanjing Fozhao". The estimated disposal costs include employee resettle ment
fees, compensation for the termination of the original tenant's contract, and taxes related to the proceeds of de molition.


12. Current Portion of Non-current Assets

Naught


13. Other Current Assets

                                                                                                                                 Unit: RMB

                    Item                                    Ending balance                               Beginning balance

Large bank deposit certificate (note)                                                                                     90,417,315.07

Input tax of VAT to be certified and
                                                                            84,065,408.31                                 84,673,053.78
deducted

Advance payment of enterprise income tax                                      1,573,600.91

Others                                                                           54,979.52

Total                                                                       85,693,988.74                                175,090,368.85

Other notes;
Bank deposit receipts of large amounts with a maturity of over three months which were transferable but not redeemable until
maturity.


14. Creditor’s Rights Investment

Naught


15. Other Creditor’s Rights Investment

Naught


16. Long-term Accounts Receivable

Naught




                                                                                                                                          248
Foshan Electrical and Lighting Co., Ltd.                                                                                             Annual Report 2021


17. Long-term Equity Investment

                                                                                                                                                Unit: RMB

                                                                   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           181,365,0                              2,260,497                               2,080,390                              181,545,1
(Nanho)            16.32                                    .27                                    .50                                  23.09
Electronic
s Ltd.

             181,365,0                              2,260,497                               2,080,390                              181,545,1
Subtotal
                   16.32                                    .27                                    .50                                  23.09

             181,365,0                              2,260,497                               2,080,390                              181,545,1
Total
                   16.32                                    .27                                    .50                                  23.09




18. Other Equity Instrument Investment

                                                                                                                                                Unit: RMB

                          Item                                      Ending balance                                     Beginning balance

Non-listed equity investment                                                               500,000.00                                         5,054,176.40

Listed equity investment                                                             1,474,360,785.15                                  3,300,446,853.66

Total                                                                                1,474,860,785.15                                  3,305,501,030.06



Disclosure of non-trading equity instrument investment by items
                                                                                                                                                Unit: RMB

                                                                                                                     Reason for
                                                                                           Amount of other                             Reason for other
                                                                                                                    assigning to
                                                                                            comprehensive                               comprehensive
                          Dividend income       Accumulative         Accumulative                                  measure in fair
         Item                                                                                   income                                        income
                            recognized              gains                   losses                                 value and the
                                                                                            transferred to                              transferred to
                                                                                                                  changes included
                                                                                           retained earnings                           retained earnings
                                                                                                                      in other


                                                                                                                                                         249
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


                                                                                               comprehensive
                                                                                                   income

                                                                                              Not satisfied with Sale              of
Stock of Xiamen                                                                               the condition of     shareholdings
                         19,748,551.68     353,361,994.91                     93,217,030.86
Bank                                                                                          trading equity
                                                                                              instrument

                                                                                              Not satisfied with Sale              of
Stock of Gotion                                                                               the condition of     shareholdings
                                           803,565,100.63                    903,146,499.85
High-tech                                                                                     trading equity
                                                                                              instrument

                                                                                              Not satisfied with Sale              of
Stock               of                                                                        the condition of     shareholdings
                          3,894,818.34                                        33,804,550.70
Everbright Bank                                                                               trading equity
                                                                                              instrument

                                                                                              Not satisfied with
Stock               of
                                                                                              the condition of
Nationstar                                   1,538,511.32
                                                                                              trading equity
Optoelectronics
                                                                                              instrument

Foshan Fochen                                                                                 Not satisfied with Sale              of
Highway                                                                                       the condition of     shareholdings
                                                                              10,875,167.71
Development Co.,                                                                              trading equity
Ltd.                                                                                          instrument

Other notes:

Note: The ending balance of other equity instrument investment was RMB-1,830,640,244.91, decreasing by 55.38%, which was
caused by sales of some stocks in the current period.


19. Other Non-current Financial Assets

Naught


20. Investment Property

(1) Investment Property Adopting the Cost Measurement Mode

√ Applicable □ Not applicable
                                                                                                                             Unit: RMB

             Item             Houses and buildings          Land use right    Construction in progress               Total

I. Original carrying value

1. Beginning balance

2. Increased amount of
                                         49,792,377.90                                                                49,792,377.90
the period


                                                                                                                                   250
Foshan Electrical and Lighting Co., Ltd.           Annual Report 2021


(1) Outsourcing

(2) Transfer from
inventories/fixed
                                   49,792,377.90       49,792,377.90
assets/construction in
progress

(3) Enterprise
combination increase



3. Decreased amount of
the period

(1) Disposal

(2) Other transfer



4. Ending balance                  49,792,377.90       49,792,377.90

II. Accumulative
depreciation and
accumulative
amortization

1. Beginning balance

2. Increased amount of
                                    6,444,553.56        6,444,553.56
the period

(1) Withdrawal or
                                      591,284.49          591,284.49
amortization

(2) Transfer from
inventories/fixed
                                    5,853,269.07        5,853,269.07
assets/construction in
progress (note)

3. Decreased amount of
the period

(1) Disposal

(2) Other transfer



4. Ending balance                   6,444,553.56        6,444,553.56

III. Depreciation reserves

1. Beginning balance

2. Increased amount of
the period

(1) Withdrawal


                                                                 251
Foshan Electrical and Lighting Co., Ltd.                                                               Annual Report 2021




3. Decreased amount of
the period

(1) Disposal

(2) Other transfer



4. Ending balance

IV. Carrying value

1. Ending carrying value                 43,347,824.34                                                      43,347,824.34

2. Beginning carrying
value


(2) Investment Property Adopting the Fair Value Measurement Mode

□ Applicable √ Not applicable


(3) Investment Property Failed to Accomplish Certification of Property

Other notes

In October 2021, the Company held the 20th meeting of the ninth Board of Directors, where the Proposal on
Changing Some Self-used Real Estate into Investment Real Estate and Measuring by Cost Model was deliberated
and adopted, and the K2 and K3 buildings of Gaoming Fuwan Standard Workshop were changed from fixed assets
projects to investment real estate projects, measured by cost model, and depreciation was accrued by the same
method as fixed assets.



21. Fixed Assets

                                                                                                                 Unit: RMB

                     Item                                 Ending balance                     Beginning balance

Fixed assets                                                        1,323,076,326.60                       685,707,548.55

Disposal of fixed assets

Total                                                               1,323,076,326.60                       685,707,548.55


(1) List of Fixed Assets

                                                                                                                 Unit: RMB

                            Houses and             Machinery        Transportation     Electronic
         Item                                                                                                Total
                             buildings             equipment          equipment        equipment




                                                                                                                       252
Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021


I. Original carrying
value

  1. Beginning
                          949,016,860.88    758,424,898.71    21,812,402.45   31,973,759.69    1,761,227,921.73
balance

  2. Increased
                          555,809,608.91    496,874,274.30    17,554,115.68   11,649,527.67    1,081,887,526.56
amount of the period

     (1) Purchase           1,607,505.81     70,262,183.04     1,120,502.82    3,528,254.56       76,518,446.23

     (2) Transfer
from construction in        1,241,854.38     28,794,297.61                       20,088.49        30,056,240.48
progress

     (3) Enterprise
                          552,954,860.11    397,812,688.27    16,433,247.05    8,101,171.12      975,301,966.55
combination increase

     (4) Others
                                5,388.61           5,105.38         365.81           13.50            10,873.30
(note)

  3. Decreased
                          189,692,181.66     17,760,021.13     2,924,011.24     486,326.24       210,862,540.27
amount of the period

     (1) Disposal or
                          119,223,121.12     17,388,683.55     2,697,365.24     388,960.36       139,698,130.27
scrap

     (2) Equipment
transformation

     (3) Transfer
into investment            49,792,377.90                                                          49,792,377.90
property

     (4) Others
                           20,676,682.64        371,337.58      226,646.00       97,365.88        21,372,032.10
(note)

  4. Ending balance     1,315,134,288.13   1,237,539,151.88   36,442,506.89   43,136,961.12    2,632,252,908.02

II. Accumulative
depreciation

  1. Beginning
                          485,466,988.27    544,961,514.42    16,641,194.44   26,409,762.43    1,073,479,459.56
balance

  2. Increased
                          149,848,278.22    213,102,232.90    12,237,551.66    6,403,908.90      381,591,971.68
amount of the period

     (1) Withdrawal        38,269,817.31     61,555,839.99     2,296,408.80    2,038,449.30      104,160,515.40

     (2) Enterprise
                          111,577,060.55    151,543,552.88     9,940,676.08    4,365,442.15      277,426,731.66
combination increase

     (3) Others                 1,400.36           2,840.03         466.78           17.45             4,724.62

  3. Decreased
                          131,254,902.80     13,348,260.01     2,697,430.50     410,475.65       147,711,068.96
amount of the period



                                                                                                             253
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


     (1) Disposal or
                            111,285,269.26          13,039,992.46          2,493,449.10             351,709.23       127,170,420.05
scrap

     (2) Equipment
transformation

     (3) Transfer
into investment                5,853,269.07                                                                             5,853,269.07
property

     (4) Others
                             14,116,364.47             308,267.55            203,981.40              58,766.42         14,687,379.84
(note)

   4. Ending balance        504,060,363.69        744,715,487.31          26,181,315.60         32,403,195.68       1,307,360,362.28

III. Depreciation
reserves

   1. Beginning
                                                     2,040,485.59                                       428.03          2,040,913.62
balance

   2. Increased
amount of the period

     (1) Withdrawal



   3. Decreased
                                                       224,694.48                                                         224,694.48
amount of the period

     (1) Disposal or
                                                       224,694.48                                                         224,694.48
scrap

     (2) Equipment
transformation

   4. Ending balance                                 1,815,791.11                                       428.03          1,816,219.14

IV. Carrying value

   1. Ending carrying
                            811,073,924.44        491,007,873.46          10,261,191.29         10,733,337.41       1,323,076,326.60
value

   2. Beginning
                            463,549,872.61        211,422,898.70           5,171,208.01           5,563,569.23       685,707,548.55
carrying value


Note: Other assets such as houses and buildings involved in demolition of Nanjing Fozhao have been transferred to assets held for sale.


(2) List of Temporarily Idle Fixed Assets

                                                                                                                           Unit: RMB

                        Original carrying        Accumulated           Depreciation
           Item                                                                              Carrying value             Note
                              value              depreciation             reserves

T5, T8,                        7,270,900.82          5,675,051.55          1,536,308.44              59,540.83


                                                                                                                                   254
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


energy-saving lamp
production line

Total                         7,270,900.82            5,675,051.55          1,536,308.44            59,540.83


(3) Fixed Assets Leased out by Operation Lease

Naught


(4) Fixed Assets Failed to Accomplish Certification of Property

Other notes
The Company's Fuwan Standard Workshop J3, Fuwan Standard Workshop K1, Building 8 of Gaoming Family
Dormitory, Fuwan Staff Dormitory Building 7, Family Dormitory Building 3 to 6, Staff Village Dormitory Building
A, Staff Village Dormitory Building 2, 3, 5, 6, 10 to 13, Staff Dormitory Building 1 to 4, Fuwan Energy Saving
Lamp Workshop 2, Glass Workshop 8, Glass Workshop 9, Fluorescent Lamp Workshop, Standard Workshop A and
led Workshop have been completed and put into use and carried forward fixed assets. As of 31 December 2021, the
relevant real estate licenses are being processed. In addition, the ownership of four parking spaces of Nanning
Liaowang at No. 584 Zhenghe City, No. 155 Kerui Jiangyun, No. 160 Kerui Jiangyun and No. 588 Zhenghe City,
Liuzhou, are being processed. The management believed that there are no substantive legal barriers to the handling
of these title certificates, and it will not have a significant adverse impact on the normal operation of the Company.

(5) Disposal of Fixed Assets

Naught


22. Construction in Progress

                                                                                                                          Unit: RMB

                   Item                                    Ending balance                            Beginning balance

Construction in progress                                               730,595,319.42                               503,941,120.31

Total                                                                  730,595,319.42                               503,941,120.31


(1) List of Construction in Progress

                                                                                                                          Unit: RMB

                                       Ending balance                                           Beginning balance

         Item                           Depreciation                                              Depreciation
                     Carrying amount                       Carrying value    Carrying amount                        Carrying value
                                           reserves                                                 reserves

Construction in
                      731,914,119.42       1,318,800.00     730,595,319.42     503,941,120.31                       503,941,120.31
progress

Total                 731,914,119.42       1,318,800.00     730,595,319.42     503,941,120.31                       503,941,120.31



                                                                                                                                 255
Foshan Electrical and Lighting Co., Ltd.                                                                                    Annual Report 2021


(2) Changes in Significant Construction in Progress during the Reporting Period

                                                                                                                                         Unit: RMB

                                                                                                                   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

Kelian   726,738, 448,595, 52,999,4                               501,594,                          36,640,9
Building                                                                      77.99% 76.73%                                              Other
           900.00 364.96      87.08                                852.04                              53.02
15th and
16th
floors    115,752,              106,195,                          106,195,
office                                                                       100.00% 98.00%                                              Other
buildings 763.00                  222.94                           222.94
of R&F
Center
Gaoming
R&D
Worksho 71,690,0 31,610,8 21,920,2                                53,531,0
                                                                              84.38% 87.00%                                              Other
p 11, 12,  00.00    09.51    51.81                                  61.32
13, 14
and 18
FSL
intellige
nt        89,680,0              23,808,8                          23,808,8
manufact                                                                      30.00% 30.00%                                              Other
uring        00.00                 49.57                            49.57
factory
project
Gaoming 115,000, 5,236,80 16,972,6                                22,209,4
office                                                                        21.82% 10.00%                                              Other
building  000.00     1.98    49.43                                  51.41
Overhaul
of
Gaoming
No. 8
tank
furnace 10,890,0                6,242,79                          6,242,79
Work                                                                          64.78% 70.00%                                              Other
           00.00                    9.53                              9.53
order:
20029
Gaoming
tank
furnace
Chongqi
ng
Guinuo 14,676,7                 12,759,2 12,164,4                 594,723.
                                                                              98.24% 94.14%                                              Other
machiner  05.40                    09.37      86.22                    15
y and
equipme

                                                                                                                                                 256
Foshan Electrical and Lighting Co., Ltd.                                     Annual Report 2021


nt batch
Gaoming
LED T8
worksho 4,170,00              3,691,77          3,691,77
p                                                           96.50% 100.00%           Other
            0.00                  6.89              6.89
relocatio
n
Relocati
on and
reconstru
ction
project
of        6,542,60            5,903,25          5,903,25
general                                                     98.35% 100.00%           Other
light         0.00                4.16              4.16
bulb
worksho
p
(formerl
y T8 I)
48 t
electric
furnace 11,650,0 4,721,11 4,643,52 9,364,64
(18025)                                                     90.83% 100.00%           Other
Gaoming    00.00     9.09     7.44     6.53
tank
furnace
APS        2,990,00 877,679. 1,919,11           2,796,79
system                                                     100.00% 100.00%           Other
project       0.00       42       4.72              4.14
Upgradi
ng and
reconstru
ction
project
of        2,800,00 1,024,80 466,385. 1,491,19
                                                            60.18% 100.00%           Other
Haolaite      0.00     9.18       92     5.10
producti
on
worksho
p and
office
Relocati
on and
reconstru
ction
project
of
medium 1,877,28               1,590,89          1,590,89
lamp                                                        95.76% 100.00%           Other
           0.00                   8.68              8.68
worksho
p
(original
paper
products
)
Self-mad
e 1 fifth
generatio
n         2,000,00 1,011,23 686,583. 1,697,82
                                                            95.93% 100.00%           Other
LEDT8         0.00     9.59       35     2.94
lamp
automati
c

                                                                                             257
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


assembly
line
Work
order:
20030
Gaoming
LEDT8

           1,176,45 493,077, 259,800, 24,718,1 13,982,7 714,176,                        36,640,9
Total                                                                  --        --                                         --
           8,248.40     823.73    010.89   50.79      23.87   959.96                       53.02


(3) List of the Withdrawal of the Depreciation Reserves for Construction in Progress

                                                                                                                        Unit: RMB

                     Item                              Amount withdrawn                         Reason for withdrawal

Oxidation line engineering                                             1,318,800.00 Idleness

Total                                                                  1,318,800.00                      --


(4) Engineering Materials

Naught


23. Productive Living Assets

Naught


24. Oil and Gas Assets

□ Applicable √ Not applicable


25. Right-of-use Assets

                                                                                                                        Unit: RMB

              Item                    Houses and buildings             Land use right                         Total

I. Original carrying value

   1. Beginning balance                              851,453.04                 28,139,965.65                     28,991,418.69

   2. Increased amount of the
                                                   17,081,728.89                                                  17,081,728.89
period

     (1) Leased in                                 10,378,526.12                                                  10,378,526.12

     (2) Business combination
                                                    6,703,202.77                                                      6,703,202.77
increase

   3. Decreased amount of the
                                                     725,181.47                  2,451,601.62                         3,176,783.09
period

   4. Ending balance                               17,208,000.46                25,688,364.03                     42,896,364.49


                                                                                                                                 258
Foshan Electrical and Lighting Co., Ltd.                                                                   Annual Report 2021


II. Accumulated amortization

  1. Beginning balance                                  14,234.11            25,034,096.28                     25,048,330.39

  2. Increased amount of the
                                                     6,020,215.21             1,291,150.56                      7,311,365.77
period

     (1) Withdrawal                                  2,689,218.04             1,291,150.56                      3,980,368.60

     (2) Business combination
                                                     3,330,997.17                                               3,330,997.17
increase

  3. Decreased amount of the
                                                      684,511.68              2,275,958.99                      2,960,470.67
period

  4. Ending balance                                  5,349,937.64            24,049,287.85                     29,399,225.49

IV. Carrying value

  1. Ending carrying value                          11,858,062.82             1,639,076.18                     13,497,139.00

  2. Beginning carrying value                         837,218.93              3,105,869.37                      3,943,088.30


26. Intangible Assets

(1) List of Intangible Assets

                                                                                                                   Unit: RMB

                                                            Non-patent
         Item         Land use right       Patent                        Software        Others (note 1)         Total
                                                            technology

I. Original
carrying value

  1. Beginning
                      232,199,092.68                                      4,597,419.45       7,622,600.00     244,419,112.13
balance

  2. Increased
amount of the         126,333,626.70         19,051.89                   14,141,452.07         61,387.26      140,555,517.92
period

     (1) Purchase      26,596,784.43                                      5,774,506.85         12,277.36       32,383,568.64

     (2) Internal
R&D

     (3) Business
combination            99,736,842.27         19,051.89                    8,366,945.22         49,109.90      108,171,949.28
increase



  3. Decreased
amount of the          24,594,710.00                                                                           24,594,710.00
period



                                                                                                                          259
Foshan Electrical and Lighting Co., Ltd.                                          Annual Report 2021


     (1) Disposal

     (2) Others
                     24,594,710.00                                                     24,594,710.00
(note 2)

  4. Ending
                    333,938,009.38         19,051.89   18,738,871.52   7,683,987.26   360,379,920.05
balance

II. Accumulated
amortization

  1. Beginning
                     71,255,724.77                      2,215,427.39    254,086.67     73,725,238.83
balance

  2. Increased
amount of the        17,810,980.47          1,428.93    3,414,683.43    812,392.88     22,039,485.71
period

     (1)
                      5,720,423.15           793.85     1,261,650.26    767,375.56      7,750,242.82
Withdrawal

     (2) Business
combination          12,090,557.32           635.08     2,153,033.17     45,017.32     14,289,242.89
increase

  3. Decreased
amount of the         7,447,370.16                                                      7,447,370.16
period

     (1) Disposal

     (2) Others
                      7,447,370.16                                                      7,447,370.16
(note 2)

  4. Ending
                     81,619,335.08          1,428.93    5,630,110.82   1,066,479.55    88,317,354.38
balance

III. Depreciation
reserves

  1. Beginning
balance

  2. Increased
amount of the                                            388,613.87                       388,613.87
period

     (1)
                                                         388,613.87                       388,613.87
Withdrawal



     3. Decreased
amount of the
period

     (1) Disposal


                                                                                                  260
Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021




   4. Ending
                                                                                   388,613.87                              388,613.87
balance

IV. Carrying
value

   1. Ending
                       252,318,674.30           17,622.96                       12,720,146.83          6,617,507.71    271,673,951.80
carrying value

   2. Beginning
                       160,943,367.91                                            2,381,992.06          7,368,513.33    170,693,873.30
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 0.00%.


(2) Land Use Right with Certificate of Title Uncompleted

Other notes:
Note 1: Intangible assets-others mainly include the marketing channels and human resources invested by Foshan Nationstar
Optoelectronics Co., Ltd. (hereinafter referred to as "Nationstar") in Haolaite Company.
Note 2: Other reductions in intangible assets in the current period are the land involved in demolition in Nanjing Fozhao, which has
been transferred to assets held for sale.


27. Development Costs

Naught


28. Goodwill

(1) Original Carrying Value of Goodwill

                                                                                                                            Unit: RMB

   Name of the                                          Increase                            Decrease
 invested units or      Beginning           Formed by
                                                                                                                      Ending balance
events generating         balance            business                            Disposal
     goodwill                               combination

Nanning                                      16,211,469.82                                                              16,211,469.82
Liaowang Auto
Lamp Co., Ltd.

        Total                                16,211,469.82                                                              16,211,469.82




                                                                                                                                   261
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


Note: It is the difference between the combined consideration paid and the fair value of the identifiable net
assets purchased (including the recognized deferred income tax liabilities).

(2) Depreciation Reserves of Goodwill

None

29. Long-term Prepaid Expense

                                                                                                                            Unit: RMB

                                                                        Amortization          Other decreased
         Item           Beginning balance      Increased amount                                                      Ending balance
                                                                    amount of the period          amount

Mould                           879,096.86        123,131,220.31          36,882,355.13                                 87,127,962.04

Expense on
maintenance and              10,828,775.09         25,349,246.45            8,118,275.54                                28,059,746.00
decoration

Boarding box                                         4,466,068.58          1,474,241.95                    578.17        2,991,248.46

Other                         1,703,354.28           9,119,292.30          3,762,663.03                                  7,059,983.55

Total                        13,411,226.23        162,065,827.64          50,237,535.65                    578.17      125,238,940.05

Other notes

Note: Due to the merger of Nanning Liaowang not under the same control in the current period, RMB94,182,937.64 of the increas e in
long-term deferred expenses in the current period is the amortized amount on the purchase day, mainly for automobile lamp
manufacturing molds.


