English Translation for Reference Only
Foshan Electrical and Lighting Co., Ltd.
Semi-Annual Report 2011
（Date of disclosure: 17 Aug. 2011）
Important Notice: The Board of Directors, the Supervisory Committee as well as
directors, supervisors and senior executives of Foshan Electrical and Lighting Co.,
Ltd. (hereinafter referred to as the Company) guarantee that there are no significant
omissions, fictitious or misleading statements carried in the Report and will take
individual and joint responsibilities for the truthfulness, accuracy and completeness of
the Report.
Director Mr.Joerg Thaele entrusted Director Francis Michael Piscitelli to attend
the board session for reviewing this report and vote on behalf of him when he
was on a business trip at the moment.
The Abstract of the Semi-Annual Report is extracted from the Semi-Annual Report
2011, which is simultaneously published in www.cninfo.com.cn. For details, investors
are suggested to read the Semi-Annual Report 2011 carefully.
No director, supervisor or senior management staff of the Company is unable to
guarantee or has demur at the factuality, exactness or completeness of the contents in
this Report.
The semi-annual financial report 2011 has not been audited by the accounting firm.
This report is prepared both in Chinese and English. Should there be any difference in
interpretation of the two versions, the Chinese version shall prevail.
Mr. Zhong Xincai, Chairman of the Board as well as the General Manager and person
in charge of accounting work, and Wang Shuqiong, Manager of Financial Department,
hereby confirm that the financial report enclosed in this Semi-Annual Report is true
and complete.
Contents
I. Company Profile………………………………………………………………2
II. Changes in Shares Capital and Particulars about Shares Held by Principal
Shareholders………………………...…………………………………………5
III. Particulars about Directors, Supervisors and Senior Executives……………8
IV. Report of the Board of Directors……………………………………………11
V. Significant Events……………………………………………………………14
VI. Financial Report……………………………………………………………22
VII. Notes to Financial Report ……………………………………………………37
VIII. Documents Available for Reference………………………….……………101
1
English Translation for Reference Only
I. Company Profile
(I) General information
1. Legal name of the Company in Chinese: 佛山电器照明股份有限公司
Abbr.: Foshan Zhaoming
Legal Name of the Company in English: FOSHAN ELECTRICAL AND
LIGHTING CO., LTD.
Abbr.: FSL
2. Stock exchange listed with: Shenzhen Stock Exchange
Short form of the stock: Foshan Zhaoming (A share)
Yue Zhaoming B (B share)
Stock code: 000541 (A share)
200541 (B share)
3. Registered and office address: No. 64, Fenjiang Road North, Chancheng District,
Foshan City, Guangdong Province
Post Code: 528000
International Website: www.chinafsl.com
E-mail: fsl@chinafsl.com
4. Legal representative: Zhong Xincai
5. Secretary of the Board of Directors: Zhou Xiangfeng
Address: No. 64, Fenjiang Road North, Chancheng District, Foshan City,
Guangdong Province
Tel: (0757) 82966062、82810239
Fax: (0757) 82816276
E-mail: fsldsh@126.com
6. Newspapers designated for information disclosing: China Securities Journal,
Securities Times, Hongkong Ta Kung Pao
Website designated by CSRC: http://www.cninfo.com.cn
Place where the interim report is prepared and placed: Secretariat Office of Board
of Directors, Office Building of the Company
(II) Main financial data and indices
1. Main financial data and indices
Unit: RMB Yuan
Increase/decrease at the end of
At the end of this At the end of last
this reporting period compared
reporting period year
with the end of last year (%)
Total assets (Yuan) 3,102,265,236.42 3,128,547,460.46 -0.84%
Owners’ equity attributable to shareholders
2,627,603,894.11 2,766,913,027.29 -5.03%
of the listed company (Yuan)
Share capital (share) 978,563,745.00 978,563,745.00 0.00%
Net assets per share attributable to
shareholders of the listed company 2.69 2.83 -4.95%
(Yuan/share)
2
English Translation for Reference Only
Reporting period
Same period of Increase/decrease year-on-year
(From Jan. to Jun.
last year (%)
2011)
Total operating income (Yuan) 1,095,319,303.24 824,360,344.65 32.87%
Operating profit (Yuan) 151,632,304.43 100,391,784.74 51.04%
Total profit (Yuan) 147,367,757.98 99,393,710.09 48.27%
Net profit attributable to shareholders of the
117,867,457.28 80,817,767.96 45.84%
listed company (Yuan)
Net profit attributable to shareholders of the
listed company after deducting 121,278,591.24 77,499,017.69 56.49%
non-recurring gains and losses (Yuan)
Basic earnings per share (Yuan/share) 0.12 0.08 50.00%
Diluted earnings per share (Yuan/share) 0.12 0.08 50.00%
Weighted average ROE (%) 4.39% 3.12% 1.27%
Weighted average ROE after deducting
4.52% 2.99% 1.53%
non-recurring gains and losses (%)
Net cash flows from operating activities
74,468,557.85 75,605,698.73 -1.50%
(Yuan)
Net cash flows per share from operating
0.08 0.08 0.00%
activities (Yuan/share)
2. Items of non-recurring gains and losses
Unit: RMB Yuan
Note (if
Items of non-recurring gains and losses Amount
applicable)
Gains and Losses on disposal of non-current assets -5,125,258.92
Government subsidies accounted into current income
account, except for those government subsidies closely
related to the Company’s normal operation business, 710,499.98
according with state policies, and sustainably received by
quota or ration
Gain/loss from change of fair value of transactional asset
and liabilities, and investment gains from disposal of
transactional financial assets and liabilities and sellable 14,033.17
financial assets, other than valid period value instruments
related to the Company’s common businesses
Capital occupied from non-financial enterprise recorded into
165,423.00
current gains and losses
Other non-operating income and expense except the
150,212.49
aforesaid items
Impact on income tax 686,488.26
Other gains and losses accorded with definition of
-12,531.94
non-current gains and losses
Total -3,411,133.96 -
3
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3. Difference between PRC GAAP and IFRS
Unit: RMB Yuan
Net profit attributable to shareholders of the Owners’ equity attributable to shareholders
listed company of the listed company
Amount in the Amount in the same
Closing amount Opening amount
reporting period period of last year
According to IFRS 117,867,457.28 80,817,767.96 2,627,603,894.11 2,766,913,027.29
According to PRC
117,867,457.28 80,817,767.96 2,627,603,894.11 2,766,913,027.29
GAAP
Sub-items adjusted according to IFRS and total:
Total difference
between PRC GAAP 0.00 0.00 0.00 0.00
and IFRS
Explanation on
difference between No difference
PRC GAAP and IFRS
4. Net return on equity and earnings per share of the reporting period were accounted
in accordance with requirement in Compilation Rules for Information Disclosures by
Companies That Offer Securities to the Public (No. 9)-Calculation and Disclosure of
Net Return on Equity and Earnings per Share issued by CSRC (Revised in 2010)
Net return on equity
Earnings per share (RMB Yuan)
(%)
Items
Basic earnings per Diluted earnings
Weighted average
share per share
Net profit attributable to
shareholders holding
ordinary shares of the 4.39 0.12 0.12
Company
The first
Net profit attributable to
half year
shareholders holding
of 2011
ordinary shares of the
4.52 0.12 0.12
Company after
deducting non-recurring
profit and loss
4
English Translation for Reference Only
II. Changes in Shares Capital and Particulars about Shares Held by
Principal Shareholders
(I) In the reporting period, the stock structure changed due to the reason that some
restricted shares were released. However, the total shares remained unchanged.
Unit: share
Before the change Increase/decrease (+, - ) After the change
Turning
capital
Proportio Bonus Proportio
Amount New shares reserves Others Sub-total Amount
n (%) shares n (%)
into share
capital
I. Shares subject to 145,690,41 137,286,28
14.89% -8,404,132 -8,404,132 14.03%
trading moratorium 7 5
1. Shares held by the
state
2. Shares held by
state-owned legal
entities
3. Shares held by
other domestic 4,286,189 0.44% 4,286,189 0.44%
investors
Including: shares
held by domestic
3,942,813 0.40% 3,942,813 0.40%
non-state-owned
legal entities
Shares held by
domestic natural 343,376 0.04% 343,376 0.04%
persons
4. Shares held by 140,219,81 131,815,68
14.33% -8,404,132 -8,404,132 13.47%
foreign investors 7 5
Including: shares
131,815,68 131,815,68
held by foreign legal 13.47% 13.47%
5 5
entities
Shares held by
foreign natural 8,404,132 0.86% -8,404,132 -8,404,132 0 0.00%
persons
5. Shares held by
1,184,411 0.12% 1,184,411 0.12%
senior executives
II. Shares not subject
832,873,32 841,277,46
to trading 85.11% 8,404,132 8,404,132 85.97%
8 0
moratorium
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English Translation for Reference Only
1. RMB ordinary 616,056,42 616,056,42
62.96% 62.96%
shares 3 3
2. Domestically listed 216,816,90 225,221,03
22.16% 8,404,132 8,404,132 23.02%
foreign shares 5 7
3. Overseas listed
foreign shares
4. Others
978,563,74 978,563,74
III. Total shares 100.00% 0 0 100.00%
5 5
(II) Statement on the top ten shareholders and the top ten shareholders holding shares
not subject to trading moratorium
Unit: Share
Total number of As at the end of the reporting period, shareholders totaled to 165,696, of which A-share holders amounted to
shareholders 145,294 and B-share holders amounted to 20,402.
Particulars about shares held by the top ten shareholders
Shareholding Total number of Shares subject to Shares pledged or
Name of shareholder Nature of shareholder
ratio (%) shares held trading moratorium held frozen
OSRAM Holding Co.,
Foreign corporation (04) 13.47% 131,815,685 131,815,685 0
Ltd.
Prosperity Lamps and
Foreign corporation (04) 10.50% 102,751,648 0 0
Components Ltd.
DBS VICKERS
(HONG KONG) LTD Foreign corporation (04) 1.37% 13,405,145 0 0
A/C CLIENTS
Taifook Securities
Company
Foreign corporation (04) 1.12% 10,916,212 0 0
Limited-Account
Client
EAST ASIA
SECURITIES
Foreign corporation (04) 0.97% 9,527,080 0 0
COMPANY
LIMITED
Foreign natural person
Zhuang Jianyi 0.86% 8,404,132 0 0
(05)
Bank of China-E Fund
Shenzhen Stock 100 Funds, wealth
Transaction management products 0.71% 6,938,693 0 0
Open-ended Index and others (06)
Fund
Bank of Funds, wealth
China-First-Trust management products 0.61% 5,925,152 0 0
Goodquality Life and others (06)
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Stock Fund
Industrial and
Commercial Bank of
Funds, wealth
China- Rongtong
management products 0.56% 5,524,155 0 0
Shenzhen Stock
and others (06)
Exchange 100 Index
Stock Fund
Guangzhou Prosperity
Lamps and General domestic
0.50% 4,911,140 0 0
Components Trading cooperation (02)
Co., Ltd.
Particulars about shares held by the top ten shareholders not subject to trading moratorium
Shares not subject to trading moratorium
Name of shareholders Type of shares
held
Prosperity Lamps and Components Ltd. 102,751,648 RMB ordinary share
DBS VICKERS (HONG KONG) LTD A/C
13,405,145 Domestically listed foreign share
CLIENTS_
Taifook Securities Company Limited-Account
10,916,212 Domestically listed foreign share
Client_
EAST ASIA SECURITIES COMPANY
9,527,080 Domestically listed foreign share
LIMITED_
Zhuang Jianyi 8,404,132 Domestically listed foreign share
Bank of China-E Fund Shenzhen Stock 100
6,938,693 RMB ordinary share
Transaction Open-ended Index Fund
Bank of China-First-Trust Goodquality Life
5,925,152 RMB ordinary share
Stock Fund
Industrial and Commercial Bank of China-
Rongtong Shenzhen Stock Exchange 100 Index 5,524,155 RMB ordinary share
Stock Fund
Guangzhou Prosperity Lamps and Components
4,911,140 RMB ordinary share
Trading Co., Ltd.
Bank of China-Da Cheng Blue Chip Sustaining
4,553,267 RMB ordinary share
Stock Fund
Explanation on Among the top ten shareholders of the Company, there exists association relationship between Prosperity
associated relationship Lamps and Components Limited and Zhuang Jianyi, and they belong to acting-in-concert. Except that, it is
among the unknown whether there is any associated relationship among the any other shareholders among the top ten
above-mentioned shareholders and among the top ten shareholders not subject to moratorium, or whether there is any
shareholders or action-in-concert among them as described by the Administrative Rules on Information Disclosure about
acting-in-concert Changing of Shareholding Status.
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III. Particulars about Directors, Supervisors and Senior Executives
(I) Change in shares held by directors, supervisors and senior executives
Shares Shares Share
Shares held Shares held Of which:
increased in decreased in options held Reason for
Name Office term at at restricted
the current the current at change
period-begin period-end shares held
period period period-end
Chairman of Board of
Zhong Xincai 876,206 876,206 657,153 0
Directors & GM
Vice Chairman of Board
Liu Xingming 351,280 351,280 263,460 0
of Directors & Vice GM
Mr.Joerg
Thaele (Mr. Director 0
Tai Le)
Francis
Michael
Director 0
Piscitelli (Mr.
Pan Dali)
Ye Zaiyou Director 0
Liu Zhenping Independent director 0
Dou Linping Independent director 0
Zhang Haixia Independent Director 0
Jiao Zhigang Supervisor 22,880 22,880 17,160 0
Ye
Supervisor 20,560 20,560 15,420 0
Zhenghong
Yang Xudong Supervisor 3,900 3,900 2,925 0
Zhuang Rujia Supervisor 0
Zhang yingqi Supervisor 0
Xie Qing Vice GM 12,950 12,950 9,150 0
Wei Bin Vice GM 15,684 15,684 11,763 0
Zhao Yong Vice GM 8,700 8,700 6,525 0
Zou Jianping Vice GM 0
Wang
CFO 140,013 140,013 105,010 0
Shuqiong
Zhou
Company Secretary 0
Xiangfeng
(II) Engagement or dismissal of directors, supervisors and senior executives
during the report period.
8
English Translation for Reference Only
1. On 6 Jan. 2011, the Board of Directors of the Company approved on Mr. Zou
Jianping’s resignation from the post of secretary to the Board of Directors, as
well as Mr. Huang Guanxiong’s resignation from the post of vice GM.
2. The 7th Session of the 6 th Board of Directors of the Company passed the
resolution on engaging Mr. Zhou Xiangfeng as secretary to the Board of
Directors.
Zhou Xiangfeng, male, was born in Dec. 1961. He belongs to Chinese nationality
and has no right of permanent residence abroad. He graduated from Zhongnan
University of Economics with a master degree majoring in economics and
obtained the qualification certification for secretary to board of directors. He
once worked as a lecturer in the School of Ecomics and Management of Hainan
University, the fully-authorized securities representive of Guangdong Macro Co.,
Ltd., the office director in Guangzhou Branch and the general manager of
Huangpu Business Office of China Securities Co., Ltd.,and the secretary to the
board of directors, the office director, as well as the head of strategety
development department of Guangdong Nanfang Soda Ash Industrial Co., Ltd.
Zhou Xiangfeng does’t hold any share of Foshan Electrical and Lighting Co.,
Ltd., and has never been punished by CSRC, Shenzhen Stock Exchange, and
other related departments.
3. On 26 Apr. 2011, the 9th Session of the 6th Board of Directors of the Company
passed the resolution on engaging Mr. Zhaoyong as director of the 6th Board of
Directors to fill the gap.
Zhao Yong, male, was born in Li County of Hunan Province in Oct. 1966. He is a
member of CPC and an engineer with a bachelor degree. At present, he works as the
vice GM of the Company. He graduated from the major of casting in the 2nd
Department of Mechanics of South China University of Technology in Jun. 1989, and
received the training concerning light source and lighting engineering in Fudan
University from Sep. to Dec. 2001. From Jun. 1989 to Jun. 1990, he worked in
Foshan Craft and Art Casting Factory. From Jul. 1990 to Feb. 1992, he acted as the
maintenance worker in machine repair workshop of Foshan Electrical and Lighting
Co., Ltd.. From Feb. 1992 to Mar. 1994, he worked as the technican in auto lamp
workshop of the Company. From Mar. 1994 to Mar. 1995, he worked at the
research institute of the Company. From Apr. 1995 to Dec. 1997, he worked as
the technican in single-end workshop. From Jan. 1998 to May 2001, he wored as
the director assistant in auto lamp workshop. From May 2001 to Dec. 2005, he
worked as the head of department of technology. From Jan. 2006 to Oct. 2008, he
worked as the head of OEM department. From Oct. 2008 to Jan. 2011, he worked
as the manager of purchase department. From May 2009, he started to
concurrently to act as the manager of Foshan Taimei Times Lamps and Lanterns
Co., Ltd. From Sep. 2009, he worked as the vice GM of the Company. From Feb.
2011, he concurrently acted as the manager of the Lamps and Lanterns Co., Ltd.
There’s no related relationship between Mr. Zhao Yong and shareholders holding
over 5% equity of the Company; as at the end of the reporting period, Mr. Zhao
Yong held 8700 shares of the Company, and has never been punished by CSRC
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and Shenzhen Stock Exchange.
4. On 26 Apr. 2011, the 3 rd Session of the 6 th Supervisory Committee of the
Company passed the resolution on engaging Mr. Zhang Yingqi as supervisor of
the 6th Supervisory Committee to fill the gap
Zhang Yingqi, male, born in Feb. 1951, Han nationality, a party member of CPC
and a postgraduate, comes from Shanghai. From Nov. 1968 to Feb. 1969, he
worked as a worker at the No.7 Loading Area of Shanghai Port Bureau; from Feb.
1969 to Aug. 1986, he served as a cadre in the air force of Guangzhou military
region; from Aug. 1986 to Dec. 1993, he acted as secretary and manager of
Guangzhou Pearl River Enterprises Group; from Dec. 1993 to Sep. 2003, he
worked in Guangzhou Pearl River Investment Fund Management Co., Ltd. as the
managing director; from May 2001 to Aug. 2010, he worked as the General
Manager in Guangzhou Pearl River Asset Management Co., Ltd. and has been
holding the post of Chairman of the Board of Directors since Aug. 2010, and;
since Dec. 2002, he has been serving as a supervisor in Guangzhou Pearl River
Beer Co., Ltd.
There’s no associated relationship between Mr. Zhang Yingqi and shareholders
holding more than 5% equity of the Company. Mr. Zhang Yingqi neither holds
any stock of the Company, nor has ever been punished by CSRC and Shenzhen
Stock Exchange.
5. On 26 May 2011, Mr. Zhao Yong and Mr. Zhang Yingqi were elected at the
Company’s Shareholders’ General Meeting respectively as a director for the Sixth
Board of Directors and a supervisor for the Sixth Supervisory Committee.
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IV. Report of the Board of Directors
(I) Discussion and analysis by the management
1. Business overview for the reporting period
For the first half of 2011, with fierce competition in the domestic electric light source
sector, rising prices of main raw materials, increasing labor cost and growing RMB,
the Company pooled the wisdom and efforts of everyone, overcoming lots of
difficulties. It followed the guideline of ―to closely follow market needs, develop
strategic products, enhance marketing channels and increase sales‖, which had been
set at the beginning of the year. As a result, the Company achieved a better business
performance for the reporting period.
For the reporting period, the Company achieved operating revenues of RMB
1095.3193 million, up 32.87% from a year earlier; total profit of RMB 147.3678
million, up 48.27% from a year earlier; and net profit attributable to owners of the
Company of RMB 117.8675 million, up 45.84% from a year earlier. The gross profit
rate for the reporting period basically leveled with that for the same period of last
year.
2. Main businesses classified according to industries and products
Unit: RMB Ten thousand
Main businesses classified according to industries
Year-on-year Year-on-year Year-on-year
Operating Gross profit rate increase/decreas increase/decreas increase/decrease
Industries or products Operating cost
income (%) e of operating e of operating of gross profit
income (%) cost (%) rate (%)
Lighting appliances and
107,389.86 80,829.78 24.73% 32.83% 31.34% 0.85%
lamps
Main businesses classified according to products
Lighting appliances and
107,389.86 80,829.78 24.73% 32.83% 31.34% 0.85%
lamps
3. Main businesses classified according to regions
Unit: RMB Ten thousand
Region Operating income Year-on-year increase/decrease (%)
Domestic 68,002.82 39.93%
Overseas 39,387.04 22.13%
4. Major movements of financial indicators for the reporting period
Unit: RMB Ten thousand
For the first half of Movement
Items For the first half of 2010 Reasons for the movement
2011 (%)
Increase of both domestic and overseas sales of electric light
Operating revenues 109,531.93 82,436.03 32.87%
source products in the reporting period
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Operating cost 82,111.62 62,547.03 31.28% Increase of operating revenues
Increase of expenses on advertising and distribution, as well as
Selling expenses 5,211.01 3,923.16 32.83%
other operating costs
Financial expenses -105.37 -345.73 69.52% Less interest income due to less bank deposits
Non-operating
586.49 252.97 131.84% More fixed assets were disposed in the reporting period.
expenses
Net profit attributable
to owners of the 11,786.75 8,081.78 45.84% Increase of sales
Company
Movement
Items 30 Jun. 2011 31 Dec. 2010 Reasons for the movement
(%)
Considering rising prices of raw materials, the Company
Prepayments 10,227.24 2,936.79 248.25%
increased prepayments for materials.
Unit prices of raw materials increased and the Company
Accounts payable 27,151.42 19,261.59 40.96%
increased its stock of raw materials.
Taxes and fares Withholding individual income tax and enterprise income tax
3,988.82 -501.30 895.69%
payable due to dividend distribution
For the first half of Movement
Items For the first half of 2010 Reasons for the movement
2011 (%)
Cash inflows from Increase of cash received from selling goods and rendering
121,705.38 93,230.22 30.54%
operating activities services
Cash outflows from
114,258.53 85,669.65 33.37% Increase of cash paid to purchase goods and accept services
operating activities
(II) Problems and difficulties encountered
1. Due to rising inflation, prices of raw materials such as fluorescent powder, tin wire,
lamp holders, oil-gas, etc. kept rising, which led to more costs and a narrower space
for profit.
2. Caused by changes of the macro-environment and policies, as well as the structural
adjustment and relocation of industries, substantial change took place in labor supply
and demand for traditional labor-intensive enterprises. It became harder to recruit and
workers had been asking for higher salaries. For the first half of 2011, salary levels of
the Company’s workers rose around 00% from a year earlier.
3. Competition over product prices and marketing channels became increasingly
fierce in the sector.
Major countermeasures taken by the Company to solve the aforesaid problems and
difficulties:
1. Through reducing work quotas and piece prices, the Company tried to promote
thrift in material and energy consumption by workshops.