30. Deferred Income Tax Assets/Deferred Income Tax Liabilities

(1) Deferred Income Tax Assets that Had not Been Off-set

                                                                                                                            Unit: RMB

                                              Ending balance                                       Beginning balance

             Item           Deductible temporary        Deferred income tax        Deductible temporary         Deferred income tax
                                 difference                    assets                      difference                  assets

Provision for impairment            160,147,646.18                24,951,655.41
                                                                                              88,758,899.69             14,118,876.93
of assets

Unrealized profit of
                                     21,677,239.37                  3,251,585.91               5,784,713.24                867,706.99
internal transactions

Undistributed deficit                36,016,962.39                  7,312,677.73              20,735,316.21              5,183,829.06

Depreciation of fixed
                                     63,273,361.51                  9,491,004.25              71,106,985.78             10,810,152.06
assets

Payroll payable                      51,262,888.11                  7,689,433.22              61,821,414.20              9,273,212.13


                                                                                                                                      262
Foshan Electrical and Lighting Co., Ltd.                                                                                   Annual Report 2021


Accrued liabilities                       7,671,948.69                 1,150,792.30

Others                                    1,625,953.13                    364,138.46

Total                                  341,675,999.38                 54,211,287.28                248,207,329.12                 40,253,777.17


Deferred income tax assets increased by 34.67% to RMB13,957,510.11 at the end of the period compared with the beginning of the
period, which was mainly due to the combination of Nanning Liaowang not under the same control in the current period.


(2) Deferred Income Tax Liabilities Had not Been Off-set

                                                                                                                                       Unit: RMB

                                                 Ending balance                                           Beginning balance

           Item                 Taxable temporary           Deferred income tax             Taxable temporary           Deferred income tax
                                    difference                    liabilities                   difference                    liabilities

Assets assessment
appreciation from
business consolidation                   93,485,366.87                14,022,805.03
not under the same
control

Changes in fair value of
financial assets recorded
                                     1,152,615,606.86               172,892,341.03               2,758,137,833.20               413,720,674.97
into other comprehensive
income

Changes in fair value of
held-for-trading financial                4,912,265.32                    776,194.13                  6,332,900.00                    949,935.00
assets

Total                                1,251,013,239.05               187,691,340.19               2,764,470,733.20               414,670,609.97


Deferred income tax liabilities decreased by 54.74% at the end of the period to RMB-226,979,269.78 compared with the beginning of
the period, which was mainly due to the Company's sale of some stocks in the current period and the corresponding accumulated fair
value changes carried forward.


(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set

                                                                                                                                       Unit: RMB

                             Mutual set-off amount of       Amount of deferred           Mutual 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
                                                                      54,211,287.28                                               40,253,777.17
assets

Deferred income tax                                                 187,691,340.19                                              414,670,609.97


                                                                                                                                                263
Foshan Electrical and Lighting Co., Ltd.                                                                                Annual Report 2021


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

Naught


31. Other Non-current Assets

                                                                                                                                  Unit: RMB

                                                                Ending balance                               Beginning balance

                   Item                         Carrying         Depreciation     Carrying        Carrying       Depreciation    Carrying
                                                amount             reserve          value         amount           reserve         value

                                            455,129,434.                         455,129,434.
Prepayments for equity acquisition (note)
                                                           98                                98

Prepayments for construction and            14,219,171.6                         14,219,171.6 10,401,758.4                      10,401,758.4
equipment                                                   5                                 5              7                               7

Assets of subsidiaries to be cleared and
                                                803,224.12                         803,224.12 1,022,085.15                      1,022,085.15
cancelled

                                            470,151,830.                         470,151,830. 11,423,843.6                      11,423,843.6
Total
                                                           75                                75              2                               2
Other notes: Refer to the prepayments for purchasing 30% of equity to former shareholders of NationStar Optoelectronics in
accordance with the Share Transfer Agreement.


32. Short-term Borrowings

(1) Category of Short-term Borrowings

                                                                                                                                  Unit: RMB

                   Item                                         Ending balance                               Beginning balance

Guarantee loans                                                                 97,700,000.00

Credit loans                                                                 128,914,000.00

Interest from short-term borrowings                                               165,997.01

Total                                                                        226,779,997.01



Notes of short-term borrowings category:

List of short-term borrowings as of 31 December 2021 was as follows:



                                                                                                                                            264
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


                                                                                                                          Unit: RMB

     Borrowing contract number             Loan balance            Term of borrowing          Conditions of Annual interest rate
                                                                                                      loan
GJKFYHWHLDZJDK441020210110                    63,757,000.00     2021-12-7 to 2022-12-7            Credit loans      1.2711%
0001595
GJKFYHWHLDZJDK441020210110                    63,757,000.00    2021-12-20 to 2022-12-20           Credit loans      1.3115%
0001595
XYGDMYBLJZ (2021) No. 1001                    47,700,000.00       2021-2-1 to 2022-2-1            Guarantee,          2.76%
                                                                                                    pledge
XY WYZH2021012600174                          10,000,000.00     2021-1-26 to 2022-1-26            Guarantee,          2.97%
                                                                                                    pledge
XYMYZH2021042100146                           20,000,000.00     2021-4-21 to 2022-4-21            Guarantee,          2.97%
                                                                                                    pledge
XYMYZH2021042100164                           20,000,000.00     2021-4-21 to 2022-4-21            Guarantee,          2.97%
                                                                                                    pledge
LZYHKJZHJK210418069785                         1,400,000.00     2021-4-18 to 2022-4-18            Credit loans        4.90%
                  Total                     226,614,000.00                 ——                       ——            ——

Note: see Note XIV-(III) Others for details about guarantees of short-term borrowings.


(2) List of the Short-term Borrowings Overdue but not Returned

Naught


33. Held-for-trading Financial Liabilities

Naught


34. Derivative Financial Liabilities

Naught


35. Notes Payable

                                                                                                                          Unit: RMB

                    Item                                  Ending balance                              Beginning balance

Bank acceptance bill                                                    826,164,918.71                              480,971,214.80

Total                                                                   826,164,918.71                              480,971,214.80

The total amount of the due but not paid notes payable at the end of the period was of RMB0.00.
The ending balance of bills payable increased by 71.77% to RMB345,193,703.91 compared with the beginning of the period,
which was mainly due to RMB353,248,472.44 arising from the combination of Nanning Liaowang not under the same control in the
current period.




                                                                                                                                265
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


36. Accounts Payable

(1) List of Accounts Payable

                                                                                                                        Unit: RMB

                   Item                                 Ending balance                             Beginning balance

Accounts payable                                                    1,554,585,231.38                             1,059,674,020.99

Total                                                               1,554,585,231.38                             1,059,674,020.99


The ending balance of accounts payable increased by 46.70% to RMB494,911,210.39 compared with the beginning of the period,
which was mainly due to the combination of Nanning Liaowang not under the same control in the current period.


(2) Significant Accounts Payable Aging over One Year

                                                                                                                        Unit: RMB

                   Item                                 Ending balance                       Unpaid/ Un-carry-over reason

Supplier A                                                             50,857,480.81 Not reaching the settlement period

Supplier B                                                             11,408,340.39 No settlement yet for quality dispute

Supplier C                                                               5,937,450.99 No settlement yet for quality dispute

Supplier D                                                               4,273,965.99 Not reaching the settlement period

Total                                                                  72,477,238.18                       --


37. Advances from Customer

(1) List of Advances from Customers

                                                                                                                        Unit: RMB

                   Item                                 Ending balance                             Beginning balance

Advances from customers                                                  8,106,923.79                                1,285,357.28

Total                                                                    8,106,923.79                                1,285,357.28


(2) Significant Advances from Customers Aging over One Year

Naught


38. Contract Liabilities

                                                                                                                        Unit: RMB

                   Item                                 Ending balance                             Beginning balance

Advances from customers                                                84,818,285.22                                65,777,726.45


                                                                                                                              266
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


Total                                                            84,818,285.22                          65,777,726.45


39. Employee Benefits Payable

(1) List of Employee Benefits Payable

                                                                                                            Unit: RMB

            Item               Beginning balance      Increase                   Decrease          Ending balance

I. Short-term salary                  82,485,090.47    781,021,939.02             775,031,452.39        88,475,577.10

II. Post-employment
benefit-defined                                         56,718,237.36              56,267,925.26           450,312.10
contribution plans

III. Termination benefits                                  231,106.93                 231,106.93

Total                                 82,485,090.47    837,971,283.31             831,530,484.58        88,925,889.20


(2) List of Short-term Salary

                                                                                                            Unit: RMB

            Item               Beginning balance      Increase                   Decrease          Ending balance

1.       Salary,      bonus,
                                      82,131,394.79    701,502,776.07             698,073,511.49        85,560,659.37
allowance, subsidy

2. Employee welfare                                     32,127,911.04              31,335,455.09           792,455.95

3. Social insurance                                     25,647,623.95              25,169,757.60           477,866.35

Of       which:    Medical
                                                        19,980,988.36              19,575,936.99           405,051.37
insurance premiums

                   Work-re
                                                         1,305,393.14               1,236,876.17            68,516.97
lated injury insurance

                   Materni
                                                         4,361,242.45               4,356,944.44             4,298.01
ty insurance

4. Housing fund                                         15,028,878.11              14,865,923.40           162,954.71

5. Labor union budget
and employee education                   353,695.68      6,714,749.85               5,586,804.81         1,481,640.72
budget

Total                                 82,485,090.47    781,021,939.02             775,031,452.39        88,475,577.10


(3) List of Defined Contribution Plans

                                                                                                            Unit: RMB

            Item               Beginning balance      Increase                   Decrease          Ending balance


                                                                                                                    267
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


1. Basic pension benefits                                           55,513,044.63                 55,077,515.01               435,529.62

2. Unemployment
                                                                     1,137,309.73                  1,122,527.25                14,782.48
insurance

3. Annuity                                                              67,883.00                    67,883.00

Total                                                               56,718,237.36                 56,267,925.26               450,312.10

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 agencie s. 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.
(4) Termination Benefits


                  Item                 Beginning balance           Increase                    Decrease            Ending balance

1. Compensation for termination of                                    231,106.93                    231,106.93
labor relations
2. Estimated internal staff
expenditure
Total                                                                 231,106.93                    231,106.93


40. Taxes Payable

                                                                                                                               Unit: RMB

                     Item                                    Ending balance                               Beginning balance

VAT                                                                           12,999,526.19                               7,470,456.34

Corporate income tax                                                          54,088,937.37                               6,753,904.80

Personal income tax                                                            2,643,442.46                               1,009,832.30

Urban maintenance and construction tax                                         2,060,219.96                               1,174,681.01

VAT of land                                                                    6,392,510.40                                   414,132.63

Education surcharge                                                            1,536,805.36                                   845,486.44

Property tax                                                                    821,836.12                                    315,798.24

Land use tax                                                                    545,215.31                                    187,752.00

Other                                                                           922,566.28                                    704,613.75

Total                                                                         82,011,059.45                              18,876,657.51


41. Other Payables

                                                                                                                               Unit: RMB

                     Item                                    Ending balance                               Beginning balance



                                                                                                                                     268
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


Dividends payable                                                           15,646.07

Other payables                                                       298,795,466.66                                 76,668,330.66

Total                                                                298,811,112.73                                 76,668,330.66


(1) Interest Payable

Naught


(2) Dividends Payable

                                                                                                                        Unit: RMB

                    Item                                Ending balance                             Beginning balance

Ordinary share dividends                                                    15,646.07

Total                                                                       15,646.07


(3) Other Payables

1) Other Payables Listed by Nature

                                                                                                                        Unit: RMB

                    Item                                Ending balance                             Beginning balance

Account current                                                      165,250,657.72

Performance bond                                                      51,177,605.86                                 42,365,111.53

Relevant expense of sales                                                5,853,486.17                                3,143,336.62

Compensation for lawsuit                                                                                             1,082,784.95

Payments for demolition                                               54,990,047.00

Other                                                                 21,523,669.91                                 30,077,097.56

Total                                                                298,795,466.66                                 76,668,330.66


2) Significant Other Payables Aging over One Year

                                                                                                                        Unit: RMB

                    Item                                Ending balance                  Reason for not repayment or carry-over

Unit A                                                               120,352,181.20 Unsettled

Unit B                                                                   5,327,583.26 Unsettled for involving in lawsuits

Total                                                                125,679,764.46                        --

Other notes

The ending balance of other payables increased by 289.75% to RMB222,142,782.07 compared with the beginning of the pe riod, which
was mainly caused by the merger of Nanning Liaowang not under the same control in the current period and the compensation for

                                                                                                                              269
Foshan Electrical and Lighting Co., Ltd.                                                               Annual Report 2021


demolition received by Nanjing Fozhao in the current period.


42. Liabilities Held for sale

Naught


43. Current Portion of Non-current Liabilities

                                                                                                                  Unit: RMB

                     Item                                  Ending balance                   Beginning balance

Current portion of long-term borrowings
                                                                        19,423,561.38
(note)

Current portion of lease liabilities                                        7,855,712.16                        1,750,282.11

Total                                                                   27,279,273.54                           1,750,282.11

Note: Refer to the current portion of financing lease payments.


44. Other Current Liabilities

                                                                                                                  Unit: RMB

                     Item                                  Ending balance                   Beginning balance

Pending changerover output VAT                                              8,038,471.15                        5,503,702.07

Total                                                                       8,038,471.15                        5,503,702.07


45. Long-term Borrowings

Naught


46. Bonds Payable

Naught


47. Lease Liabilities

                                                                                                                  Unit: RMB
                     Item                                  Ending balance                   Beginning balance

Lease liabilities                                                        15,718,515.38                          3,943,088.30

Less: current portion of lease liabilities                                  -7,855,712.16                   -1,750,282.11

                    Total                                                   7,862,803.22                        2,192,806.19



Analysis on maturity date of lease liabilities
                       Item                                  Ending balance                 Beginning balance

                                                                                                                         270
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


1 to 2 years                                                                  2,780,281.78                              1,552,519.37
3 to 5 years                                                                  4,095,243.05                               640,286.82
Over 5 years                                                                   987,278.39
                        Total                                                 7,862,803.22                              2,192,806.19




48. Long-term Payables

(1) Long-term Payables Listed by Nature

                                                                                                                           Unit: RMB
                       Item                                  Ending balance                          Beginning balance

Principal and interest of financing lease
                                                                          19,423,561.38
borrowings (note)

Less: Current portion of long-term
                                                                          19,423,561.38
payables

Total                                                                                 0.00

Other notes:

Note: The ending balance is generated from the financial leasing business of Nanning Liaowang.


(2) Specific Payables

Naught


49. Long-term Employee Benefits Payable

Naught


50. Provisions

                                                                                                                           Unit: RMB
                Item                        Ending balance                Beginning balance              Reason for formation

                                                                                                    Provisions of claim on using the
Product Quality Assurance                            7,671,948.69
                                                                                                    oil paint of Hipro by DFSK

Total                                                7,671,948.69                                                  --


51. Deferred Income

                                                                                                                           Unit: RMB
                                                                                                                    Reason for
         Item             Beginning balance         Increase             Decrease            Ending balance
                                                                                                                    formation



                                                                                                                                  271
Foshan Electrical and Lighting Co., Ltd.                                              Annual Report 2021


The first batch of
special funds for
industrial and
information
development for                            2,333,333.50   166,666.65   2,166,666.85 Related to assets
autonomous regions
in 2017 (technical
transformation)
Special funds for
industry and
informatization in                         2,225,000.00   125,000.00   2,100,000.00 Related to assets
Chongqing Liang
Jiang New Area
The Second batch of
support funds for the
"technological
transformation of
thousands of                               2,000,000.00    33,333.34   1,966,666.66 Related to assets
enterprises" project
in the autonomous
region in 2021
Government fund
subsidy of Liuzhou
Treasury Payment                           1,882,999.97    82,999.97   1,800,000.00 Related to assets
Bureau
Allocation of the
14th batch of
industrial support
funds by Finance
Bureau of                                  1,112,500.00    62,500.00   1,050,000.00 Related to assets
Chongqing Liang
Jiang New Area in
2019
Special funds for
automobile and parts                       1,000,000.00    83,333.35    916,666.65 Related to assets
projects in 2020
Innovation funds for
enterprises in
                                            962,500.00     62,500.00    900,000.00 Related to income
Liudong New Area
in 2017
Liuzhou Guige 2021
Liuzhou urban
construction
industrial Internet                         790,000.00     52,666.68    737,333.32 Related to assets
demonstration city
financial support
project
The Third Batch of
Special Funds for
Innovation-Driven                           752,000.00     40,000.00    712,000.00 Related to income
Development in
Guangxi in 2018
Funds for intelligent
transformation and
upgrading project of                        651,666.65     28,333.35    623,333.30 Related to assets
automobile industry
enterprises in 2021
Project funds of
Liuzhou High-tech
Industrial                                  602,666.69     26,666.65    576,000.04 Related to assets
Development Zone
Management


                                                                                                        272
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


Committee
The first batch of
Liuzhou enterprise
support fund support                                     471,333.27            65,333.38              405,999.89 Related to assets
projects in 2018
Funding for
innovative projects                                      372,000.00            20,000.00              352,000.00 Related to assets

Special funds of
Guangxi Zhuang
Science and
Technology                                               113,000.00              5,000.00             108,000.00 Related to assets
Department for
innovation-driven
development in 2020
Research and
development of key
technologies and
industrialization of                                     550,376.08           550,376.08                            Related to assets
intelligent LED
automobile lamps

Total                                                15,819,376.16           1,404,709.45           14,414,666.71             --

Other notes:

Note: Due to the merger of Nanning Liaowang not under the same control in the current period, RMB13,029,376.16 of the increase
in deferred income in the current period is the amortized amount on the purchase day.


52. Other Non-current Liabilities

                                                                                                                               Unit: RMB

                      Item                                  Ending balance                              Beginning balance

Liabilities of subsidiaries to be cleared and
                                                                               22,653.46                                    1,244,064.84
cancelled

Total                                                                          22,653.46                                    1,244,064.84


53. Share Capital

                                                                                                                               Unit: RMB

                                                                Increase/decrease (+/-)
                      Beginning
                                       New shares                      Bonus issue                                       Ending balance
                       balance                      Bonus shares                            Other          Subtotal
                                         issued                        from profit

The sum of       1,399,346,154.                                                                                           1,399,346,154.
shares                            00                                                                                                    00



Other notes:
                                                                                                                               Unit: RMB

 Item/Investor               Beginning balance                                                             Ending balance
                                                            Increase          Decrease
                      Invested amount       Proportion                                         Invested amount            Proportion



                                                                                                                                        273
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


Restricted                 13,169,196.00          0.94%                                         13,169,196.00               0.94%
shares
Unrestricted             1,386,176,958.00     99.06%                                         1,386,176,958.00              99.06%
shares
        Total            1,399,346,154.00    100.00%                                         1,399,346,154.00             100.00%




54. Other Equity Instruments

Naught


55. Capital Reserves

                                                                                                                        Unit: RMB

             Item               Beginning balance           Increase                 Decrease               Ending balance

Capital premium                                                                                                      4,825,948.60
                                        7,911,543.36                                     3,085,594.76
(premium on stock)

Other capital reserves                  7,245,971.54                                                                 7,245,971.54

Total                                  15,157,514.90                                     3,085,594.76               12,071,920.14


56. Treasury Shares

                                                                                                                        Unit: RMB
             Item               Beginning balance           Increase                 Decrease               Ending balance

Treasury shares
                                                             201,955,572.33                                        201,955,572.33
(A-share)

Treasury shares (B-share)                                     48,645,302.21                                         48,645,302.21

Total                                                        250,600,874.54                                        250,600,874.54

Other notes, including changes and reason of change:

Note: According to the Proposal on Repurchase of Some RMB Common Shares (A Shares) and Domestic Listed Foreign Shares (B
Shares) of the Company, which was deliberated and adopted at the sixth meeting of the ninth Board of Directors and the Third
Extraordinary General Meeting in 2020 in December 2020, during the period, the Company repurchased 31,952,995 A shares and
18,398,512 B shares by means of call auction trading with its own funds of RMB250,600,874.54 (excluding trading costs). As of the
end of the reporting period, the share repurchase has been completed. For details, please refer to Note XV-2 "Cancellation of
Repurchase Shares".




57. Other Comprehensive Income

                                                                                                                        Unit: RMB

                Item                  Beginning                           Reporting Period                                Ending


                                                                                                                              274
Foshan Electrical and Lighting Co., Ltd.                                                                                  Annual Report 2021


                                        balance                                    Less:                                               balance
                                                                      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
                                                     taxation in prior period       prior       Income        the        non-contro
                                                        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                        -380,765,4                  1,041,043, -57,114,81
                                      2,349,389,6                                                          -1,364,693                  984,695,
that may not subsequently be                              62.68                      249.12         9.40
                                            58.23                                                             ,892.40                   765.83
reclassified to profit or loss

         Changes in fair value of                    -380,765,4                  1,041,043, -57,114,81
                                      2,349,389,6                                                          -1,364,693                  984,695,
other equity instrument                                   62.68                      249.12         9.40
                                            58.23                                                             ,892.40                   765.83
investment

II. Other comprehensive income
                                                                                                                                       -57,333.
that may subsequently be                -1,124.62 -27,539.73                                               -56,209.20 28,669.47
                                                                                                                                            82
reclassified to profit or loss

         Differences arising from
translation of foreign                                                                                                                 -57,333.
                                        -1,124.62 -27,539.73                                               -56,209.20 28,669.47
currency-denominated financial                                                                                                              82
statements

Total of other comprehensive          2,349,388,5 -380,793,0                     1,041,043, -57,114,81 -1,364,750                      984,638,
                                                                                                                          28,669.47
income                                      33.61         02.41                      249.12         9.40      ,101.60                   432.01

Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized amount:

The ending balance of other comprehensive income was RMB-1,364,750,101.60 decreasing 58.09% compared with that at the
beginning of the period, mainly due to the transfer of the accumulated fair value previously recorded into other comprehensive
income into retained earnings for sales of some stocks by the Company in the Reporting Period.


58. Specific Reserve

Naught


59. Surplus Reserves

                                                                                                                                      Unit: RMB

             Item                Beginning balance                Increase                     Decrease                  Ending balance


                                                                                                                                            275
Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021


Statutory surplus
                                      699,673,077.00                                                                  699,673,077.00
reserves

Discretionary       surplus
                                       41,893,962.55                                            213,691.59             41,680,270.96
reserves

Total                                 741,567,039.55                                            213,691.59            741,353,347.96

Notes including changes and reasons thereof:

1. In line with the Company's Articles of Association, if the Company's accumulative statutory surplus reserve exceeds the
Company's registered capital by over 50%, withdrawal is not required any more.
2. During the reporting period, the trading fees related to repurchase of shares of the Company offset any surplus reserve by
RMB213,691.59.




60. Retained Earnings

                                                                                                                           Unit: RMB

                        Item                                       Reporting Period                   Same period of last year

Beginning balance of retained earnings before
                                                                             1,758,462,062.48                       1,700,426,915.63
adjustments

Beginning balance of retained earnings after
                                                                             1,758,462,062.48                       1,700,426,915.63
adjustments

Add: Net profit attributable to owners of the
                                                                               250,091,965.87                         316,914,185.34
Company as the parent

        Dividend of ordinary shares payable                                    135,847,668.70                         258,879,038.49

Others (note)                                                               -1,041,043,249.12

Ending retained earnings                                                     2,913,749,608.77                       1,758,462,062.48

When selling stocks for the current period, the accumulated changes in fair value included in other comprehensive earnings in the
previous period are transferred to retained earnings.
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.

(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.


61. Operating Revenue and Cost of Sales

                                                                                                                           Unit: RMB

            Item                                Reporting Period                                Same period of last year



                                                                                                                                 276
Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


                               Operating revenue            Cost of sales            Operating revenue             Cost of sales

Main operations                    4,607,263,246.86           3,836,340,666.94              3,699,836,965.57         2,957,658,247.04

Other operations                     165,427,222.28             125,871,366.53                45,077,487.15             38,615,663.76

Total                              4,772,690,469.14           3,962,212,033.47              3,744,914,452.72         2,996,273,910.80

Whether the lower of the net profit before and after deduction of non-recurring gains and losses through audit is negative
□ Yes √ No


62. Taxes and Surtaxes

                                                                                                                              Unit: RMB

                    Item                                  Reporting Period                           Same period of last year

Urban maintenance and construction tax                                      14,486,804.19                               12,797,350.61

Education surcharge                                                          6,546,395.13                                5,487,588.14

Property tax                                                                10,858,526.89                                8,136,199.68

Land use tax                                                                 5,641,160.53                                5,170,804.93

Vehicle and vessel use tax                                                     31,087.26                                      15,852.28

Stamp duty                                                                   3,996,416.04                                2,847,363.44

Local education surcharge                                                    3,900,946.03                                3,660,351.56

VAT of land                                                                                                                  414,132.63

Environmental protection tax                                                  102,675.89                                     101,985.20

Others                                                                        393,432.00                                        212.76

Total                                                                       45,957,443.96                               38,631,841.23


63. Selling Expense

                                                                                                                              Unit: RMB

                    Item                                  Reporting Period                           Same period of last year

Employee benefits                                                           74,454,733.88                               62,699,560.82

Business propagandize fees and
                                                                            44,511,114.76                               23,567,538.03
advertizing fees

Sales promotion fees                                                        12,840,438.91                               10,124,091.58

Business travel charges                                                     11,418,043.43                                9,248,697.83

Commercial insurance premium                                                 4,751,270.10                                5,257,100.62

Dealer meeting expense                                                         806,507.86                                    974,212.62

Other                                                                       21,498,932.40                               33,348,498.85

Total                                                                    170,281,041.34                                145,219,700.35



                                                                                                                                    277
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


64. Administrative Expense

                                                                                                                        Unit: RMB

                    Item                                Reporting Period                        Same period of last year

Employee benefits                                                      119,834,123.62                              89,335,431.10

Office expenses                                                         19,943,898.38                              14,548,829.21

Depreciation charge                                                     18,638,776.21                              16,796,115.88

Amortization of intangible assets                                          7,598,775.25                              5,036,363.10

Engineering decoration cost                                                6,980,479.30                              4,504,630.47

Rent of land and management charge                                         4,477,445.47                              5,822,250.99

Utilities                                                                  4,270,695.13                              4,811,554.12

Service charge                                                             3,260,561.19

Disability security fund                                                   2,955,901.37                              1,466,128.42

Party construction funds                                                                                             5,050,315.69

Others                                                                  18,375,455.89                                7,993,754.77

Total                                                                  206,336,111.81                             155,365,373.75

Other notes:

Compared with the previous period, the management expenses rose by 32.81% to RMB50,970,738.06 in the current period, which wa s
mainly caused by the merger of Nanning Liaowang in the current period and the reduction and exemption of social security due to the
pandemic in the previous period.


65. Development Costs

                                                                                                                        Unit: RMB

                    Item                                Reporting Period                        Same period of last year

Employee benefits                                                       95,475,565.26                              64,755,944.49

Material consumption                                                    52,326,677.63                                8,251,441.92

Depreciation and long-term prepaid
                                                                        19,220,357.95                                6,884,584.37
expense

Certification and testing fee                                           10,890,898.99                              12,746,279.58

Expense on equipment debugging                                             8,662,071.21                              7,866,127.63

Charges related to patents                                                 1,287,039.72                              1,970,723.98

Other                                                                   15,819,008.40                                6,410,194.74

Total                                                                  203,681,619.16                             108,885,296.71

Other notes:

1. In respect of R&D expense incurred by the Company, expense other than that on bench-scale and pilot-scale production is
included in R&D expense; and sales revenue of products from bench-scale and pilot-scale production is included in core business


                                                                                                                               278
Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


revenue and the relevant costs are included in cost of sales of core business.

2. R&D expense stood at RMB94,796,322.45 in the current period, up 87.06% year-on-year, primarily driven by a considerable
increase of input in R&D, expansion of R&D teams and R&D projects, etc. as well as the combination of Nanning Liaowang in the
current period.


66. Finance Costs

                                                                                                                             Unit: RMB

                    Item                                   Reporting Period                         Same period of last year

Interest expense                                                              5,790,716.89

Less: Interest income                                                       16,201,526.00                                37,650,815.03

Foreign exchange gains or losses                                            12,012,555.38                                30,819,758.83

Other                                                                         1,518,283.46                                1,207,770.75

Total                                                                         3,120,029.73                               -5,623,285.45

Other notes:

The financial expenses in the current period grew by RMB8,743,315.18 compared with the previous pe riod, which was mainly due to
the increase in interest expenses of new bank loans in the current period and the simultaneous decrease in interest income ca used by the
decrease in time deposit business.


67. Other Income

                                                                                                                             Unit: RMB

                   Sources                                 Reporting Period                         Same period of last year

Subsidies for position training of
                                                                              2,968,000.00                                5,541,000.00
employees

Special fund for promoting high-quality
                                                                              2,004,092.60
economic development

Subsidies for high-tech enterprises                                           1,510,200.00

Support funds for industrial design
industry development in Chancheng                                             1,000,000.00
District, Foshan City

Subsidy for stabilizing posts                                                    824,913.04                               2,907,529.01
Industrial Internet project transformation
award                                                                            809,900.00

The third batch of special funds for
innovation-driven development in Guangxi
by the Guangxi Zhuang Science and                                                550,376.08
Technology Department (Intelligent LED
Lamp Project)

Rewards of “Competition among Hundreds
                                                                                 500,000.00                                 500,000.00
of Enterprises”



                                                                                                                                     279
Foshan Electrical and Lighting Co., Ltd.                                                                       Annual Report 2021


Chongqing enterprise R&D reserve in
                                                                            410,000.00
2021

Supporting fund for import and export                                       340,000.00                                3,674,307.07

Foshan's funds for supporting
municipal-level development of industrial                                   300,000.00                                1,000,000.00
design

Science and technology innovation
inclusive policy funds provided by the
                                                                            300,000.00
Finance Bureau of Liang Jiang New Area
in 2021

Foshan's funds for promotion of robot
                                                                                                                      4,988,602.00
application and industrial development

Foshan's special funds for supporting
                                                                                                                      3,000,000.00
industrial Internet development

Chancheng District's funds for supporting
example setting and quality improvement
                                                                                                                      1,422,900.00
of high-tech enterprises (towns and streets)
in 2018

Chancheng District's government quality
                                                                                                                      1,000,000.00
award in 2019

Other                                                                     4,794,421.52                                4,955,190.12

Total                                                                    16,311,903.24                               28,989,528.20


Other income decreased by 43.73% to RMB-12, 677,624.96 in the current period compared with the previous period, mainly due to the
decrease of industrial development support funds received in the current period compared with the previous period.


68. Investment Income

                                                                                                                        Unit: RMB

                      Item                                   Reporting Period                      Same period of last year

Long-term equity investment income
                                                                                2,260,497.27                          2,351,681.39
accounted by equity method

Investment income from disposal of long-term
                                                                                3,085,594.76
equity investment

Investment income from holding of other
                                                                             23,643,370.02                           14,940,422.96
equity instrument investment

Income received from financial products and
                                                                                1,118,141.63                         23,451,129.06
structural deposits

Other                                                                           6,013,450.00                          3,492,971.49



                                                                                                                               280
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


Total                                                                        36,121,053.68                         44,236,204.90




69. Net Gain on Exposure Hedges

Naught


70. Gain on Changes in Fair Value

                                                                                                                       Unit: RMB

                  Sources                               Reporting Period                        Same period of last year

Held-for-trading financial assets                                          4,649,669.44                             4,785,700.00

Total                                                                      4,649,669.44                             4,785,700.00


71. Credit Impairment Loss

                                                                                                                       Unit: RMB

                   Item                                 Reporting Period                        Same period of last year

Expected credit loss of accounts receivable                             -4,202,568.39                             -15,841,416.23

Expected credit loss of other receivables                                   -189,864.56                              -268,176.13

Expected credit loss of contract assets                                     -264,782.57

Total                                                                   -4,657,215.52                             -16,109,592.36


72. Asset Impairment Loss

                                                                                                                       Unit: RMB

                   Item                                 Reporting Period                        Same period of last year

II. Loss on inventory valuation and
                                                                       -29,184,207.60                              -7,581,307.74
contract performance cost

VII. Loss on construction in progress                                   -1,318,800.00

X. Loss on intangible assets                                                -388,613.87

Total                                                                  -30,891,621.47                              -7,581,307.74

Other notes:

The asset impairment loss increased by 307.47% to RMB23,310,313.73 in the current period compared with the previous period, which
was mainly caused by the increase of Nanning Liaowang's asset impairment loss of RMB14,681,409.95 in the current period compa red
with the previous period, and the Company's replenishment of inventory depreciation loss for newly added backlog products.




                                                                                                                             281
Foshan Electrical and Lighting Co., Ltd.                                                                                Annual Report 2021


73. Assets Disposal Income

                                                                                                                                  Unit: RMB

                  Sources                                   Reporting Period                            Same period of last year

Disposal income of fixed assets                                               77,713,637.77                                    9,090,874.79


Compared with the previous period, the income from disposal of fixed assets increased by RMB68,622,762.98 in the current period,
mainly due to the disposal of some property assets by the Company in the current period, including No.59 Lecheng Second Road, Suite
24 of Middle and North Blocks of No.1 Lecheng First Road, Luocun District 3, No.2 Lecheng Third Road Fourth Street and No.4
Lecheng Third Street.


74. Non-operating Income

                                                                                                                                  Unit: RMB

                                                                                                            Amount recorded in the current
               Item                        Reporting Period               Same period of last year
                                                                                                              non-recurring profit or loss

Government grants                                                                              57,720.00

Total income from scrap of
                                                        2,003,455.62                           48,168.04                        2,003,455.62
non-current assets

Of which: Income from scrap of
                                                        2,003,455.62                           48,168.04                        2,003,455.62
fixed assets

Income from default money                               7,060,000.00                                                            7,060,000.00

Other                                                   4,123,500.76                         2,058,806.15                       4,123,500.76

Total                                               13,186,956.38                            2,164,694.19                      13,186,956.38

Government grants recorded in current profit or loss:

                                                                                                                                  Unit: RMB

                                                                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

Other
miscellaneou                                                                                                                   Related to
                               Subsidy                        No              No                                   57,720.00
s government                                                                                                                   income
grants


75. Non-operating Expense

                                                                                                                                  Unit: RMB

               Item                        Reporting Period               Same period of last year          Amount recorded in the current


                                                                                                                                             282
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


                                                                                                            non-recurring profit or loss

Exchange loss on non-monetary
                                                        645,945.89                        1,672,244.18                         645,945.89
assets

Donations                                                                                      104,364.08

Losses on inventories                                   311,858.32                             291,692.80                      311,858.32

Penalty                                                       200.00                            26,000.00                          200.00

Delaying payment                                        190,078.72                                556.29                       190,078.72

Other                                                       40,388.61                     1,759,560.64                          40,388.61

Total                                                 1,188,471.54                        3,854,417.99                       1,188,471.54


76. Income Tax Expense

(1) List of Income Tax Expense

                                                                                                                                Unit: RMB

                    Item                                     Reporting Period                           Same period of last year

Current income tax expense                                                  23,309,089.13                                  46,120,717.25

Deferred income tax expense                                                     1,741,577.22                                  -406,009.72

Total                                                                       25,050,666.35                                  45,714,707.53


(2) Adjustment Process of Accounting Profit and Income Tax Expense

                                                                                                                                Unit: RMB

                               Item                                                              Reporting Period

Profit before taxation                                                                                                    292,348,101.65

Current income tax expense accounted at statutory/applicable tax
                                                                                                                           43,852,215.25
rate

Influence of applying different tax rates by subsidiaries                                                                    3,056,765.33

Influence of income tax before adjustment                                                                                    1,031,206.00

Influence of non-deductable costs, expenses and losses                                                                       2,944,791.18

Influence of deduction                                                                                                     -21,834,983.83

Regarded as sales                                                                                                              349,091.72

Investment income and final dividend                                                                                        -4,348,419.30

Income tax expense                                                                                                         25,050,666.35


77. Other Comprehensive Income

Refer to Note VII Main Items of Consolidated Financial Statements-57 for details.


                                                                                                                                           283
Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021


78. Cash Flow Statement

(1) Cash Generated from Other Operating Activities

                                                                                                       Unit: RMB

                    Item                      Reporting Period                  Same period of last year

Taxes of equity transfer payments from
                                                             48,637,165.49
former shareholder of Nanning Liaowang

Margin income                                                40,666,019.15                         12,240,049.79

Income from waste                                            27,393,454.55                         18,500,712.83

Deposit interest                                             18,109,095.02                         38,946,211.76

Government grants                                            17,435,679.47                         29,323,585.92

Property and rental income                                   12,980,397.19                          9,828,318.01

Income from insurance compensation                                 25,003.20                           21,871.82

Other                                                            5,778,972.29                      10,805,467.01

Total                                                      171,025,786.36                         119,666,217.14


(2) Cash Used in Other Operating Activities

                                                                                                       Unit: RMB

                    Item                      Reporting Period                  Same period of last year

Administrative     and R&D expense paid in
                                                             67,305,563.82                         51,683,094.67
cash

Selling expense paid in cash                                 61,331,324.84                        139,896,500.31

Finance costs paid in cash                                       1,302,431.92                         509,435.98

Returned cash deposit                                        42,863,242.64                          8,933,825.48

Payment for taxes of equity transfer
accounts on behalf of former shareholder                     48,637,165.49
of Nanning Liaowang

Other                                                            9,057,860.33                       6,746,686.92

Total                                                      230,497,589.04                         207,769,543.36


(3) Cash Generated from Other Investing Activities

                                                                                                       Unit: RMB

                    Item                      Reporting Period                  Same period of last year

Demolition compensation received                             54,990,047.00

Total                                                        54,990,047.00


                                                                                                              284
Foshan Electrical and Lighting Co., Ltd.                                                            Annual Report 2021


(4) Cash Used in Other Investing Activities

Naught


(5) Cash Generated from Other Financing Activities

Naught


(6) Cash Used in Other Financing Activities

                                                                                                            Unit: RMB

                     Item                         Reporting Period                  Same period of last year

Share repurchase                                               250,814,566.13

Finance lease rent                                               49,995,876.21

Total                                                          300,810,442.34


79. Supplemental Information for Cash Flow Statement

(1) Supplemental Information for Cash Flow Statement

                                                                                                            Unit: RMB

           Supplemental information                Reporting Period                 Same period of last year

1. Reconciliation of net profit to net cash
                                                          --                                   --
flows generated from operating activities:

Net profit                                                     267,297,435.30                          322,168,591.79

Add: Provision for impairment of assets                          35,548,836.99                          23,690,900.10

     Depreciation of fixed assets, oil-gas
                                                               104,751,799.89                           76,762,605.39
assets, and productive living assets

     Depreciation of right-of-use assets                             3,980,368.60

     Amortization of intangible assets                               7,750,242.82                        5,036,363.10

     Amortization     of    long-term   prepaid
                                                                 50,237,535.65                           8,024,378.24
expenses

     Loss from disposal of fixed assets,
intangible assets and other long-term assets                    -77,713,637.77                           -9,090,874.79
(gains: negative)

     Losses from scrapping of fixed assets
                                                                 -1,357,509.73                           1,624,076.14
(gains: negative)

     Losses from changes in fair value
                                                                 -4,649,669.44                           -4,785,700.00
(gains: negative)

     Finance costs (gains: negative)                                 5,790,716.89


                                                                                                                   285
Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


      Investment loss (gains: negative)                                  -36,121,053.68                                -44,236,204.90

      Decrease in deferred income tax assets
                                                                           2,222,138.97                                    -246,364.71
(increase: negative)

      Increase       in     deferred     income     tax
                                                                            -480,561.75                                    717,855.00
liabilities (“-” for decrease)

     Decrease in inventory (“-” for increase)                          -43,528,121.23                              -105,929,840.59

     Decrease in operating receivables (“-”
                                                                       -201,444,146.36                                   86,704,874.15
for increase)

     Increase in operating payables (“-” for
                                                                       -389,309,460.41                                   34,387,672.98
decrease)

      Others

      Net     cash        generated    from/used     in
                                                                       -277,025,085.26                                394,828,331.90
operating activities

2.   Significant      investing        and   financing
activities    without involvement of cash                         --                                          --
receipts and payments

      Transfer of debts into capital

      Current portion of convertible corporate
bonds

      Fixed assets leased in for financing

      Share purchase fund unpaid yet (note)                               41,695,763.31

3.Net increase/decrease of cash and cash
                                                                  --                                          --
equivalents:

      Ending balance of cash                                           1,139,089,151.31                               875,728,218.57

      Less: Beginning balance of cash                                   875,728,218.57                               1,051,079,042.41

         Add:      Ending       balance      of    cash
equivalents

        Less: Beginning balance of cash
equivalents

     Net increase in cash and cash equivalents                          263,360,932.74                               -175,350,823.84

The unpaid equity purchase price refers to the unpaid price arising from the combination of Nanning Liaowang not under the same
control by the Company in the current period. According to the Share Transfer Agreement, the Company will pay the second shar e
transfer price within 15 days after the original shareholders of Nanning Liaowang complete the share transfer in 2022.


(2) Net Cash Paid For Acquisition of Subsidiaries

                                                                                                                            Unit: RMB

                                                                                                  金额



                                                                                                                                   286
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


Cash or cash equivalents paid in the Reporting Period for business
                                                                                                                     252,184,400.45
combination occurring in the Reporting Period

Of which:                                                                                            --

Nanning Liaowang Auto Lamp Co., Ltd.                                                                                 252,184,400.45

Less: Cash and cash equivalents held by subsidiaries on purchase
                                                                                                                     120,835,756.18
date

Of which:                                                                                            --

Nanning Liaowang Auto Lamp Co., Ltd.                                                                                 120,835,756.18

Of which:                                                                                            --

Nanning Liaowang Auto Lamp Co., Ltd.                                                                                 120,835,756.18

Net payments for acquisition of subsidiaries                                                                         131,348,644.27

Other notes:

Note: The difference between the cash and cash equivalents held by Nanning Liaowang on the purchase date and the monetary funds on
the purchase date was RMB55,190,042.63 for the limited use of bank acceptance bill margin and wealth management products.


(3) Net Cash Received from Disposal of the Subsidiaries

Naught


(4) Cash and Cash Equivalents

                                                                                                                          Unit: RMB

                      Item                                  Ending balance                            Beginning balance

I. Cash                                                                1,139,089,151.31                              875,728,218.57

Including: Cash on hand                                                        16,733.10                                  14,800.25

              Bank deposit on demand                                   1,039,748,114.76                              870,224,197.60

              Other monetary assets on demand                             99,324,303.45                                5,489,220.72

III. Ending balance of cash and cash
                                                                       1,139,089,151.31                              875,728,218.57
equivalents

(5) Subsidiaries and Other Business Units Acquired or Disposed in the Reporting Period
Naught
(6) Other Notes
Naught


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



                                                                                                                                 287
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


81. Assets with Restricted Ownership or Right of Use

                                                                                                                             Unit: RMB

                       Item                           Ending carrying value                         Reason for restriction

                                                                                         Security deposit of notes, letter of
Monetary assets                                                      245,575,069.72
                                                                                         guarantee, etc.