2. Non-production employees were reduced. Managerial personnel were assigned to
work at factories on a regular basis. And the working environment was improved to
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ease shortage of front-line workers.
3. The Company responsively adjusted its production plans, as well as its product
structure and specifications, so that its conventional products could meet market needs
in a better way and production and sales could be maximized.
4. Development, production and sale of new products such as EC030 and LED were
beefed up.
5. Without affecting normal sales, the Company tried to minimize its stock of finished
and half-finished products.
6. OEM on some products was expanded.
7. The Company continued to expand marketing networks in the second and third-tier
cities.
8. The Company strictly controlled financial risk in purchase and sale.
(III) Investments made during the reporting period
1. During the reporting period, the Company did not raise any funds and there was no
such a case where the application of the funds previously raised continued to the
reporting period.
2. Significant investment projects with non-raised proceeds during the reporting
period
(1) As reviewed and approved at the Eighth Session of the Sixth Board of Directors,
the Company jointly incorporated Guangdong Fozhao Guoxuan Power Energy Co.,
Ltd. with Hefei Guoxuan High-Tech Power Energy Co., Ltd.. The joint venture has a
registered capital of RMB 50 million, with both parties contributing RMB 25 million
and accounting for 50% of the joint venture’s share capital respectively. The joint
venture was registered with the administrative bureau for industry and commerce on
27 Jun. 2011. Currently, the joint venture is buying equipments, decorating factories
and handling other relevant work.
(2) As reviewed and approved at the Ninth Session of the Sixth Board of Directors,
the Company incorporated a wholly-owned subsidiary—Guangdong Fozhao Financial
Leasing Co., Ltd., which has a registered capital of RMB 200 million. The subsidiary
was registered with the administrative bureau for industry and commerce on 7 Jun.
2011. Currently, the subsidiary is recruiting employees, carrying out business
trainings, soliciting business, etc..
(3) As reviewed and approved at the Ninth Session of the Sixth Board of Directors,
the Company jointly incorporated Guangdong Fozhao New Light Sources
Technology Co., Ltd. with Bright Technology & Venture Limited (registered in Hong
Kong). The joint venture has a registered capital of RMB 222 million, of which the
Company contributed RMB 122 in cash, accounting for 55% of the joint venture, and
Bright Technology & Venture Limited contributed its technologies (consideration of
RMB 100 million), accounting for 45% of the joint venture. The joint venture was
registered with the administrative bureau for industry and commerce on 30 May 2011.
Currently, the joint venture is recruiting employees, decorating factories and buying
equipments.
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V. Significant Events
(I) Corporate governance
During the reporting period, pursuant to applicable laws and regulations, as well as
regulatory documents issued by the CSRC and the Shenzhen Stock Exchange on
corporate governance of listed companies, the Company continued to improve its
corporate governance and regulated its operation. The Company will further improve
its corporate governance, strengthen its ability of corporate governance, enhance
execution and supervision, and give full play to the supervising function of its audit
committee, so as to make sure that all rules are effectively executed. The Board of
Directors of the Company believes the actual conditions of the Company’s corporate
governance basically comply with the Code of Corporate Governance for Listed
Companies.
(II) During the reporting period, the Company executed the dividend
distribution plan approved at the 2010 Annual Shareholders’ General Meeting,
i.e. to distribute a cash dividend of RMB 2.5 for every 10 shares.
The Company will not distribute profit or transfer capital reserve into share capital for
the reporting period.
(III) During the reporting period, the Company was not involved in any
significant lawsuit or arbitration.
(IV) Related-party transactions during the reporting period
Related-party transactions related to daily operation
Unit: RMB Ten thousand
Purchasing products and
Selling products and providing
receiving service from related
service to related parties
parties
Related parties Proportion in the Proportion in the
Trading total trading Trading total trading
amount amount of the amount amount of the
same kind same kind
Prosperity Lamps and Components Limited 3,488.52 3.10% 847.66 1.28%
Prosperity Electrical (China) Co., Ltd. 80.72 0.07% 768.60 1.16%
OSRAM (China) Lighting Ltd. 736.40 0.65% 0.00 0.00%
Prosperity (Xinxiang) Lighting Machinery Co., Ltd. 0.00 0.00% 65.75 0.10%
Prosperity (Hangzhou) Lighting Electrical Co., Ltd. 57.30 0.05% 0.00 0.00%
Total 4,362.95 3.87% 1,682.01 2.54%
The aforesaid transactions were all priced based on market prices, which were fair and
just.
The related-party transactions were necessary for the normal operation of the
Company, which was helpful to the long-term development of the Company.
The related-party transactions above would not adversely affect the independence of
14
English Translation for Reference Only
the Company.
(V) Securities investments
Unit: RMB Yuan
Proportion in
Number of the total
Serial Variety of Code of Abbr. of Initial investment shares held Closing carrying closing Gain/loss in the
No. securities securities securities amount at the amount securities reporting period
period-end investment
amount (%)
Other securities investments held at the period-end 5,000,000.00 - 4,824,336.08 100.00% 0.00
Gain/loss on selling securities in the reporting
- - - - 13,971.96
period
Total 5,000,000.00 - 4,824,336.08 100% 13,971.96
Explanation on securities investments:
Other securities investments were wealth management products bought from
securities traders, which was reviewed and approved at the board session held on 25
Nov. 2010. The purchase of the said products was in strict compliance with the
Management Rules for Securities Investment of the Company.
(VI) Equity of other listed companies held by the Company
Unit: RMB Yuan
Change of
Proportion in Gain/loss in
Closing owners’
Initial investment the the Accounting Stock
Stock code Stock abbr. carrying equity during
amount company’s reporting title source
amount the reporting
total equity period
period
Available-for-
80,992,172.8 -12,535,654. Additional
601818 Everbright Bank 30,828,816.00 0.06% 0.00 sale financial
0 21 issue
assets
80,992,172.8 -12,535,654.
Total 30,828,816.00 - 0.00 - -
0 21
(VII) Execution of commitments made by the Company, its shareholders and
actual controller
Commitments made by the Company, its directors, supervisors, senior executives,
shareholders with an over 5% shareholding, actual controller and other stakeholders
during the reporting period, or such commitments carried down into the reporting
period:
Commitment
Commitments Contents of the commitments Execution
maker
Commitments made in OSRAM Commitments made by OSRAM Holding Company Limited: 1. Being executed as
share reforms Holding No listing or transfer may be taken within 60 months since the promised
15
English Translation for Reference Only
Company date when the shares of the Company held by this company obtain
Limited the trading right [i] or before Dec. 31, 2011 [ii] (taking the earlier
date between [i] and [ii]). Osram would submit Shenzhen Stock
Exchange to lock up the said shares in the course of the
moratorium of trading right of the aforesaid shares after transfer
of the shares. 2. Germany OSRAM Company would purchase the
lamp products from FSL in accordance with the clauses of the
Purchase Contract on Lamp Products signed between Germany
OSRAM Company and FSL on Aug. 31, 2004. 3. As required by
FSL, OSRAM should urge Germany OSRAM Company to
provide the relevant technology abidance and skill to FSL in
accordance with the clauses and conditions negotiated between
FSL and Germany OSRAM Company.
Commitments made by OSRAM Holding Company Limited and
Prosperity Lamps and Components Limited: 1. Within four years
after completion of the share reform and transfer procedure, a
profit distribution plan would be proposed in the Annual
Shareholders’ General Meeting of FSL, and the said two
companies would vote the affirmative votes on the plan, in which
the proportion of profit distribution would not be less than 65% of
profit available for distribution realized by FSL in that year. 2. In
order to maintain stability of FSL’s Management Team, OSRAM
and Hong Kong Prosperity undertook: they would exercise the
voting right in the Board session and the Shareholders’ General
Meeting of FSL after the completion of share transfer to support
continually Mr. Zhong Xincai to take the post of Chairman of the
Board, so as to ensure that the existing management team
remained unchanged basically within three years, but under the
conditions that the existing management team should not give a
poorer performance to produce adverse impact on FSL’s business
performance.
Commitments made in
acquisition reports or
reports on equity
changes
Commitments made in
significant asset
reorganization
Commitments made in
share issuance
Other commitments
(including
supplementary ones)
16
English Translation for Reference Only
(VIII) Other comprehensive incomes
Unit: RMB Yuan
Item Reporting period Same period of last year
1. Profits/(losses) from available-for-sale financial assets -14,747,828.48
Less: Effects on income tax from available-for-sale
-2,212,174.27
financial assets
Net amount transferred into profit and loss in the current
period that was recognized into other comprehensive
income in prior periods
Subtotal -12,535,654.21
2. Interests in the investee entities’ other comprehensive
income as per equity method
Less: Effects on income tax from the interests in the
investee entities’ other comprehensive income as per equity
method
Net amount transferred into profit and loss in the current
period that was recognized into other comprehensive
income in prior periods
Subtotal
3. Profits/(losses) from cash flow hedging instrument
Less: Effects on income tax from cash flow hedging
instrument
Net amount transferred into profit and loss in the current
period that was recognized into other comprehensive
income in prior period
The adjustment value that is the converted initial
recognition amount of arbitrage project
Subtotal
4. Translation difference of foreign currency financial
statements
Less: Net value of disposal of oversea operations that were
recognized into current profit and loss
Subtotal
5. Other
Less: Effects on income tax from the others that were
included into other comprehensive income
Net amount transferred into profit and loss in the current
period that was recognized into other comprehensive
income in prior periods
Subtotal
Total -12,535,654.21 0.00
(IX) Researches, interviews and visits received during the reporting period
17
English Translation for Reference Only
Main discussion and materials provided
Time Place Way of reception Visitor
by the Company
Production and operation of the
18 Apr. 2011 The Company Filed research Hwabao Securities
Company
Production and operation of the
28 Apr. 2011 The Company Filed research Sealand Securities
Company
Production and operation of the
28 Apr. 2011 The Company Filed research SWS Research
Company
Shenzhen Hengxun
Production and operation of the
28 Apr. 2011 The Company Filed research Investment Consulting
Company
Co., Ltd.
Production and operation of the
28 Apr. 2011 The Company Filed research Hongyuan Securities
Company
Shenzhen Changrun Asset Production and operation of the
28 Apr. 2011 The Company Filed research
Management Co., Ltd. Company
Minsheng Royal Fund Production and operation of the
28 Apr. 2011 The Company Filed research
Management Co., Ltd. Company
Guangdong New Value Production and operation of the
28 Apr. 2011 The Company Filed research
Investment Co., Ltd. Company
Production and operation of the
28 Apr. 2011 The Company Filed research GTJA Allianz Funds
Company
Production and operation of the
28 Apr. 2011 The Company Filed research Beijing Fuhua Securities
Company
Production and operation of the
28 Apr. 2011 The Company Filed research GF Securities
Company
Jiangsu Ruihua
Production and operation of the
28 Apr. 2011 The Company Filed research Investment &
Company
Development Co., Ltd.
Production and operation of the
28 Apr. 2011 The Company Filed research Essence Securities
Company
China Nature Asset Production and operation of the
28 Apr. 2011 The Company Filed research
Management Co., Ltd. Company
Shenzhen Shangcheng Production and operation of the
28 Apr. 2011 The Company Filed research
Asset Management Ltd. Company
Shenzhen Goldstone Asset Production and operation of the
28 Apr. 2011 The Company Filed research
Management Ltd. Company
Production and operation of the
28 Apr. 2011 The Company Filed research Gao Hua Securities
Company
28 Apr. 2011 The Company Filed research Founder Securities Production and operation of the
Company
18
English Translation for Reference Only
Production and operation of the
28 Apr. 2011 The Company Filed research Hwabao Securities
Company
Tian Hong Asset Production and operation of the
20 May 2011 The Company Filed research
Management Co., Ltd. Company
Production and operation of the
8 Jun. 2011 The Company Filed research China Securities Co., Ltd.
Company
(X) Index for information disclosed
Serial Newspaper and website for Time of
Announcement name
No. disclosure disclosure
1 Announcement on Resignation of the Company Secretary
China Securities Journal, Securities
Announcement Resolutions of the Seventh Session of the Sixth Board of
2 Times, Ta Kung Pao (HK), 2011-1-6
Directors
http://www.cninfo.com.cn
3 Announcement on Resignation of Senior Executive
China Securities Journal, Securities
Announcement of Outward Investment Progress of Qinghai Fozhao
4 Times, Ta Kung Pao (HK), 2011-1-24
Lithium Energy Exploitation Co., Ltd.
http://www.cninfo.com.cn
Announcement on Resolutions of the Eighth Session of the Sixth Board of
5
Directors China Securities Journal, Securities
6 Announcement on Financial Support among Subsidiaries Times, Ta Kung Pao (HK), 2011-4-11
http://www.cninfo.com.cn
Announcement on Incorporating Guangdong Fozhao Guoxuan Power
7
Energy Co., Ltd.
8 Announcement on Preliminary Earnings Estimate for 2010 China Securities Journal, Securities
Times, Ta Kung Pao (HK), 2011-4-14
9 Announcement on Estimated Business Growth for the First Quarter of 2011 http://www.cninfo.com.cn
10 Abstract of the 2010 Annual Report
Announcement on Resolutions of the Ninth Session of the Sixth Board of
11
Directors
12 Notice on Convening the 2010 Annual Shareholders’ General Meeting
13 Abstract of the Report for the First Quarter of 2011 China Securities Journal, Securities
Times, Ta Kung Pao (HK), 2011-4-28
Announcement on Resolutions of the Third Session of the Sixth
14 http://www.cninfo.com.cn
Supervisory Committee
15 Announcement on Routine Related-party Transactions for 2011
16 Announcement on Incorporating a Financial Leasing Subsidiary
Announcement on Incorporating Guangdong Fozhao New Light Sources
17
Technology Co., Ltd.
Announcement on Resolutions of the 2010 Annual Shareholders’ General China Securities Journal, Securities
18 2011-5-26
Meeting Times, Ta Kung Pao (HK),
19
English Translation for Reference Only
http://www.cninfo.com.cn
China Securities Journal, Securities
19 Clarification Announcement Times, Ta Kung Pao (HK), 2011-5-27
http://www.cninfo.com.cn
China Securities Journal, Securities
Announcement on Progress of the Guangdong Fozhao New Light
20 Times, Ta Kung Pao (HK), 2011-6-13
Sources Technology Co., Ltd. Project
http://www.cninfo.com.cn
21 Announcement on Executing the Profit Distribution Plan for 2010 China Securities Journal, Securities
Announcement on Winning the Bid for the National Project for Times, Ta Kung Pao (HK), 2011-6-15
22 http://www.cninfo.com.cn
Promoting High-Efficient Lighting Products
(XI) Significant contracts
1. During the reporting period, the Company did not hold in trust, contract or lease
substantial assets of other companies, nor vise versa. And there were no such case that
occurred in previous periods and were carried down into the reporting period.
2. During the reporting period, the Company was not involved in any significant
guarantee. And there were no such case that occurred in previous periods and were
carried down into the reporting period.
3. During the reporting period, the Company did not entrust others with substantial
cash asset management. And there were no such case that occurred in previous
periods and were carried down into the reporting period.
(XII) During the reporting period, the Company, or shareholders with an over
5% shareholding (inclusive), did not make any commitment that might produce
substantial influence on the Company’s operating results and financial position.
And there were no such case that occurred in previous periods and were carried
down into the reporting period.
(XIII) Special statement and independent opinion by independent directors on
capital occupation by related parties and external guarantees: Upon serious
checks upon the Company’s provision of external guarantees and capital
occupation by its controlling shareholder and other related parties, independent
directors believes that: For the first half of 2011, the Company did not provide
any guarantee (against applicable regulations or not) to external parties. And
there were no borrowings, lendings or capital occupation between the Company
and its controlling shareholder and related parties with a shareholding below
50%; and there were no such cases that occurred in previous periods and were
carried down to 30 Jun. 2011.
(XIV) The financial report for the reporting period has not been audited.
(XV) During the reporting period, the Company, its Board of Directors and
directors did not receive any investigation, administrative punishment or
20
English Translation for Reference Only
criticism by circular from the CSRC, any punishment from any other
administrative departments, or any public censure from the stock exchange.
(XVI) As reviewed and approved at the Eighth Session of the Sixth Board of
Directors, the Company jointly incorporated Guangdong Fozhao Guoxuan
Power Energy Co., Ltd. with Hefei Guoxuan High-Tech Power Energy Co., Ltd..
The joint venture has a registered capital of RMB 50 million, with both parties
contributing RMB 25 million and accounting for 50% of the joint venture’s
share capital respectively. The joint venture was registered with the
administrative bureau for industry and commerce on 27 Jun. 2011.
(XVII) As reviewed and approved at the Eighth Session of the Sixth Board of
Directors, Qinghai Fozhao Lithium Ion Battery Cathode Materials Co., Ltd., of
which the Company controlled a 51% stake, was agreed to provide financial
support for Qinghai Fozhao Lithium Energy Exploitation Co., Ltd., of which the
Company held a 38% stake. The financial support (a borrowing of RMB 25
million)—both principal and interest—was taken back on 2 Apr. 2011.
(XVIII) As reviewed and approved at the Ninth Session of the Sixth Board of
Directors, the Company incorporated a wholly-owned subsidiary—Guangdong
Fozhao Financial Leasing Co., Ltd., which has a registered capital of RMB 200
million. The subsidiary was registered with the administrative bureau for
industry and commerce on 7 Jun. 2011.
(XIX) As reviewed and approved at the Ninth Session of the Sixth Board of
Directors, the Company jointly incorporated Guangdong Fozhao New Light
Sources Technology Co., Ltd. with Bright Technology & Venture Limited
(registered in Hong Kong). The joint venture has a registered capital of RMB
222 million, of which the Company contributed RMB 122 in cash, accounting for
55% of the joint venture, and Bright Technology & Venture Limited contributed
its technologies (consideration of RMB 100 million), accounting for 45% of the
joint venture. The joint venture was registered with the administrative bureau
for industry and commerce on 30 May 2011.
21
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VI. Financial Report（Unaudited）
(I) Balance sheet
Prepared by Foshan Electrical and Lighting Co., Ltd. 30 Jun. 2011 Unit: RMB Yuan
Closing balance Opening balance
Items
Consolidation The Company Consolidation The Company
Current Assets:
Monetary funds 547,799,984.61 290,544,862.94 711,853,632.95 681,198,634.58
Settlement reserves
Intra-group lendings
Transactional financial assets 4,824,336.08 4,824,336.08 38,287,211.70 5,097,211.70
Notes receivable 95,701,617.96 91,132,017.96 79,964,518.10 74,911,048.10
Accounts receivable 340,328,640.68 349,636,837.08 317,185,505.67 332,564,283.12
Accounts paid in advance 102,272,435.13 87,150,608.45 29,367,891.60 18,230,151.84
Premiums receivable
Reinsurance premiums
receivable
Receivable reinsurance contract
reserves
Interest receivable
Dividend receivable 14,968,946.03 7,228,228.30
Other accounts receivable 15,780,890.52 59,511,046.61 20,254,086.70 62,118,207.87
Financial assets purchased
under agreements to resell
Inventories 464,795,681.63 415,736,031.02 365,413,882.78 339,343,349.75
Non-current assets due within 1
year
Other current assets
Total current assets 1,571,503,586.61 1,313,504,686.17 1,562,326,729.50 1,520,691,115.26
Non-current assets:
Loans by mandate and
advances granted
Available-for-sale financial
80,992,172.80 80,992,172.80 95,740,001.28 95,740,001.28
assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 454,723,766.01 820,200,766.01 443,373,689.60 598,850,689.60
Investing property
Fixed assets 632,893,846.71 542,958,281.19 683,122,864.12 591,335,800.42
Construction in progress 123,045,179.20 84,943,988.19 100,914,324.93 72,198,935.48
Engineering materials
22
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Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 216,775,899.37 199,289,355.18 220,607,352.76 202,020,835.92
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 22,330,785.72 22,394,175.90 22,462,498.27 22,323,210.28
Other non-current assets
Total of non-current assets 1,530,761,649.81 1,750,778,739.27 1,566,220,730.96 1,582,469,472.98
Total assets 3,102,265,236.42 3,064,283,425.44 3,128,547,460.46 3,103,160,588.24
Current liabilities:
Short-term borrowings
Borrowings from Central Bank
Customer bank deposits and
due to banks and other financial
institutions
Intra-group borrowings
Transactional financial
liabilities
Notes payable
Accounts payable 271,514,170.73 280,249,143.95 192,615,874.39 214,720,055.92
Accounts received in advance 16,820,927.52 42,775,364.41 22,598,645.79 37,156,710.99
Financial assets sold for
repurchase
Handling charges and
commissions payable
Employee’s compensation
42,141,871.53 42,141,871.53 54,092,566.23 53,759,277.53
payable
Tax payable 39,888,211.52 38,914,576.10 -5,013,034.54 -3,412,797.35
Interest payable
Dividend payable 3,415,262.58
Other accounts payable 35,333,182.19 34,351,162.96 30,383,813.76 28,785,087.45
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting
underwriting of securities
Non-current liabilities due
within 1 year
Other current liabilities
Total current liabilities 409,113,626.07 438,432,118.95 294,677,865.63 331,008,334.54
23
English Translation for Reference Only
Non-current liabilities:
Long-term borrowings
Bonds payable
Long-term payables
Specific payables
Estimated liabilities
Deferred income tax liabilities 7,524,503.52 7,524,503.52 9,736,677.79 9,736,677.79
Other non-current liabilities 11,815,274.99 10,471,941.67 11,951,441.65 10,556,441.65
Total non-current liabilities 19,339,778.51 17,996,445.19 21,688,119.44 20,293,119.44
Total liabilities 428,453,404.58 456,428,564.14 316,365,985.07 351,301,453.98
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share
978,563,745.00 978,563,745.00 978,563,745.00 978,563,745.00
capital)
Capital reserves 632,711,120.32 629,610,293.38 645,246,774.53 642,145,947.59
Less: Treasury stock
Specific reserves
Surplus reserves 555,433,925.97 555,433,925.97 555,433,925.97 555,433,925.97
Provisions for general risks
Retained profits 460,895,102.82 444,246,896.95 587,668,581.79 575,715,515.70
Foreign exchange difference
Total equity attributable to owners
2,627,603,894.11 2,607,854,861.30 2,766,913,027.29 2,751,859,134.26
of the Company
Minority interests 46,207,937.73 45,268,448.10
Total owners’ equity 2,673,811,831.84 2,607,854,861.30 2,812,181,475.39 2,751,859,134.26
Total liabilities and owners’
3,102,265,236.42 3,064,283,425.44 3,128,547,460.46 3,103,160,588.24
equity
Person in charge of the Company: Zhong Xincai
Person in charge of accounting affairs: Zhong Xincai
Person in charge of accounting firm: Wang Shuqiong
(II) Income statement
Prepared by Foshan Electrical and Lighting Co., Ltd. Jan.-Jun. 2011 Unit: RMB Yuan
Reporting period Same period of last year
Items
Consolidation The Company Consolidation The Company
I. Total operating revenues 1,095,319,303.24 1,082,909,469.69 824,360,344.65 753,152,624.27
Including: Sales income 1,095,319,303.24 1,082,909,469.69 824,360,344.65 753,152,624.27
Interest income
Premium income
Handling charge and
24
English Translation for Reference Only
commission income
II. Total operating cost 944,575,593.83 952,892,092.24 724,146,678.01 655,742,434.86
Including: Cost of sales 821,116,200.01 840,361,496.35 625,470,314.21 571,479,580.10
Interest expenses
Handling charge and
commission expenses
Surrenders
Net claims paid
Net amount withdrawn for
the insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
Taxes and associate
11,860,578.51 10,164,480.35 7,228,353.99 6,408,030.82
charges
Selling and distribution
52,110,105.61 49,745,840.51 39,231,617.50 34,157,925.91
expenses
Administrative expenses 59,191,173.51 52,403,223.14 55,859,131.20 42,439,164.15
Financial expenses -1,053,651.60 -584,697.22 -3,457,326.40 -3,009,297.89
Asset impairment loss 1,351,187.79 801,749.11 -185,412.49 4,267,031.77
Add: Gain/(loss) from change in
-162,575.62 -162,575.62
fair value (―-‖ means loss)
Gain/(loss) from investment
1,051,170.64 9,020,116.66 178,118.10 4,876,871.01
(―-‖ means loss)
Including: share of profits in
associates and joint ventures
Foreign exchange gains (―-‖
means loss)
III. Business profit (―-‖ means
151,632,304.43 138,874,918.49 100,391,784.74 102,287,060.42
loss)
Add: non-operating income 1,600,358.50 1,479,708.43 1,531,640.51 1,231,323.31
Less: non-operating expense 5,864,904.95 5,080,111.93 2,529,715.16 2,524,715.16
Including: loss from non-current
asset disposal
IV. Total profit (―-‖ means loss) 147,367,757.98 135,274,514.99 99,393,710.09 100,993,668.57
Less: Income tax expense 25,145,548.48 22,102,197.49 18,058,926.42 15,642,954.93
V. Net profit (―-‖ means loss) 122,222,209.50 113,172,317.50 81,334,783.67 85,350,713.64
Attributable to owners of the
117,867,457.28 113,172,317.50 80,817,767.96 85,350,713.64
Company
Minority shareholders’
4,354,752.22 517,015.71 0.00
income
VI. Earnings per share
(I) basic earnings per share 0.12 0.08
25
English Translation for Reference Only
(II) diluted earnings per
0.12 0.08
share
Ⅶ. Other comprehensive incomes -12,535,654.21 0.00
Ⅷ. Total comprehensive incomes 109,686,555.29 113,172,317.50 81,334,783.67 85,350,713.64
Attributable to owners of the
105,331,803.07 113,172,317.50 80,817,767.96 85,350,713.64
Company
Attributable to minority
4,354,752.22 517,015.71
shareholders
For any business combination under the same control that occurred in the reporting
period, the combined party realized zero net profit before the combination.