Notes receivable                                                     275,626,604.28 Pledged for notes pool

                                                                                         Related-party mortgage guarantee, see
Fixed assets                                                         277,849,723.49
                                                                                         Note XIV-(III) Others for details

                                                                                         Related-party mortgage guarantee, see
Intangible assets                                                        11,274,770.33
                                                                                         Note XIV-(III) Others for details

Total                                                                810,326,167.82                            --


82. Foreign Currency Monetary Items

(1) Foreign Currency Monetary Items

                                                                                                                             Unit: RMB

                                   Ending foreign currency                                            Ending balance converted to
                Item                                                      Exchange rate
                                           balance                                                                  RMB

Monetary assets                              --                                 --                                     266,653,929.34

Of which: USD                                     31,760,973.86 6.3757                                                 202,498,441.04

           EUR                                        44,157.41 7.2197                                                     318,803.25

           HKD                                    45,316,276.57 0.8176                                                  37,050,587.72

               IDR                         59,924,155,104.30 0.000447                                                   26,786,097.33

Accounts receivable                          --                                 --                                     376,000,761.23

Of which: USD                                     58,005,666.69 6.3757                                                 369,826,729.12

           EUR                                       212,143.56 7.2197                                                    1,531,612.86

           HKD

               IDR                         10,385,725,386.30 0.000447                                                     4,642,419.25

Long-term borrowings                         --                                 --

Of which: USD

           EUR

           HKD

Other non-current assets                                                                                                   766,142.51

Of which: USD                                         59,710.71 6.3757                                                     380,697.60

           EUR                                        53,387.94 7.2197                                                     385,444.91



                                                                                                                                   288
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


Short-term borrowings                                                                                                   127,514,000.00

Of which: USD                                        20,000,000.00 6.3757                                               127,514,000.00

Accounts payable                                                                                                             593,644.68

Of which: IDR                                     1,328,064,155.40 0.000447                                                  593,644.68

Contract liabilities:                                                                                                    19,121,489.94

Of which: USD                                         2,965,980.32 6.3757                                                18,910,200.73

              EUR                                        29,265.65 7.2197                                                    211,289.21

Current portion of non-current
                                                                                                                           2,982,902.02
liabilities

Of which: IDR                                     6,673,158,881.43 0.000447                                                2,982,902.02

Lease liabilities                                                                                                             81,284.42

Of which: IDR                                       181,844,340.04 0.000447                                                   81,284.42

Other non-current liabilities                                                                                                 11,004.46

Of which: USD                                              1,726.00 6.3757                                                    11,004.46


(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

Qualitative and quantitative information of relevant arbitrage instruments, hedged risk in line with the type of arbitrage to disclose:
Naught


84. Government Grants

Government grants

                                                                                                                              Unit: RMB

                                                                                                                 Amount recorded in
                                Sources                                      Amount             Listed items     the current profit or
                                                                                                                         loss


                                                                                                    Other
 Grants for employees' on-the-job training                               2,968,000.00                                2,968,000.00
                                                                                                   income


 Special funds for promoting high-quality economic                                                  Other
                                                                         2,004,092.60                                2,004,092.60
 development                                                                                       income


                                                                                                    Other
 Grants for high-tech enterprises                                        1,510,200.00                                1,510,200.00
                                                                                                   income



                                                                                                                                         289
Foshan Electrical and Lighting Co., Ltd.                                                                             Annual Report 2021



 Support funds for industrial design industry development in                                         Other
                                                                            1,000,000.00                              1,000,000.00
 Chancheng District, Foshan City                                                                    income


                                                                                                     Other
 Subsidy for stabilizing employment                                         824,913.04                                    824,913.04
                                                                                                    income


                                                                                                     Other
 Industrial Internet project transformation award                           809,900.00                                    809,900.00
                                                                                                    income

 The third batch of special funds for innovation-driven
 development in Guangxi by the Science and Technology                                                Other
                                                                            550,376.08                                    550,376.08
 Department of Guangxi Zhuang Autonomous Region                                                     income
 (Intelligent LED Lamp Project)


                                                                                                     Other
 "100 Enterprises Strive for the First Place" bonus                         500,000.00                                    500,000.00
                                                                                                    income


                                                                                                     Other
 Chongqing enterprise R&D reserve in 2021                                   410,000.00                                    410,000.00
                                                                                                    income

                                                                                                     Other
 Import and export support funds                                            340,000.00                                    340,000.00
                                                                                                    income


                                                                                                     Other
 Industrial design development support funds in Foshan                      300,000.00                                    300,000.00
                                                                                                    income


 Science and technology innovation inclusive policy funds
                                                                                                     Other
 provided by the Finance Bureau of Liang Jiang New Area in                  300,000.00                                    300,000.00
                                                                                                    income
 2021


                                                                                                     Other
 Others                                                                     4,794,421.52                              4,794,421.52
                                                                                                    income


                              Total                                     16,311,903.24                                16,311,903.24



85. Other

Naught


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

                                                                                                                                 Unit: RMB
                                                                                                               Income of      Net profits of
                 Time and
                                 Cost of                                                      Recognition acquiree from acquiree from
  Name of         place of                   Proportion of Way to gain
                               gaining the                                    Purchase date     basis of      the purchase the purchase
  acquiree      gaining the                      equity        the equity
                                   equity                                                     purchase date     date to          date to
                   equity
                                                                                                              period-end       period-end


                                                                                                                                           290
Foshan Electrical and Lighting Co., Ltd.                                                                                Annual Report 2021


                                                              Purchase of                       Reelect
                                                              former                            directors and
Nanning
                                                              shareholders’                    complete
Liaowang       1 August        493,880,163.                                     1 August                         707,022,757. 28,862,888.6
                                                       53.79% equity and                        changes of
Auto Lamp      2021                         76                                  2021                                      31               3
                                                              capital                           industrial and
Co., Ltd.
                                                              increase in                       commercial
                                                              cash                              registration


(2) Combination Cost and Goodwill

                                                                                                                                  Unit: RMB

                          Combination cost

--Cash                                                                                                                     493,880,163.76

Total combination cost                                                                                                     493,880,163.76

Less: fair value of identifiable net assets acquired                                                                       477,668,693.94

The amount of goodwill/combined cost less than the fair value
                                                                                                                               16,211,469.82
share of identifiable net assets obtained




(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date

                                                                                                                                  Unit: RMB

                                                                            Nanning Liaowang lamp Co., Ltd

                                                        Fair value on purchase date                  Carrying value on purchase date

Monetary assets                                                              176,025,798.81                                176,025,798.81

Inventories                                                                  313,460,310.46                                313,460,310.46

Fixed assets                                                                   697,875,234.89                               629,478,819.32

Intangible assets                                                               93,882,706.39                                  66,748,282.54

Held-for-trading financial assets                                              15,086,008.74                                   15,086,008.74

Notes receivable and accounts receivable                                       598,705,624.03                               598,705,624.03

Other current assets                                                            8,843,992.98                                    8,843,992.98

Construction in progress                                                        3,901,388.20                                    3,901,388.20

Right-of-use assets                                                             3,372,205.60                                    3,372,205.60

Long-term prepaid expense                                                      94,182,937.64                                   94,182,937.64

Goodwill                                                                       14,329,625.91

Deferred income tax assets                                                      16,179,649.08                                  16,179,649.08

Other non-current assets                                                       21,659,286.52                                   21,659,286.52

Total assets                                                                2,043,175,143.34                              1,947,644,303.92


                                                                                                                                         291
Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021


Borrowings                                                                 198,258,013.62                             198,258,013.62

Deferred income tax liabilities                                             14,329,625.91

Notes payable and accounts payable                                       1,015,328,033.63                            1,015,328,033.63

Employee benefits payable                                                   19,573,230.62                               19,573,230.62

Taxes payable                                                                 9,284,798.88                               9,284,798.88

Current portion of non-current liabilities                                  53,169,797.06                               53,169,797.06

Lease liabilities                                                             1,941,745.82                               1,941,745.82

Long-term payables                                                          22,247,027.59                               22,247,027.59

Provisions                                                                    7,988,407.72                               7,988,407.72

Deferred income                                                             13,029,376.16                               13,029,376.16

Total liabilities                                                        1,355,150,057.01                            1,340,820,431.10

Net assets                                                                 688,025,086.33                              606,823,872.82

Less: Non-controlling interests                                            406,462,516.18                              358,491,518.87

Net assets acquired (note)                                                 281,562,570.15                              248,332,353.95

The determination method of the fair value of identifiable assets and liabilities:
The Company adopts the asset-based method to determine the fair value of the assets and liabilities of Nanning Liaowang at the date of
purchase. The valuation methods of major assets and their key assumptions are listed as follows:
The evaluation method of fixed assets is replacement cost method, and the fair value is determined by the current market pric e plus
necessary transportation and miscellaneous expenses, installation and commissioning expenses, capital cost and newness rate.
The valuation method of intangible assets is market approach, and the fair value is mainly determined by the land price on the base date
of valuation.
The valuation method of inventory is the market price method, and the fair value is determined according to the book value and product
sales profit on the valuation base date.
Other notes:
After purchasing about 40.92% of the original shareholder's equity in Nanning Liaowang, the Company increased its capital by
RMB200,000,000.00 in cash, including an increase in paid-in capital of RMB7,635,930.00 and an increase in capital reserve-capital
premium of RMB192,364,070.00; the fair value after capital increase is RMB888,025,086.33, and the Company holds 53.79% shares
in Nanning Liaowang, and the owner's equity attributable to the Company is RMB477,668,693.94.


(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 business 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




                                                                                                                                    292
Foshan Electrical and Lighting Co., Ltd.                                                                         Annual Report 2021


(6) Other Notes

Naught


2. Business Combination under the Same Control

(1) Business Combination under the Same Control during the Reporting Period

Naught


(2) Combination Cost

Naught


(3) The Carrying Value of Assets and Liabilities of the Combined Party on the Combination Date

Naught


3. Counter Purchase

Naught


4. Disposal of Subsidiary

Whether there is a single disposal of the investment to the subsidiary and lost control?
□ Yes √ No
Whether there are several disposals of the investment to the subsidiary and lost controls?

□ Yes √ No


5. Changes in Combination Scope for Other Reasons

Note to changes in combination scope for other reasons (such as newly establishment or liquidation of subsidiaries, etc.) and relevant
information:
Hainan Technology was newly established in May of this period and has been included in the scope of consolidation since its
establishment. New Light Source and Hunan Keda have completed industrial and commercial cancellation in September and
November respectively, and will no longer be included in the scope of consolidation from the date of cancellation.


6. Other

Naught




                                                                                                                                  293
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


IX. Equity in Other Entities

1. Equity in Subsidiary

(1) Subsidiaries


                        Main operating                            Nature of               Holding percentage
       Name                              Registration place                                                           Way of gaining
                            place                                     business         Directly        Indirectly

Foshan Lighting
Lamps &                                                       Production and                                         Newly
                       Foshan            Foshan                                            100.00%
Components Co.,                                               sales                                                  established
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.

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
Manufacturing
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

Foshan Haolaite                                               Production and                                         Newly
                       Foshan            Foshan                                             51.00%
Lighting Co., Ltd.                                            sales                                                  established

Foshan Kelian
New Energy                                                    Property
                       Foshan            Foshan                                            100.00%                   Acquired
Technology Co.,                                               development
Ltd.

Fozhao (Hainan) Haikou                   Haikou               Production         and                                 Newly
                                                                                           100.00%
Technology Co.,                                               sales                                                  established


                                                                                                                                   294
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


Ltd.

Nanning
Liaowang Auto                                                Manufacturing of
                     Nanning            Nanning                                           53.79%                        Acquired
Lamp Co., Ltd.                                               vehicle lamps
(note 2)

Liuzhou Guige
Lighting                                                     Manufacturing of
                     Liuzhou            Liuzhou                                                                 53.79% Acquired
Technology Co.,                                              vehicle lamps
Ltd.

Liuzhou Guige                                                Manufacturing of
Foreshine                                                    automotive
                     Liuzhou            Liuzhou                                                                 53.79% Acquired
Technology Co.,                                              electronic
Ltd.                                                         products

Chongqing
Guinuo Lighting                                              Manufacturing of
                     Chongqing          Chongqing                                                               53.79% Acquired
Technology Co.,                                              vehicle lamps
Ltd.

Qingdao Guige
Lighting                                                     Manufacturing of
                     Qingdao            Qingdao                                                                 53.79% Acquired
Technology Co.,                                              vehicle lamps
Ltd.

Indonesia
                                                             Manufacturing of
Liaowang Auto        Indonesia          Indonesia                                                               53.79% Acquired
                                                             vehicle lamps
Lamp Co., Ltd.
Other notes:
Note: Liuzhou Guige Lighting, Liuzhou Guige Foreshine, Chongqing Guinuo, Qingdao Lighting and Indonesia Liaowang are
wholly-owned subsidiaries (grandchildren) of Nanning Liaowang.


(2) Significant Non-wholly-owned Subsidiary

                                                                                                                                Unit: RMB

                            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%                   742,477.85                                        11,450,551.98
Ltd.

FSL Zhida Electric
                                                 49.00%                 2,513,547.88                                        24,626,765.88
Technology Co., Ltd.

Foshan Haolaite Lighting
                                                 49.00%                 1,415,333.79                                        16,852,876.19
Co., Ltd.


                                                                                                                                        295
Foshan Electrical and Lighting Co., Ltd.                                                                                            Annual Report 2021


Nanning Liaowang Auto
                                                   46.21%                  12,562,779.38                                               422,919,171.77
Lamp Co., Ltd.


(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary

                                                                                                                                                Unit: RMB

                                     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

Foshan
Taimei
Times
              135,829, 17,573,4 153,402, 115,233,                       115,233, 71,270,5 15,316,4 86,586,9 50,893,3                             50,893,3
Lamps
               008.12       37.36    445.48       938.88                  938.88       18.28       06.34      24.62       44.19                     44.19
and
Lanterns
Co., Ltd.

FSL
Zhida
Electric      126,777, 12,494,2 139,272, 76,679,7                       76,679,7 112,196, 8,962,67 121,158, 63,696,1                             63,696,1
Technolo       943.85       11.78    155.63        76.30                   76.30      198.34        6.26     874.60       84.82                     84.82
gy Co.,
Ltd.

Foshan
Haolaite      60,890,6 12,887,9 73,778,5 39,384,2                       39,384,2 51,192,0 12,249,9 63,442,0 31,936,1                             31,936,1
Lighting        48.90       36.38      85.28       09.45                   09.45       90.96       45.68      36.64       60.19                     60.19
Co., Ltd.

Nanning
Liaowan
              1,346,86 817,363, 2,164,22 1,305,42 23,058,6 1,328,47
g Auto
              3,737.14     839.98 7,577.12 0,077.19            96.78 8,773.97
Lamp
Co., Ltd.

              1,670,36 860,319, 2,530,68 1,536,71 23,058,6 1,559,77 234,658, 36,529,0 271,187, 146,525,                                          146,525,
Total
              1,338.01     425.50 0,763.51 8,001.82            96.78 6,698.60         807.58       28.28     835.86      689.20                    689.20

                                                                                                                                                Unit: RMB

                                       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            147,525,074. 2,474,926.17 2,474,926.17 3,103,173.55 145,973,615. 4,983,862.50 4,983,862.50 -1,854,553.69


                                                                                                                                                         296
Foshan Electrical and Lighting Co., Ltd.                                                                       Annual Report 2021


Taimei Times             10                                                        97
Lamps and
Lanterns Co.,
Ltd.

FSL Zhida
Electric        164,800,910.                               -10,852,478.6 123,690,820.
                               5,129,689.55 5,129,689.55                                 8,881,031.22 8,881,031.22 2,202,238.82
Technology               54                                           5            25
Co., Ltd.

Foshan
Haolaite        81,332,587.1                                              30,156,976.5
                               2,888,499.38 2,888,499.38 1,704,983.53                    -1,209,123.55 -1,209,123.55 -5,636,610.73
Lighting Co.,              8                                                         8
Ltd.

Nanning
Liaowang        707,022,757. 28,862,888.6 28,924,930.3 13,797,867.2
Auto Lamp                31              3             3              1
Co., Ltd.

                1,100,681,32 39,356,003.7 39,418,045.4                    299,821,412. 12,655,770.1 12,655,770.1
Total                                                      7,753,545.64                                                -5,288,925.60
                        9.13             3             3                           80                7             7


(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


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




                                                                                                                                 297
Foshan Electrical and Lighting Co., Ltd.                                                                   Annual Report 2021


(3) Main Financial Information of Significant Associated Enterprises

Naught


(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises

                                                                                                                   Unit: RMB

                                                                                     Beginning balance/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                                  181,545,123.09                            181,365,016.32

The total of following items according to the
                                                              --                                      --
shareholding proportions

--Net profit                                                          2,260,497.27                              2,351,681.39

--Total comprehensive income                                          2,260,497.27                              2,351,681.39


(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


(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated Enterprises

Naught


4. Significant Common Operation

Naught




                                                                                                                             298
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements

Naught


6. Other

Naught


X. The Risk Related to Financial Instrume nts

The financial instruments of the Company included: equity investment, notes receivable, accounts receivable,
accounts payable, etc. The details of each financial instrument see relevant items of Note V.
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 analysis 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 when 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 Financial 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 refers to the risk of loss due to exchange rate changes. The Company's exposure to foreign
exchange risk is mainly related to the US dollar and the euro. As of 31 December 2021, the Company's assets and
liabilities were in RMB, except for the balances of usd, euro, Hong Kong dollar and rupiah as set out in this Note
VII-82, Foreign Currency Monetary Items. Foreign exchange risk arising from the assets and liabilities of such
foreign currency balances may have a certain impact on the Company's operating results.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

                                                                                                                     299
Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021


to the change of market interest rates. The interest rate risk faced by the Company mainly comes from bank
borrowings. By establishing a good bank-enterprise relationship, the Company reasonably designed the credit line,
credit variety and credit period, ensured sufficient credit line of banks, and met various short-term financing needs
of the Company with preferential loan interest rates. As of 31 December 2021, the Company's fixed interest rate
loan balance was RMB226,614,000.00, accounting for 100% of the total loan balance, and the risks in this part
were controllable.
3. Other price risk
Naught

XI. The Disclosure of Fair Value

1. Ending Fair Value of Assets and Liabilities at Fair Value

                                                                                                                       Unit: RMB

                                                                      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) Held-for-trading
                                        5,825,678.18          322,422,447.43                                   328,248,125.61
financial assets

1. Financial assets at fair
value through profit or                 5,825,678.18          322,422,447.43                                   328,248,125.61
loss

(III) Other equity
                                    1,474,360,785.15                                           500,000.00     1,474,860,785.15
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 rate.

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 are bank's wealth management products, which are measured at the
contractual expected yield rate as a reasonable estimate of the fair value.




                                                                                                                             300
Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021


4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3

(1) Because the business environment, operation conditions and financial conditions of the invested company,
China Guangfa Bank has not changed significantly, the Company takes investment costs as the reasonable
estimation of fair value to measure.
(2) Because the business environment, operation conditions and financial conditions of the invested company,
Shenzhen Zhonghao (Group) Co., Ltd. were deteriorated, the Company takes zero element as the 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 include: 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


XII. Related Party and Related-party Transactions

1. Information Related to the Company as the Parent of the Company

1. The parent company of the Company

                                                                                     Proportion of share   Proportion of voting
                                                                                         held by the       rights owned by the
         Name         Registration place   Nature of business   Registered capital     Company as the        Company as the
                                                                                      parent against the    parent against the
                                                                                       Company (%)            Company (%)




                                                                                                                             301
Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021



Hongkong Wah           Hong Kong              Investment            HKD110,000                           13.47%                 13.47%
Shing Holding
Company Limited

Guangdong            Guangzhou                Production and sales RMB462 million                         8.77%                  8.77%
Electronics
Information Industry
Group Ltd.

Guangdong Rising Guangzhou                    Investment            100 亿元                              5.94%                  5.94%
Holdings Group Co.,
Ltd.

Rising Investment      Hong Kong              Investment            RMB200 million                        1.82%                  1.82%
Development                                                         and HKD1 million
Limited

Total                                                                                                    30.00%                 30.00%

Notes: Information on parent company of the Company
Hongkong Wah Shing Holding Company Limited (hereinafter referred to as "Hongkong Wah Shing"), the largest shareholder of the
Company, is a wholly-owned subsidiary of Guangdong Electronics Information Industry Group Ltd. (hereinafter referred to as
"Electronics Group"), and Electronics Group, Shenzhen Rising Investment Development Co., Ltd. (hereinafter referred to as
"Shenzhen Rising"), Guangdong Rising Holdings Group Co., Ltd. (renamed Guangdong Rising Capital Investment Co., Ltd. on 13
December 2021, here inafter referred to as “Rising Capital”) and Rising Investment Development Limited (hereinafter referred to as
“Rising Investment”) are wholly-owned subsidiaries of Guangdong Rising Holdings Group Co., Ltd. (hereinafter referred to as
“Rising Holdings Group”). According to the relevant provisions of the Company Law and the Measures for the Administrative
Measures on Acquisition of Listed Companies, Electronics Group, Shenzhen Rising, Rising Capital and Rising Investment are
concerted actors, and Rising Holdings Group becomes the actual controller of the Company. On 15 December 2021, Shenzhen Rising
and Rising Capital transferred all their shares of the Company to Rising Holdings Group. After the transfer, Rising Holdings Group,
Electronics Group and Rising Investment acted in concert with each other. As of 31 December 2021, the above-mentioned persons
acting in concert held a total of 419,803,826.00 A and B shares of the Company, accounting for 30.00% of the total share capital of
the Company.


2. Subsidiaries of the Company

Refer to Note IX Equity in Other Entities-1. Equity in Subsidiaries for details.


3. Information on the Joint Ventures and Associated Enterprises of the 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

PROSPERITY LAMPS & COMPONENTS LTD                                   Shareholder owning over 5% shares

Foshan NationStar Optoelectronics Co. Ltd.                          Under same actual controller


                                                                                                                                     302
Foshan Electrical and Lighting Co., Ltd.                                                                      Annual Report 2021


Guangdong Fenghua Advanced Technology Holding Co., Ltd.         Under same actual controller

Guangdong Rising Lighting Technology 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 Management Co., Ltd.               Under same actual controller

Shaoguan Green Resource Recycling Development Co., Ltd.         Under same actual controller

Zhuhai Doumen District Yongxingsheng Environmental
                                                                Under same actual controller
Industrial Wastes Recycling Comprehensive Treatment Co., Ltd.

Jiangmen Dongjiang Environmental Protection Technology Co.,
                                                                Under same actual controller
Ltd.

Foshan Fulong Environmental Protection Technology Co., Ltd.     Under same actual controller

Guangdong New Electronic Information Ltd.                       Under same actual controller

Guangdong Huajian Enterprise Group Co. Ltd.                     Under same actual controller

Guangdong Zhongnan Construction Co., Ltd.                       Under same actual controller

Guangzhou Huajian Engineering Construction Co., Ltd.            Under same actual controller

Guangdong Yixin Changcheng Construction Group                   Under same actual controller

Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd.       Under same actual controller

Shenzhen Zhongjin Lingnan Nonfemet Company Limited              Under same actual controller

Guangdong Guangsheng Communications Technology Co., Ltd. Under same actual controller

Guangdong Rising Capital Investment Co., Ltd.                   Under same actual controller

Guangdong Electronics Information Industry Group Ltd.           Under same actual controller

Guangdong Heshun Property Management Co., Ltd.                  Under same actual controller

Rising International Building Branch of Guangdong Heshun
                                                                Under same actual controller
Property Management Co., Ltd.

Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. Under same actual controller

Guangdong Rising Rare Metals Photoelectric Materials Ltd.       Under same actual controller

Shenzhen Yuepeng Construction Co., Ltd.                         Under same actual controller

NationStar Optoelectronics (Germany) Co., Ltd.                  Under same actual controller

Guangdong Zhongjin Lingnan Junpeng Intelligent Equipment        Under same actual controller
Co., Ltd.

Guangdong Rising South Construction Co., Ltd.                   Under same actual controller

Primatronix Nanho Technology Ltd.                               Under same actual controller

Hangzhou Times Lighting and Electrical Co., Ltd.                Enterprise controlled by related natural person



                                                                                                                            303
Foshan Electrical and Lighting Co., Ltd.                                                                            Annual Report 2021


Prosperity (Hangzhou) Lighting and Electrical Co., Ltd.              Enterprise controlled by related natural person

Prosperity Electrical (China) Co., Ltd.                              Enterprise controlled by related natural person

Siteco Prosperity Lighting (Langfang) Co., Ltd.                      Enterprise controlled by related natural person

OSRAM (China) Lighting Co., Ltd.                                     Enterprise significantly affected by related natural person

Shanglin ChenWang Ecological Agriculture Professional
                                                                     Enterprise significantly affected by related natural person
Cooperative

Nanning Qiuyuan Jingwang Industrial Investment Co., Ltd.             Enterprise significantly affected by related natural person

Nanning Ruixiang Industrial Investment Co., Ltd.                     Enterprise significantly affected by related natural person


5. List of Related-party Transactions

(1) Information on Acquisition of Goods and Reception of Labor Service

Information on acquisition of goods and reception of labor service
                                                                                                                              Unit: RMB

                                                                 The approval trade      Whether exceed trade      Same period of last
    Related party              Content      Reporting Period
                                                                         credit               credit or not               year

Foshan NationStar
                          Purchase of
Optoelectronics                                42,644,701.72           120,000,000.00                         否          54,268,443.27
                          materials
Co., Ltd.

Guangdong
Fenghua Advanced Purchase of
                                                  7,858,610.67           15,000,000.00                        否           8,810,002.31
Technology Holding materials
Co., Ltd.

PROSPERITY
LAMPS &                   Purchase of
                                                  2,654,442.36           13,000,000.00                        否           3,128,174.91
COMPONENTS                materials
LTD

Prosperity Electrical Purchase of
                                                  1,394,588.50                                                               118,407.08
(China) Co., Ltd.         materials

Hangzhou       Times
                          Purchase of
Lighting            and                            646,501.00                                                                448,824.06
                          materials
Electrical Co., Ltd.

Guangdong
Electronic                Purchase of
                                                  1,151,902.67            3,000,000.00                        否             724,424.77
Technology                equipment
Research Institute

Guangdong
                          Receiving labor
Zhongnan                                       60,430,362.16                                                            139,734,113.59
                          service
Construction Co.,


                                                                                                                                     304
Foshan Electrical and Lighting Co., Ltd.                                                                  Annual Report 2021


Ltd.

Guangdong Yixin
                        Receiving labor
Changcheng                                         16,489,569.63
                        service
Construction Group

Jiangmen
Dongjiang
Environmental           Receiving labor
                                                         269,383.02                                               326,229.47
Protection              service
Technology Co.,
Ltd.

Guangdong
Electronic              Receiving labor
                                                           2,734.91                                                 16,851.55
Technology              service
Research Institute

Foshan Fulong
Environmental
                        Receiving labor
Protection                                                25,471.70                                                 42,477.88
                        service
Technology Co.,
Ltd.
Zhuhai         Doumen
District
Yongxingsheng
Environmental           Receiving labor
                                                           5,660.38                                                 13,274.34
Industrial      Wastes service
Recycling
Comprehensive
Treatment Co., Ltd.

Shenzhen Yuepeng
                        Receipt of labor
Construction Co.,                                        234,245.88
                        services
Ltd.

Shaoguan Green
Resource Recycling Receiving labor
                                                                                                                    35,150.44
Development Co.,        service
Ltd.

Total                                            133,808,174.60       151,000,000.00                          207,666,373.67

Information of sales of goods and provision of labor service
                                                                                                                   Unit: RMB

             Related party                       Content                Reporting Period        Same period of last year

Guangdong        New     Electronic
                                      Sale of products                          37,516,153.50                  13,257,739.83
Information Ltd.

PROSPERITY           LAMPS         & Sale of products                           25,442,505.36                  23,581,892.27


                                                                                                                           305
Foshan Electrical and Lighting Co., Ltd.                                Annual Report 2021


COMPONENTS LTD

Guangdong Rising Rare Metals
                                      Sale of products   8,100,954.40
Photoelectric Materials Ltd.

Shenzhen      Zhongjin     Lingnan
                                      Sale of products   3,104,398.07          508,074.33
Nonfemet Company Limited

Guangdong Yixin Changcheng
                                      Sale of products   3,089,642.46        2,001,082.10
Construction Group

NationStar Optoelectronics
                                      Sale of products   1,642,983.52
(Germany) Co., Ltd.

Guangdong Zhongnan
                                      Sale of products   1,863,057.74        2,478,832.12
Construction Co., Ltd.

Rising International Building
Branch of Guangdong Heshun            Sale of products    619,220.36
Property Management Co., Ltd.

Guangdong Zhongjin Lingnan
Equipment      Technology      Co., Sale of products      225,710.62           367,903.54
Ltd.

Guangdong Zhongjin Lingnan
Engineering Technology Co., Sale of products              108,592.02
Ltd.

Guangdong Heshun Property
                                      Sale of products     73,458.68
Management Co., Ltd.

Guangdong Zhongjin Lingnan
Junpeng Intelligent Equipment         Sale of products     49,674.33
Co., Ltd.

Guangdong      Rising      Holdings
                                      Sale of products     30,226.55            57,417.70
Group Co., Ltd.

Prosperity Electrical (China)
                                      Sale of products     26,984.56            44,923.04
Co., Ltd.

Guangdong Rising South
                                      Sale of products     14,356.46
Construction Co., Ltd.

Guangdong               Electronics
Information     Industry     Group Sale of products          8,013.27            8,004.42
Ltd.

Guangzhou                   Huajian
Engineering Construction Co., Sale of products               6,145.47          678,572.88
Ltd.

Primatronix Nanho Technology
                                      Sale of products        857.79
Co., Ltd.



                                                                                      306
Foshan Electrical and Lighting Co., Ltd.                                                                          Annual Report 2021


Guangdong Electronic
                                    Sale of products                                                                      856,798.23
Technology Research Institute

Guangdong                  Rising
Communications        Technology Sale of products                                                                          23,628.32
Co., Ltd.

Total                                                                               81,922,935.16                      43,864,868.78

Information of sales/purchase of goods and provision/reception of labor service
1. The pricing policy for related-party transactions is as follows:
The pricing for related-party transactions observes the principle of market subject to the market price when the transaction happens
and relevant accounts shall be paid on time based on actual transaction.
2. Related-party transactions between the Company and its subsidiaries, as well as those between the subsidiaries were offset when
preparing the consolidated financial statements.


(2) Information on Related-party Trusteeship/Contract

Naught


(3) Information on Related-party Lease

Naught


(4) Information on Related-party Guarantee

Other notes
See Note XIV-(III) Others.


(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: RMB

                    Item                                    Reporting period                        Same period of last year

Chairman of the Board                                                          1,503,487.93                               553,233.53

General Manager                                                                1,425,147.02                             2,246,860.84

Chairman of the Supervisory Committee                                          1,328,797.52                             1,011,360.58

Secretary of the Board                                                          306,708.16


                                                                                                                                 307
Foshan Electrical and Lighting Co., Ltd.                                                                             Annual Report 2021


Chief Financial Officer                                                       1,302,654.16                                    992,873.82

Other                                                                        10,793,083.07                                  7,286,668.80

Total                                                                        16,659,877.86                                12,090,997.57


(8) Other Related-party Transactions

(8.1) Acquisition of equity from related parties
In October 2021, Electronics Group signed the Equity Transfer Agreement with the Company on Foshan Sigma Venture Capital Co.,
Ltd., and transferred its 100% equity of Sigma (Sigma holds 79,753,050 shares of NationStar Optoelectronics) to the Company a t a
consideration of RMB917,980,229.67. In the same month, Rising Holdings Group and Rising Capital respectively signed the S hare
Transfer Agreement on Foshan NationStar Optoelectronics Co., Ltd. with the Company, and transferred their total 52,051,945 tradable
shares of NationStar Optoelectronics with unlimited selling conditions to the Company at a consideration of RMB599,117,886.95
(RMB11.51/share). As of 31 December 2021, the Company has paid 30% of the equity acquisition amount, that is,
RMB455,129,434.98, as the security deposit for this trading. For details of the equity acquisition progress, please refer to Note XV
Events after the Balance Sheet Date.


(8.2) Funds Interests of Related Parties
               Related party                         Content               Reporting Period               Same period of last year

Guangdong Huajian Enterprise Group              Borrowing interest                                                        11,857,755.40
Co., Ltd. (Note)                                     expense
                    Total                                                                                                 11,857,755.40
         Note: It is the loan interest expense of Foshan Kelian, a subsidiary, from Guangdong Huajian Enterprise Group Co., Ltd.
         (hereinafter referred to as "Huajian Enterprise Group"). The relevant loan principal and interest have been settled, and there is
         no new loan interest in this period.
(8.3) Collect liquidated damages from related parties
         In December 2020, the Company signed the Equity Transfer Agreement and Supplementary Agreement with Huajian
         Enterprise Group, and the Company acquired 100% equity of Hunan Keda, thus holding Kelian Building. In this period, due
         to the dispute between the two parties over the completion acceptance date agreed in the Equity Transfer Agreement, the
         Company required Huajian Enterprise Group to bear the liquidated damages for delayed delivery of the building according to
         the Agreement. After negotiation, Huajian Enterprise Group will pay liquidated damages of RMB7,060,000.00 to the
         Company.
(8.4) Deposits and Loans of Related Parties
               Related party                       Deposit nature            Deposit term                    Ending balance
Guangdong Rising Finance Co., Ltd.                Current, agreed      can be withdrawn at any                          294,777,469.27
(note)                                                                           time

Note: According to the Financial Services Agreement signed by both parties in 2020 and 2021, the maximum daily deposit balance of
the company in Guangdong Rising Finance Co., Ltd. does not exceed RMB300,000,000.00, of which the annualized interest rate of
time deposit is 3.3%, the annualized interest rate of seven-day notice deposit is 2.45%, and the annualized interest rate of agreement
deposit is 1.75%; the interest income incurred and recognized in the current period is RMB6,873,960.08.




                                                                                                                                       308
Foshan Electrical and Lighting Co., Ltd.                                                                  Annual Report 2021


6. Accounts Receivable and Payable of Related Party

(1) Accounts Receivable

                                                                                                                    Unit: RMB

                                                       Ending balance                          Beginning balance
        Item                 Related party
                                             Carrying amount     Bad debt provision   Carrying amount     Bad debt provision

Monetary
                      Guangdong Rising
capital-Interest                                                                           1,581,250.00
                      Finance Co., Ltd.
receivable

                      PROSPERITY
                      LAMPS &
Accounts receivable                               7,536,111.98           226,083.36        3,953,777.97            118,613.34
                      COMPONENTS
                      LTD

                      OSRAM (China)
Accounts receivable                                                                          117,554.16             94,043.33
                      Lighting Co., Ltd.

                      Prosperity
                      (Hangzhou) Lighting
Accounts receivable                                                                           86,000.00             86,000.00
                      and Electrical Co.,
                      Ltd.

                      Guangdong Vollsun
Accounts receivable Data Solid-state                                                       2,553,280.00            765,984.00
                      Storage Co., Ltd.

                      Guangdong
                      Zhongnan
Accounts receivable                               1,095,727.04            32,871.81        2,642,688.00             79,280.64
                      Construction Co.,
                      Ltd.

                      Guangdong Yixin
Accounts receivable Changcheng                    5,752,518.74           172,575.56        2,261,222.79             67,836.68
                      Construction Group

                      Shenzhen Zhongjin
Accounts receivable Lingnan Nonfemet              2,621,178.80            78,635.36          574,124.00             17,223.72
                      Company Limited

                      Guangdong
                      Zhongjin Lingnan
Accounts receivable                                 670,784.00            46,301.49          415,731.00             12,471.93
                      Equipment
                      Technology Co., Ltd.

                      Guangzhou Huajian
                      Engineering
Accounts receivable                                  44,823.00             4,445.48          289,857.54              8,695.73
                      Construction Co.,
                      Ltd.


                                                                                                                          309
Foshan Electrical and Lighting Co., Ltd.                                                    Annual Report 2021


                      Guangdong New
Accounts receivable Electronic                 10,627,013.80   318,810.41   14,131,264.06          423,937.92
                      Information Ltd.

                      Guangdong
                      Zhongjin Lingnan
Accounts receivable                                10,118.00      303.54
                      Engineering
                      Technology Co., Ltd.

                      Guangdong Rising
                      Rare Metals
Accounts receivable                             6,455,385.93   193,661.58
                      Photoelectric
                      Materials Ltd.

                      Guangdong Heshun
                      Property
Accounts receivable                                 2,303.60        69.11
                      Management Co.,
                      Ltd.

                      Rising International
                      Building Branch of
                      Guangdong Heshun
Accounts receivable                               669,790.40    20,093.71
                      Property
                      Management Co.,
                      Ltd.

                      Guangdong Huajian
Other receivables     Enterprise Group          7,060,000.00   211,800.00
                      Co. Ltd.

                      Guangdong New
Other receivables     Electronic                    8,865.50      265.97
                      Information Ltd.

                      Prosperity Electrical
Prepayments                                                                    39,428.00
                      (China) Co., Ltd.

                      Foshan NationStar
Prepayments           Optoelectronics Co.                                      31,266.86
                      Ltd.

                      Guangdong Rising
Other non-current
                      Capital Investment       19,999,513.57
assets
                      Co., Ltd.

                      Guangdong
Other non-current     Electronics
                                              275,394,068.90
assets                Information Industry
                      Group Ltd.

Other non-current     Guangdong Rising
                                              159,735,852.51
assets                Holdings Group Co.,


                                                                                                          310
Foshan Electrical and Lighting Co., Ltd.                                                                    Annual Report 2021


                    Ltd.

Total                                             497,684,055.77      1,305,917.38          28,677,444.38        1,674,087.29


(2) Accounts Payable

                                                                                                                    Unit: RMB

             Item                          Related party           Ending carrying amount         Beginning carrying amount

                               Foshan NationStar
Notes payable                                                                   5,816,952.78
                               Optoelectronics Co., Ltd.

                               Guangdong Fenghua Advanced
Notes payable                                                                        798,496.60
                               Technology Holding Co., Ltd.

                               Foshan NationStar
Accounts payable                                                               13,989,061.63                    32,866,944.98
                               Optoelectronics Co., Ltd.

                               Guangdong Fenghua Advanced
Accounts payable                                                                     794,923.94                  5,258,863.67
                               Technology Holding Co., Ltd.

                               Prosperity Electrical (China)
Accounts payable                                                                     567,218.00
                               Co., Ltd.

                               PROSPERITY LAMPS &
Accounts payable                                                                                                 1,350,955.58
                               COMPONENTS LTD

                               Hangzhou Times Lighting and
Accounts payable                                                                     178,185.14                    289,282.42
                               Electrical Co., Ltd.

                               HONG KONG PROSPERITY
Accounts payable               LAMPS & COMPONENTS                               1,337,304.32
                               LTD

                               Guangdong Zhongnan
Accounts payable                                                               12,370,475.74
                               Construction Co., Ltd.

                               Guangdong Yixin Changcheng
Accounts payable                                                                3,825,018.07
                               Construction Group

                               Nanning Ruixiang Industrial
Other payables                                                                120,352,181.20
                               Investment Co., Ltd.

                               Guangdong Huajian Enterprise
Other payables                                                                  1,726,264.40                     9,358,999.63
                               Group Co., Ltd.

                               Guangdong Electronic
Other payables                                                                       391,025.00                    260,860.00
                               Technology Research Institute

                               Guangdong Fenghua Advanced
Other payables                                                                        30,000.00                     30,000.00
                               Technology Holding Co., Ltd.

                               Shenzhen Yuepeng
Other payables                                                                       298,300.64
                               Construction Co., Ltd.

Other payables                 Foshan NationStar                                     240,354.07                    279,800.91


                                                                                                                              311
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


                               Optoelectronics Co., Ltd.

Contract liabilities, other    Prosperity Electrical (China)
                                                                              59,428.00                    39,764.94
current liabilities            Co., Ltd.

Contract liabilities, other    Guangdong Heshun Property
                                                                               2,303.60
current liabilities            Management Co., Ltd.

Contract liabilities, other    Guangdong Rising South
                                                                               3,233.00
current liabilities            Construction Co., Ltd.

Contract liabilities, other    NationStar Optoelectronics
                                                                               7,219.71
current liabilities            (Germany) Co., Ltd.

Total                                                                    162,787,945.84                49,735,472.13


7. Commitments of Related Party

1. Commitment on Avoidance of Horizontal Competition
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: Electronics Group and its acting-in-concert parties 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 of themselves and their relevant enterprises so
that besides the enterprise above that is in horizontal competition with the Company for now, if the products or
business of them or their relevant enterprises become the same with or similar to those of the Company or its
subsidiaries in the future, they shall take the following measures: (1) If the Company thinks necessary, they and
their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If the
Company thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets and
business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid
horizontal competition with the Company are also applicable to their directly or indirectly controlled subsidiaries.
They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document
and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries
break the aforesaid commitments and thus cause a loss for the Company, they shall compensate the Company on a
rational basis.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(2) Commitment maker: Rising Group
Contents of Commitment: 1. The Promisor will take active measures to avoid any business or activity that
competes or may compete with the principal business of the Company and its auxiliary enterprises, and urge the
Promisor to control enterprises to avoid any business or activity that competes or may compete with the principal
business of the Company and its auxiliary enterprises. 2. If the Promisor and its controlled enterprises are given
the opportunity to engage in new business that constitutes or may constitute horizontal competition with the
principal businesses of the Company and its auxiliary enterprises, the Promisor will make every effort to make the
business opportunity first available to the Company or its auxiliary enterprises on reasonable and fair terms and
conditions on the premise that conditions permit and in the interest of the listed company.
Date of commitment making: 4 November 2021
Term of commitment: Long-standing

                                                                                                                 312
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


Fulfillment: In execution
(3)Commitment maker: Rising Group, Rising Capital, and Hongkong Wah Shing
Contents of Commitment: 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 FSL for now, if the products or business of them or their relevant enterprises become the same
with or similar to those of FSL or its subsidiaries in the future, they shall take the following measures: (1) If FSL
thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and
business; and (2) If FSL 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 FSL are also applicable to their directly or indirectly controlled subsidiaries.
They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document
and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries
break the aforesaid commitments and thus cause a loss for FSL, they shall compensate FSL on a rational basis.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
2. Commitment on Reduction and Regulation of Related-party Transactions
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: Electronics Group and its acting-in-concert parties Hongkong Wah Shing 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 their position as the controlling shareholder and
actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or
associated companies (the “Relevant Enterprises” for short) will try their best to avoid or reduce related-party
transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness,
fairness and equal value exchange for necessary and unavoidable related-party transactions between them and
their Relevant Enterprises and the 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
(2) Commitment maker: Rising Group
Contents of Commitment: 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 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


                                                                                                                 313
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


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.
Date of commitment making: 4 November 2021
Term of commitment: Long-standing
Fulfillment: In execution
(3)Commitment maker: Rising Group, Rising Capital, and Hongkong Wah Shing
Contents of Commitment: They have made a commitment that during their direct or indirect holding of FSL
activities of themselvesstrictly abide by the regulatory documents of the CSRC and the SZSE,FSL’s Articles of
Association, etc. and not harm the interests of the Company or other shareholders of FSL in their production and
operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2.
make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the
"Relevant Enterprises" for short) will try their best to avoid or reduce related-party transactions with FSL or FSL’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 FSL, 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 FSL, its subsidiaries or FSL’s other shareholders, they shall be obliged to compensate.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
3. Commitment on Independence
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: In order to ensure the independence of FSL in business, personnel, asset, organization
and finance, Electronics Group and Hong Kong Rising Investment have made the following commitments: 1. They
will ensure the independence of FSL in business: (1) They promise that FSL 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 FSL’s business activities other than the execution of
their rights as FSL’s shareholders. (3) They promise that they and their related parties will not be engaged in
business that is substantially in competition with FSL’s business. And (4) They promise that they and their related
parties will try their best to reduce related-party transactions between them and FSL; 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 FSL in personnel: (1) They promise
that FSL’s GM, deputy GMs, CFO, Company Secretary and other senior management personnel will work only for
and receive remuneration from FSL, not holding any positions in them or their other controlled subsidiaries other
than director and supervisor. (2) They promise FSL’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 FSL and not to hire or dismiss
employees beyond FSL’s Board of Directors and General Meeting. 3. They will ensure the independence and
completeness of FSL in asset: (1) They promise that FSL 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