Person in charge of the Company: Zhong Xincai
Person in charge of accounting affairs: Zhong Xincai
Person in charge of accounting firm: Wang Shuqiong
(III) Cash flow statement
Prepared by Foshan Electrical and Lighting Co., Ltd. Jan.-Jun. 2011 Unit: RMB Yuan
Reporting period Same period of last year
Items
Consolidation The Company Consolidation The Company
I. Cash flows from operating
activities:
Cash received from sale of
commodities and rendering of 1,167,237,804.52 1,123,579,807.51 913,436,533.36 780,869,364.36
service
Net increase of deposits from
customers and dues from banks
Net increase of loans from the
central bank
Net increase of funds borrowed
from other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from
reinsurance business
Net increase of deposits of
policy holders and investment
fund
Net increase of disposal of
tradable financial assets
Cash received from interest,
handling charges and
26
English Translation for Reference Only
commissions
Net increase of intra-group
borrowings
Net increase of funds in
repurchase business
Tax refunds received 42,005,225.14 41,757,239.95 9,373,907.90 9,103,907.90
Other cash received relating to
7,810,787.51 8,668,462.54 9,491,739.21 9,424,471.25
operating activities
Subtotal of cash inflows from
1,217,053,817.17 1,174,005,510.00 932,302,180.47 799,397,743.51
operating activities
Cash paid for goods and
856,308,150.90 852,185,589.05 633,133,201.91 527,210,282.87
services
Net increase of customer
lendings and advances
Net increase of funds deposited
in the central bank and amount
due from banks
Cash for paying claims of the
original insurance contracts
Cash for paying interest,
handling charges and
commissions
Cash for paying policy
dividends
Cash paid to and for employees 142,691,769.52 123,908,432.96 128,171,951.00 113,847,318.65
Various taxes paid 81,501,927.12 64,089,642.55 61,532,232.54 50,056,203.44
Other cash payment relating to
62,083,411.78 66,260,891.21 33,859,096.29 33,281,845.21
operating activities
Subtotal of cash outflows from
1,142,585,259.32 1,106,444,555.77 856,696,481.74 724,395,650.17
operating activities
Net cash flows from operating
74,468,557.85 67,560,954.23 75,605,698.73 75,002,093.34
activities
II. Cash flows from investing
activities:
Cash received from withdrawal
33,396,800.00 206,800.00 1,193,874.04 1,193,874.04
of investments
Cash received from return on
2,411,455.42 2,411,455.42 178,118.10 4,840,571.97
investments
Net cash received from disposal
of fixed assets, intangible assets 100,000.00
and other long-term assets
Net cash received from disposal
of subsidiaries or other business
units
27
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Other cash received relating
to investing activities
Subtotal of cash inflows
35,908,255.42 2,618,255.42 1,371,992.14 6,034,446.01
from investing activities
Cash paid to acquire fixed
assets, intangible assets and other 39,458,297.28 16,092,517.78 29,406,644.35 22,726,409.89
long-term assets
Cash paid for investment 12,806,800.00 222,806,800.00 1,036,005.00 1,036,005.00
Net increase of pledged loans
Net cash paid to acquire
subsidiaries and other business
units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
52,265,097.28 238,899,317.78 30,442,649.35 23,762,414.89
investing activities
Net cash flows from investing
-16,356,841.86 -236,281,062.36 -29,070,657.21 -17,727,968.88
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments
by subsidiaries
Cash received from
borrowings
Cash received from issuance
of bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from
financing activities
Repayment of borrowings
Cash paid for interest
expenses and distribution of 221,508,538.40 221,508,538.40 202,806,459.02 201,781,832.57
dividends or profit
Including: dividends or profit
paid by subsidiaries to minority
shareholders
Other cash payments relating
to financing activities
Sub-total of cash outflows from
221,508,538.40 221,508,538.40 202,806,459.02 201,781,832.57
financing activities
28
English Translation for Reference Only
Net cash flows from financing
-221,508,538.40 -221,508,538.40 -202,806,459.02 -201,781,832.57
activities
IV. Effect of foreign exchange
rate changes on cash and cash -428,597.63 -425,125.11 -712,700.32 -712,700.32
equivalents
V. Net increase in cash and cash
-163,825,420.04 -390,653,771.64 -156,984,117.82 -145,220,408.43
equivalents
Add: Opening balance of
711,625,404.65 681,198,634.58 1,036,582,265.88 927,931,735.27
cash and cash equivalents
VI. Closing balance of cash and
547,799,984.61 290,544,862.94 879,598,148.06 782,711,326.84
cash equivalents
Person in charge of the Company: Zhong Xincai
Person in charge of accounting affairs: Zhong Xincai
Person in charge of accounting firm: Wang Shuqiong
29
English Translation for Reference Only
(IV) Consolidated Statement of Changes in Owners’ Equity
Prepared by Foshan Electrical and Lighting Co., Ltd. For the first half year of 2011 Unit: RMB Yuan
Amount for the reporting period Amount for the previous year
Equity attributable to owners of the Company Equity attributable to owners of the Company
Paid-u Paid-u
Minorit Minorit
Items p Total p Total
Less: Specifi Genera y Less: Specifi Genera y
capital Capital Surplus Retaine owners capital Capital Surplus Retaine owners
treasur c l risk Others interest treasur c l risk Others interest
(or reserve reserve d profit ’ equity (or reserve reserve d profit ’ equity
y stock reserve reserve s y stock reserve reserve s
share share
capital) capital)
I. Balance at the 978,56 645,24 555,43 587,66 2,812,1 978,56 586,92 528,47 566,13 2,705,9
45,268, 45,896,
end of the 3,745.0 6,774.5 3,925.9 8,581.7 81,475. 3,745.0 5,954.5 4,746.9 5,541.7 96,974.
448.10 986.77
previous year 0 3 7 9 39 0 3 2 6 98
Add: change of
accounting policy
Correction of
errors in previous
periods
Other
II. Balance at the 978,56 645,24 555,43 587,66 2,812,1 978,56 586,92 528,47 566,13 2,705,9
45,268, 45,896,
beginning of the 3,745.0 6,774.5 3,925.9 8,581.7 81,475. 3,745.0 5,954.5 4,746.9 5,541.7 96,974.
448.10 986.77
year 0 3 7 9 39 0 3 2 6 98
III. Increase/ -126,77 -138,36 106,18
-12,535 939,48 58,320, 26,959, 21,533, -628,53
decrease of 3,478.9 9,643.5 4,500.4
,654.21 9.63 820.00 179.05 040.03 8.67
amount in the 7 5 1
30
English Translation for Reference Only
year (―-‖ means
decrease)
117,86 122,22 263,77 271,09
4,354,7 7,321,2
(I) Net profit 7,457.2 2,209.5 6,242.9 7,445.9
52.22 02.98
8 0 8 6
(II) Other
-12,535 -12,535 55,185, 55,185,
comprehensive
,654.21 ,654.21 225.24 225.24
incomes
117,86 109,68 263,77 326,28
Subtotal of (I) -12,535 4,354,7 55,185, 7,321,2
7,457.2 6,555.2 6,242.9 2,671.2
and (II) ,654.21 52.22 225.24 02.98
8 9 8 0
(III) Capital
paid in and 3,135,5 4,296,4 7,432,0
reduced by 94.76 61.84 56.60
owners
1. Capital 16,510, 16,510,
paid in by owners 297.45 297.45
2. Amounts of
share-based
payments
recognized in
owners’ equity
3,135,5 -12,213 -9,078,
3. Others
94.76 ,835.61 240.85
(IV) Profit -244,640 -3,415,2 -248,056 26,959,1 -242,243 -12,246, -227,530
distribution ,936.25 62.59 ,198.84 79.05 ,202.95 203.49 ,227.39
31
English Translation for Reference Only
1.
26,959, -26,959
Appropriations to
179.05 ,179.05
surplus reserves
2.
Appropriations to
general risk
provisions
3.
-244,64 -248,05 -215,28 -227,53
Appropriations to -3,415, -12,246
0,936.2 6,198.8 4,023.9 0,227.3
owners (or 262.59 ,203.49
5 4 0 9
shareholders)
4. Other
(V) Internal
carry-forward of
owners’ equity
1. New
increase of capital
(or share capital)
from capital
public reserves
2. New
increase of capital
(or share capital)
from surplus
reserves
32
English Translation for Reference Only
3. Surplus
reserves for
making up losses
4. Other
( Ⅵ ) Specific
reserve
1.
Withdrawn for
the period
2. Used in
the period
(Ⅶ) Other
978,56 632,71 555,43 460,89 2,673,8 978,56 645,24 555,43 587,66 2,812,1
IV. Closing 46,207, 45,268,
3,745.0 1,120.3 3,925.9 5,102.8 11,831. 3,745.0 6,774.5 3,925.9 8,581.7 81,475.
balance 937.73 448.10
0 2 7 2 84 0 3 7 9 39
Person in charge of the Company: Zhong Xincai
Person in charge of accounting affairs: Zhong Xincai
Person in charge of accounting firm: Wang Shuqiong
33
English Translation for Reference Only
(V) Statement of Change in Owners’ Equity of the Company
Prepared by Foshan Electrical and Lighting Co., Ltd. For the first half year of 2011 Unit: RMB Yuan
Amount for the reporting period Amount for the previous year
Paid-up Paid-up
Less: General Total Less: General Total
Items capital Capital Specific Surplus Retained capital Capital Specific Surplus Retained
treasury risk owners’ treasury risk owners’
(or share reserve reserve reserve profit (or share reserve reserve reserve profit
stock reserve equity stock reserve equity
capital) capital)
2,751,8 2,642,3
I. Balance at the end of the 978,563 642,145 555,433 575,715 978,563 586,971 528,474 548,366
59,134. 76,860.
previous year ,745.00 ,947.59 ,925.97 ,515.70 ,745.00 ,440.10 ,746.92 ,928.12
26 14
Add: change of accounting
policy
Correction of errors in
previous periods
Other
2,751,8 2,642,3
II. Balance at the beginning 978,563 642,145 555,433 575,715 978,563 586,971 528,474 548,366
59,134. 76,860.
of the year ,745.00 ,947.59 ,925.97 ,515.70 ,745.00 ,440.10 ,746.92 ,928.12
26 14
III. Increase/ decrease of -131,46 -144,00
-12,535, 55,174, 26,959, 27,348, 109,482
amount in the year (―-‖ 8,618.7 4,272.9
654.21 507.49 179.05 587.58 ,274.12
means decrease) 5 6
113,172 113,172 269,591 269,591
(I) Net profit
,317.50 ,317.50 ,790.53 ,790.53
(II) Other comprehensive -12,535, -12,535, 55,174, 55,174,
incomes 654.21 654.21 507.49 507.49
Subtotal of (I) and (II) -12,535, 113,172 100,636 55,174, 269,591 324,766
34
English Translation for Reference Only
654.21 ,317.50 ,663.29 507.49 ,790.53 ,298.02
(III) Capital paid in and
reduced by owners
1. Capital paid in by
owners
2. Amounts of
share-based payments
recognized in owners’ equity
3. Others
-244,640 -244,640 26,959,1 -242,243 -215,284
(IV) Profit distribution
,936.25 ,936.25 79.05 ,202.95 ,023.90
1. Appropriations to 26,959, -26,959,
surplus reserves 179.05 179.05
2. Appropriations to
general risk provisions
3. Appropriations to -244,640 -244,640 -215,284 -215,284
owners (or shareholders) ,936.25 ,936.25 ,023.90 ,023.90
4. Other
(V) Internal carry-forward
of owners’ equity
1. New increase of
capital (or share capital) from
capital public reserves
2. New increase of
capital (or share capital) from
surplus reserves
35
English Translation for Reference Only
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
2,607,8 2,751,8
978,563 629,610 555,433 444,246 978,563 642,145 555,433 575,715
IV. Closing balance 54,861. 59,134.
,745.00 ,293.38 ,925.97 ,896.95 ,745.00 ,947.59 ,925.97 ,515.70
30 26
Person in charge of the Company: Zhong Xincai
Person in charge of accounting affairs: Zhong Xincai
Person in charge of accounting firm: Wang Shuqiong
36
English Translation for Reference Only
VII. Notes to the Financial Statements
(Unless otherwise stated, all amounts are expressed in RMB Yuan.)
( I ) C o m p a n y P ro f i l e
Company History
Foshan Electrical & Lighting Co., Ltd. (hereinafter referred to as ―the Company‖), a joint-stock
limited company jointly founded by Foshan Electrical and Lighting Company, Nanhai Wuzhuang
Color Glazed Brick Field, and Foshan Poyang Printing Industrial Co. on Oct. 20, 1992 by raising
funds under the approval of YGS (1992) No. 63 Document issued by the Joint Examination Group
for Experimental Enterprises in Stock System of Guangdong Province and the Economic System
Reform Commission of Guangdong Province, is an enterprise with its shares held by both the
corporate and the natural persons. As approved by China Securities Regulatory Commission with
Document (1993) No. 33, the Company publicly issued 19.3 million shares of social public shares
(A shares) to the public in Oct., 1993, and was listed in Shenzhen Stock Exchange for trade on
Nov. 23, 1993. The Company was approved to issue 50,000,000 B shares on Jul. 23, 1995. And, as
approved to change into a foreign-invested stock limited company on Aug. 26, 1996 by (1996)
WJMZEHZ No. 466 Document issued by the Ministry of Foreign Trade and Economic
Cooperation of the People’s Republic of China. On Dec. 11, 2000, as approved by China
Securities Regulatory Commission with ZJGS Zi [2000] No. 175 Document, the Company
additionally issued 55,000,000 A shares. At approved by the Shareholders’ General Meeting 2006,
2007 and 2008, the Company implemented the plan of capitalization of capital reserve, after the
transfer, the registered capital of the Company has increased to RMB 978,563,745.00 Yuan. And
the registration code for corporate business license is QGYZZ No. 002889.
Legal representative: Mr. Zhong Xincai
Address: No. 64, Fenjiang North Road, Foshan, Guangdong Province
Business Scope of the Company
R&D and production of electro-optical source products, electro-optical source equipment and
electro-optical accessories, and sales of such products made by it on both the domestic and
overseas markets, and the relevant engineering consultation service. The main products of the
Company include all kinds of electro-optical source products.
Basic Structure of the Organ of the Company
Shareholders’ General Meeting is the highest authority organ of the Company, Board of Directors
is an executive organ to carry out the provisions formulated by the Shareholders’ General Meeting,
Board of supervisors is an internal supervision organ of the Company, and the General Manager is
responsible for routine operation and management. Up to the end of the reporting period, the
Company owns 10 subsidiaries, namely, Foshan Chanchang Electric Appliance (Gaoming) Co.,
Ltd., Foshan Chansheng Electronic Ballast Co., Ltd., Foshan Taimei Times Lamps and Lanterns
37
English Translation for Reference Only
Co., Ltd., Foshan Gaoming Fuwan Landscape Resort Co., Ltd., Nanjing Fozhao Lighting
Components Co., Ltd., FSL (Xinxiang) Lighting Co., Ltd., Foshan Lighting Lamps and Lanterns
Co., Ltd., Qinghai Fozhao Lithium Ion Battery Cathode Materials Co., Ltd., Guangdong Fozhao
New Light Sources Technology Co., Ltd. and Guangdong Fozhao Financial Leasing Co., Ltd..
The cross-off of Foshan Chanchang Lighting Components Co., Ltd., a subsidiary with the
Company as its actual controller, has not been finished yet.
Financial Report Approval and Submission
The Financial Report had been approved and authorized for issue by the Board of Directors on 15
Aug. 2011.
Statement of Compliance with Corporate Accounting Standards
The financial statements prepared by the Company is in compliance with the requirements of
Accounting Standard for Business Enterprises, which gives a true and fair view of the state of
affairs of the Company as for the financial status and operating results & cash flows.
(II). Basis for preparation of financial statements
With going-concern assumption as the basis, the Company prepares its financial statement in light
of the actual transactions and matters, as well as the accounting standard for business
enterprise-basic standard promulgated by the Ministry of Finance of PRC in 15 Feb. 2006, other
specific accounting standards, and the relevant provisions of application guide and interpretation,
as well as the following primary accounting policies and accounting estimates.
(III). Main accounting policies, accounting estimates and preparation methods of the
Company’s consolidated financial statements
Fiscal Year
A fiscal year starts on 1 Jan. and ends on 31 Dec. according to the Gregorian calendar.
Recording Currency
Renminbi is the recording currency for the Company.
Accounting Basis and Principle
The accounting basis of the Company is the accrual system; generally by adopting of historical
cost as the accounting principle. And the Company adopts measurement replacement costs, net
realizable values, present values and fair values when the confirmed accounting elements accord
with the requirements of the accounting standard for business enterprise and can be reliably
measured.
38
English Translation for Reference Only
Accounting Method for Foreign Currency
Foreign currency shall be recognized by employing systematic and reasonable methods, and shall
be translated into the amount in the functional currency at the exchange rate which is approximate
to the spot exchange rate of the transaction date. On the balance sheet date, the foreign currency
monetary items shall be translated at the spot exchange rate. The balance of exchange arising from
the difference between the spot exchange rate on the balance sheet date and the spot exchange rate
at the time of initial recognition or prior tot the balance sheet date shall be recorded into the profits
and losses at the current period except that the balance of exchange arising from foreign currency
borrowings for the purchase and construction or production of qualified assets shall be capitalized.
The foreign currency non-monetary items measured at the historical cost shall still be translated at
the spot exchange rate on the transaction date.
Recognition Standards for Cash Equivalents
The term ―cash equivalents‖ refers to short-term ( within 3 months from the purchase date) and
highly liquid investments that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of change in value.
Financial Instruments
Financial Assets Classification, Recognition and Measurement
—Financial assets shall be classified into the following four categories when they are initially
recognized: financial assets measured at fair value and of which variations are recorded in the
profits and losses for the current period, loans and the account receivables, financial assets
available for sale and the investments which will be held to their maturity. Financial assets, at their
initial recognition, shall be measured at fair value. As for financial assets measured at fair value
and of which variations are recorded in the profits and losses for the current period, the relevant
trading expenses shall be directly recorded into the profits and losses of the current period; for
other categories of financial assets, the transaction expenses thereof shall be included into the
initially recognized amount.
——Financial assets measured at fair value and of which variations are recorded in the profits and
losses for the current period refer to financial assets held by the Company for the purpose of
selling in the near future, including transactional financial assets, or financial assets designated by
the management in the initial recognition to be measured at fair value with variations recorded in
the gains and losses for the current period. Financial assets measured at fair value and of which
variations are recorded in the profits and losses for the current period are subsequently measured
at their fair values. Interest or cash dividends arising from such assets during the holing period are
recognized as investment gains. Gains or losses arising from fair value changes are recorded in the
gains and losses for the current period at the end of the reporting period. When such assets are
disposed, the difference between their fair values and initially recognized amounts is recognized
as investment gains and the gains and losses arising from fair value changes are adjusted
accordingly.
—— Loan and accounts receivable: the non-derivative financial assets for which there is no
quoted price in the active market and of which the recoverable amount is fixed or determinable
shall be classified as loan and accounts receivable. The Company shall make subsequent
measurement on its loan and accounts receivable on the basis of the post-amortization costs by
39
English Translation for Reference Only
adopting the actual interest rate, from which gains and losses, when loan and accounts receivable
are terminated from recognizing, or are impaired or amortized, shall be recorded into the profits
and losses of the current period.