                                                                                                                  314
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


independent systems for the procurement of raw materials and the sale of its products. (2) They promise that FSL
will have independent and complete assets all under FSL’s control and independently owned and operated by FSL.
And (3) They promise that they and their other controlled subsidiaries will not illegally occupy FSL’s funds and
assets in any way, or use FSL’s assets to provide guarantees for the debts of themselves or their other controlled
subsidiaries with. 4. They will ensure the independence of FSL in organization: (1) They promise that FSL 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 management organs within FSL will independently execute
their functions according to laws, regulations and FSL’s Articles of Association. 5. They will ensure the
independence of FSL in finance: (1) They promise that FSL will have an independent financial department and
financial accounting system with normative, independent financial accounting rules. (2) They promise that FSL will
have independent bank accounts and not share bank accounts with its related parties. (3) They promise that FSL’s
financial personnel do not hold concurrent positions in its related parties. (4) They promise that FSL will
independently pay its tax according to law. And (5) They promise that FSL can make financial decisions
independently and that they will not illegally intervene in FSL’s use of its funds.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(2) Commitment maker: Rising Group
Contents of Commitment: To maintain the independence of the Company, the Promisor has made the following
commitments: 1. It will ensure the personnel independence of the Company. It promises to ensure personnel
independence with the Company, and GM, deputy GMs, CFO, Secretary of the Board of Directors and other senior
management personnel of the Company will not hold positions other than directors and supervisors in the
enterprises wholly owned, controlled or actually controlled by it and its subsidiaries (hereinafter referred to as
"subsidiaries"), and will not receive salaries from it or its subsidiaries. the Company: To maintain the independence
of the Company, the Promisor has made the following commitments: 1. It will ensure the personnel independence of
the Company. It promises to ensure personnel independence with the Company, and GM, depnd (2) It promises that
it and its subsidiaries will not illegally occupy the Company’s funds and assets in any way. 3. It will ensure the
financial independence of the Company: (1) It promises that the Company will have an independent financial
department and financial accounting system. (2) It promises that the Company will have a standardized and
independent financial accounting system. (3) It promises that the Company will have independent bank accounts
and not share bank accounts with it. (4) It promises that the Company’s financial personnel do not hold concurrent
positions in it or its subsidiaries. And (5) It promises that the Company can make financial decisions independently
and that they will not illegally intervene in the Company’s use of its funds. 4. It will ensure the independence of the
Company in organization: (1) It promises that the Company can operate independently with an independent and
complete organization structure. (2) It promises that the office and production and business premises of the
Company are separated from those of Rising Holdings Group. And (3) It promises that the Board of Directors, the
Supervisory Committee and various functional departments of the Company operate independently, and there is no
subordinate relationship with the functional departments of Rising Holdings Group. And 5, It will ensure the
independence of the Company in business: (1) It promises that the Company will have independence in business.
And (2) It promises 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.
Date of commitment making: 4 November 2021
Term of commitment: Long-standing
Fulfillment: In execution


                                                                                                                    315
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


4. Commitment on effective performance of measures to fill up returns
Commitment maker: Rising Group, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong Kong Rising
Investment and Shenzhen Rising Investment
Contents of Commitment: 1. They promise not to interfere in the operation and management activities of the listed
company beyond their authority and not to encroach on the interests of the listed company. 2. From the date of
issuance of these commitments to the completion of this trading of the listed company, if the CSRC makes new
regulatory requirements on measures to fill up returns and commitments of relevant personnel, and the above
commitments cannot meet these new regulatory requirements of the CSRC, they promise to issue supplementary
commitments according to the latest regulations of the CSRC at that time. 3. They promise to earnestly fulfill the
measures to fill up returns formulated by the listed company and any commitments made by them. If they violate
these commitments and causes losses to the listed company or investors, they are willing to bear the compensation
responsibility for the listed company or investors according to law. As one of the subjects responsible for the
measures to fill up returns, if they violate the above commitments or refuses to fulfill the above commitments, they
agree that the securities regulatory agencies such as the CSRC and the SZSE will punish them or take relevant
regulatory measures in accordance with the relevant regulations and rules they formulated or issued.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
5. Commitment on non-reduction of FSL shares during major asset restructuring
Commitment maker: Rising Group, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong Kong Rising
Investment and Shenzhen Rising Investment
Contents of Commitment: 1. They promise that there will be no share reduction plan from the date of issuance of
this Letter of Commitments to the completion of this trading, and they will not reduce its FSL shares in any other
way (except the transfer or transfer between Rising Holdings Group and its wholly-owned subsidiaries). 2. If FSL
implements ex-rights behaviors such as share conversion, share offering and share allotment from the date of
issuance of this Letter of Commitments to the completion of this trading, the newly added shares obtained by them
will also be subject to the above commitments related to not reducing share holdings.
Date of commitment making: 28 September 2021.
Term of commitment: Until the completion of this trading.
Fulfillment: Complete
6. Commitment on explanation about not prohibited from participating in of any major asset restructuring
of listed companies as stipulated in Article 13 of the Interim Provisions on Strengthening the Supervision of
Abnormal Stock Trading Related to Major Asset Restructuring of Listed Companies
(1) Commitment maker: Shenzhen Rising Investment, Hong Kong Rising Investment, and Hongkong Wah Shing
Contents of Commitment: As of the issuance date of the Report on Major Asset Purchase and Related Party Trading
of Foshan Electrical and Lighting Co., Ltd. (Draft), they have not been placed on file for investigation or criminal
investigation due to suspected insider trading related to this trading, and has not been subject to administrative
punishment by the CSRC or criminal responsibility investigated by judicial organs according to law for insider
trading related to any major asset restructuring in the last 36 months. The relevant entities of this trading are not
prevented from participating in any major asset restructuring of listed companies according to Article 13 of the
Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset
Restructuring of Listed Companies.
Date of commitment making: 27 October 2021.
Term of commitment: Three years prior to the date of issue of commitment.
Fulfillment: Complete
(2) Commitment maker: Directors, supervisors and senior management of Shenzhen Rising Investment, Hong Kong
Rising Investment, and Hongkong Wah Shing

                                                                                                                 316
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


Contents of Commitment: As of the issuance date of the Report on Major Asset Purchase and Related Party Trading
of Foshan Electrical and Lighting Co., Ltd. (Draft), they have not been placed on file for investigation or criminal
investigation due to suspected insider trading related to this trading, and has not been subject to administrative
punishment by the CSRC or criminal responsibility investigated by judicial organs according to law for insider
trading related to any major asset restructuring in the last 36 months. The relevant entities of this trading are not
prevented from participating in any major asset restructuring of listed companies according to Article 13 of the
Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset
Restructuring of Listed Companies.
Date of commitment making: 27 October 2021.
Term of commitment: Three years prior to the date of issue of commitment.
Fulfillment: Complete
(3) Commitment maker: Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: As of the issuance date of the Report on Major Asset Purchase and Related Party Trading
of Foshan Electrical and Lighting Co., Ltd. (Draft), the counterparties of this restructuring have not been placed on
file for investigation or criminal investigation due to suspected insider trading related to this trading, and has not
been subject to administrative punishment by the CSRC or criminal responsibility investigated by judicial organs
according to law for insider trading related to any major asset restructuring in the last 36 months. The relevant
entities of this trading do not disclose the insider information of this restructuring or use the insider information of
this restructuring to conduct trading. In case of any violations to the above commitments, the relevant subjects of
this trading will bear corresponding compensation liabilities.
Date of commitment making: 27 October 2021.
Term of commitment: Three years prior to the date of issue of commitment.
Fulfillment: Complete
7. Commitment on legal compliance
(1)Commitment maker: Shenzhen Rising Investment, Hong Kong Rising Investment, and Hongkong Wah Shing
Contents of Commitment: 1. They have not been investigated by the judicial organ for suspected crimes or by the
CSRC for suspected violations of laws and regulations, and there is no administrative punishment (except those
obviously unrelated to the securities market) or criminal punishment in the last three years; 2. They have not failed
to repay large debts on schedule, failed to fulfill their commitments, been taken administrative supervision measures
by the CSRC, or been disciplined by any stock exchange, have not been publicly condemned by any stock exchange,
have no other major acts of dishonesty and have no any other bad record in the last three years.
Date of commitment making: 27 October 2021.
Term of commitment: Three years prior to the date of issue of commitment.
Fulfillment: Complete
(2) Commitment maker: Rising Capital
Contents of Commitment: 1. Rising Capital has not been investigated by the judicial organ for suspected crimes or
by the CSRC for suspected violations of laws and regulations, and there is no administrative punishment (except
those obviously unrelated to the securities market) or criminal punishment in the last five years; 2. Rising Capital
has not failed to repay large debts on schedule, failed to fulfill its commitments, been taken administrative
supervision measures by the CSRC, or been disciplined by any stock exchange, has not been publicly condemned by
any stock exchange, has no other major acts of dishonesty and has no any other bad record in the last five years. 3.
The main management personnel of Rising Capital have not received administrative punishment or criminal
punishment related to the securities market, and have not involved in major civil litigation or arbitration related to
economic disputes in the last five years. 4. The main management personnel of Rising Capital have not failed to
repay large debts on schedule, failed to fulfill their commitments, been taken administrative supervision measures
by the CSRC or been disciplined by any stock exchange in the last five years.
Date of commitment making: 27 October 2021
Term of commitment: Five years prior to the date of issue of commitment.


                                                                                                                    317
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


Fulfillment: Complete
(3) Commitment maker: Electronics Group
Contents of Commitment: 1. Electronics Group has not been investigated by the judicial organ for suspected crimes
or by the CSRC for suspected violations of laws and regulations, and there is no administrative punishment (except
those obviously unrelated to the securities market) or criminal punishment in the last five years; 2. Electronics
Group has not failed to repay large debts on schedule, failed to fulfill its commitments, been taken administrative
supervision measures by the CSRC, or been disciplined by any stock exchange, has not been publicly condemned by
any stock exchange, has no other major acts of dishonesty and has no any other bad record in the last five years. 3.
On 20 November , 2019, Guangdong Regulatory Bureau of the CSRC issued an administrative penalty decision
([2019] No. 13), giving Liu Ke, the director of Guang Dong Fenghua Advanced Technology (Holding) Co., Ltd.
(now chairman of Electronics Group), a warning and a fine of RMB30,000 over the case of illegal information
disclosure of Guang Dong Fenghua Advanced Technology (Holding) Co., Ltd. Except as aforesaid, the main
management personnel of Electronics Group have not received administrative punishment or criminal punishment
related to the securities market, and have not involved in major civil litigation or arbitration related to economic
disputes in the last five years; 4. Except as aforesaid, the main management personnel of Electronics Group have not
failed to repay large debts on schedule, failed to fulfill their commitments, been taken administrative supervision
measures by the CSRC or been disciplined by any stock exchange in the last five years.
Date of commitment making: 27 October 2021
Term of commitment: Five years prior to the date of issue of commitment.
Fulfillment: Complete
(4) Commitment maker: Rising Group
Contents of Commitment: 1. Rising Group has not been investigated by the judicial organ for suspected crimes or by
the CSRC for suspected violations of laws and regulations, and there is no administrative punishment (except those
obviously unrelated to the securities market) or criminal punishment in the last five years; 2. Rising Group has not
failed to repay large debts on schedule, failed to fulfill its commitments, been taken administrative supervision
measures by the CSRC, or been disciplined by any stock exchange, has not been publicly condemned by any stock
exchange, has no other major acts of dishonesty and has no any other bad record in the last five years. 3. According
to the announcement of Guangdong Discipline Inspection and Supervision Network on 18 October 2021, Yu Gang,
a member of the Party Committee and deputy general manager of Rising Group, is suspected of serious disciplinary
violations and is currently undergoing disciplinary review and supervision by the Supervision Committee of
Guangdong Provincial Commission for Discipline Inspection. As of the date of issuance of this Letter of
Commitments, there is no result of disciplinary review and supervision. Except as aforesaid, the main management
personnel of Rising Group have not received administrative punishment or criminal punishment related to the
securities market, and have not involved in major civil litigation or arbitration related to economic disputes in the
last five years. 4. The main management personnel of Rising Capital have not failed to repay large debts on schedule,
failed to fulfill their commitments, been taken administrative supervision measures by the CSRC or been disciplined
by any stock exchange in the last five years.
Date of commitment making: 27 October 2021
Term of commitment: Five years prior to the date of issue of commitment.
Fulfillment: Complete
(5) Commitment maker: NATIONSTAR and Sigma
Contents of Commitment: NATIONSTAR and Sigma have not been investigated by judicial organs for suspected
crimes or by the CSRC for suspected violations of laws and regulations, and have not been subject to major
administrative punishment or criminal punishment in the last five years.


                                                                                                                 318
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


Date of commitment making: 27 October 2021.
Term of commitment: Five years prior to the date of issue of commitment.
Fulfillment: Complete
(6) Commitment maker: Directors, supervisors and senior management personnel of NationStar Optoelectronics
and Sigma
Contents of Commitment: NationStar Optoelectronics and Sigma have not been investigated by judicial organs for
suspected crimes or by the CSRC for suspected violations of laws and regulations, and have not been subject to
major administrative punishment or criminal punishment in the last five years.
Date of commitment making: 27 October 2021.
Term of commitment: Five years prior to the date of issue of commitment.
Fulfillment: Complete
8. Commitment on compensation for possible violations of laws and regulations by NationStar
Optoelectronics
Commitment maker: Rising Holdings Group, Electronics Group, and Rising Capital
Contents of Commitment: If NationStar Optoelectronics is subject to administrative penalties such as accountability
and fines by relevant competent departments after the completion of this trading due to the illegal acts of NationStar
Optoelectronics before the completion of this acquisition, they promise to fully bear the losses of NATIONSTAR or
FSL, as well as the expenses and fees under punishment or recourse, to ensure that NationStar Optoelectronics or
FSL will not suffer any economic losses.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
9. Commitment on explanation of confidentiality measures and confidentiality system adopted for this
trading
Commitment maker: Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: 1. During the preliminary negotiation between the listed company and the counterparty
on this trading, necessary and sufficient confidentiality measures were taken to limit the scope of knowledge of
relevant sensitive information. According to the requirements of the SZSE, the listed company have completed the
submission and online reporting of the memorandum of trading process, relevant materials of insider information
insiders. The listed company have hired independent financial advisers, legal advisers, audit institutions, valuation
institutions and other intermediaries, and signed confidentiality agreements or appointment agreements with
confidentiality clauses with the above intermediaries, clearly stipulating the scope of confidential information and
the confidentiality responsibilities of each intermediary.
Date of commitment making: 27 October 2021.
Term of commitment: Until the completion of this trading.
Fulfillment: In execution.
10. Commitment on the truthfulness, accuracy and completeness of the information provided during this
major asset restructuring
(1) Commitment maker: Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: 1. They promise that the information provided is true, accurate and complete, and there
are no false records, misleading statements or material omissions. 2. They have provided relevant information and
documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related
to this trading to the intermediaries. They promise that the copies or photocopies of the documents and materials
provided are consistent with the originals, and that the signatures and seals of the documents and materials are


                                                                                                                    319
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


authentic, and the signatories of the documents have been legally authorized and effectively signed the documents;
that there are no false records, misleading statements or material omissions. 3. They promise that the explanations
and confirmations issued by them are true, accurate and complete, and there are no false records, misleading
statements or material omissions. 4. During this trading, they will disclose the information about this trading in a
timely manner in accordance with relevant laws and regulations, the CSRC and the SZSE, and ensure the
authenticity, accuracy and completeness of such information. 5. They shall bear legal responsibility for the
authenticity, accuracy and completeness of the information, documents, materials, explanations and confirmations
provided. In case of any violation or losses caused to the listed company, investors, parties to the trading and
intermediaries participating in this trading, they will be liable for compensation according to law. 6. Where the
information provided or disclosed by them in this trading is suspected of false records, misleading statements or
material omissions, and they are filed for investigation by the judicial organ or by the CSRC, the shares with
interests in the listed company will not be transferred until the investigation conclusion is formed.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
(2) Commitment maker: NationStar Optoelectronics
Contents of Commitment: NationStar Optoelectronics has provided the necessary, true, accurate, complete and
effective documents, materials or oral statements and explanations for this trading at this stage, and there is no
concealment, falsehood or material omission. The copies or photocopies of the documents provided are consistent
with the original materials or originals. The signatures and seals on the documents and materials provided are
authentic, and NationStar Optoelectronics has fulfilled the legal procedures required for such signatures and seals
and obtained legal authorization. All the facts stated and explained are consistent with the facts that happened.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
(3)Commitment maker: Sigma
Contents of Commitment: 1. Sigma has provided relevant information and documents (including but not limited to
original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries
providing professional services of auditing, valuation, legal and financial consultancy for this trading. Sigma
promises that the copies or photocopies of the documents and materials provided are consistent with the originals,
and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents
have been legally authorized and effectively signed the documents; that the provided information and documents are
authentic, accurate and complete and that there are no false records, misleadin g statements or material omissions.
FSL also promises to bear individual and joint and several liability. 2. Sigma promises that the information provided
is true, accurate and complete. In case of any losses caused to investors due to any false presentations, misleading
statements or material omissions in the information provided, Sigma will be liable for compensation according to
law.
Date of commitment making: 27 October 2021
Term of commitment: Long-standing..
Fulfillment: In execution.
11. Commitment on the clarity of the underlying assets of this major asset restructuring
(1) Commitment maker: Electronics Group
Contents of Commitment: Electronics Group promises that the 100% equity of Sigma it held is clear in ownership
and is not subject to any dispute or potential dispute, and there is no situation affecting its legal existence; and


                                                                                                                  320
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that may
lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the relevant
judicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction or
prohibition of transfer of the above-mentioned equity controlled by Electronics Group.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
(2) Commitment maker: Rising Group
Contents of Commitment: Rising Group promises that 46,260,021 shares of NationStar Optoelectronics it held is
clear in ownership and is not subject to any dispute or potential dispute, and there is no situation affecting its legal
existence; the above shares are not subject to any other pledges, guarantees or third-party interests or restrictions
and there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that
may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the
relevant judicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction or
prohibition of transfer of the above-mentioned equity controlled by Rising Group.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
(3) Commitment maker: Rising Capital
Contents of Commitment: Rising Capital promises that 5,791,924 shares of NationStar Optoelectronics it held is
clear in ownership and is not subject to any dispute or potential dispute, and there is no situation affecting its legal
existence; the above shares are not subject to any other pledges, guarantees or third-party interests or restrictions
and there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that
may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the
relevant judicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction or
prohibition of transfer of the above-mentioned equity controlled by Rising Group.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
(4)Commitment maker: Sigma
Contents of Commitment: Among 79,753,050 shares of tradable shares with unlimited selling conditions of
NationStar Optoelectronics held by Sigma, 39,876, 500 shares were pledged for Guangdong Electronics
Information Industry Group Ltd. As of the date of issuance of this commitment, the pledge of the above shares has
been released. However, the Maximum Pledge Contract for Stocks of Listed Companies (No.: XYYZZ (BY)
No.201906280001-2) signed by Sigma and Guangzhou Branch of Industrial Bank Co., Ltd. has not been dissolved.
Guangdong Electronics Information Industry Group Ltd. has promised that it will not add any new loans to
Guangzhou Branch of Industrial Bank Co., Ltd. as a borrower during the validity period of the guarantee, and that it
will not substantially assume any guarantee responsibility due to the Maximum Pledge Contract for Stocks of Listed
Companies. Except as aforesaid, the asset ownership of Sigma is clear, there is no dispute or potential dispute, and
there is no situation affecting the legal existence. There is no entrusted shareholding or trust shareholding,
restriction or prohibition of transfer of the above-mentioned equity controlled by Rising Holdings Group.
Date of commitment making: 27 October 2021
Term of commitment: Long-standing.
Fulfillment: Complete


                                                                                                                    321
Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021


12. Commitment on compliance of this major asset restructuring with Several Provisions on the Reduction of
Shares by Shareholders, Directors and Supervisors of Listed Companies
Commitment maker: Rising Group and Rising Capital
Contents of Commitment: 1. They are not subject to any securities and futures crimes as stipulated in Article 6 of
Several Provisions on the Reduction of Shares by Shareholders, Directors and Supervisors of Listed Companies.
During the period when the CSRC or the judicial organ filed a case for investigation, and less than six months
after the administrative penalty decision and criminal judgment were made, there was no situation that the shares
of NATIONSTAR could not be reduced due to violation of the rules of stock exchanges and public censure by
stock exchanges for less than three months. 2. In case of any violation or losses caused to NATIONSTAR,
investors, parties to the trading and intermediaries participating in this trading, they will be liable for
compensation according to law.
Date of commitment making: 27 October 2021.
Term of commitment: Until the completion of this trading.
Fulfillment: In execution.
13. Commitment on the release of credit guarantee
Commitment maker: Electronics Group
Contents of Commitment: 1. As of the date of issuance of the Letter of Commitments, Sigma has signed the
Maximum Guarantee Contract (Contract No.: XYYBZ (BY) No.201906280001-1) and the Maximum Pledge
Contract for Stocks of Listed Companies (Contract No.: XYYZZ (BY) No.201906280001-2) with Guangzhou
Branch of Industrial Bank Co., Ltd. Sigma will provide the maximum guarantee and pledge guarantee for the debt of
Electronics Group, with the guarantee amount of RMB400 million (in words: RMB Four Hundred Million), and the
guarantee will be valid from 28 June 2019 to 27 June 2022. Electronics Group promises that on the date of issuance
of this Letter of Commitment, all the loans involved in the Maximum Guarantee Contract and the Maximum Pledge
Contract for Stocks of Listed Companies have been repaid, there is no debt based on the guarantee under the above
contracts, and 39,876,500 shares of NationStar Optoelectronics held by Sigma have been released from pledge. At
the same time, Electronics Group further makes an irrevocable commitment that it will not add any new loans to
Guangzhou Branch of Industrial Bank Co., Ltd. as a borrower before the expiration date of the Maximum Guarantee
Contract and the Maximum Pledge Contract for Stocks of Listed Companies, so as to ensure that Sigma will not
actually assume any guarantee responsibilities due to the above guarantee contracts. 2. Electronics Group promises
that it will not arrange for Sigma to add any form of guarantee before the completion of the delivery of Sigma's
equity in this trading. 3. In case of any violations of the above commitments, Electronics Group shall solve and
eliminate the above situation within ten days, and bear corresponding legal responsibilities to Sigma and FSL.
Date of commitment making: 27 October 2021
Term of commitment: Until the completion of this trading.
Fulfillment: In execution.
14. Commitment on no ownership dispute in equity
Commitment maker: Sigma
Contents of Commitment: 1. Sigma promises that all its registered capital has been paid in. 2. Sigma promises that
all existing shareholders contribute their own funds to hold shares, there is no situation such as holding shares on
behalf of them, and there is no dispute or potential dispute between shareholders over their shares.
Date of commitment making: 27 October 2021
Term of commitment: Long-standing.
Fulfillment: In execution.
15. Commitment on explanation on litigation and administrative punishment


                                                                                                                322
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


Commitment maker: Sigma
Contents of Commitment: As of the date of issuance of this note, Sigma and its wholly-owned and controlled
subsidiaries have no outstanding or foreseeable major lawsuits, arbitrations and administrative penalties that have a
significant adverse impact on this trading. As of the date of issuance of this note, the directors, supervisors and
senior management personnel of Sigma have no pending or foreseeable major lawsuits, arbitrations and
administrative penalties that have a significant adverse impact on this trading.
Date of commitment making: 27 October 2021
Term of commitment: Before the date of issuance of the commitment.
Fulfillment: Complete
16.About absence of insider trading
Commitment maker: Key management personnel of Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: They promise that they will not disclose the relevant insider information of this trading or make use of
the insider information for insider trading; 2. As of the issuance date of the Report on Major Asset Purchase and Related Party
Trading of Foshan Electrical and Lighting Co., Ltd. (Draft), they have not been placed on file for investigation or criminal
investigation due to suspected insider trading related to this trading, and have not been subject to administrative punishment by the
CSRC or criminal responsibility investigated by judicial organs according to law for insider trading related to any major asset
restructuring, and have not been prohibited from engaging in any major asset restructuring of listed companies according to A rticle
13 of the Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset Restructuring of
Listed Companies in the last 36 months; 3. In case of violation of the above commitments, they will bear all losses caused to the
listed company and its shareholders.
Date of commitment making: 27 October 2021
Term of commitment: From the date of the issuance of the letter of commitment until the completion of this trading
Fulfillment: In execution.