—— Available-for-sale Financial Assets: the non-derivative financial assets which are designated
as available-for-sale financial assets when they are initially recognized as well as the
non-derivative financial assets other than loans and accounts receivables, investments held until
their maturity and transactional financial assets. The Company shall make subsequent
measurement on available-for-sale financial assets at fair value, and the profits and losses arising
from the change in the fair value shall be directly recorded into the owner’s equity, until the said
financial assets shall be transferred out when they are terminated from recognizing or are impaired,
which shall be recorded into the profits and losses of current period. Where the intention of
holding or the ability to hold changes, or the fair value can not be reliably measured any more, or
the term of holding has exceeded "two complete accounting years", which makes it no longer
suitable to measure the available-for-sale financial assets at its fair value, the Company concerned
may measure the said financial assets on the basis of post-amortization cost. And such
post-amortization cost at the re-classification day shall be the carrying amount of the financial
assets. The gains or losses that are related to the said financial assets and that are directly included
in the owner’s equity shall be dealt with according to the following provisions: (1) Where such
financial asset has a fixed date of maturity, it shall be amortized within the remaining period of the
said financial asset by adopting the actual interest rate method and be recorded into the profits and
losses of the current period. The gap between the post-amortization cost of the financial asset and
the amount on the maturity date shall also be amortized within the remaining period of the said
financial asset by adopting the actual interest rate method and be recorded into the profits and
losses of the current period. If, during the subsequent accounting period, the financial asset is
impaired, the relevant profits and losses that were included in the owner’s equity shall be
transferred out and be recorded into the current profits and losses. (2) Where such financial asset
does not have a fixed date of maturity, it shall remain in the owner’s equity. Where such financial
asset is transferred out when it is impaired or determined from recognizing during the remaining
period of accounting that follows, and shall be recorded into the profits and losses of the current
period.
—— Held-to-maturity Investments: non-derivative financial asset with a fixed date of maturity, a
fixed or determinable recoverable amount and which the Company’s management holds for a
definite purpose or the Company’s management is able to hold until its maturity. The Company
shall make subsequent measurement on its Held-to-maturity Investments on the basis of the
post-amortization costs by adopting the actual interest rate, from which gains and losses, when
loan and accounts receivable are terminated from recognizing, or are impaired or amortized, shall
be recorded into the profits and losses of the current period. Where part of the held-to-maturity
investment is sold or the re-classified amount thereof is considerably large, so that the remainder
of the said investment is no longer suitable to be classified as a held-to-maturity investment, the
Company shall re-classify the remainder of the said investment as an available-for-sale financial
asset, and shall make subsequent measurement on it according to its fair value on the
re-classification day, and no longer re-classify the said financial asset as held-to-maturity
investment in the current fiscal year and the subsequent two complete accounting years. The gap
between the carrying amount of the said remnant part of the investment at the re-classification day
40
English Translation for Reference Only
and the fair value shall be computed into the owner’s equity. And when the said available-for-sale
financial asset is impaired or transferred out when it is terminated from recognition, it shall be
recorded into the profits and losses of the current period.
Classification, Recognition and Measurement of Financial Liabilities
—— Financial liabilities shall be classified into the following two categories when they are
initially recognized: (1) the transactional financial liabilities; and (2) other financial liabilities. The
financial liabilities initially recognized by the Company shall be measured at their fair values. For
the transactional financial liabilities, the transaction expenses thereof shall be directly recorded
into the profits and losses of the current period; for other categories of financial liabilities, the
transaction expenses thereof shall be included into the initially recognized amount.
—— Transactional financial liabilities: such financial liabilities held by the Company for the
purpose for repurchasing at the fair value in the near future, and financial liabilities formed a part
of combination of financial instruments which are managed by way of short-term profit making in
the near future, and derivative financial liabilities (the designated derivative instruments which are
effective hedging instruments, or derivative instruments to financial guarantee contracts, and the
derivative instruments which are connected with the equity instrument investment for which there
is no quoted price in the active market, whose fair value cannot be reliably measured, and which
shall be settled by delivering the said equity instruments) shall be classified as transactional
financial liabilities. Subsequent measurement of transaction financial liabilities shall be measured
at fair value, and the profits and losses arising from the change in the fair value shall be recorded
into the profits and losses of the current period.
—— Other financial liabilities: The Company shall make subsequent measurement on its other
financial liabilities on the basis of the post-amortization costs by adopting the actual interest rate,
from which gains and losses, when other financial liabilities are terminated from recognizing or
amortized, shall be recorded into the profits and losses of the current period.
Determination of the Fair Value of Financial Instruments
—As for the financial instruments for which there is an active market, the quoted prices in the
active market shall be used to determine the fair values thereof. Where there is no active market
for a financial instrument, the Company concerned shall adopt value appraisal techniques to
determine its fair value. The value appraisal techniques mainly include the prices adopted by the
parties, who are familiar with the condition, in the latest market transaction upon their own free
will, the current fair value obtained by referring to other financial instruments of the same
essential nature, the cash flow capitalization method and the option pricing model, etc.
Impairment test of financial assets and withdrawal method of impairment provision
—The Company shall carry out an inspection, on the balance sheet day, on the carrying amount of
the financial assets other than those transactional financial assets. Where there is any objective
evidence proving that such financial asset has been impaired, an impairment provision shall be
made.
—— Measurement for impairment of financial assets measured on the basis of the
post-amortization costs
41
English Translation for Reference Only
Where there is any objective evidence proving that a financial asset measured on the basis of
post-amortization costs is impaired, the carrying amount of the said financial asset shall be written
down to the current value of the predicted future cash flow (excluding the loss of future credits not
yet occurred), and the amount as written down shall be recognized as loss of the impairment of the
asset and shall be recorded into the profits and losses of the current period. An impairment test
shall be made on the financial assets with significant single amounts. With regard to the financial
assets with insignificant single amounts, an impairment test may be carried out by independent or
combination. Where, upon independent test, the financial asset has not been impaired, it shall be
included in a combination of financial assets with similar risk features so as to conduct another
impairment test. The financial assets which have suffered from an impairment loss in any single
amount shall not be included in any combination of financial assets with similar risk features for
any impairment test. During the follow-up period, if there is any objective evidence proving that
the value of the said financial asset has been restored, and it is objectively related to the events that
occur after such loss is recognized, the impairment-related losses as originally recognized shall be
reversed and be recorded into the profits and losses of the current period. However, the reversed
carrying amount shall not be any more than the post-amortization costs of the said financial asset
on the day of reverse under the assumption that no provision is made for the impairment. Where
any financial asset measured on the basis of post-amortization costs is recognized as having loss,
the relevant impairment provision withdrawn shall be written off.
—— Available-for-sale financial assets
Where an available-for-sale financial asset is impaired, even if the recognition of the financial
asset has not been terminated, the accumulative losses arising from the decrease of the fair value
of the owner’s equity which was directly included shall be transferred out and recorded into the
profits and losses of the current period. The accumulative losses that are transferred out shall be
the net amount obtained from the initially obtained costs of the sold financial asset after deducting
the principals as taken back, the current fair value and the impairment-related losses as was
recorded into the profits and losses of the current period.
Calculation of bad-debt provisions for accounts receivables
—For accounts receivables with a significant single amount and for which bad-debt provisions are
made separately:
Definition or amount
Accounts receivable with a significant single amount refer to the top five accounts
criteria for an account
receivable with the largest balances or accounts accounting for over 10% of the total
receivable with a
balance of receivables.
significant single amount
Where there is objective evidence proving that the Company is not able to recover the
full amount of an account receivable according to the original terms in relation to the
Making separate
account, an independent impairment test is carried out on the account receivable and the
bad-debt provisions for
bad-debt provision is made according to the difference between the present value of the
accounts receivable with
account’s future cash flows and the account’s carrying amount. If the independent
a significant single
impairment test shows that the account receivable has not been impaired, the balance of
amount
the account is put into the corresponding group and the bad-debt provision is made using
the balance percentage method.
—Accounts receivable for which bad-debt provisions are made on the group basis
42
English Translation for Reference Only
Grouping criteria:
Group name Criteria
Accounts receivable arising from other common
Common transaction group transactions than internal transactions are classified
according to credit risk features.
Accounts receivable arising from internal transactions
Internal transaction group within the scope of the consolidation statements are
classified according to credit risk features.
Making bad-debt provisions for accounts receivable on the group basis:
Group name Method for making provisions
Common transaction group Balance percentage method
The bad-debt provision is made according to the
Internal transaction group difference between the present value of the group’s future
cash flows and the group’s carrying amount.
—For receivable groups for which bad-debt provisions are made using the balance percentage
method:
Group name Provision ratio for account Provision ratio for other
receivables (%) receivables (%)
Common transaction groups 6% 6%
—Accounts receivable with an insignificant single amount but for which the bad-debt provision is
made independently
——When can the bad-debt provision be made independently for an account receivable with an
insignificant amount
When there is conclusive evidence proving that obvious difference exists in the recoverability.
——Method for making bad-debt provisions for the said accounts receivables
The bad-debt provision is made according to the difference between the present value of the
account’s future cash flows and the account’s carrying amount.
As for other receivables (including notes receivable, prepayments, interest receivable, long-term
receivables, etc.), bad-debt provisions are made according to the differences between the present
values of their future cash flows and their carrying amounts.
Accounting Method of Inventory
Inventory category: raw materials, products in processing, materials for consigned processing,
finished products, semi-manufactured semi-finished products, and low-value consumption goods.
Accounting of inventory: raw materials and finished products shall be measured at actual cost,
while weighted average method shall be adopted when receiving or outgoing.
Inventory system: a perpetual inventory system
Recognition of provision for falling price of inventory and withdrawal: The Company shall make
provision for falling price of inventory on the basis of each item of inventory at the balance that
net realizable value is lower than carrying cost. For finished goods, merchandise inventories, and
available for sale materials which are applied directly for sales of stock inventory, the amount
after deducting the estimated sale expense and relevant taxes from the estimated sell price of the
inventory shall be recognized as the net realizable value. For material inventories which need to be
43
English Translation for Reference Only
processed, the amount after deducting the estimated cost of completion, estimated sale expense
and relevant taxes from the estimated sale price of produced finished goods shall be recognized as
the net realizable value.
Measurement of Long-term Equity Investment
Measurement of long-term equity investment
— Long-term equity investment for the merger of enterprises
—— For the merger of enterprises under the same control, it shall, on the date of merger, regard
the share of the book value of the owner's equity of the merged enterprise as the initial cost of the
long-term equity investment, and the direct relevant expenses occurred for the merger of
enterprises shall be included into the profits and losses of the current period.
—— For the merger of enterprises not under the same control, The combination costs shall be the
fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the
equity securities issued by the Company in exchange for the control on the acquiree, and all
relevant direct costs incurred to the acquirer for the business combination. Where any future event
that is likely to affect the combination costs is stipulated in the combination contract or agreement,
if it is likely to occur and its effects on the combination costs can be measured reliably, the
Company shall record the said amount into the combination costs.
—— The 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.
—— The cost of a long-term equity investment obtained on the basis of issuing equity securities
shall be the fair value of the equity securities issued.
—— The cost of a long-term equity investment of an investor shall be the value stipulated in the
investment contract or agreement except the unfair value stipulated in the contract or agreement.
—— The cost of a long-term investment obtained by the exchange of non-monetary assets (having
commercial nature) shall be recognized basing on taking the fair value and relevant payable taxes
as the cost of the assets received.
—— The cost of a long-term equity investment obtained by recombination of liabilities shall be
recognized at the fair value.
Subsequent measurement of long-term equity investment and recognized method of investment
income
—The long-term equity investment of the Company that is able to control the invested enterprise
and which of the Company that does not do joint control or does not have significant influences on
the invested entity, and has no offer in the active market and its fair value cannot be reliably
measured, it shall be measured by employing the cost method. Except for the declared but not
distributed cash dividends or profits included in the price or consideration actually paid when an
investment is obtained, the dividends or profits declared to distribute by the invested entity shall
be recognized as the current investment income.
—A long-term equity investment of the Company that does joint control or significant influences
over the invested entity shall be measured by employing the equity method. If the cost of a
long-term equity investment is more than the Company's attributable share of the fair value of the
invested entity's identifiable net assets for the investment, the cost of the long-term equity
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investment may not be adjusted. If the cost of a long-term equity investment is less than the
Company's attributable share of the fair value of the invested entity's identifiable net assets for the
investment, the difference shall be included in the current profits and losses and the cost of the
long-term equity investment shall be adjusted simultaneously. The Company shall recognize the
net losses of the invested enterprise until the book value of the long-term equity investment and
other long-term rights and interests which substantially form the net investment made to the
invested entity are reduced to zero, unless the investing enterprise has the obligation to undertake
extra losses. The Company shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net profits
and losses of the invested entity after it adjusts the net profits of the invested entity.
Provision for impairment of long-term investment
—The Company shall conduct inspection to long-term investment item by item at the end of
reporting period. If the market price of long-term investment falls into sustained decline or the
invested enterprise’s operation status grow worse, which will cause that the recoverable amount is
lower than carrying value, moreover, such reduced value will not be restored in predicted future
period, then the negative balance between the recoverable amount and carrying value of long-term
investment shall be measured as provision for impairment of long-term investment. The
recoverable amount shall be determined in light of the higher one of the net amount of the fair
value of the long-term equity investment minus the disposal expenses and the current value of the
expected future cash flow of the long-term equity investment. Once any loss of impairment of the
long-term investment is recognized, it shall not be switched back in the future accounting periods.
Measurement and depreciation methods of fixed Assets
Recognition of fixed assets: Fixed assets of the Company refers to the tangible assets that
simultaneously possess the features as follows: they are held for the sake of producing
commodities, rendering labor service, renting or business management; and their useful life is in
excess of one fiscal year and unit price is higher.
Category of fixed assets: housing and building, machinery equipment, transportation vehicle and
other.
Measurement and depreciation methods of fixed assets: fixed assets shall be measured at actual
cost. Depreciation rate shall be recognized by employing the straight-line method and in
accordance with appraisal economical useful life and predicated net residuals. The appraisal
economical useful life and depreciation rate are listed as below:
Categories Useful life Annual depreciation rate Residuals rate
Housing and Building 3—25 31.67%-4.75% 5%
Machinery equipments 2—8 47.50%-11.88% 5%
Transportation vehicle 5—10 19%-9.50% 5%
Other 2—8 47.50%-11.88% 5%
Provision for impairment of fixed assets: The Company shall carry out inspection to fixed assets
item by item every year. If the recoverable amount is lower than carrying value due to sustained
decline of market price of fixed assets or technological obsolescence, damage or long-term idle,
then the provision for impairment of fixed assets shall be withdrawn on the basis of the balance
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hereof. Once any loss of impairment of the fixed assets is recognized, it shall not be switched back
in the future accounting periods. The recoverable amount shall be determined in light of the higher
one of the net amount of the fair value of the fixed assets minus the disposal expenses and the
current value of the expected future cash flow of the fixed assets. The current value of future cash
flow of assets shall be recognized based on the amount after the predicated future cash flow
occurred in the process of continuous services and when the final disposal is discounted by
adopting proper discount rate.
Accounting Measurement of Construction in Progress
Construction in progress shall be measured at actual cost. Constructions in progress shall be
carried down to fixed assets by adopting provisional estimate when bringing to the expected
conditions for use. After completion and settlement procedures, the Company shall adjust the
carrying value of fixed assets at the actual cost. As for interests on borrowings incurred to
special-borrowing loans or general borrowing for the acquisition and construction or production of
assets eligible for capitalization and the ancillary expense incurred to special-borrowing loans,
those incurred before a qualified asset under acquisition, construction or production is ready for
the intended use or sale shall be capitalized into capitalized cost, while those incurred after a
qualified asset under acquisition and construction or production is ready for the intended use or
sale shall be included into the profits and losses of the current period.
Provision for impairment of construction in progress: the Company shall carry out overall
inspection to the construction in progress at the end of the reporting period. If the construction in
progress has been stopped for a long time and cannot be continued restarting in the coming three
years, and such construction in progress has already fallen behind, whatever in performance or in
technology, resulting in an uncertainty to economic benefit of the Company, and there is an
obvious evidence shows that the construction in progress has been impaired, then provision for
impairment of the construction in progress shall be withdrawn based on the negative balance
between the recoverable amount of single construction in progress and carrying value. Once any
loss of impairment of the construction in progress is recognized, it shall not be reversed in the
future accounting periods.
Measurement of Intangible Assets and Amortization Method
Measurement of intangible assets
—— The cost of outsourcing intangible assets shall be measured at actual expenditures occurred
for reaching the expected use purpose.
—— The research expenditures for its internal research and development projects of the
Company shall be recorded into the profit or loss for the current period. The development
expenditures for its internal research and development projects of the Company may be confirmed
as cost of intangible assets when they satisfy capitalization conditions.
—— The cost invested into intangible assets by investors shall be determined according to the
conventional value in the investment contract or agreement, except for those of unfair value in the
contract or agreement.
—— The intangible assets received by the Company through accepting debtor’s non-cash assets
for compensation for debts, or by receivables, shall be measured at the fair value of the intangible
assets received.
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—— The cost invested into intangible assets by non-monetary transaction shall be determined
according to the fair value of non-monetary assets and relevant payable taxes.
Amortization of intangible assets: Intangible assets with limited service life shall be amortized by
the straight-line method within its estimated service life. If it is unable to forecast the period when
the intangible asset can bring economic benefits to the Company, it shall be regarded as an
intangible asset with uncertain service life. Intangible assets with uncertain service life may not be
amortized. The Company’s intangible assets is mainly land use right, which is amortized
averagely by the service life (50 years).
Provision for impairment of intangible assets: the Company shall made overall inspection to the
intangible asset at the end of reporting period. If the intangible assets have already been replaced
by other new technologies, resulting in the Company’s ability to create economic benefits
suffering materials adverse influence, or a sustained decline of market price of intangible assets
and impossible to be recover within the residual amortization years, or certain intangible asset has
exceeded the term protected by law but still part of useful value is remained, or there is an obvious
evidence shows that the intangible assets has been impaired, then provision for impairment of the
intangible assets shall be withdrawn based on the balance between the recoverable amount of
single intangible assets and carrying value. Once any loss of impairment of the intangible assets is
recognized, it shall not be reversed in the future accounting periods.
Measurement of Long-term Deferred Expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year
(one year excluded) that have occurred but attributable to the current and future periods.
Long-term deferred expense shall be recoded into book in the light of the actual expenditure, and
amortized averagely within benefit period. In case of no benefit in the future accounting period,
the amortized value of such project that fails to be amortized shall be transferred into the profits
and losses of the current period.
Measurement of Capitalization of Borrowing Costs
The borrowing costs shall not be capitalized unless they simultaneously meet the following
requirements: (1) The asset disbursements have already incurred, which shall include the cash,
transferred non-cash assets or interest bearing debts paid for the acquisition and construction or
production activities for preparing assets eligible for capitalization; (2) The borrowing costs has
already incurred; and (3) The acquisition and construction or production activities which are
necessary to prepare the asset for its intended use or sale have already started.
To-be-capitalized amount of interests of borrowing: As for interests of borrowing occurred
special-borrowing loans or general borrowing for the acquisition and construction or production of
assets eligible for capitalization, those incurred before a qualified asset under acquisition,
construction or production is ready for the intended use or sale shall be capitalized based on the
following methods:
—— As for special-borrowing loans for the acquisition and construction or production of assets
eligible for capitalization, the to-be-capitalized amount of interests shall be determined in light of
the actual cost incurred of the specially borrowed loan at the present period minus the income of
interests earned on the unused borrowing loans as a deposit in the bank or as a temporary
investment.
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—— Where a general borrowing is used for the acquisition and construction or production of
assets eligible for capitalization, the Company shall calculate and determine the to-be-capitalized
amount of interests on the general borrowing by multiplying the weighted average asset
disbursement of the part of the accumulative asset disbursements minus the general borrowing by
the capitalization rate of the general borrowing used. The capitalization rate shall be calculated
and determined in light of the weighted average interest rate of the general borrowing.
Suspension of capitalization: Where the acquisition and construction or production of a qualified
asset is interrupted abnormally and the interruption period lasts for more than 3 months, the
capitalization of the borrowing costs shall be suspended. The borrowing costs incurred during
such period shall be recognized as expenses, and shall be recorded into the profits and losses of
the current period, till the acquisition and construction or production of the asset restarts. If the
interruption is a necessary step for making the qualified asset under acquisition and construction
or production ready for the intended use or sale, the capitalization of the borrowing costs shall
continue.
Recognition and Measurement of Estimated liabilities
Recognition of estimated debts: The obligation such as external guaranty, pending litigation or
arbitration, product quality assurance, layoff plan, loss contract, restructuring and disposal of fixed
assets, pertinent to a contingencies shall be recognized as an estimated debts when the following
conditions are satisfied simultaneously: ① That obligation is a current obligation of the enterprise;
② It is likely to cause any economic benefit to flow out of the enterprise as a result of
performance of the obligation; and ③ The amount of the obligation can be measured in a reliable
way.
The estimated debts shall be initially measured in accordance with the best estimate of the
necessary expenses for the performance of the current obligation. To determine the best estimate,
the Company shall take into full consideration of the risks, uncertainty, time value of money, and
other factors pertinent to the Contingencies. If the time value of money is of great significance, the
best estimate shall be determined after discounting the relevant future outflow of cash. If there is a
sequent range for the necessary expenses and if all the outcomes within this range are equally
likely to occur, the best estimate shall be determined in accordance with the middle estimate
within the range. In other cases, the best estimate shall be conducted in accordance with the
following situations, respectively: ① If the Contingencies concern a single item, it shall be
determined in the light of the most likely outcome. ② If the Contingencies concern two or more
items, the best estimate should be calculated and determined in accordance with all possible
outcomes and the relevant probabilities. ③ When all or some of the expenses necessary for the
liquidation of an estimated debts of an enterprise is expected to be compensated by a third party,
the compensation should be separately recognized as an asset only when it is virtually certain that
the reimbursement will be obtained. The Company shall check the book value of the estimated
debts on the balance sheet date. The Company shall, subject to change, make adjustment to
carrying value to reflect the current best estimate.
Employee Compensation
The employee compensation refers to all kinds of payments and other relevant expenditures given
by the Company during the accounting period of an employee' providing services to the Company,
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including: wages, bonuses, allowances and subsidies for the employees; welfare expenses for the
employees; social insurances such as medical insurance, endowment insurance, unemployment
insurance, work injury insurance, maternity insurance and other, which are paid by the Company
to the employee, and housing accumulation fund. If the Company cancels the labor relationship
with any employee prior to the expiration of the relevant labor contract or brings forward any
compensation proposal for the purpose of encouraging the employee to accept a layoff (the
cancellation of labor relationship or proposal on voluntary layoff will execute it soon, and The
Company is unable to unilaterally withdraw the plan on the cancellation of labor relationship or
the layoff), the Company shall recognize the estimated liabilities incurred hereof, and shall
simultaneously record them into the profit or loss for the current period.
Recognition of revenue
No revenue shall be realized unless the following conditions are met simultaneously: a. The
significant risks and rewards of ownership of the goods or products have been transferred to the
buyer by the enterprise; b. The Company retains neither management right nor effective control
over the sold goods or products; c. The relevant revenue has been received or valid evidence has
been obtained, d. relevant cost related to sales of goods and products can be measured in a reliable
way.
Revenue from providing services shall be recognized by adopting the percentage-of-completion
method when following conditions shall be met simultaneously: The amount of revenue can be
measured in a reliable way; The relevant economic benefits are likely to flow into the enterprise;
The schedule of completion under the transaction can be confirmed in a reliable way; and the costs
incurred or to be incurred in the transaction can be measured in a reliable way. If the Company can
not measure the result of a transaction concerning the providing of labor services in a reliable way,
and the cost of labor services incurred is expected to be compensated, the revenue from the
providing of labor services shall be recognized in accordance with the amount of the cost of labor
services incurred. If the cost of labor services incurred is not expected to compensate in full, the
revenue shall be recognized in accordance with the amount of the cost of labor service can be
compensated; if all cost of labor services incurred is not expected to compensate and no revenue
from the providing of labor services may be recognized.
The revenue from abalienating of right to use the Company’s assets may be recognized when the
following conditions are met simultaneously: a. the relevant economic benefits are likely to flow
to the Company; and b. the amount of revenues can be measured in a reliable way. The user
charge receivable should be measured and confirmed as operating revenue in accordance with the
period and method of charging as stipulated in the relevant contract or agreement.
Government Subsidies
No government subsidy may be recognized unless the following conditions are met
simultaneously: (1) The Company can meet the conditions for the government subsidies; and (2)
The Company can obtain the government subsidies.
If a government subsidy is a monetary asset, it shall be measured in the light of the received or
receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at its fair
value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal
amount.
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The government subsidies pertinent to assets shall be recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current profits and
losses. But the government subsidies measured at their nominal amounts shall be directly included
in the current profits and losses. The government subsidies pertinent to incomes shall be treated
respectively in accordance with the circumstances as follows: (1) Those subsidies used for
compensating the related future expenses or losses of the enterprise shall be recognized as
deferred income and shall included in the current profits and losses during the period when the
relevant expenses are recognized; or (2) Those subsidies used for compensating the related
expenses or losses incurred to the enterprise shall be directly included in the current profits and
losses.
Accounting Treatment of Income Tax
Income tax shall be measured by adopting balance sheet approach. On the balance sheet day,
deferred income tax assets and relevant deferred income tax income shall be recognized based on
the deductible temporary difference and result calculated at the applicable income tax rate;
deferred income tax liabilities and relevant deferred income tax expense shall be recognized based
on taxable temporary difference and result calculated at the applicable income tax rate.
Method for Profit Distribution
In accordance with the Articles of Association, the Company’s profit shall be distributed in order
as follows:
—— Making up losses in the previous year;
—— Appropriating 10% net profit as statutory public reserve, if accumulative appropriated
amount reaches over 50% of registered capital, the Company may no longer appropriate;
—— Appropriating discretionary public reserve after approval by the Shareholders’ General
Meeting;
—— Retained profit shall be distributed according to the resolution of the Shareholders’
General Meeting.
Business Combinations
The term "business combinations" refers to a transaction or event bringing together two or more
separate enterprises into one reporting entity. The Company shall recognize assets and liabilities
obtained for business combinations on the combining date and acquisition date. The "combining
date" or ―acquisition date‖ refers to the date on which the combining party actually obtains control
on the combined party.
In a business combination under the same control, the assets and liabilities that the combining
party obtains in a business combination shall be measured on the basis of their carrying amount in
the combined party on the combining date. As for the balance between the carrying amount of the
net assets obtained by the combining party and the carrying amount of the consideration paid by it,
the additional paid-in capital shall be adjusted. If the additional paid-in capital is not sufficient to
be offset, the retained earnings shall be adjusted.
In a business combination not under the same control, the combination costs shall be the fair
values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity
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securities issued by the acquirer in exchange for the control on the acquiree. The positive balance
between the combination costs and the fair value of the identifiable net assets it obtains from the
acquiree shall be recognized as business reputation. The negative balance between the
combination costs and the fair value of the identifiable net assets it obtains from the acquiree shall
be recorded into the profits and losses of the current period after the reexamination.
Preparation methods for consolidated financial statements
The scope of consolidation of consolidated financial statements shall include the Company and all
its subsidiaries. The operating outcomes and financial status of the subsidiaries shall be included
in the consolidated financial statements from start date of the control to end date of the control.
The subsidiaries that the Company obtains due to business combination under the same control
shall be included into the scope of consolidation when preparing the consolidated financial
statements of the current period, and the beginning balance in the consolidated financial statement
and prior comparison sheet shall be adjusted accordingly.
As for the subsidiaries that the Company obtains due to business combination not under the same
control, their financial statements shall be adjusted based on the fair value of each identifiable
asset and liability determined on the combining date when preparing the consolidated financial
statements of the current period. Such combined subsidiaries shall be included into the scope of
consolidation from the combining date.
If the accounting period and accounting policies adopted by a subsidiary are different from those
adopted by the Company, when preparing the consolidated financial statement, necessary
adjustments shall be made to the financial statements of the subsidiary under the accounting
period and accounting policies adopted by the Company. Within the scope of consolidation, all
significant transactions between the enterprises, balance and unrealized profits and losses shall be
offset when preparing the consolidated financial statement. As for the unrealized losses occurred
in the internal transaction, if there is a evidence shows that such loss is impairment loss on
relevant assets, it shall not be offset. The equity and profits & losses attributable to minority
shareholders of the subsidiary shall be particularly presented in the item of ―shareholder’s equity‖
in the consolidated balance sheets and in the item of ―net profit‖ in the consolidated income
statement respectively.
Change in accounting policies and accounting estimates and corrections of prior accounting
errors
During the reporting period, there is no change in accounting policies or accounting estimates and
no correction of prior accounting errors.
(IV). Major Taxes
VAT
VAT on sales is calculated based on 17% of sales revenue. VAT is calculated and paid based on the
difference of VAT on sales deducting deductable input VAT. Tax on exports managed by the
Company, as approved by the taxation departments, is paid by adopting the policy of ―tax
exemption, tax deduction and tax rebate‖ since 1 Jan. 2002.
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Corporate Income Tax
The Company was identified as a high-tech enterprise in Dec. 2008, and won the ―Certificate of
High-tech Enterprise‖ with serial number GR200844000085 after approval by Department of
Science and Technology of Guangdong Province, Department of Finance of Guangdong Province,
Guangdong Provincial Bureau of State Taxation and Guangdong Provincial Bureau of Local
Taxation on 16 Dec. 2008. In accordance with relevant provisions in Corporate Income Tax Law
of the People's Republic of China and the Administration Measures for Identification of High-tech
Enterprises promulgated in 2007, the Company paid the corporate income tax based on a tax rate
of 15% within three years since 1 Jan. 2008.
In 2011, in accordance with the Administration Measures for Identification of High-tech
Enterprises, Management Guidelines on Identification of High-tech Enterprises and circulars on
relevant rechecks from Department of Science and Technology of Guangdong Province, the
Company has submitted the relevant materials for recheck to relevant authorities, and now it is on
the recheck process. Besides, in accordance with [2011] No. 4 document from State
Administration of Taxation, the Company paid the corporate income tax based on a tax rate of
15% temporarily in 2011.
The subsidiaries of the Company, including Foshan Taimei Times Lamps and Lanterns Co., Ltd.,
and Foshan Chanchang Electric Appliance (Gaoming) Co., Ltd., are all productive foreign funded
enterprises, so that the said three companies enjoy a preferential CIT policy of ―Two plus three‖
(Exemption of enterprise income tax for the first two years of making profit, and 50% tax
reduction for following three years). Of which, year 2007 is the first profit-making year that
Foshan Taimei Times Lamps and Lanterns Co., Ltd. enjoys the said preferential policy of ―Two
plus three‖, therefore, it should be allowed a 50% reduction of income tax in 2011. Foshan
Chanchang Electric Appliance (Gaoming) Co., Ltd. enjoys a preferential CIT policy of ―Two plus
three‖ since 2008, therefore the said company should be allowed a 50% reduction of the enterprise
income tax in 2011, as at the rate of 12.5%..
The subsidiaries of the Company, including Foshan Chansheng Electronic Ballast Co., Ltd.,
Foshan Gaoming Fuwan Landscape Resort Co., Ltd., Nanjing Fozhao Lighting Components
Manufacturing Co., Ltd., Foshan Electrical & Lighting (Xinxiang) Co., Ltd., Foshan Lighting
Lamps and Lanterns Co., Ltd., Qinghai Fozhao Lithium Ion Battery Cathode Materials Co., Ltd.
Guangdong Fozhao New Light Sources Technology Co., Ltd., and Guangdong Fozhao Financial
Leasing Co., Ltd., whose enterprise income tax rate is 25%.
（V）. Subsidiaries controlled by the Company
The subsidiaries received by the Company through establishment or investment
Amount
Name of Registered invested by
Date of Registration Equity Legal Consolidated
invested capital the Main business
foundation place owned representative statement
company (RMB’0000) Company
(RMB’0000)
Foshan Manufacturing
1989 Foshan USD180 USD72 40% Zhong Xincai Yes
Chanchang bromine
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Lighting tungsten lamp,
Components special
Co., Ltd. lighting
source
products and
ancillary
devices
Foshan Manufacturing
Chansheng electronic
Electronic ballasts,
Ballast Co., 2003 Foshan RMB100 RMB75 75% Zhong Xincai electronic Yes
Ltd. transformers
and electronic
triggers.
Foshan Production
Chanchang and operation
Electric of lamps,
Appliance electric light
(Gaoming) source
Co., Ltd. products and
2005 Foshan RMB6000 RMB4200 70% Zhong Xincai Yes
accessories,
installation
and related
engineering
and consulting
business.
Foshan Research,
Taimei development,
Times production
Lamps and and sales of
Lanterns lighting,
Co., Ltd. 2005 Foshan RMB50 RMB35 70% Zhao Yong household Yes
appliances and
accessories
and other
lighting
products.
Foshan Making
Gaoming arrangement
Fuwan (tourist
Landscape 2006 Foshan RMB480 RMB480 100% Zhong Xincai industry, Yes
Resort Co., catering
Ltd. service, sauna,
foot-bathing,
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games, retail
of beverages,
sports on the
water, chess)
Foshan R&D and
Lighting production of
Lamps and electric light
Lanterns source lamp
Co., Ltd. products and
relevant
2009 Foshan RMB500 RMB507 100% Zhong Xincai Yes
electric
engineering
materials,
metal material
and non-metal
material
Foshan Production
Electrical & and sales of
Lighting electric light
(Xinxiang) source
Co., Ltd. equipment and
electric light
source
products, sales
of accessories
of electric
light source,
2009 Xinxiang RMB1000 RMB500 100% Zhong Xincai Yes
electric light
source
materials,
electric
engineering
materials,
accessories for
motor
vehicles,
lamps and
components
Qinghai
Production
Fozhao and sales of
Lithium Ion lithium ion
2010 Qinghai RMB5000 RMB2550 51% Zhong Xincai battery Yes
Battery cathode
Cathode materials
exploitation
Materials
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Co., Ltd.
Production
and sales of
Guangdong LED lighting
Fozhao products, LED
New Light lighting
2011 Foushan RMB22200 RMB1000 55% Zhong Xincai Yes
Sources appliances
Technology products and
Co., Ltd. installment of
lighting
project
Financing
lease business,
leasing
business,
consultancy
and guarantee
for leasing
trade,
Guangdong
financing
Fozhao
Zhou lease and
Financial 2011 Foushan RMB20000 RMB20000 100% Yes
Jianping service for
Leasing
new energy
Co., Ltd.
automobile
and main
components,
energy-save
lighting
products and
related
projects
—Foshan Chanchang Lighting Components Co., Ltd. was founded in 1989, and the Company
holds 40% equities of the said company. Under relevant provisions in the agreement signed
between the Company and foreign shareholder of Foshan Chanchang Lighting Components Co.,
Ltd., the Company owns the real control right. Therefore, the said company is included into the
scope of the consolidated financial statements. Owing to expiration of the duration of joint venture
ended 30 Nov. 2008, the Board of the said subsidiary company decided to terminate its operation.
Up until 30 Jun. 2011, the termination was not completed.
— Foshan Chanchang Electric Appliance (Gaoming) Co., Ltd., who is the Sino-foreign joint
ventures invested and established by the Company and Prosperity Lamps and Components Ltd,
had obtained license for business corporation on 23 Aug. 2005 through approval by Foreign Trade
and Economic Cooperation Bureau of Gaoming District, Foshan with document ―MWJMY Zi
[2005] No. 79‖. The Company holds 70% equities of the said company, therefore the said
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subsidiary was included into the scope of the consolidated financial statements since date of the
foundation.
—Foshan Taimei Times Lamps and Lanterns Co., Ltd., who is the Sino-foreign joint ventures
invested and established by the Company and Reback North America Investment Limited, had
obtained license for Business Corporation on 5 Dec. 2005 through approval by Foreign Trade and
Economic Cooperation Bureau of Gaoming District, Foshan with document ―MWJMY Zi [2005]
No. 97‖. The Company holds 70% equities of the said company, therefore the said subsidiary was
included into the scope of the consolidated financial statements since date of foundation.
—Foshan Gaoming Fuwan Landscape Resort Co., Ltd. is limited liability company, which is
invested and established by the Company, obtaining its license for Business Corporation on 23
Nov. 2006. And the company holds 100% equities of this company. Therefore the said subsidiary
was included into the scope of the consolidated financial statements since date of foundation.
— Foshan Lighting Lamps and Lanterns Co., Ltd. is limited liability company, which is invested
and established by the Company together with Foshan Haozhiyuan Trading Co., Ltd., Shanghai
Liangqi Electric Co., Ltd, Changzhou Sanfeng Electrical & Lighting Co., Ltd., Henan Xingchen
Electrical & Lighting Co., Ltd., Foshan Hongbao Electrical & Lighting Co., Ltd., Hebei Jinfen
Trading Co., Ltd., obtaining its license for Business Corporation on 27 Mar. 2009. The Company
holds 60% equities of this company. Therefore the said subsidiary was included into the scope of
the consolidated financial statements since date of the foundation. The said company had put into
production in May 2009. On 25 Sep. 2009, the equity transfer agreement was signed between the
Company and Foshan Haozhiyuan Trading Co., Ltd., in which Foshan Haozhiyuan Trading Co.,
Ltd. transferred 10% equities of Foshan Lighting Lamps and Lanterns Co., Ltd. to the Company.
After transfer, the Company holds 70% equities of Foshan Lighting Lamps and Lanterns Co., Ltd..
On 19 Nov. 2010, the Company signed Equity Transfer Contract with Shanghai Liangqi Electric
Co., Ltd, Changzhou Sanfeng Electrical & Lighting Co., Ltd., Henan Xingchen Electrical &
Lighting Co., Ltd., Foshan Hongbao Electrical & Lighting Co., Ltd., and Taizhou Luqiao Hengyu
Lighting Equipment Trading Company. Since then, the above said minority shareholder
respectively transferred 6% of their holding equities of Foshan Lighting Lamps and Lanterns Co.,
Ltd. to the Company, the Company held 100% equities of Foshan Lighting Lamps and Lanterns
Co., Ltd. after the transfer.
—Foshan Electrical & Lighting (Xinxiang) Co., Ltd. is limited liability company with the
registered capital of RMB 10 million, which is invested and established by the Company,
obtaining its license for Business Corporation on 17 Apr. 2009. As at 31 Dec. 2010, the Company
had invested RMB 5 million in this company, holding 100% equities of this company. Therefore
the said subsidiary was included into the scope of the consolidated financial statements since date
of foundation.
—Qinghai Fozhao Lithium Ion Battery Cathode Materials Co., Ltd. is limited liability company,
which is invested and established by the Company together with Hefei Lixin Energy Material Co.,
Ltd., Qinghai Power New Energy Material Co., Ltd., Lithium Energy Holdings, Ltd. and Jianagsu
Guogang Communication Engineering Co., Ltd.. On 25 Oct. 2010, Qinghai Fozhao Lithium
Energy Exploitation Co., Ltd. received Business License for Enterprise as a Legal Person, of
which the Company holds 51% equities of the company, and it was included into the scope of the
56
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consolidated financial statements since date of foundation.
—Guangdong Fozhao New Light Sources Technology Co., Ltd. is limited liability company,
which is invested and established by the Company together with Bright Technology & Venture
Limited, obtaining its license for Business Corporation on 7 Jun. 2011, of which the Company
holds 55% equities of the company, and it was included into the scope of the consolidated
financial statements since date of foundation.
—Guangdong Fozhao Financial Leasing Co., Ltd. is limited liability company with a registered
capital of RMB 200 million, which is invested and established by the Company, obtaining its
licence for Business Corporation on 30 May 2011, of which the Company holds 100% equities of
the company, and it was included into the scope of the consolidated financial statements since date
of foundation.
The subsidiary for business combination not under the same control
Amount
Name of Registered invested by
Date of Registration Equity Legal Consolidated
invested capital the Main business
foundation place owned representative statement
company (RMB’0000) Company
(RMB’0000)
Production of
energy-saving
photoelectric
source
products,
lamps and
lanterns, light
source
Nanjing
equipments,
Fozhao
illumination
Lighting
2002 Nanjing RMB4168.32 RMB7200 100% Zhong Xincai engineering; Yes
Components
technological
Manufacturing
development
Co., Ltd.
of
energy-saving
and production
of relevant
components;
sales of
self-production
products
— In accordance with the equity transfer agreement signed between the Company and Prosperity
Lamps and Components Ltd on 27 Aug. 2008, Prosperity Lamps and Components Ltd. transferred
100% equities of Nanjing Fozhao Lighting Components Manufacturing Co., Ltd.(used to known
as ―Prosperity (Nanjing) Lighting Components Co., Ltd.‖, and changed name to ―Nanjing Fozhao
57
English Translation for Reference Only
Lighting Components Manufacturing Co., Ltd.‖ on 15 Nov. 2010.) to the Company. Therefore,
Prosperity (Nanjing) Lighting Components Co., Ltd. became the wholly-owned subsidiary of the
Company. The said subsidiary was included into the scope of the consolidated financial statements
since merger date.
Change of consolidation scope and reason
—As above mentioned, the Company newly established and invested Qinghai Fozhao Lithium Ion
Battery Cathode Materials Co., Ltd. in 2011 and the said company was included into the scope of
the consolidated financial statements since date of foundation.
Subsidiaries that newly combined into consolidation scope in current period
Name Closing net assets Net profit in current period
Guangdong Fozhao New Light 9,901,642.00 -98,358.00
Sources Technology Co., Ltd. Leasing
Guangdong Fozhao Financial 199,922,775.50 -77,224.50
Co.,MLtd.ority interests and profits and losses of minority shareholders of controlling
— in
subsidiaries
As at 30 Jun. 2011 As at 30 Jun. 2010
Profits and losses Profits and losses
Name of company Minority of minority Minority of minority
interests shareholders as of interests shareholders as
this period of this period
Foshan Chanchang Lighting Components Co.,
Ltd. 101,572.25 16,119,953.03
Foshan Chansheng Electronic Ballast Co., Ltd.
586,622.46 -163,687.01 -284,907.31 765,485.42
Foshan Chanchang Electric Appliance
(Gaoming) Co., Ltd. 25,518,519.13 2,362,222.02 -2,391,819.82 20,921,313.71
Foshan Taimei Times Lamps and Lanterns
Co., Ltd. 4,021,865.84 2,489,538.9 1,442,362.71 2,974,689.65
Foshan Lighting Lamps and Lanterns Co., Ltd 1,649,807.88 3,767,709.71
Qinghai Fozhao Lithium Ion Battery Cathode
Materials Co., Ltd.
16,125,191.40 -289,060.59
Guangdong Fozhao New Light
-44,261.10 -44,261.1
Total 46,207,937.73 4,354,752.22 517,015.71 44,549,151.52
（VI）. Notes to Main Items of Consolidated Financial Statements
1. Monetary Funds
Closing amount Opening amount
Item Amount in
Exchange Amount in Amount in Exchange Amount in
foreign
rate RMB foreign currency rate RMB
currency
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English Translation for Reference Only
Cash
73,199.54 114,480.22
Bank
deposits 547,721,103.99 701,830,065.08
Of which:
RMB 485,993,471.84 694,505,957.79
account
HKD 93.05 0.8316 77.38 93.05 0.8509 79.18
account
USD 4,842,446.46 6.4726 31,343,426.96 994,429.22 6.6227 6,585,806.34
account
Euro 83,854.4 9.3612 784,977.81 83,826.92 8.8065 738,221.77
Account
Other
currency
5,681.08 9,909,087.65
funds
Of which:
RMB 5,681.08 9,909,087.65
Total
547,799,984.61 711,853,632.95
—Closing monetary capital decreases RMB164,053,648.34 compared to period-begin with a
decrease of 23.05%, mainly due to the increase on external equity investment of the Company in
current period.
—All bank deposits are in the name of the Company or the subsidiaries which are within the scope
of consolidated financial statements.
—Other monetary capital are refundable deposit the Company deposited in exchange company
under the company name.
2. Tradable Financial Assets
Items
Closing balance Opening balance
Tradable financial assets
4,824,336.08 38,287,211.70
—Tradable financial assets are detailed as follows:
Item Investment ratio Closing investment Closing market Impairment reserve
amount value
Fund investment 5,000,000.00 4,824,336.08 -
Total 5,000,000.00 4,824,336.08 -
—Tradable financial assets above were all shares acquired by the Company by subscription at the
primary market.
3. Notes Receivable
Item Closing balance Opening balance
Bank acceptance bill 95,701,617.96 79,964,518.10
Total 95,701,617.96 79,964,518.10
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— As at 30 Jun. 2011, there is no undue trade acceptance draft receivable discounted or pledged.
—Closing balance of notes receivable increases by RMB15,737,099.86 as compared with the
opening balance, an increase of 19.68% due to most customers adopt notes to make payments in
current period.
—There is no amount due from shareholders who hold 5% or more of voting shares of the
Company in the closing balance of notes receivable.