8. Other

Naught


XIII. Stock Payment

1. The Overall Situation of Stock Payment

□Applicable √ Not applicable


2. The Stock Payment Settled in Equity

□Applicable √ Not applicable


3. The Stock Payment Settled in Cash

□Applicable √ Not applicable


4. Modification and Termination of the Stock Payment

Naught

                                                                                                                                 323
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


5. Other

Naught


XIV. Commitments and Contingency

1. Significant Commitments

Significant commitments on the balance sheet date

1. Commitment about cash dividends
Commitment maker: The Company
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. Commitment on the development of Haikou plot
In November 2021, Hainan Technology, a wholly-owned subsidiary of the Company, acquired an industrial land
located in Mei'an Science and Technology New City, Haikou, with a land area of 34,931.13 square meters and a
land price of RMB26,596,784.43. In the same month, Hainan Technology signed the Agreement on Industrial
Project Development and Land Access with Haikou National High-tech Industrial Development Zone Management
Committee (hereinafter referred to as “Haikou Development Zone Management Committee”). The agreement
stipulates that the above-mentioned plots are used for the development of marine lighting R&D and manufacturing
base projects, and the investment in fixed assets is about RMB314 million (including plant, equipment and land,
equivalent to RMB6 million per mu). Hainan Technology promises to complete the planning scheme design within
two months from the date of signing the Confirmation of Listing and Transferring the Right to Use State-owned
Construction Land; complete the construction drawing design within three months after completing the planning
scheme design and obtain the Building Construction Permits and start construction at the same time (subject to the
foundation concrete pouring of the main buildings). The project will be put into production within 18 months from
the date of signing the Confirmation of Listing and Transferring the Right to Use State-owned Construction Land.
From the date of signing the contract to the first year after the project is put into production, the accumulated tax
payment is not less than RMB10 million, the accumulated tax payment in the first two years is not less than
RMB27.4 million, the accumulated tax payment in the first three years is not less than RMB67.1 million, the
accumulated tax payment in the first four years is not less than RMB117 million, and the accumulated tax payment
in the five years is not less than RMB203 million. The total industrial output value (or revenue) in the first year after
the project is put into production is not less than RMB218 million, the accumulated value in the first two years is not
less than RMB433 million, the accumulated value in the first three years is not less than RMB929 million, the
accumulated value in the first four years is not less than RMB1.548 billion, and the accumulated value in the five
years is not less than RMB2.62 billion. If the project fails to start construction within 12 months from the date of
signing the Confirmation of Listing and Transfering of State-owned Construction Land Use Rights due to Hainan
Technology reasons, the Haikou Development Zone Management Committee has the right to unilaterally terminate
the contract and the municipal government will recover the land use rights according to law; if the total amount of
tax paid in the year after putting into production does not reach the annual agreement, Hainan Technology shall pay
liquidated damages to Haikou Development Zone Management Committee according to the difference; if Hainan


                                                                                                                     324
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


Technology has idle land due to government reasons and force majeure, the municipal government shall collect idle
land fees or recover the right to use state-owned construction land.



2. Contingency

(1) Significant Contingency on Balance Sheet Date

1. 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. On 28 October 2021, the Civil Judgment of Foshan
Intermediate People's Court ((2018) Y06MZ No.6382) ruled that the preserved goods should be deducted from the
payment of RMB3 million owed by Beijing Zhengshi, and Beijing Zhengshi should pay the balance of
RMB11,220,827.14 and liquidated damages to the Company, and Jiang Zhenghao should bear joint and several
liabilities. As of the date of this report, the above balance has not been implemented. On 16 December 2021, the
Company applied to the court for compulsory enforcement, and on 21 February 2022, it received the court's order
restricting the consumption of Beijing Zhengshi and Jiang Zhenghao.
2. Litigation between Foshan Kelian and some owners
Due to the late delivery of housing by Foshan Kelian, three owners (plaintiffs) of the housing filed a lawsuit against
Foshan Kelian and Shenzhen Chuanglian Real Estate Agency Co., Ltd. (hereinafter referred to as "Shenzhen
Chuanglian") with Chancheng District People's Court of Foshan City in October 2021 (case number: (2021)
Y0604MC No.41627, No.41628 and No.41629 respectively), requesting: 1. Terminate the Commodity House
Purchase and Sales Contract entered into between the plaintiffs and Foshan Kelian; 2. Order the two defendants to
jointly refund the house price and interest of RMB1,999,544.00 (based on the total house price, calculated at an
annual interest rate of 4.35% from 1 October 2020 to the actual refund date), compensate for losses of
RMB71,185.48 (including property management and maintenance fund and deed tax), and bear liquidated damages
of RMB 149,008.00 (calculated according to the total house price), totaling RMB2,219,737.48 3. The litigation
costs in this case shall be borne by the two defendants. The above case has been heard on 30 December 2021, and as
of the date of this report, the above case has not been concluded.
3. Litigation between Foshan Kelian and Shenzhen Chuanglian
In April 2021, Foshan Kelian and Shenzhen Chuanglian signed the Exclusive Sales Agreement of Property of
Foshan Kelian Center Project. Both parties confirm that the original contract was terminated, Shenzhen
Chuanglian's agency sales right was terminated, and it was unable to fulfill the exclusive purchase of the target
property. However, Shenzhen Chuanglian was responsible for handling the follow-up related matters such as the
decoration and repossession of 32 apartments that have been sold. On the premise that Shenzhen Chuanglian fulfills


                                                                                                                  325
Foshan Electrical and Lighting Co., Ltd.                                                           Annual Report 2021


the terms agreed in this agreement, Foshan Kelian will refund part of the deposit of the original contract in batches.
In December 2021, Shenzhen Chuanglian filed a lawsuit with Chancheng District People's Court of Foshan City
(Case No.: (2021) Y0604MC No.42183). On the grounds that Foshan Kelian failed to deliver the house to the owner
before July 31, 2021, which made it impossible to achieve the conditions agreed in the termination agreement, it
requested to order the Company to return the money of RMB5,572,000.00 and interest of RMB50,000.00
(provisional), pay the lawyer's fee of RMB98,000.00 to Shenzhen Chuanglian and bear all the litigation costs of this
case, totaling RMB5,720,000.00 (provisional). The case was heard on 11 February 2022, and as of the date of this
report, it has not yet been concluded. As of the date of this report, the case has not been concluded.
4. Sales contract disputes between Nanning Liaowang and Hubei Meiyang
Nanning Liaowang filed a lawsuit with Xiangyang High-tech Development Zone People's Court for a dispute over
the sales contract with Hubei Meiyang Automobile Industry Co., Ltd. (hereinafter referred to as "Hubei Meiyang"),
demanding that Hubei Meiyang pay RMB590,948.44 as payment for goods and RMB59,000 as liquidated damages.
After coordination by the court, both parties voluntarily reached the following mediation agreement: Hubei
Meiyang made the goods payment of RMB196,890.00 before June 30 and July 31 respectively and fully paid the
remaining payment of RMB197,168.44 before 31 August, 2021. If the defendant Hubei Meiyang failed to fulfill the
payment obligations as agreed in any of the above periods, Nanning Liaowang has the right to apply to the court for
compulsory execution of the actual outstanding payment. Up to now, Hubei Meiyang has not fulfilled its payment
obligations. Nanning Liaowang has applied for compulsory execution. The court has not found any enforceable
property, and has returned the litigation costs borne by Nanning Liaowang.
5. Technology entrusted development contract disputes between Nanning Liaowang and Chongqing Meiwan
Nanning Liaowang has a dispute with Chongqing Meiwan New Energy Automobile Technology Co., Ltd.
(hereinafter referred to as "Chongqing Meiwan") over the entrusted development contract of technology, and filed
an arbitration application with China Chongqing Arbitration Commission (Case No.: (2020) YZ Zi No.3414),
demanding that Chongqing Meiwan pay RMB4,702,100 for technology development, RMB707,300 for late
payment and RMB50,000 for attorney fees, totaling RMB5,459,400 (the above amount is provisional).
On 19 March 2021, China Chongqing Arbitration Commission ruled as follows: Chongqing Meiwan paid
RMB4,702,100 to Nanning Liaowang, paid liquidated damages for late payment (based on the payment, calculated
according to the judgment), paid attorney fees of RMB50,000, and the arbitration fee of RMB55,200 in this case
was borne by Chongqing Meiwan. This award is final. Because Chongqing Meiwan failed to fulfill its payment
obligations according to the arbitration award, Nanning Liaowang applied to Chongqing No.1 Intermediate People's
Court for compulsory execution, and was allowed to file a case for execution on 6 July, 2021 (Case No.: (2021)
Y01Z No.1419). On 23 September, 2021, Chongqing No.1 Intermediate People's Court made an execution ruling:
The execution procedure was terminated because no property available for execution was found yet.
On 6 December 2021, Chongqing No.5 Intermediate People's Court made a civil ruling ((2021) Y05PS No.504),
ruling to accept the bankruptcy liquidation case of Chongqing Meiwan. On 16 December 2021, Chongqing No.5
Intermediate People's Court made a decision ((2021) Y05P No.343), appointing Sichuan Finding (Chongqing) Law
Firm as the manager of Chongqing Meiwan. On 4 January 2022, Nanning Liaowang received the Notice of
Creditor's Rights Declaration under Bankruptcy Liquidation of Chongqing Meiwan. On 26 January 2022, Nanning
Liaowang collected the information according to the notice requirements and sent it to the administrator of this
bankruptcy liquidation case. On 17 February 2022, the administrator of Chongqing Meiwan held the first creditors'
meeting of the case. On 25 February 2022, the voting notice of the first creditors' meeting was received: The voting
results of the first creditors' meeting of Chongqing Meiwan are as follows: The Debtor's Property Management Plan,
Bankruptcy Estate Conversion Plan, Bankruptcy Estate Distribution Plan and Proposal for Off-site Voting
deliberated by this creditors' meeting were all voted and adopted and are binding on all creditors.


                                                                                                                  326
Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021


6. Sales contract disputes between Nanning Liaowang and Hipro Polymer Materials
Nanning Liaowang has a dispute over the sales contract with Hipro Polymer Materials (Jiangsu) Co., Ltd.
(hereinafter referred to as "Hipro Polymer Materials"), and filed a lawsuit with Nanning Intermediate People's Court
of Guangxi Zhuang Autonomous Region (Case No.: (2021) G01MC No.1028), requesting Hipro Polymer Materials
to compensate Nanning Liaowang for the loss of quality claim amount of RMB21.304 million and the loss of
overdue interest on payment of goods of RMB2.876 million, totaling RMB24.1799 million. Nanning Liaowang
provided the Sales Contract of Car Lamp Parts and Materials, Quality Assurance Agreement and Claim Agreement
related to this case. Due to the quality problems of the surface hardening coating provided by Hipro Polymer
Materials, Nanning Liaowang began to receive three packages of returned parts from the host customer due to the
failure of the surface hardening coating in January 2018. As of 30 October 2020, Nanning Liaowang had 28 batches
of car lamp products returned and claimed by the host customer, with a total of 29,657 car lamp products, resulting
in a loss of RMB21.304 million. After many negotiations, both parties failed to reach a claim agreement.
Because of the emergence of new facts in this case, after comprehensive consideration, Nanning Liaowang decided
to withdraw the lawsuit and then file a new lawsuit and submit evidence to the court. After Nanning Liaowang
submitted the application for withdrawal, Nanning Intermediate People's Court made a ruling on 8 October 2021,
allowing the plaintiff (Nanning Liaowang) to withdraw the lawsuit, and the case acceptance fee was halved (the
application for withdrawal and refund of fees has been submitted to Nanning Intermediate People's Court for
processing). At present, the evidence has been sorted out and is being submitted. At present, the evidence has
basically been collected and sorted out and printed according to the requirements of the lawyer, the first batch of
electronic mail and other evidence applications are notarized, and the second batch of evidence (OEM has sent an
email, to be sorted and checked) are to be collected and notarized, and then submitted for prosecution after the
notarization is completed.
7. Sales contract disputes between Chongqing Guinuo and Hubei Meiyang
Chongqing Guinuo filed a lawsuit with the People's Court of Xiangyang High-tech Development Zone because of
the dispute over the sales contract with Hubei Meiyang, requesting the court to order Hubei Meiyang to pay
RMB8,493,100 for goods and the loss of capital occupation. After the case was filed with the court on 16 August
2019, the court heard the case according to the summary procedure. After mediation by the court, Hubei Meiyang
agreed to make the payment to Chongqing Guinuo in installments, but it actually failed to fulfill the payments.
Chongqing Guinuo has applied to the court for enforcement, which is currently under implementation.
Chongqing Guinuo has a dispute over the sales contract with Hubei Meiyang and filed a lawsuit with the People's
Court of Xiangyang High-tech Development Zone, requesting the court to order Hubei Meiyang to bear the loss of
goods of RMB3,694,800. On 3 May 2021, the People's Court of Xiangyang High-tech Development Zone ruled that
the parts purchase contract and price agreement between Chongqing Guinuo and Hubei Meiyang were dissolved,
and other claims of Chongqing Guinuo were rejected. On 11 January 2022, Chongqing Guinuo applied to the court
for compulsory enforcement, and the court took measures to restrict consumption in Hubei, and because there was
no enforceable property, the court terminated this enforcement.
8. Labor disputes
(1) In June, 2021, a lighting equipment company moved to Gaoming District, Foshan City, and at the same time, it
took compensatory measures such as providing shuttle bus or accommodation to all employees. However, 13
employees were still unwilling to resign with the relocation of the company, and asked the lighting equipment
company to pay economic compensation. On 20 August 2021, Foshan Nanhai District Labor and Personnel Dispute
Mediation and Arbitration Commission issued the Arbitration Order (FNLRZA Zi [2021] No.3423), rejecting the
arbitration request for economic compensation of the above 13 persons. As a result, 12 of them refused to accept the
above arbitration order, and filed a lawsuit with Nanhai District People's Court of Foshan City in September 2021,


                                                                                                                327
Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


requesting confirmation that the labor contract between them and the lighting equipment company was terminated
on 28 June 2021, and ordered the lighting equipment company to pay economic compensation totaling
RMB412,100.00 for terminating the labor contract and bear the litigation costs of this case. As of the date of this
report, the above cases have not been concluded. The case was heard on 13 December 2021 and has not been
concluded as of the date of this report.



(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

As of 31 December 2021, guarantees among Nanning Liaowang and its subsidiaries, Nanning Ruixiang Industrial
Investment Co., Ltd. (formerly named Nanning Guige Precision Industry Technology Co., Ltd., hereinafter
referred to as “Nanning Ruixiang”) were as follows (RMB’0,000):
     Principal      Principal                                                                      Guarantee
                                                Guarantor                   Type of guarantee                      Guarantee balance
      debtor            debtee                                                                      amount
Nanning          Nanning         Kuang Linchang, Liang Xiaoling, Yang      Joint-liability             20,000.00              4,770.00
Liaowang         Branch of       Shiyue, Gu Hanhua, Nanning Ruixiang,      guarantee,
(note 1)         Industrial Bank Qingdao Lighting, Liuzhou Lighting,       mortgage
                                 Chongqing Guinuo
Nanning          Far Eastern     Nanning Liaowang, Nanning Ruixiang,       Joint-liability              2,600.00                724.13
Liaowang         International   Qingdao Lighting, Liuzhou Lighting,       guarantee
(note 2)         Financial       Kuang Linchang, Liang Xiaoling, Yang
                 Leasing Co.,    Shiyue, Gu Hanhua
                 Ltd.
Liuzhou          Nanning         Nanning Liaowang, Liuzhou Lighting,       Joint-liability             15,000.00              5,000.00
Lighting (note Branch of         Kuang Linchang, Liang Xiaoling, Yang      guarantee,
3)               Industrial Bank Shiyue, Gu Hanhua                         mortgage
Chongqing        Far Eastern     Nanning Liaowang, Nanning Ruixiang,       Joint-liability              3,990.00              1,218.23
Guinuo (note International       Qingdao Lighting, Liuzhou Lighting,       guarantee
4)               Financial       Kuang Linchang, Liang Xiaoling, Yang
                 Leasing Co.,    Shiyue, Gu Hanhua
                 Ltd.
      Total             ——                        ——                           ——                41,590.00             11,712.36
Note 1: Nanning Liaowang and Nanning Branch of Industrial Bank signed the Working Capital Loan Contract (XYGCBLJ Zi (2021)
No.1001), with a loan amount of RMB47.7 million (from 1 February 2021 to 1 February 2022). Among them, Nanning Liaowang
provides mortgage guarantee with the immovable property owned as collateral, and the balance of its creditor's rights does not exceed
the maximum mortgage principal of RMB72.3444 million. The mortgaged real estate is a) YG (2017) NNSBDCQZ No.0065501; b)
EG (2017) NNSBDCQZ No.0065499; c) SG (2017) NNSBDCQZ N o.0065498; d) SG (2017) NNSBDCQZ No.0065497; Nanning
Ruixiang provides mortgage guarantee with the immovable property owned as collateral, and the balance of its creditor's rights does not
exceed the maximum mortgage principal of RMB24.0445 million. The mortgaged real estate is: e) WG (2017) NNSBDCQZ
No.0064815; f) LG (2017) NNSBDCQZ No.0064833; g) QG (2017) NNSBDCQZ No.0064840. Kuang Linchang, Liang Xiaoling,


                                                                                                                                   328
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


Yang Shiyue, Gu Hanhua, Nanning Ruixiang, Qingdao Lighting, Liuzhou Guige Lighting and Chongqing Guinuo jointly assume joint
and several guarantee liabilities for all creditor's rights balances under the maximum principal limit of RMB200 million, and the
guarantee amount is valid from 30 December 2019 to 30 December 2024.
In addition to the above mortgages and guarantees, Chongqing Guinuo takes its immovable property as collateral for the maximum
balance of its main creditor's rights not exceeding RMB122,294,700, and the mortgage amount is valid from 15 June 2020 to 15 June
2023. The mortgaged real estate is a) YY (2020) LJXQBDCQ No.000436821, b) EY (2020) LJXQBDCQ No.000437330, c) SY (2020)
LJXQBDCQ No.000437429 and d) SY (2020) LJXQBDCQ No.000437448.
Note 2: On 18 May 2020, Nanning Liaowang and Far East International Financial Leasing Co., Ltd. (hereinafter referred to as "Far East
Leasing") signed the Sale Lease Contract (Contract No.: IFELC20DE24MZT-L-01), with a financing loan amount of RMB26 million,
and the actual loan amount obtained was RMB24 million (the difference with the financing loan amount was RMB2 million as a deposit,
which was withheld by Far East Leasing), and the loan term of finance lease is 30 months. Nanning Ruixiang, Liuzhou Guige Lig hting,
Qingdao Lighting, Yang Shiyue, Gu Hanhua, Kuang Linchang and Liang Xiaoling provide joint and several liability guarantee for this
financing loan. Nanning Liaowang signed the Ownership Transfer Agreement with Far East Leasing. According to the General Terms
and Conditions of the Sale and Return Lease Contract: Under the condition that Party B (Nanning Liaowang, the same below) enjoys all
the rights under this contract and does not affect Party B's normal use, Party A (Far East Leasing, the same below) may trans fer its
ownership of the leased items to any third party, or mortgage the leased items and other guarantees, and the validity of the contract will
not be affected. Party A undertakes not to adversely affect Party B's rights (especially the performance of this contract) due to the
transfer/mortgage. Party B shall perform this contract according to the contract, and Party A shall guarantee that Party B shall have the
right to use the leased items and the ownership after the expiration of the lease period according to the contract.
Note 3: Liuzhou Guige Lighting and Nanning Branch of Industrial Bank signed loan contracts numbered WYZH2021012600174,
WYZH2021042100164 and WYZH2021042100146, borrowing RMB10 million (from 26 January 2021 to 26 January 2022), RMB20
million (from 21 April 2021 to 21 April 2022), and RMB20 million (from 22 April 2021 to 22 April 2022) respectively. Among them,
Liuzhou Guige Lighting provides mortgage guarantee with the real estate owned by Liuzhou Guige Lighting as collateral for the
maximum balance of its main creditor's rights not exceeding RMB150 million, and the guarantee amount is valid from 30 December
2019 to 30 December 2024. The mortgaged real estate is: a) YG (2019) LZSBDCQ No.0191988, located at No.1 Factory Building,
No.12 Hengsi Road, Cheyuan; b) EG (2019) LZSBDCQ No.0191991, located in the mold center of No.12 Hengsi Road, Cheyuan; c)
SG (2019) LZSBDCQ No.0191994, located in the logistics gate guard room at No.12 Hengsi Road, Cheyuan; d) SG (2019) LZSBDCQ
No.0191995, located in the guard room of Gate 12, Hengsi Road, Cheyuan. Nanning Liaowang, Kuang Linchang, Liang Xiaoling,
Yang Shiyue and Gu Hanhua provide joint and several liability guarantee with the maximum balance of principal creditor's rights not
exceeding RMB150 million exposure, and the guarantee amount is valid from 30 December 2019 to 30 December 2024.
Note 4: On 21 June 2020, Chongqing Guinuo signed the Sale and Return Lease Contract with Far East Leasing (Contract No.:
IFELC20DE2XZXM-L-01), with a financing loan amount of RMB39.9 million and an actual loan amount of RMB35.99 million (the
difference with the financing loan amount is RMB4 million as a deposit, which is withheld by Far East Leasing), and the loan term of
finance lease is 30 months. This financial lease loan is mortgaged by Chongqing Guinuo with 28 fixed assets and 104 molds owned by
itself. Chongqing Guinuo signed the Ownership Transfer Agreement with Far East Leasing, and Nanning Liaowang, Nanning Ruixiang,
Liuzhou Guige Lighting, Qingdao Lighting, Liang Xiaoling, Yang Shiyue, Gu Hanhua and Kuang Linchang provided joint and severa l
liability guarantee for the lease loan. According to the General Terms and Conditions of the Sale and Return Lease Contract: Under the
condition that Party B (Chongqing Guinuo, the same below) enjoys all the rights under this contract and does not affect Party B's
normal use, Party A (Far East Leasing, the same below) may transfer its ownership of the leased items to any third party, or mortgage
the leased items and other guarantees, and the validity of the contract will not be affected. Party A undertakes not to adversely affect
Party B's rights (especially the performance of this contract) due to the transfer/mortgage. Party B shall perform this contract according
to the contract, and Party A shall guarantee that Party B shall have the right to use the leased items and the ownership after the
expiration of the lease period according to the contract.