4. Accounts Receivable
Net amount of account receivable as at 30 Jun. 2011 stood at RMB340,328,640.68 which is
classified by categories as follows:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Item Propo Propo Prop Propo
Amount rtion Amount rtion Amount ortion Amount rtion
(%) (%) (%) (%)
Significant single amounts
and make independent
- - - - - - - -
provision for impairment
losses
Accounts receivable that make provision for impairment loss according to ages combination
Normal business
combination 362,051,745.40 99.66 21,723,104.72 6.00 337,431,389.01 99.68 20,245,883.34 6.00
Subtotal of combination
362,051,745.40 99.66 21,723,104.72 6.00 337,431,389.01 99.68 20,245,883.34 6.00
Not significant single
amounts but make
independent provision for
impairment losses 1,245,185.87 0.34 1,245,185.87 100.00 1,085,613.12 0.32 1,085,613.12 100.00
Total 363,296,931.27 100.00 22,968,290.59 6.32 338,517,002.13 100.00 21,331,496.46 6.30
—Within the combination, analysis of accounts receivable that make provision for losses by
balance percentage method
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Account
age Withdrawal Withdrawal
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Within 1
year 341,630,470.68 94.36 20,497,828.24 6 326,532,449.48 96.77 19,591,946.97 6
1-2 years 14,342,672.82 3.96 860,560.36 6 10,296,197.99 3.05 617,771.88 6
2-3 years 4,206,815.64 1.16 252,408.94 6 437,722.27 0.13 26,263.34 6
Over 3
years 1,871,786.26 0.52 112,307.18 6 165,019.27 0.05 9,901.15 6
60
English Translation for Reference Only
Total 362,051,745.40 100.00 21,723,104.72 6 337,431,389.01 100.00 20,245,883.34 6
—Not significant single amounts but make independent provision for impairment losses
Withdrawal
Content of accounts
Book balance Bad debt provision proportion Reason
receivable
(%)
Guangzhou Yaotong
Estimatedly
Lighting Appliances uncollectible
Trading Co., Ltd. 729,453.94 729,453.94 100.00%
Jilin Changchun Meijia
Shopping Mall Estimatedly
Yongchun Wholesale uncollectible
Haitian Lamps 184,263.00 184,263.00 100.00%
Dongda Economic Trade Estimatedly
Co., Ltd. 142,107.94 142,107.94 100.00% uncollectible
Shanghai Xianyi
Estimatedly
Lighting Electric uncollectible
Appliance Co., Ltd. 185,237 185,237 100.00%
Jilin Changchun Haitian
Dongda Estimatedly
Commerce&Trade Co., uncollectible
Ltd. 4,123.99 4,123.99 100.00%
Total 1,245,185.87 1,245,185.87 100.00%
—Particulars about arrears of the top fives units
Closing balance Opening balance
Item
Amount Proportion Amount Proportion
Total amount and percentage of
arrears of the top five 67,925,264.60 18.70% 119,661,219.69 35.35%
—Main units
Relationship with the Proportion in total
Customer Amount Account age
Company prepayments
No.1 Non-related supplier 37,918,081.90 Within 1 year
10.44%
No.2 Non-related supplier 8,576,922.94 Within 1 year
2.36%
No.3 Non-related supplier 8,441,256.38 Within 1 year
2.32%
No.4 Non-related supplier 7,211,779.83 Within 1 year
1.99%
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No.5 Non-related supplier 5,777,223.55 Within 1 year
1.59%
Total 67,925,264.60 18.70%
—Please see Note Ⅷ for amount due from shareholders who hold 5% or more of voting shares of
the Company in the balance of prepayments.
5. Prepayments
Balance of prepayment as at 30 Jun. 2011 stood at RMB102,272,435.13, which is classified
according to aging as follows:
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year
91,429,888.40 89.40 28,823,861.60 98.15
1-2 years
10,298,516.73 10.07 - -
2-3 years
50,000.00 0.05 50,000.00 0.17
Over 3 years
494,030.00 0.48 494,030.00 1.68
Total
102,272,435.13 100.00 29,367,891.60 100.00
—Arrears of the top five units in the closing balance of prepayments total RMB46,470,000.00,
accounting for 45.44% of the prepayment balance. Details are as follows:
Customer Relationship with the Amount Account age Proportion in total
Company prepayments
Unit 1 Non-related supplier Within 1 year
19,820,000.00 19.38%
Unit 2 Non-related supplier Within 1 year
9,300,000.00 9.09%
Unit 3 Non-related supplier Within 1 year
9,000,000.00 8.80%
Unit 4 Non-related supplier Within 1 year
4,350,000.00 4.25%
Unit 5 Non-related supplier Within 1 year
4,000,000.00 3.91%
Total Within 1 year
46,470,000.00 45.44%
—The balance of prepayments has increased by RMB72,904,543.53 compared with the
period-begin, a decrease of 248.25%, which was mainly because the Company increased
prepayments for materials considering the supply and demand condition of raw materials and the
continuous rising price of raw materials.
—There is no amount due from shareholders who hold 5% or more of voting shares of the
Company in the balance of prepayments.
—Please see Note Ⅷ for details about amount due from shareholders who hold 5% or more of
voting shares of the Company in the balance of prepayments.
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6. Other Receivables
Net amount of other receivables as at 30 Jun. 2011 stands at RMB15,780,890.52, which is detailed
as follows according to categories:
Closing balance Opening balance
Item Book balance Bad debt provision Book balance Bad debt provision
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
Significant
single amounts
and make
independent
provision for
impairment
losses
Accounts receivable that make provision for impairment loss according to ages combination
Normal
business
combination 16,788,181.40 99.37 1,007,290.88 6.00 21,546,983.92 99.51 1,292,897.22 6.00
Subtotal of
16,788,181.40 99.37 1,007,290.88 6.00 21,546,983.92 99.51 1,292,897.22 6.00
combination
Not significant
single amounts
but make 106,552.50 0.63 106,552.50 100 106,552.50 0.49 106,552.50 100.00
independent
Total
16,894,733.90 100.00 1,113,843.38 6.59 21,653,536.42 100.00 1,399,449.72 6.46
provision for
—Within the combination, analysis of other receivables that make provision for losses by balance
impairment
percentage method
losses
Closing balance Opening balance
Book balance Bad debts provision Book balance Bade debts provision
Account
age Withdrawal Withdrawal
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Within
1 year 13,600,158.60 81.01 816,009.51 6 19,307,484.75 89.61% 1,158,527.27 6
1-2
years 2,106,292.80 12.55 126,377.57 6 741,965.77 3.44% 44,517.94 6
2-3
years 200,000.00 1.19 12,000.00 6 447,478.66 2.08% 26,848.72 6
Over 3
years 881,730.00 5.25 52,903.80 6 1,050,054.74 4.87% 63,003.29 6
Total 16,788,181.40 100.00 1,007,290.88 6 21,546,983.92 100.00% 1,292,897.22 6
—Particulars of other accounts receivable on top five units in debt
63
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Closing balance Opening balance
Item
Amount Proportion Amount proportion
Total of the top five units in debt and
13,039,245.74 77.18% 15,742,698.16 72.70%
proportion
—Main units of other accounts receivable
Proportion to
Ranking of Relationship with
Amount in arrear Ages accounts
units the Company
receivable
Non-related
No. 1
relationship 9,670,292.20 With in 1 year 57.24%
No. 2 Related relationship 2,106,292.80 With in 1 year 12.47%
Non-related 1,031,929.60 With in 1 year 6.11%
No. 3 relationship
Non-related
relationship 120,000.00 Over 1 year 0.71%
No. 4
Non-related
relationship 110,731.14 Over 1year 0.66%
No. 5
Total 13,039,245.74 77.18%
—Bad debt provisions for closing other receivables with significant single amounts or
insignificant but being conducted an independent impairment test on:
Book Ages Bad debt Withdrawal Reasons
Customer
balance ratio
Fangcheng County Yuli Glass Tube Over 3 Estimatedly
Co., Ltd. 106,552.50 106,552.50 100.00
years uncollectible
Total 106,552.50 106,552.50
—The balance of other receivables has increased by RMB4,758,802.52 compared with the
period-begin, an increase of 21.98%, which was mainly because increase in export tax refund
amount of accounts receivable.
—There is no amount due from shareholders who hold 5% or more of voting shares of the
Company in the balance of other receivables.
7. Inventory
Net inventory as at 30 Jun. 2011 stands at RMB464,795,681.63, which is detailed as follows
according to types:
Items Closing balance Opening balance
64
English Translation for Reference Only
Falling price Falling price
Book balance Book value Book balance Book value
reserve reserve
Raw
156,772,802.3 156,772,802.3 75,949,966.31 - 75,949,966.31
materials
Goods in 3 3
process 16,082,089.71 16,082,089.71 4,144,854.25 - 4,144,854.25
Finished
goods 188,100,835.2 143,155.2 187,957,680.0 192,492,121.8 143,155.2 192,348,966.6
Self-made 9 5 4 8 5 3
half-finishe 103,225,646.0 103,225,646.0 92,304,692.71 - 92,304,692.71
d goods
Low-value 4 4
fugitive 757,463.51 757,463.51 665,402.88 - 665,402.88
items
Total 464,938,836.8 143,155.2 464,795,681.6 365,557,038.0 143,155.2 365,413,882.7
—Provisions for inventory price falling 3 3 5 8
Decrease in this period
Opening book Provision for this Closing book balance
Item
balance period Transferring Writing off
back
Finished
143,155.25 - - - 143,155.25
product
Total - - -
143,155.25 143,155.25
—The balance of inventories increased RMB99,381,798.85 compared with the year-begin, an
increase of 27.20%, mainly due to a general increase in price of raw material and the Company
increased storage in the reporting period in response to the general rising price of raw materials.
8. Financial assets available for sales
Particulars on financial assets available for sale
Item Fair value at period-end Fair value at year-begin
Tradable shares with trading
80,992,172.80 95,740,001.28
moratorium
Total 80,992,172.80 95,740,001.28
—On 18 Aug. 2010, China Everbright Bank listed on Shanghai Stock Exchange with shares of
24,176,768.00 owned by the Company turned into tradable shares with trading moratorium. Up to 30 Jun.
2011, the fair value of China Everbright Bank was RMB80,992,172.80, and the change in fair value was
RMB14,747,828.48. In accordance with relevant regulations, the Company made provision for deferred
income tax liabilities of RMB2,212,174.27, of which the difference of RMB12,535,654.21 recorded into
capital reserve.
9. Long-term equity investment
65
English Translation for Reference Only
Net amount of long-term equity investment as at 30 Jun. 2011 stands at RMB454,723,766.01, which is
detailed as follows according to types:
Opening balance Closing balance
Increase in this Decrease in
Items
Provision for period this period Provision for
Amount Amount
impairment impairment
Stock
5,850,000.0 5,850,000.0
investment
11,850,000.00 11,850,000.00
0 0
Investment
to affiliated 12,600,000.0 1,249,923.5
enterprises 36,703,867.37 - 48,053,943.78
Other
0 9
investment 403,968,727.0 3,298,904.8 403,968,727.0 3,298,904.8
s
4 1 4 1
Total 452,522,594.4 9,148,904.8 12,600,000.0 1,249,923.5 463,872,670.8 9,148,904.8
1 1 0 9 2 1
Particulars on category of long-term equity investment are listed as follows：
—Stock investment
Name of Stock Number Proportion in Invested Closing Impairment
invested nature of stock registered amount market value reserve
company capital of
Shenzhen Corporate Less than
650,000 invested 5,850,000.00 - 5,850,000.00
Zhonghao shares 5%
company
(Group) Ltd.
Chengdu Corporate
5,000,000 6.94% 6,000,000.00 - -
Hongbo shares
Industrial Co.,
Ltd. 11,850,000.00 - 5,850,000.00
—A full-amount impairment reserve has been withdrawn for the investment to Shenzhen
Zhonghao (Group) Ltd. for its inability to offset debts with assets.
66
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—Investment to affiliated entities
Total closing Total operating
Equity-holding Voting rights ratio in Total closing Closing net assets Net profit in current
Invested entity liabilities revenue in current
ratio (%) invested entity (%) assets amount amount period
amount period
Qinghai Fozhao Lithium Ion Battery
38% 38% 100,700,244.04 7,400,000.00 93,300,244.04 -3,289,272.61
Cathode Materials Co., Ltd.
Guangdong Fozhao Guoxuan Power
50.00% 50.00% 12,600,000.00 - 12,600,000.00 -
Energy Co., Ltd.
—In Mar 2011, the Company and Gefei Guoxuan Power Energy Co., Ltd. signed Contract on Investing and Establishing Guangdong Fozhao Guoxuan Power Energy
Co., Ltd. Together. In accordance with relevant regulations, registered capital of it is RMB 50 million, with the Company holds 50% equities of it. The Company has
paid a first phase investment of RMB 12.6 million on Jun. 2011 that Guangdong Fozhao Guoxuan Power Energy Co., Ltd. was established on 27 Jun. 2011.
—Other equity investment
Explanation
for
equity-holdi
Equity-holdi Voting ng ratio and Impairmen
Accou Cash
Initial investment Opening Increase/de Closing ng ratio in rights ratio voting Impairment t reserve
Invested entity nting bonus for
cost balance crease balance invested in invested rights ratio reserve for this
method this period
entity (%) entity (%) in invested period
entity are
not in
accord
Guangzhou Zhujiang Cost
Asset Management method 10,000,000.00 10,000,000.00 - 10,000,000.00 15.38% 15.38% In accord 3,298,904.81 - -
Company Limited
Guangdong Cost
500,000.00 500,000.00 - 500,000.00 Less than5% Less than5% In accord - - -
Development Bank method
67
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Foshan Branch
Foshan Fochen Road Cost
Development Company method 20,757,600.00 11,175,627.38 11,175,627.38 7.66% 7.66% In accord - - -
Limited
Shenzhen Liangke Cost
Venture Capital method 13,718,882.66 13,718,882.66 - 13,718,882.66 18.50% 18.50% In accord - - -
Company Limited
Xiamen Commercial Cost
208,574,217.00 208,574,217.00 208,574,217.00 9.99% 9.99% In accord - - -
Bank method
Hefei Guoxuan Cost
High-tech Power Energy method 160,000,000.00 160,000,000.00 160,000,000.00 18.00% 18.00% In accord - - -
Co., Ltd.
Total 413,550,699.66 403,968,727.04 403,968,727.04 3,298,904.81 -
68
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10. Fixed Assets and Accumulated Depreciation
Net fixed assets as at 30 Jun. 2011 stands at RMB632,893,846.71, which is detailed as follows:
Decrease in this
Items Opening amount Increase in this period Closing amount
period
Original value of fixed
assets:
Housing and building 552,309,340.86 1,002,069.14 23,926.17 553,287,483.83
Machinery equipments 1,133,488,467.77 6,323,870 22,647,743.00 1,117,164,594.77
Transportation
equipments 15,246,419.14 294,532.42 203,247.86 15,337,703.70
Other equipment 22,197,702.01 693,745.57 63,127.18 22,828,320.40
Total 1,723,241,929.78 8,314,217.13 22,938,044.21 1,708,618,102.70
Accumulated
depreciation:
Housing and building 255,770,716.96 14,146,784.58 37,367.22 269,880,134.32
Machinery equipments 761,870,584.67 39,168,043.50 17,578,877.87 783,459,750.30
Transportation
equipments 10,217,194.62 585,278.34 33,813.31 10,768,659.65
Other equipment 10,216,920.63 1,067,673.08 35,632.31 11,248,961.40
Total 1,038,075,416.88 54,967,779.50 17,685,690.71 1,075,357,505.67
Impairment reserve for
fixed assets
Machinery equipments 2,043,648.78 1,676,898.46 366,750.32
Net value 683,122,864.12 632,893,846.71
—Construction in progress with original value of RMB1,804,805.62 was transferred into fixed assets in the
reporting period.
—Depreciation amount recorded into operating cost, operating expenses and administrative expenses totaled
RMB54,967,779.50 in current period.
—Up until 30 Jun. 2011, there had existed no fixed assets temporarily idle, rent in by financial leasing or
held for sale.
—Impairment reserves for fixed assets:
Item of fixed Written off in this
Opening amount Increase in this period Closing amount
asset period
Machinery equipment
2,043,648.78 - 1,676,898.46 366,750.32
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—The Company had withdrawn in previous years provisions for impairment of fixed assets on some
machinery equipments which failed to meet requirements of production processes and might result in losses.
Written off in this period is due to measurement to fixed assets that has made provisions for impairment loss
on the previous period.
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11. Construction in Process
Balance of construction in process as at 30 Jun. 2011 stands at RMB123,045,179.20, which is detailed as follows:
Closing balance Opening balance
Item
Book balance Impairment reserve Net book value Book balance Impairment reserve Net book value
Construction in process 123,045,179.20 123,045,179.20 100,914,324.93 - 100,914,324.93
Total 123,045,179.20 123,045,179.20 100,914,324.93 - 100,914,324.93
—Changes in construction in process:
Amount transferred into
Name of construction project Opening amount Increase in this period fixed assets in this period Other decrease Closing amount Funds source
Self-owned
Fuwan Lighting Industrial Park 43,793,376.74 2,269,706.58 19,441.17 46,043,642.15 funds
Self-owned
Furnace 20,063,324.21 149,041.21 8,200.00 20,204,165.42 funds
Self-owned
4#, 5# factories in Xinxiang, Henan 7,901,630.50 7,901,630.50 funds
Production lines of T8 and Self-owned
metal-halide lamps 6,602,750.94 8,757,668.38 77,153.00 15,283,266.32 funds
Self-owned
Rebuilding of liya line 4,975,561.95 1,144,444.78 462,866.75 5,657,139.98 funds
Self-owned
Fuwan Hotel and supporting facilities 1,111,239.00 296,300.00 814,939.00 funds
Self-owned
Production line of T5 fluorescent lamp 90,000.00 90,000.00 funds
Self-owned
T8 Workshop 24,547.94 765,856.92 790,404.86 funds
71
English Translation for Reference Only
Amount transferred into
Name of construction project Opening amount Increase in this period fixed assets in this period Other decrease Closing amount Funds source
Self-owned
Other 16,351,893.65 11,145,242.02 1,237,144.70 26,259,990.97 funds
Total 100,914,324.93 24,231,959.89 1,804,805.62 296,300.00 123,045,179.20
—None of the items of projects under construction has any interest to be capitalized and exchange gain or loss.
—As at 30 Jun. 2011, the Company did not need to withdraw provision for impairment of projects under construction.
12. Intangible assets
Increase in current Transfer out in Amortization in Accumulated Acquisition
Type Initial amount Opening balance Closing balance
period current period current period amortization mode
Assignment and
Land use right 253,215,544.34 220,544,019.70 - 3,821,453.37 36,492,978.01 216,722,566.33 purchase
Input by
Patent right 63,333.06 146,666.96 53,333.04
200,000.00 - 10,000.02 investors
Total
253,415,544.34 220,607,352.76 - 3,831,453.39 36,639,644.97 216,775,899.37
—As at 30 Jun. 2011, the Company has no provision for impairment of intangible assets that need to be withdrawn.
72
English Translation for Reference Only
13. Deferred income tax assets/deferred income liabilities
—Recognized deferred income tax assets/deferred income tax liabilities
Items Closing amount Opening amount
Deferred income tax assets:
Provision for assets impairment 5,061,141.65 5,146,336.49
Depreciation of fixed assets 12,150,494.52 12,219,435.34
Payroll payable 5,094,763.20 5,094,763.20
Fair value change gains and losses 24,386.35 1,963.24
Total 22,330,785.72 22,462,498.27
Deferred income liabilities:
Fair value changes on financial assets available for sale 7,524,503.52 9,736,677.79
Total 7,524,503.52 9,736,677.79
—Items of assets/liabilities leading to temporary difference and relevant amount:
Items Closing balance Opening balance
Deferred income tax assets
Provision for assets impairment
33,740,944.35 34,066,655.02
Depreciation of fixed assets
81,003,296.83 81,462,902.24
Payroll payable
33,965,088.00 33,965,088.00
Fair value changes on tradable financial assets
162,575.62 13,088.30
Total
148,871,904.80 149,507,733.56
Deferred income liabilities:
Fair value changes on financial assets available for sale
50,163,356.80 64,911,185.28
Total
50,163,356.80 64,911,185.28
73
English Translation for Reference Only
14. Provision for Assets Impairment
Opening Increase in current period Decrease in current period Closing
Items
balance Other Withdrawn Written back Write-off balance
Provision for bad debts of increase
accounts receivable 21,331,496.46 - 1,636,794.13 22,968,290.59
Provision for bad debts of
other receivables
1,399,449.72 - 285,606.34 1,113,843.38
Provision for falling price
of inventory 143,155.25 - 143,155.25
Provision for impairment
of long-term investment 9,148,904.81 - 9,148,904.81
Provision for impairment 2,043,648.78 - 1,676,898.46 366,750.32
of fixed assets
Total
34,066,655.02 - 1,636,794.13 1,962,504.80 33,740,944.35
15. Accounts Payable
Items Closing balance Opening balance
Accounts payable 271,514,170.73 192,615,874.39
—Among the closing balance of accounts payable, and increase amount of RMB78,898,296.34 compared to
period-begin, an increase of 40.96% which is mainly for rising price of raw material this reporting period
and increase in inventories.
—There was no significant accounts payable aged more than 3 years.
16. Advance from customers
Items Closing balance Opening balance
Advance from customers 16,820,927.52 22,598,645.79
—The closing balance of the advance from the customers is all advances on sales. There was no advance
from customers aged more than 3 years.
— Among the closing balance of the advance from the customers, there was no advance from customers due
from shareholders with more than 5% (including 5%) of the voting shares of the Company.
17. Payroll payable
Increase in current Payment in current
Items Opening balance Closing balance
period period
Salary, bonus, allowance
and subsidy 387,288.70 131,133,074.96 131,481,963.66 38,400.00
Share incentive fund 53,705,277.53 430,060.00 12,031,866.00 42,103,471.53
Employee welfare - 872,269.29 872,269.29
74
English Translation for Reference Only
Increase in current Payment in current
Items Opening balance Closing balance
period period
Labor union fee - 483,913.90 483,913.90
Social insurance - 14,251,617.47 14,251,617.47
Including: Medical
- 4,508,836.50 4,508,836.50
insurance
Basic endowment
- 7,352,541.94 7,352,541.94
insurance
Unemployment
- 720,077.89 720,077.89
insurance
Injury insurance
- 1,384,405.05 1,384,405.05
premium
Pregnancy insurance
- 285,756.09 285,756.09
Housing fund - 254,662.40 254,662.40
Total 54,092,566.23 161,677,215.49 173,627,910.19 42,141,871.53
—There was no payroll payable in arrears in the Company. The balance of ―Salary, bonus, allowance and
subsidy‖ presented in the payroll payable has been paid in Jul. 2011.
18. Taxes payable
As at 30 Jun. 2011, the Company’s balance of taxes payable is RMB39,888,211.52, the details as below:
Taxes Closing balance Opening balance
Corporate income tax
13,428,529.84 18,417,980.75
VAT
-3,021,188.18 -28,473,420.69
Other
29,480,869.86 5,042,405.40
Total
39,888,211.52 -5,013,034.54
—Among the closing balance of taxes payable, an increase amount of RMB44,901,246.07 compared to
period-begin, an increase of 895.69% which is mainly for the need of prepaying individual income tax and
corporate income tax for bonus.
19. Other Payables
Items Closing balance Opening balance
Other payables 35,333,182.19 30,383,813.76
—Among the closing balance of other payables, the amount of RMB10,826,555.36 is a payment aged more
than 3 years, which is mainly for margin money paid by material suppliers.
—Among the closing balance, there were no other payables due from shareholders with more than 5%
(including 5%) of the voting shares of the Company.
20. Dividends Payable
Items Closing balance Opening balance
75
English Translation for Reference Only
Dividends payable 3,415,262.58
—Closing balance of dividends payable is bonus money payable of subsidy Foshan Taimei Times Lamps
and Lanterns Co., Ltd. to other shareholders pay in advance.
21. Deferred income
Opening
Items Closing balance Notes
balance
Government grants
No 3174 document of Fa-Gai-Tou-Zi
(2008) ―National Development and
Reform Commission on 2009 Ten
Major Energy Conservation Projects,
9,852,274.95 9,852,274.95 Circular Economy and Industrial
Pollution Treatment Projects in Key
Including: The project of electronic energy-saving Watersheds and Investment Plan of
lamp transformed from incandescence lamp New Add Central Budget 2008‖
Government grant for pointed industry
Production line of 50 million energy-saving investment besides ―4 plus 8‖
fluorescent lamp 1,395,000.00 1,395,000.00 industries in 2010 issued by Nanjing
Financial Bureau
The project of furnace desulphurization and dust No. 689 document of NanFuFu[2009]
removal system 619,666.72 704,166.70 of government of Nanhai District
Total 11,815,274.99 11,951,441.65
22. Share Capital
Opening amount Increase/decrease in current period Closing amount
Shares
Capitalizati
subject to
Items Propor on of Proportion Numbe
Number trading Subtotal Number
tion % capital % r
moratorium
reserve
listed
I. Shares subject to
trading moratorium
1. Shares held by
domestic legal 3,942,813 0.57 - - 3,942,813 0.40
persons
2. Shares held by
foreign legal 131,815,685 13.47 - - 131,815,685 13.47
persons
3. Shares held by
domestic natural 1,527,787 - - - 1,527,787 0.16
persons
76
English Translation for Reference Only
4. Shares held by
foreign legal 8,404,132 - -8,404,132 -8,404,132
persons
Total shares
subject to trading 145,690,417 14.04 - - 137,286,285 14.03
moratorium
II. Shares not
subject to trading 0
moratorium
1. RMB ordinary
616,056,423 62.94 - - 616,056,423 62.96
shares
2. Domestically
listed foreign 216,816,905 23.02 - - 8,404,132 8,404,132 225,221,037 23.02
shares
Total shares not
subject to trading 832,873,328 85.96 - - 832,873,328 85.97
moratorium
III. Total shares 978,563,745 100.00 - - 978,563,745 100.00
23. Capital Reserve
Decrease in current
Items Opening amount Increase in current period Closing amount
period
Share premium
582,653,147.29 582,653,147.29
Provision for equity
investment 4,514.43 4,514.43
Other capital reserve
62,589,112.81 12,535,654.21 50,053,458.60
Total
645,246,774.53 12,535,654.21 632,711,120.32
—Decrease of share reserves this period is due to a difference of RMB12,535,654.21 of the change in fair
value of the holding shares of China Everbright Bank deducting deferred income tax.
24. Surplus reserve
Increase in current pe Decrease in current pe
Items Opening amount Closing amount
riod riod
Statutory surplus
418,547,357.61 418,547,357.61
reserves
Discretionary surplus
reserve 136,886,568.36 136,886,568.36
Total
555,433,925.97 555,433,925.97
25. Retained profit
Items Current period Last period
Retained profit as at the end of last year before adjustment
587,668,581.79 566,135,541.76
Total opening retained profit adjusted
77
English Translation for Reference Only
Opening retained profit after adjustment
587,668,581.79 566,135,541.76
Plus: Net profit attributable to parent company for current
117,867,457.28 80,817,767.97
period
Less: Appropriation of statutory surplus reserves
Dividends distributed for ordinary shares
244,640,936.25 215,284,023.90
Closing retained profit
460,895,102.82 431,669,285.83
Of which: Cash dividends to be distributed
26. Operating Income and Operating Cost
—Category of operating income and operating cost is listed as follows:
Amount of current period Amount of last period
Items
Revenue Cost Revenue Cost
Main operation 1,084,190,077.75 814,325,046.72 817,689,117.18 620,284,762.95
Others 11,129,225.49 6,791,153.29 6,671,227.47 5,185,551.26
Total 1,095,319,303.24 821,116,200.01 824,360,344.65 625,470,314.21
—Breakdown of main operation income according to industries:
Amount of current period Amount of last period
Items
Revenue Cost Revenue Cost
Lighting equipments and
lamps 1,073,898,556.06 808,297,835.81 808,490,507.69 615,400,972.89
Income from hotel 10,291,521.69 6,027,210.91 9,198,609.49 4,883,790.06
Total 1,084,190,077.75 814,325,046.72 817,689,117.18 620,284,762.95
—Breakdown of main operation income from products sales according to regions:
Item Amount of current period Amount of last period
Revenue Cost Revenue Cost
Domestic sales 680,028,197.19 512,563,506.22 485,990,174.25 371,009,678.35
Export sales 393,870,358.87 295,734,329.59 322,500,333.44 244,391,294.54
Total 1,073,898,556.06 808,297,835.81 808,490,507.69 615,400,972.89
—Top five customers in sales income:
Proportion in total operating revenue
Customer Operating revenue
(%)
Customer 1 70,330,195.13 6.42
Customer 2 40,814,976.58 3.73
Customer 3 32,103,181.94 2.93
Customer 4 22,296,270.92 2.04
Customer 5 21,647,391.04 1.98
78
English Translation for Reference Only
Total 187,192,015.61 17.09
27. Taxes and Associate Charges
Items Amount of current period Amount of last period Measurement basis
City maintenance and construction
tax 6,588,334.69 4,658,284.63 7% of turnover tax
Educational surtax 4,704,861.13 1,996,407.69 3% of turnover tax
Business tax 527,586.90 564,174.87 5% of taxable income
Others 39,795.79 9,486.80 -
Total 11,860,578.51 7,228,353.99
28. Operating expenses
Category Amount of current period Amount of last period
Transportation expenses 18,907,862.14 16,687,284.00
Service charges on promotion of
energy-saving products 9,248,087.2 7,988,370.22
Payroll 6,893,770.73 5,400,899.25
Advertising expenses, business
propagandize fee 7,472,394.24 2,045,834.38
Commission 1,313,771.07 1,160,190.58
Travel charge 1,605,138.54 1,001,197.32
Other 6,669,081.69 4,947,841.75
Total 52,110,105.61 39,231,617.5
29. Management expense
Category Amount of current period Amount of last period
Employee payroll 11,589,221.90 8,870,677.65
Depreciation charges 7,282,621.67 6,874,395.06
Tax expense 5,318,621.99 6,282,259.81
Office expenses 2,589,276.85 1,849,445.60
Expenses on amortization of intangible
assets 3,831,453.39 1,919,010.30
Research and development expenses 838,765.65 424,380.86
Text and examination charge 1,235,640.88 1,750,400.18
Other 26,505,571.18 27,888,561.74
Total 59,191,173.51 55,859,131.20
30. Financial expense
79
English Translation for Reference Only
Category Amount of current period Amount of last period
Interest expense
Less: Interest revenue 3,522,919.74 5,205,520.58
Exchange loss 1,422,100.41 598,716.80
Less: Exchange gain
Others
1,047,167.73 1,149,477.38
Total
-1,053,651.60 -3,457,326.40
—Financial expense increase RMB2,403,674.80 compared with last period, an increase of 69.52%, mainly
due to bank deposit of the Company decreases that leads to interest expense decreases.
31. Assets Impairment Losses
Items Amount of current period Amount of last period
Bad debts losses 1,351,187.79 -185,412.49
Other
Total 1,351,187.79 -185,412.49
32. Gains and Loss on the Changes in Fair Value
Items Amount of current period Amount of last period
Income from changes in fair value of tradable financial
-162,575.62 -
assets
33. Investment Income
Items Amount of current period Amount of last period
Income from long-term equity investments calculated by
cost method
Long-term equity investment calculated by equity method
-1,249,923.57
Investment income obtained through holding tradable financial
178,118.10
assets
Investment income obtained through holding available-for-sale
financial assets, etc. 2,287,122.25
Investment income obtained through disposing tradable financial
assets 13,971.96
Total 178,118.10
1,051,170.64
34. Non-operating income
Amount recorded into
Occurred amount of this Occurred amount of last
Items non-recurring gains and
period period
losses of this period
Total gains from disposal of
63,947.00 186,413.73 63,947.00
non-current assets
80
English Translation for Reference Only
Including: Gains from disposal of
63,947.00 186,413.73 63,947.00
fixed assets
Gains from disposal of
intangible assets
Government subsidy 903,288.66 1,298,249.58 903,288.66
Accounts payable that irrecoverable
34,505.15 34,505.15
due to the creditor
Other 598,617.69 46,977.20 598,617.69
Total
1,600,358.50 1,531,640.51 1,600,358.50
35. Non-operating expense
Amount recorded into
Items Amount of this period Amount of last period non-recurring gains and
losses of this period
Losses on disposal of fixed assets
5,189,155.92 230,673.71 5,189,155.92
Donation
4,620.00 1,000,000.00 4,620.00
Other
671,129.03 1,299,041.45 671,129.03
Total
5,864,904.95 2,529,715.16 5,864,904.95
36. Income tax expense
Amount of this period Amount of last period
Items
Current income tax expense 25,610,018.60 17,240,377.60
Deferred income tax expense -464,470.12 818,548.82
Total 25,145,548.48 18,058,926.42
37. Earnings per share
Items Amount of this period Amount of last period
Basic earnings per share 0.120 0.083
Diluted earnings per share 0.120 0.083
—The above earnings per share are calculated in accordance with the Rules for the Compilation of
Information Disclosures by the Companies that Offer Securities to the Public No. 9- Calculation and
Disclosure of Net Return of Equity and Earnings per Share (revised in 2010). Please refer to NoteⅩⅠ for
details of the calculation process.
38. Other comprehensive income
Amount of this
Items Amount of last period
period
81
English Translation for Reference Only
1. Gain/(loss) arising from available-for-sale financial assets -14,747,828.48
Less: Effects of income tax generating from available-for-sale financial
-2,212,174.27
assets
Net amount transferred into profit and loss in the current period that recorded
into other comprehensive income in previous period
Subtotal -12,535,654.21
2. Other
Less: Effects of income tax generating from other recorded into other
comprehensive income
Net amount transferred into profit and loss in the current period that recorded
into other comprehensive income in previous period
Subtotal
Total
-12,535,654.21
39. Other Cash Received Relating to Operating Activities
Other cash received relating to operating activities is RMB7,810,787.51 in the 1st half year of 2011, main
items are as below:
Items Amount
3,522,919.74
Deposit interest
Income from subsidy 726,000.00
Income from property and rental of equipment 283,068.87
Others 3,278,798.90
40. Other Cash Paid Relating to Operating Activities
Other cash paid relating to operating activities is RMB62,083,411.78 in 2011, main items are as below:
Items Amount
Transport charges
17,277,269.10
Advertising and general publicity expense
8,590,103.00
Expense for product promotion
3,640,810.65
Office expense 8,855,791.26
Land lease and administration expense 900,000.00
Commission
1,271,056.57
82
English Translation for Reference Only
41. Supplemental information of cash flow statement
Supplemental information Amount of this period Amount of last period
1. Reconciliation of net profit to net cash flows generated from
operating activities
Net profit 122,809,485.51 81,334,783.67
Add: Provision for impairment of assets 1,351,187.79 -185,412.49
Depreciation of fixed assets 54,967,779.50 57,148,508.53
Amortization of intangible assets 3,831,453.39 1,919,010.30
Amortization of long-term deferred expense
Losses on disposal of property, plant and equipment,
5,125,208.92 44,259.98
intangible assets and other long-term assets (gains: negative)
Losses on retirement of fixed assets
Losses from variation of fair value 175,663.92
Financial cost 428,597.63 712,700.32
Investment loss (gains: negative) -1,051,170.64 -178,118.10
Decrease in deferred income tax assets
-464,470.12 818,548.82
(―+‖ means increase)
Increase in deferred income tax liabilities
(―-‖ means decrease)
Decrease in inventory (increase: negative) -99,381,798.85 -102,629,165.04
Decrease in accounts receivable from operating activities
-43,656,532.46 -2,427,440.30
(increase: negative)
Increase in payables from operating activities
30,333,153.26 39,048,023.04
(decrease: negative)
Net cash flows generated from operating activities 75,605,698.73
74,468,557.85
2. Net increase in cash and cash equivalents
Closing balance of cash 547,799,984.61 879,598,148.06
Less: opening balance of cash 711,625,404.65 1,036,582,265.88
Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -163,825,420.04 -156,984,117.82
— Cash and cash equivalents
Items Closing balance Opening balance
83
English Translation for Reference Only
I. Cash 547,799,984.61 711,853,632.95
Including: Cash on hand 73,199.54 114,480.22
Bank deposit on demand 547,721,103.99 701,830,065.08
Other monetary funds on demand 5,681.08 9,909,087.65
II. Cash equivalent -
Including: Bond investment due in three months -
III. Closing balance of cash and cash equivalents 547,799,984.61 711,853,632.95
(VII). Notes to the Financial Statements of Parent Company
1. Accounts Receivable
Net account receivable as at 30 Jun. 2011 stands at RMB 349,636,837.08, which is detailed as follows
according to varieties:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Items
Proportion Proportion Proportion Proportio
Amount Amount Amount Amount
(%) (%) (%) n (%)
Accounts receivable with
- - - - - - - -
significant single amount
allotted individually for bad
Accounts receivable allotted in combination for bad debt provisions
debt provisions
Combinations of ordinary 350,427,921.78 94.22 21,025,675.31 6.00 328,964,325.70 93.09 19,737,859.53 6.00
businesses
Combinations of internal 20,234,590.61 5.44 23,337,816.95 6.60 - -
businesses
Subtotal of combinations 370,662,512.39 99.67 21,025,675.31 5.67 352,302,142.65 99.69 19,737,859.53 5.60
Accounts receivable with 1,245,185.87 0.33 1,245,185.87 100.00 1,085,613.12 0.31 1,085,613.12 100.00
insignificant single amount
allotted individually for bad
Total 371,907,698.26 100.00 22,270,861.18 5.99 353,387,755.77 100.00 20,823,472.65 5.89
debt provisions
—Aging analysis of balances of accounts receivable allotted for bad debt provisions by balance-percentage
method in combinations:
84
English Translation for Reference Only
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Age
Withdrawal Withdrawal
Proportion
Amount Amount proportion Amount Proportion (%) Amount proportion
(%)
(%) (%)
Within 1 330,370,748.27 94.28 19,822,244.90 6 318,282,858.45 96.75 19,096,971.50 6
year
1-2 years 14,168,319.01 4.04 850,099.14 6 10,210,913.85 3.10 612,654.83 6
2-3 years 4,017,068.24 1.15 241,024.09 6 351,846.84 0.11 21,110.81 6
Over 3 years 1,871,786.26 0.53 112,307.18 6 118,706.56 0.04 7,122.39 6
Total 350,427,921.78 100.00 21,025,675.31 6 328,964,325.70 100.00 19,737,859.53 6
—Accounts receivable with insignificant single amount allotted individually for bad debt provisions
Withdrawal
Content Book balance Bad debt provision Reason
proportion
Guangzhou Yaotong
Lighting Appliances
Estimatedly uncollectible
Trading Co., Ltd. 729,453.94 729,453.94 100.00%
Jilin Changchun Meijia
Shopping Mall Yongchun Estimatedly uncollectible
Wholesale Haitian Lamps 184,263.00 184,263.00 100.00%
Dongda Economic & Estimatedly uncollectible
Trade Co., Ltd. 142,107.94 142,107.94 100.00%
Shanghai Xianyi Lighting
Electrical Appliances Co., Estimatedly uncollectible
Ltd. 185,237 185,237 100.00%
Jilin Changchun Haitian
Dongda
Commerce&Trade Co., Estimatedly uncollectible
Ltd. 4,123.99 4,123.99 100.00%
Total 1,245,185.87 1,245,185.87 100.00%
—The top five entities owing accounts receivable
Closing amount Opening amount
Items
Amount Proportion Amount Proportion
Total amount and proportion of the
67,925,264.60 18.26% 119,661,219.69 33.86%
top five entities owing arrears
85
English Translation for Reference Only
—Main entities owing accounts receivable
Relation with Proportion in
Rank Arrear amount Age
the Company accounts receivable
No.1 Unrelated 37,918,081.90 With 1 year 10.20%
No.2 Unrelated 8,576,922.94 With 1 year 2.31%
No.3 8,441,256.38 With 1 year
Unrelated 2.27%
No.4 7,211,779.83 With 1 year
Unrelated 1.94%
No.5 5,777,223.55 With 1 year
Unrelated 1.55%
Total 67,925,264.60 18.26%
—For details of arrears in the closing balance of accounts receivable owed by shareholders holding more
than 5% (including 5%) equity of the Company, please refer to Note.VIII.
2. Other receivables
Net amount of other receivables as at 30 Jun. 2011 stands at RMB59,511,046.61, which is detailed as
follows according to types:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Items
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
Other receivables with
significant single
amount allotted
individually for bad
debt provisions
Other receivables allotted in combination for bad debt provisions
Combinations of
10,201,752.82 16.94 612,105.17 6.00 20,962,409.88 99.51 1,257,744.59 6.00
ordinary businesses
Combinations of
49,921,398.96 82.89 42,413,542.58 - - -
internal businesses
Subtotal of
60,123,151.78 99.82 612,105.17 1.02 63,375,952.46 99.51 1,257,744.59 1.98
combinations
86
English Translation for Reference Only
Other receivables with
insignificant single
amount allotted 106,552.50 0.18 106,552.50 100.00 106,552.50 0.49 106,552.50 100.00
individually for bad
debt provisions
Total 60,229,704.28 100.00 718,657.67 1.19 63,482,504.96 100 1,364,297.09 2.15
—Aging analysis of balances of other receivables allotted for bad debt provisions by balance-percentage
method in combinations:
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Age
Withdrawal Withdrawal
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Within 1 year 9,614,052.82 94,24 576,843.17 6 18,764,295.83 89.51 1,125,857.75 6
1-2 years 711,800.77 3.40 42,708.04 6
2-3 years 200,000.00 1.96 12,000.00 6 445,613.66 2.13 26,736.82 6
Over 3 years 387,700.00 3.80 23,262.00 6 1,040,699.62 4.96 62,441.98 6
Total 10,201,752.82 100.00 612,105.17 6 20,962,409.88 100.00 1,257,744.59 6
—The top five entities owing other receivables
Closing amount Opening amount
Items
Amount Proportion Amount Proportion
Total amount and proportion of the top 56,001,189.08 92.98% 53,949,252.30 84.98%
five entities owing arrears
—Main entities owing other receivables
Rank Relation with the Company Arrear amount Age Proportion in other accounts
No.1 Internal cash flow 31,501,489.36 With 1 year 52.30%
No.2 Unrelated 9,670,292.20 With 1 year 16.06%
No.3 Internal cash flow 9,196,537.91 With 1 year 15.27%
No.4 Internal cash flow 5,276,454.67 Over 1 year 8.76%
356,414.94 0.59%
No.5 Internal cash flow With 1 year
Total 56,001,189.08 92.98%
—Withdrawal of bad debt provisions of other receivables with significant single amount or with insignificant
87
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amount but separately conducted for impairment test
Book Bad debt Withdrawal
Client Aging Reason
balance amount proportion
Estimatedly
Fangcheng Yuli Glass Tube Co., Ltd. 106,552.50 Over 3 years 106,552.50 100.00 uncollectible
Total 106,552.50 106,552.50
—There’s no arrear in the closing balance of other receivables owed by shareholders holding more than 5%
(including 5%) equity of the Company.
3. Long-term equity investment
Balance of long-term equity investment of the Company amounted to RMB 820,200,766.01 as at 30 Jun.
2011, of which the breakdown is listed as the following:
Item Closing amount Opening amount
Stock investment 6,000,000.00 6,000,000.00
Investment on subsidiaries 365,477,000.00 155,477,000.00
Investment on joint ventures 48,053,943.78 36,703,867.37
Other investment 400,669,822.23 400,669,822.23
Total 820,200,766.01 598,850,689.60
—Stock investment
Proportion in
Closing
Stock Number of registered capital Invested Impairment
Name of invested entity market
nature stock of invested amount reserve
value
company
Shenzhen Zhonghao Corporate Lower than
650,000 5,850,000.00 - 5,850,000.00
(Group) Ltd. shares 5%
Chengdu Hongbo Corporate
5,000,000 6.94% 6,000,000.00 - -
Industrial Co., Ltd. shares
Total 11,850,000.00 - 5,850,000.00
88
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—Investment on subsidiaries
Explanation on
inconformity Impairm
Cash
Equity-holding Voting rights ratio between Impairm ent
Initial investment bonus for
Invested entity Opening balance Increase / decrease Closing balance ratio in invested in invested entity equity-holding ent reserve
cost this
entity (%) (%) ratio and voting reserve for this
period
rights ration in period
invested entity
Foshan Chansheng
Electronic Ballast 750,000.00 750,000.00 - 750,000.00 75.00% 75.00% Accordant - -
Co., Ltd.
Foshan Chanchang
Electric Appliances 42,000,000.00 42,000,000.00 - 42,000,000.00 70.00% 70.00% Accordant - -
(Gaoming) Co., Ltd.
Foshan Taimei Times
Lamps and Lanterns 350,000.00 350,000.00 - 350,000.00 70.00% 70.00% Accordant - -
Co., Ltd.
Foshan Gaoming
Fuwan Landscape 4,800,000.00 4,800,000.00 - 4,800,000.00 100.00% 100.00% Accordant - -
Resort Co., Ltd.
Nanjing Fozhao
Lighting Components
72,000,000.00 72,000,000.00 - 72,000,000.00 100.00% 100.00% Accordant - -
Manufacturing Co.,
Ltd.
FSL (Xinxiang) 5,000,000.00 5,000,000.00 - 5,000,000.00 100.00% 100.00% Accordant - -
89
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Lighting Co., Ltd.
Qinghai Fozhao
Lithium Ion Battery
25,500,000.00 25,500,000.00 25,500,000.00 51.00% 51.00% Accordant - -
Cathode Materials
Co., Ltd
Foshan Lighting
Lamps and Lanterns 5,077,000.00 5,077,000.00 5,077,000.00 100.00% 100.00% Accordant - -
Co., Ltd.
Guangdong Fozhao
New Light Sources 10,000,000.00 10,000,000.00 10,000,000.00 55.00% 55.00% Accordant
Technology Co., Ltd.
Guangdong Fozhao
Financial Leasing 200,000,000.00 200,000,000.00 200,000,000.00 100.00% 100.00% Accordant
Co., Ltd.