                                                                                                                                      329
Foshan Electrical and Lighting Co., Ltd.                                                         Annual Report 2021


XV. Events after Balance Sheet Date

1. Significant Non-adjusted Events

Naught


2. Profit Distribution

The Company's profit distribution plan for 2021 is as follows: Based on the total share capital of 1,361,994,647
shares disclosed in the Company's 2021 annual report, deducting 13 million A shares of the remaining
repurchased shares in the Company's special repurchase account, that is, 1,348,994,647 shares, the Company
intends to distribute a cash dividend of RMB1 (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.

3. Sales Return

N/A

4. Notes to Other Events after Balance Sheet Date

(I) Profit Distribution Plan
The Company's profit distribution plan for 2021 is as follows: Based on the total share capital of 1,361,994,647
shares disclosed in the Company's 2021 annual report, deducting 13 million A shares of the remaining repurchased
shares in the Company's special repurchase account, that is, 1,348,994,647 shares, the Company intends to
distribute a cash dividend of RMB1 (tax included) for every 10 shares held by A-share and B-share holder and 0
bonus shares (tax included and dividends for B-share holders to be paid in the Hong Kong dollars). Where the total
shares of the Company with profit distribution rights change due to the issuance of new shares, the grant of equity
incentives and other reasons during the implementation of this profit distribution plan, the Company will adjust the
total dividends accordingly according to the principle of unchanged distribution ratio per share.
The proposal is still to be submitted to the 2021 Annual General Meeting for review.

(II) Cancellation of repurchased shares
The Company held the 26th meeting of the ninth Board of Directors on 14 January 2022, where the Proposal on
Cancelling Some Shares of the Company's Repurchase Special Securities Account was deliberated and adopted,
and used the repurchased 13 million A shares for the equity incentive plan. The remaining 18,952,995 A shares
and 18,398,512 B shares were repurchased, totaling 37,351,507 shares. On 8 February 2022, it was confirmed by
Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. that the number of repurchased public
shares cancelled this time was 37,351,507, accounting for 2.67% of the total share capital of the Company before
cancellation, including 18,952,995 A shares and 18,398,512 B shares. Upon completion of this share cancellation,
the total share capital of the Company was changed from 1,399,346,154 shares to 1,361,994,647 shares. Industrial
and commercial change procedures are still in process.

(III) Progress in major asset restructuring
The Company held the 19th meeting of the ninth Board of Directors and the Third Extraordinary General Meeting in
2021 on 27 October 2021 and 31 December 2021 respectively, where the untport on Major Asset Purchase and

                                                                                                                330
Foshan Electrical and Lighting Co., Ltd.                                                       Annual Report 2021


Related Party Trading of Foshan Electrical and Lighting Co., Ltd. (Draft) and Its Summary" and other proposals
related to this trading was deliberated and adopted. It was agreed that the Company will purchase 100% equity of
Sigma held by Electronics Group (Sigma holds 79,753,050 shares of NationStar Optoelectronics) and 52,051,945
tradable shares of NationStar Optoelectronics held by Rising Group and Rising Capital in total by paying cash.
According to the resolution of the Shareholders' General Meeting, the Company organized and implemented the
work related to this major asset restructuring. As of 25 February 2022, the Company has completed the 100% equity
transfer and industrial and commercial change procedures of Sigma, and Sigma has become a wholly-owned
subsidiary of the Company. The 52,051,945 tradable shares of NationStar Optoelectronics held by Rising Group
and Rising Capital with unlimited selling conditions have been transferred and registered to the Company, and the
delivery of 52,051,945 shares of NationStar Optoelectronics has been completed. So far, the Company and its
wholly-owned subsidiary Sigma hold a total of 132,819,895 shares of NationStar Optoelectronics, accounting for
21.48% of the total share capital of NationStar Optoelectronics, and the Company has become the controlling
shareholder of NationStar Optoelectronics.



XVI. Other Significant Events

1. The Accounting Errors Correction in Previous Period

Naught


2. Debt Restructuring

Naught


3. Assets Replacement

Naught


4. Pension Plan

Naught


5. Discontinued Operations

Naught


6. Segment Information

Naught


7. Other Significant Transactions and Events with Influence on Investors’ Decision-making

Naught



                                                                                                             331
Foshan Electrical and Lighting Co., Ltd.                                                                               Annual Report 2021


8. Other

(I) Demolition Matters of Nanjing Fozhao
According to the Decision of Nanjing Lishui District People's Government on House Expropriation on
State-owned Land of Honglan Street Affordable Housing Project in Lishui District (NLFZ Zi [2020] No.18), The
house owned by Nanjing Fozhao, a wholly-owned subsidiary of the Company, located at 688 Jinniu North Road,
Honglan Street, Lishui District, Nanjing (the total construction area of the house is 44,558.09 square meters,
which is an industrial house; The land use right covers an area of 135,882.4 square meters, which is industrial land)
belongs to the expropriation scope, and the compensation, relocation fee, loss fee of production and business
suspension and other rewards of the expropriated assets total RMB183,855,895.00. As of 31 December 2021,
Nanjing Fozhao has received 30% of the compensation, that is, RMB55,160,000.00, and the land use right
certificate and house ownership certificate of the assets involved have been cancelled. As of the date of this report,
the site handover is still in progress. After the demolition work is completed, Nanjing Fozhao plans to carry out
liquidation and cancellation.

XVII. Notes of Main Items in the Financial Statements of the Company as the Parent

1. Accounts Receivable

(1) Category of Accounts Receivable

                                                                                                                                  Unit: RMB

                                          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

Accounts receivable
for which bad debt      11,220,8               8,976,66               2,244,165 15,257,66                9,569,331               5,688,330.8
                                      1.00%                80.00%                               1.40%                  62.72%
provision separately      27.14                    1.72                     .42      2.85                      .99                           6
accrued

Of which:

Accounts receivable
for which bad debt      1,108,64               51,950,3               1,056,691 1,073,149                48,124,87               1,025,024,7
                                    99.00%                   4.69%                             98.60%                   4.48%
provision accrued       1,819.86                  20.95                 ,498.91    ,615.48                    2.12                    43.36
by group

Of which:

(1) Common              1,022,00               51,950,3               970,055,3 1,012,031                48,124,87               963,906,50
                                    91.26%                   5.08%                             92.98%                   4.76%
business portfolio      5,643.56                  20.95                  22.61     ,374.59                    2.12                      2.47

(2) Internal business   86,636,1                                      86,636,17 61,118,24                                        61,118,240.
                                      7.74%                                                     5.62%
portfolio                 76.30                                            6.30      0.89                                                  89


                                                                                                                                           332
Foshan Electrical and Lighting Co., Ltd.                                                                             Annual Report 2021


                         1,119,86               60,926,9              1,058,935 1,088,407              57,694,20                 1,030,713,0
Total                                100.00%                  5.44%                          100.00%                 5.30%
                         2,647.00                   82.67               ,664.33   ,278.33                   4.11                      74.22

Individual withdrawal of bad debt provision by single item:

                                                                                                                                  Unit: RMB

                                                                            Ending balance
          Name
                                  Carrying amount           Bad debt provision        Withdrawal proportion      Reason for withdrawal

                                                                                                               Involved in the lawsuit;
                                                                                                               the Company won in the
Customer A                                11,220,827.14                8,976,661.72                    80.00% first instance judgment
                                                                                                               and not executed
                                                                                                               completely

Total                                     11,220,827.14                8,976,661.72             --                          --

Withdrawal of bad debt provision by group:

                                                                                                                                  Unit: RMB

                                                                               Ending balance
               Name
                                            Carrying amount                  Bad debt provision               Withdrawal proportion

Credit risk portfolio                               1,108,641,819.86                     51,950,320.95                                4.69%

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: RMB

                                  Aging                                                         Ending balance

Within 1 year (including 1 year)                                                                                       1,048,406,539.45

1 to 2 years                                                                                                                24,832,557.94

2 to 3 years                                                                                                                 8,500,312.82

Over 3 years                                                                                                                38,123,236.79

3 to 4 years                                                                                                                17,208,975.28

4 to 5 years                                                                                                                11,978,176.23

Over 5 years                                                                                                                 8,936,085.28

Total                                                                                                                  1,119,862,647.00


(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period

The amount of expected credit loss accrued in the current period is RMB4,387,268.74, and the amount of expected credit loss
recovered or reversed in the current period is RMB0.00.




                                                                                                                                         333
Foshan Electrical and Lighting Co., Ltd.                                                                                Annual Report 2021


(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period

                                                                                                                                    Unit: RMB

                                 Item                                                                Amount

No. 1                                                                                                                         1,036,835.71

No. 2                                                                                                                              117,554.16

Other driblet small amount                                                                                                            100.31

Total                                                                                                                         1,154,490.18

Of which, verification of significant accounts receivable:
                                                                                                                                    Unit: RMB

                                                                                                                        Whether occurred
                                                                                                                           because of
  Name of the entity           Nature               Amount                 Reason               Procedure
                                                                                                                          related-party
                                                                                                                          transactions

                                                                     After litigation and The               approval
                                                                     compulsory           procedure is carried
No. 1                    Payment for goods            1,036,835.71 execution, the other out according to the Not
                                                                     party has no         Company’s rules for
                                                                     enforceable property managing bad debt.

                                                                                          The               approval
                                                                                          procedure is carried
No. 2                    Payment for goods                 117,554.16 Unrecoverable       out according to the Yes
                                                                                          Company’s rules for
                                                                                          managing bad debt.

                                                                                          The               approval
                                                                                          procedure is carried
Other retails accounts Payment for goods                      100.31 Unrecoverable        out according to the Not
                                                                                          Company’s rules for
                                                                                          managing bad debt.

Total                            --                   1,154,490.18            --                       --                      --

Note:
The approval procedure for the verification of accounts receivable during the Reporting Period had been performed in accordance
with provisions of the bad debt management system of the Company.


(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party

                                                                                                                                    Unit: RMB

                                                                        Proportion to total ending
                                      Ending balance of accounts                                             Ending balance of bad debt
         Name of units                                                balance of accounts receivable
                                              receivable                                                               provision
                                                                                    (%)



                                                                                                                                          334
Foshan Electrical and Lighting Co., Ltd.                                                          Annual Report 2021


No. 1                                      166,366,875.25                      14.86%                    4,991,006.26
No. 2                                       89,015,269.51                      7.95%                     2,670,458.09

No. 3                                       72,464,493.55                      6.47%
No. 4                                       26,525,457.91                      2.37%                        795,763.74

No. 5                                       25,411,814.39                      2.27%                        762,354.43

Total                                      379,783,910.61                      33.92%               --


(5) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable

Naught


(6) Derecognition of Accounts Receivable due to the Transfer of Financial Assets

Naught


2. Other Receivables

                                                                                                            Unit: RMB

                    Item                          Ending balance                        Beginning balance

Other receivables                                             511,056,231.24                          462,284,585.09

Total                                                         511,056,231.24                          462,284,585.09


(1) Interest Receivable

Naught


2) Significant Overdue Interest

Naught


3) Information of Withdrawal of Bad Debt Provision

□ Applicable √ Not applicable


(2) Dividends Receivable

Naught




                                                                                                                   335
Foshan Electrical and Lighting Co., Ltd.                                                                              Annual Report 2021


(3) Other Receivables

1) Other Receivables Classified by Account Nature

                                                                                                                               Unit: RMB

                    Nature                               Ending carrying amount                         Beginning carrying amount

Staff borrow and petty cash                                                     3,486,778.81                                7,403,907.26

Performance bond                                                                5,597,832.99                                4,025,073.30

Rent, water & electricity fees                                                  2,564,557.87                                2,989,445.13

VAT export tax refunds                                                          4,674,335.06                                  195,141.85

Other intercourse                                                           497,805,458.10                                450,006,575.72

Total                                                                       514,128,962.83                                464,620,143.26


2) Information of Withdrawal of Bad Debt Provision

                                                                                                                               Unit: RMB

                                   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
                                         454,821.73                 1,880,736.44                                            2,335,558.17
2021

Balance of 1 January
2021 in the Current                  ——                       ——                             ——                      ——
Period

Withdrawal of the
                                         308,426.99                    428,746.43                                             737,173.42
Current Period

Balance of 31 December
                                         763,248.72                 2,309,482.87                                            3,072,731.59
2021

Changes of carrying amount with significant amount changed of loss provision in the current period

□Applicable √Not applicable
Disclosure by aging
                                                                                                                               Unit: RMB

                                 Aging                                                            Ending balance

Within 1 year (including 1 year)                                                                                          488,303,376.34

1 to 2 years                                                                                                               19,335,851.40

2 to 3 years                                                                                                                2,598,983.38

Over 3 years                                                                                                                3,890,751.71



                                                                                                                                      336
Foshan Electrical and Lighting Co., Ltd.                                                                 Annual Report 2021


3 to 4 years                                                                                                   2,377,256.70

4 to 5 years                                                                                                   1,079,847.71

Over 5 years                                                                                                     433,647.30

Total                                                                                                        514,128,962.83


3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period

The amount of expected credit loss accrued in the current period is RMB 737,173.42, and the amount of expected credit loss
recovered or reversed in the current period is RMB0.00




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: RMB

                                                                                  Proportion to total
                                                                                                         Ending balance of
  Name of the entity           Nature         Ending balance           Aging      ending balance of
                                                                                                         bad debt provision
                                                                                 other receivables (%)
No. 1                  Internal business
                                                 395,836,356.26 Within 1 year                 76.99%
                       group
No. 2                  Internal business
                                                  69,983,015.32 Within 2 years                13.61%
                       group
No. 3                  Internal business
                                                  11,931,264.29 Within4 year                   2.32%
                       group
No. 4                  Intercourse accounts        7,060,000.00 Within 1 year                  1.37%             211,800.00

No. 5                  VAT export tax
                                                   4,674,335.06 Within 1 year                  0.91%             140,230.05
                       refunds
Total                            --              489,484,970.93          --                   95.20%             352,030.05


6) Accounts Receivable Involving Government Grants

Naught


7) Derecognition of Other Receivables due to the Transfer of Financial Assets

Naught




                                                                                                                          337
Foshan Electrical and Lighting Co., Ltd.                                                                           Annual Report 2021


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: RMB

                                         Ending balance                                           Beginning balance

         Item                             Depreciation                                              Depreciation
                     Carrying amount                       Carrying value     Carrying amount                            Carrying value
                                            reserve                                                    reserve

Investment to
                     1,061,536,766.02                      1,061,536,766.02      355,584,295.41                          355,584,295.41
subsidiaries

Investment to
joint ventures and
                       181,545,123.09                       181,545,123.09       181,365,016.32                          181,365,016.32
associated
enterprises

Total                 1,243,081,889.11                     1,243,081,889.11      536,949,311.73                          536,949,311.73


(1) Investment to Subsidiaries

                                                                                                                               Unit: RMB

                      Beginning                           Increase/decrease
                                                                                                                         Ending balance
                       balance                                      Depreciation                      Ending balance
    Investee                         Additional        Reduced                                                           of depreciation
                      (carrying                                       reserves           Other        (carrying value)
                                     investment       investment                                                             reserve
                        value)                                      withdrawn

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
Manufacturing
Co., Ltd.

Foshan
Electrical &         35,418,439.76                                                                     35,418,439.76
Lighting


                                                                                                                                       338
Foshan Electrical and Lighting Co., Ltd.                                                      Annual Report 2021


(Xinxiang) Co.,
Ltd.

Guangdong
Fozhao New
Light Sources     50,077,000.00                   50,077,000.00
Technology Co.,
Ltd.

Foshan Haolaite
Lighting Co.,     16,685,000.00                                                     16,685,000.00
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
GMBH

Hunan Keda
New Energy
Investment and    57,850,693.15 40,000,000.00                     -97,850,693.15
Development
Co., Ltd.

Foshan Kelian
New Energy
                                                                  113,000,000.00 170,000,000.00
Technology Co.,                   57,000,000.00
Ltd.

Fozhao
(Hainan)                          150,000,000.0
                                                                                   150,000,000.00
Technology Co.,                               0
Ltd.

Nanning
                                  493,880,163.7
Liaowang Auto                                                                      493,880,163.76
                                              6
Lamp Co., Ltd.

                  355,584,295.4 740,880,163.7                                      1,061,536,766.
Total                                             50,077,000.00    15,149,306.85
                              1               6                                               02




                                                                                                            339
Foshan Electrical and Lighting Co., Ltd.                                                                                   Annual Report 2021


Note: For details, please refer to Section XVII Major Events of the Company's Subsidiaries, 2. Absorption and
Merger of Hunan Keda, of this report.

(2) Investment to Joint Ventures and Associated Enterprises

                                                                                                                                      Unit: RMB

                                                               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           181,365,0                           2,260,497                            2,080,390                           181,545,1
(Nanho)          16.32                                  .27                                   .50                             23.09
Electronic
s Ltd.

             181,365,0                           2,260,497                            2,080,390                           181,545,1
Subtotal
                 16.32                                  .27                                   .50                             23.09

             181,365,0                           2,260,497                            2,080,390                           181,545,1
Total
                 16.32                                  .27                                   .50                             23.09


(3) Other Notes

Naught


4. Operating Revenue and Cost of Sales

                                                                                                                                      Unit: RMB

                                                 Reporting Period                                        Same period of last year
             Item
                                 Operating revenue               Cost of sales               Operating revenue             Cost of sales

Main business                         3,548,713,016.46             3,011,542,500.00                 3,341,450,360.57         2,726,640,272.12

Other business                          169,595,356.00                  142,496,679.53               148,816,741.96            134,309,284.64

Total                                 3,718,308,372.46             3,154,039,179.53                 3,490,267,102.53         2,860,949,556.76




                                                                                                                                                340
Foshan Electrical and Lighting Co., Ltd.                                                             Annual Report 2021


5. Investment Income

                                                                                                               Unit: RMB

                           Item                        Reporting Period                 Same period of last year

Long-term equity investment income
                                                                     38,645,385.25
accounted by cost method

Long-term equity investment income
                                                                         2,260,497.27                       2,351,681.39
accounted by equity method

Investment income from disposal of
                                                                         7,349,443.02                      43,551,565.30
long-term equity investment

Investment income from holding of other
                                                                     23,643,370.02                         14,940,422.96
equity instrument investment

Investment income from financial products
                                                                          971,514.99                       23,451,129.06
and structural deposits

Other                                                                    6,013,450.00                       3,678,150.00

Total                                                                78,883,660.55                         87,972,948.71

Note: Refer to dividends of the subsidiary Lamps & Components Limited.


6. Other

Naught


XVIII. Supple mentary Materials

1. Items and Amounts of Non-recurring Profit or Loss

√ Applicable □ Not applicable
                                                                                                               Unit: RMB

                           Item                            Amount                                Note

Gain/Loss        arising     from   disposal   of
                                                                     82,233,742.26
non-current assets

Government grants recognized in the current
period, except for those acquired in the
ordinary course of business or granted at                            15,971,903.24
certain quotas or amounts according to the
government’s unified standards

Capital occupation charges on non-financial
enterprises that are recorded into current                                881,704.19
profit or loss

Gain/loss from change of fair value of                               10,663,119.44


                                                                                                                     341
Foshan Electrical and Lighting Co., Ltd.                                                                        Annual Report 2021


trading financial assets and liabilities, and
investment gains from disposal of trading
financial    assets    and    liabilities,   and
available-for-sale financial assets, other than
valid hedging related to the Company’s
common businesses

Other non-operating income and expenses
                                                                          10,640,975.11
other than the above

Less: Income tax effects                                                  17,224,178.81

        Non-controlling interests effects                                  3,085,681.16

Total                                                                    100,081,584.27                    --

Others that meets the definition of non-recurring gain/loss:

□ Applicable √ Not applicable
No such cases in the Reporting Period.
Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains and Losses 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                                      4.23%
                                                                                                  0.1854                      0.1836
shareholders of the Company

Net profit attributable to ordinary                                      2.53%                    0.1112                      0.1101
shareholders of the Company after
deduction of non-recurring profit or
loss


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



                                                                                                                                 342
Foshan Electrical and Lighting Co., Ltd.                                              Annual Report 2021


(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




                                                                  Wu Shenghui, legal representative

                                                                Foshan Electrical and Lighting Co., Ltd.

                                                                              30 March 2022




                                                                                                    343