Total 365,477,000.00 155,477,000.00 210,000,000.00 365,477,000.00
—Investment on joint ventures
Explanation on
Equity-ho Voting inconformity
Accoun lding ratio rights between Impairment Cash bonus
Initial Opening Increase/decrea Closing Impairment
Invested entity ting in ratio in equity-holding reserve for for this
investment cost balance se balance reserve
method invested invested ratio and voting this period period
entity (%) entity (%) rights ration in
invested entity
Qinghai FSL Lithium Equity
36,703,867.37 36,703,867.37 -1,249,923.59 35,453,943.78 38.00% 38.00% Accordant - - -
Energy Exploitation method
90
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Co., Ltd.
Guangdong Fozhao
Equity
Guoxuan Power Energy 12,600,000.00 12,600,000.00 12,600,000.00 50.00% 50.00% Accordant
method
Co., Ltd.
Total 49,303,867.37 36,703,867.37 11,350,076.41 48,053,943.78 - - -
—Other investment
Explanation
on
inconformity
Equity-ho Voting
between Impairmen
Account Increase lding ratio rights Cash
Initial investment Closing equity-holdin Impairment t reserve
Invested entity ing Opening balance /decreas in ratio in bonus for
cost balance g ratio and reserve for this
method e invested invested this period
voting rights period
entity (%) entity (%)
ration in
invested
entity
Guangzhou Zhujiang
Cost
Asset Management Co., 10,000,000.00 10,000,000.00 10,000,000.00 15.38% 15.38% Accordant 3,298,904.81 - -
method
Ltd.
Guangdong
Cost Lower Lower
Development Bank, 500,000.00 500,000.00 500,000.00 Accordant - - -
method than 5% than 5%
Foshan Branch
Foshan Fochen
Cost
Highway Development 20,757,600.00 11,175,627.38 11,175,627.38 7.66% 7.66% Accordant - - -
method
Co., Ltd.
91
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Shenzhen Liangke
Cost
Venture Capital Co., 13,718,882.66 13,718,882.66 13,718,882.66 18.50% 18.50% Accordant - - -
method
Ltd.
Cost
Xiamen Bank 154,969,875.00 208,574,217.00 208,574,217.00 9.99% 9.99% Accordant - - -
method
Hefei Guoxuan
Cost
High-tech Power 160,000,000.00 160,000,000.00 160,000,000.00 18.00% 18.00% - - -
method
Energy Co., Ltd.
Total 390,775,173.66 403,968,727.04 403,968,727.04 3,298,904.81 -
92
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4. Investment income
Item Amount of this period Amount of last period
Income from long-term equity investments calculated by cost
method 7,968,946.01 4,698,753.00
Income from long-term equity investments calculated by
equity method -1,249,923.57
Investment income obtained through holding tradable financial
assets
Investment income obtained through holding available-for-sale
financial assets, etc. 2,287,122.25
Investment income obtained through disposing tradable financial
assets 13,971.97 178,118.10
Total 9,020,116.66 4,876,871.10
—Investment income of this period has increased by RMB 4,143,245.56 than last year, up by 84.96%, which
was because there’s a large amount of bonuses of subsidiaries as accounted by cost method.
—Long-term equity investment income accounted by cost method:
Invested entity Amount of this period Amount of last period
Foshan Lighting Lamps and Lanterns Co., Ltd. 1,750,000.00
Foshan Taimei Times Lamps and Lanterns Co., Ltd. 7,968,946.01 1,820,000.00
Foshan Chansheng Electronic Ballast Co., Ltd. 1,128,752.91
Total 7,968,946.01 4,698,752.91
—Long-term equity investment income accounted by equity method:
Invested entity Amount of this period Amount of last period
Qinghai FSL Lithium Energy Exploitation Co., Ltd. -1,249,923.57 -
( V I I I ) . R e l a t e d P a r t i e s a n d R e l a t e d P a r t y Tr a n s a c t i o n
Relationship between related parties
—Related parties with controlling relationship with the Company
—— Related parties with controlling relationship with the Company are as follows:
Relationship
Registration Organization Legal
Name of company Main business with the
place code representative
Company
93
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Relationship
Registration Organization Legal
Name of company Main business with the
place code representative
Company
Foshan Chansheng No.64 Fenjiang Manufacturing electronic ballasts,
Electronic Ballast North Raod, electronic transformers and electronic Subsidiary 75207544-3 Zhong Xincai
Co., Ltd. Foshan triggers.
Foshan Chanchang Cangjiang Production and operation of lamps,
Electric Appliance Industrial Park, electric light source products and
Subsidiary 77920377-5 Zhong Xincai
(Gaoming) Co., Gaoming accessories, installation and related
Ltd. District, Foshan engineering and consulting business.
Cangjiang Research, development, production
Foshan Taimei
Industrial Park, and sales of lighting, household
Times Lamps and Subsidiary 78203558-1 Zhao Yong
Gaoming appliances and accessories and other
Lanterns Co., Ltd.
District, Foshan lighting products.
Side of the
Hengjiang
Making arrangement (tourist industry,
Foshan Gaoming Reservoir, Hefu
catering service, sauna, foot-bathing,
Fuwan Landscape Road, Hecheng Subsidiary 79623406-3 Zhong Xincai
games, retail of beverages, sports on
Resort Co., Ltd. Street,
the water, chess)
Gaoming
District, Foshan
Production of energy-saving
photoelectric source products, lamps
Nanjing Fozhao
and lanterns, light source equipments,
Lighting Honglan Town,
illumination engineering;
Components Lishui County, Subsidiary 74539880-X Zhong Xincai
technological development of
Manufacturing Co., Nanjing
energy-saving and production of
Ltd.
relevant components; sales of
self-production products
Hefu Road E.,
R&D and production of electric light
Foshan Lighting Cangjiang
source lamp products and relevant
Lamps and Industrial Park, Subsidiary 68638090-8 Zhong Xincai
electric engineering materials, metal
Lanterns Co., Ltd. Gaoming
material and non-metal material
District, Foshan
Production and sales of electric light
No.428, Office
source equipment and electric light
Foshan Electrical & Building,
source products, sales of accessories
Lighting Management
of electric light source, electric light Subsidiary 68818685-0 Zhong Xincai
(Xinxiang) Co., Board, Henan
source materials, electric engineering
Ltd. Xinxiang
materials, accessories for motor
Industrial Park
vehicles, lamps and components
Foshan Chanchang
No.64 Fenjiang Manufacturing bromine tungsten
Lighting
North Road, lamp, special lighting source products Subsidiary 61762135-X Zhong Xincai
Components Co.,
Foshan and ancillary devices
Ltd.
4th Floor, No.
Qinghai Fozhao 26 Chuangye
Lithium Ion Battery Road, Manufacturing and selling lithium ion
Subsidiary 69854199-1 Zhong Xincai
Cathode Materials Nanchuan battery cathode materials
Co., Ltd Industrial Park
District, Xining
94
English Translation for Reference Only
Relationship
Registration Organization Legal
Name of company Main business with the
place code representative
Company
Foshan lighting
Guangdong Fozhao land, (Fuwan) Producing and selling
New Light Sources Industrial Park, LED-light-source products, LED
Subsidiary 57643390－9 Zhong Xincai
Technology Co., Hecheng Street, lighting applied products, and lighting
Ltd. Gaoming installation project
District, Foshan
Finance lease, lease, consultation and
No.64 Fenjiang
guarantee for lease transactions, as
Guangdong Fozhao North Raod,
well as finance lease and service
Financial Leasing Chancheng Subsidiary 57641298－0 Zou Jianping
concerning new energy automobiles
Co., Ltd. District,
and main components, energy-saving
Foshan
lighting products and projects
——Registered capital of related parties existing controlling relationship with the Company and its change
Decrease in
Name of company Opening amount Increase in this period Closing amount
this period
Foshan Chansheng Electronic Ballast
RMB1,000,000.00 RMB1,000,000.00
Co., Ltd.
Foshan Chanchang Electric Appliance
RMB72,782,944.06 RMB72,782,944.06
(Gaoming) Co., Ltd.
Foshan Taimei Times Lamps and
RMB500,000.00 RMB500,000.00
Lanterns Co., Ltd.
Foshan Gaoming Fuwan Landscape
RMB4,800,000.00 RMB4,800,000.00
Resort Co., Ltd.
Nanjing Fozhao Lighting Components
RMB41,683,200.00 RMB41,683,200.00
Manufacturing Co., Ltd.
Foshan Lighting Lamps and Lanterns
RMB 5,000,000.00 RMB 5,000,000.00
Co., Ltd.
Foshan Electrical & Lighting (Xinxiang)
RMB10,000,000.00 RMB10,000,000.00
Co., Ltd.
Qinghai Fozhao Lithium Ion Battery
RMB42,000,000.00 RMB42,000,000.00
Cathode Materials Co., Ltd
Guangdong Fozhao New Light Sources
RMB10,000,000.00 RMB10,000,000.00
Technology Co., Ltd.
Guangdong Fozhao Financial Leasing
RMB200,000,000.00 RMB200,000,000.00
Co., Ltd.
——Shares or equity held by related parties existing controlling relationship with the Company and its change
Decrease
Name of Increase in this
Opening amount Proportion in this Closing amount Proportion
company period
period
Foshan
Chansheng RMB750,000.00 75% RMB750,000.00 75%
Electronic Ballast
Co., Ltd.
Foshan
Chanchang
Electric RMB50,948,060.84 70% RMB50,948,060.84 70%
Appliance
(Gaoming) Co.,
Ltd.
95
English Translation for Reference Only
Foshan Taimei
Times Lamps and RMB350,000.00 70% RMB350,000.00 70%
Lanterns Co., Ltd.
Foshan Gaoming
Fuwan Landscape RMB4,800,000.00 100% RMB4,800,000.00 100%
Resort Co., Ltd.
Nanjing Fozhao
Lighting
Components RMB41,683,200.00 100% RMB41,683,200.00 100%
Manufacturing
Co., Ltd.
Foshan Lighting
Lamps and RMB5,000,000.00 100% RMB5,000,000.00 100%
Lanterns Co., Ltd.
Foshan Electrical
& Lighting RMB5,000,000.00 100% RMB5,000,000.00 100%
(Xinxiang) Co.,
Ltd.
Qinghai Fozhao
Lithium Ion RMB25,500,00.00 51% RMB25,500,00.00 51%
Battery Cathode
Materials Co., Ltd
Guangdong
Fozhao New
Light Sources RMB10,00,000.00 RMB10,00,000.00 55%
Technology Co.,
Ltd.
Guangdong
Fozhao Financial RMB200,000,000.00 RMB200,000,000.00 100%
Leasing Co., Ltd.
—Joint ventures
Voting
Name of Corporate Shareho rights
Enterprise Registered Business Registered Organiza
invested representati lding ration in Relation
type place nature capital tion code
entity ve ratio invested
entity
Integrated
Qinghai
development
FSL
Company and
Lithium Zhong RMB 100 38% 38% Joint-stock 6991880
of limited Qinghai utilization of
Energy Xincai million company 0-2
liability salt lake
Exploitatio
brine
n Co., Ltd.
resource.
R&D,
Guangdong production,
Fozhao and sales of
Company
Guoxuan lithium ion RMB 50 50% 50% Joint-stock 5778782
of limited Gaoming Li Zhen
Power batteries and million company 7-2
liability
Energy their
Co., Ltd. controlling
systems
— Related parties without controlling relationship with the Company
Name of related parties Relationship with the Company
Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. Company controlled by related natural person
Hangzhou Times Lighting and Electrical Co., Ltd. Company controlled by related natural person
96
English Translation for Reference Only
Prosperity Electrical (China) Co., Ltd. Company controlled by related natural person
Prosperity Lamps and Components Ltd. Shareholder holding more than 5% equity of the Company
Prosperity (Xinxiang) Electro-Optical Machinery Co., Ltd Company controlled by related natural person
Prosperity (Xinxiang) Lighting Machinery Co., Ltd. Company controlled by related natural person
OSRAM (China) Lighting Co., Ltd. Company influenced by related natural person
Qinghai Salt Lake Fozhao Lanke Lithium Industry Co., Ltd. Company significantly influenced by the Company
Related transaction
—Purchase of raw materials
Pricing method Amount of this period Amount of last period
Content of and decision Proportion Proportion
Name of enterprise related procedure of in purchase in purchase
transaction related Amount Amount
of this of last
transaction period period
Prosperity Lamps Purchase of 7,713,839.73 1.26%
and Components Ltd. materials
Market price 6,263,509.08 1.43%
Prosperity Electrical Purchase of 7,686,012.78 1.27%
(China) Co., Ltd. materials
Market price 4,354,400.26 1.00%
Prosperity
Purchase of
(Xinxiang) Lighting Market price 118,235.80 0.03%
materials
Machinery Co., Ltd.
Hangzhou Times
Purchase of
Lighting and
materials
Market price 2,880.80 0.00%
Electrical Co., Ltd.
Total 15,399,852.51 2.53% 10,739,025.94 2.46%
— Sale of products
Pricing method Amount of this period Amount of last period
Content of and decision
Name of enterprise related procedure of Proportion Proportion
transaction related Amount in sale of Amount in sale of
transaction this period last period
Prosperity Lamps and Sale of
Components Ltd. products
Market price 34,885,225.09 3.10% 41,373,390.88 5.06%
Prosperity (Hangzhou)
Sale of
Lighting and
products
Market price 573,026.39 0.05% 6,276,461.45 0.77%
Electrical Co., Ltd.
Prosperity Electrical Sale of
(China) Co., Ltd. products
Market price 807,242.79 0.07% 1,831,239.51 0.22%
OSRAM (China) Sale of
Market price 7,363,966.70 0.65% 12,129,639.12 1.48%
Lighting Co., Ltd. products
Total 43,629,460.97 3.87% 61,610,730.96 7.53%
—Sale of materials
Pricing Amount of this period Amount of last period
method and
Content of
decision Proportion Proportion in
Name of enterprise related
procedure of Amount in sale of Amount sale of last
transaction
related this period period
transaction
Prosperity Lamps and Sale of
Components Ltd. materials
Market price
- - 41,743.49 1.25%
97
English Translation for Reference Only
Prosperity (Hangzhou)
Sale of
Lighting and Electrical
materials
Market price - 4.08%
Co., Ltd. - 136,008.34
Prosperity Electrical Sale of
(China) Co., Ltd. materials
Market price
- - 5,326.5 0.16%
Hangzhou Times Lighting Sale of
and Electrical Co., Ltd. materials
Market price
- - 8,496.00 0.25%
Total - - 191,574.33 5.74%
—Purchase of fixed assets
Pricing method Amount of this period Amount of last period
Content of and decision Proportion in Proportion in
Name of enterprise related procedure of purchase of purchase of
transaction related Amount Amount
fixed assets of fixed assets of
transaction this period last period
Prosperity (Xinxiang)
Purchase of
Electro-Optical Market price 657,450.00 1.30% 435,200.00 1.28%
material
Machinery Co., Ltd
Prosperity (Xinxiang)
Purchase of
Lighting Machinery Market price 818,180.00 2.41%
material
Co., Ltd.
Total 657,450.00 1.30% 1,253,380.00 3.69%
— Payment of selling commission
The Agreement on Products Sales Commission and Supplementary Agreement were signed between the
Company and Prosperity Lamps and Components Ltd., in which the Company should pay product sales
commission to Prosperity Lamps and Components Ltd. according to a certain percentage (between 3% and 5%)
of the actual amount of goods purchased from the Company. In the 1st half year of 2011, the Company paid
selling commission RMB 762,758.88.
— Balance of accounts receivable of related parties
Closing amount Opening amount
Related parties Bad debt Bad debt
Book balance Book balance
provision provision
Accounts receivable
Prosperity (Hangzhou) Lighting and Electrical
Co., Ltd. 2,486,689.81 149,201.39 3,919,316.55 235,158.99
Prosperity Electrical (China) Co., Ltd. 381,693.37 22,901.60 426,974.16 25,618.45
OSRAM (China) Lighting Co., Ltd. 2,726,375.17 163,582.51 4,108,677.86 246,520.67
Prosperity Lamps and Components Ltd. 19,421,410.65 1,165,284.64 11,162,476.52 669,748.59
Prosperity (Xinxiang) Lighting Machinery Co.,
Ltd. 54,330.00 3,259.80
Other receivables
Qinghai Salt Lake Fozhao Lanke Lithium
Industry Co., Ltd. 1,787,079.84 107,224.79
Qinghai FSL Lithium Energy Exploitation Co.,
Ltd. 4,960.00 297.60
98
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— Balance of accounts payable of related parties
Related parties Closing amount Opening amount
Accounts payable
Prosperity Lamps and Components Ltd. 2,817,150.42
Prosperity Electrical (China) Co., Ltd. 2,060,376.00
OSRAM (China) Lighting Co., Ltd. 79,858.62
Prepayments
Prosperity (Xinxiang) Electro-Optical Machinery Co., Ltd 422,749.24
Prosperity (Xinxiang) Lighting Machinery Co., Ltd. 1,281,611.22 520,000.00
(IX). C ontingent Events
As at 30 Jun. 2011, the Company has no contingent events that need to be disclosed.
(X). Commitments
In accordance with the Equipment Purchase and Construction Contract signed by the Company, the Company
shall pay about RMB15,775,200 for relevant projects in 2011.
(XI). Supplementary Inf ormation
1. Extraordinary gains and losses
Item of extraordinary gains and losses are calculated according to related provisions of China Securities
Regulatory Commission, ―Interpretation Notice for Information Disclosures by Companies that Offer Securities
to the Public No. 1: Extraordinary Gains and Losses (revised in 2008)‖
Items Amount of this period Amount of last period
Gains on disposal of non-current assets, including reversal of the
impairment loss -5,125,258.92 -44,259.98
Government grant recognized in profits and losses of the current
year, except for those government subsidies closely related to the
Company’s business, and received at national statutory standard
and amount 710,499.98 1,298,249.58
Gain/loss from change of fair value of transactional assets and
liabilities, and investment gains from disposal of transactional
financial assets and liabilities and available-for-sale financial
assets, other than valid hedging related to the Company’s
common businesses 14,033.17 178,118.10
Included in current profit and loss against the non-financial
enterprises occupation fee funds collected 165,423.00 29,902.50
The investment cost of subsidiaries obtained by the enterprise,
joint ventures and partnership enterprise is less than the revenues
generated from the fair value of identifiable net assets of the
unvested units 4,698,752.91
Other non-business income and expenditures other than the
above 150,212.49 -2,252,064.25
Subtotal -4,085,090.28 3,908,698.86
Less: Influenced amount of income tax (―-‖ shows decrease) -686,488.26 583,446.58
99
English Translation for Reference Only
Influenced amount of minor shareholders’ gains and losses 12,531.94 6,502.01
Net extraordinary gains and losses attributable to common 3,318,750.27
shareholders of the Company -3,411,133.96
2. Return on Equity and Earnings per Share in the Consolidated Financial Statement
According to the requirements of China Securities Regulatory Commission, ―Compilation Rules for
Information Disclosures by the Companies that Offer Securities to the Public No. 9: Calculation and Disclosure
of Net Return of Equity and Earnings per Share (revised in 2010)‖, net return on equity and earnings per share
presented in the consolidated financial statement are calculated in the reporting period:
Return on equity（％） Earnings per share（RMB Yuan）
Item
Weighted average Basic EPS Diluted EPS
Net profit attributable to the
4.39 0.12 0.12
Company’s common shareholders
The 1st half year of 2011 Net profit attributable to the
Company’s common shareholders 4.52 0.12 0.12
after deducting extraordinary
gains and losses
Net profit attributable to the 3.20 0.08 0.08
Company’s common shareholders
The 1st half year of 2010 Net profit attributable to the
Company’s common shareholders 3.07 0.08 0.08
after deducting extraordinary
gains and losses
Formulas for computing various indexes are as follows:
(1) Weighted average ROE =P0/（E0＋NP÷2＋Ei×Mi÷M0– Ej×Mj÷M0±Ek×Mk÷M0）
Of which: P0 refers to Net profit attributable to common shareholders of the Company or net profit attributable
to common shareholders of the Company after deducting non-recurring gains and losses; NP refers net profit
attributable to common shareholders of the Company; E0 refers to opening net assets attributable to common
shareholders of the Company; Ei refers to additional net assets attributable to common shareholders of the
Company due to new share issuance or turning debts into shares in the report period; Ej refers to reduced net
assets attributable to common shareholders of the Company due to buy-back business or cash dividends in the
report period; M0 refers to the number of months during the report period; Mi refers to the number of months
from the next month when net assets increased to the end of the report period; Mj refers to the number of
months from the next month when net assets decreased to the end of the report period; Ek refers to change of
increase/decrease of net assets due to other transaction events; Mk refers to the number of months from the next
month when other net assets changed the end of the report period.
(2) Basic EPS =P0÷S
S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk（= total number of shares at the period-begin + the number of shares
increased due to transferring capital reserve into share capital + number of shares increased due to issuance of
new shares * the next month for increase of shares/the number of months during the report period）
Of which: P0 refers to net profit attributable to shareholders holding ordinary shares or net profit attributable to
shareholders holding ordinary shares after deducting non-recurring gains and losses; S weighted average
number of ordinary shares issued out; S0 refers to total number of shares at the period-begin; S1 refers to the
number of shares increased due to transferring capital reserve into share capital or dividend distribution of
shares during the report period; Si refers to the number of shares increased due to issuance of new shares or
debt for equity swap during the report period; Sj refers to the number of shares decreased due to stock
repurchase during the report period; Sk refers to the number of split-share during the report period; M0 refers to
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English Translation for Reference Only
the number of months during the report period; Mi refers to the number of months from the next month to the
end of the report period for increase of shares; Mj refers to the number of months from the next month to the
end of the report period for decrease of shares
Denominator of EPS for 2009 and 2010 being:
S= 978,563,745shares
(3) Diluted EPS =P1/（S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ weighted average amount of ordinary shares
increased due to subscription warrant, stock options, convertible bonds, etc.）
Of which, P1 refers to net profit attributable to shareholders holding ordinary shares or net profit attributable to
shareholders holding ordinary shares after deducting non-recurring gains and losses. The Company considered
all influence of dilutive potential ordinary share against net profit and made adjustment according to the
provisions of Accounting Standard for Business Enterprise. When the Company calculated diluted EPS, it shall
consider all influence of dilutive potential ordinary share against net profit attributable to shareholders holding
ordinary shares or net profit attributable to shareholders holding ordinary shares after deducting non-recurring
gains and losses, till to minimum diluted EPS.
VIII. Documents Available for Reference
(I). Original document of Semi-annual Report 2011 signed by legal representative;
(II) Financial statements signed and sealed by legal representative, principal of accounting work, and manager
of finance department;
(III) In the reporting period, all originals of the Company’s documents and public notices have been publicly
disclosed in China Securities Journal, Securities Times, and Ta Kung Pao.
The above documents are placed in the secretary office of the Board of Directors, No.64 Fenjiang North Road,
Foshan.
Board of Directors
Foshan Electrical and Lighting Co., Ltd.
15 Aug. 2011
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