Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
ANNUAL REPORT 2021
March 2022
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior manage ment of Foshan Electrical and Lighting Co., Ltd. (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Wu Shenghui, the Company’s legal representative, Tang Qionglan, the Company’s Chief
Financial Officer (CFO), and Liang Yuefei, the person-in-charge of the Company’s accounting
organ (equivalent to accounting manager) hereby guarantee that the Financial Statements
carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
The future plans and other forward-looking statements, as well as the cautionary statements
me ntioned in this Report shall NOT be considered as virtual promises of the Company to
investors. And investors are kindly re minded to be well aware of possible risks.
The Company has described in detail in this Report the risk of uncertainty in macro-economy,
the risk of fiercer market competition, the risk of rising raw material prices, and the risk of
exchange rate fluctuations. Please refer to the section headed “Potential Risks” in Ite m XI of
Part III of this Report.
The Board has approved a final dividend plan as follows: based on the share capital of
1,348,994,647 shares (the total share capital of 1,361,994,647 shares minus the remaining
13,000,000 A-shares repurchased in the share repurchase account at the disclosure date of the
2021 Annual Report, a cash dividend of RMB1 (tax inclusive) per 10 shares is to be
distributed to the shareholders, with no bonus issue from either profit or capital reserves.
Where any change occurs to the total shares entitled to the final dividend due to any new issue,
grant of equity incentives, etc. when the final dividend plan is implemented, the dividend per
share shall remain the same while the total payout amount shall be adjusted accordingly.
This Report has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version shall
prevail.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 6
Part III Manage ment Discussion and Analysis ............................................................................. 12
Part IV Corporate Governance ...................................................................................................... 51
Part V Environme ntal and Social Responsibility .......................................................................... 79
Part VI Significant Events ............................................................................................................... 86
Part VII Share Changes and Shareholder Information ............................................................. 153
Part VIII Preferred Shares ........................................................................................................... 165
Part IX Corporate Bonds .............................................................................................................. 166
Part X Financial Statements ......................................................................................................... 167
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Documents Available for Reference
Investors and interested parties can get access to the following materials in the Board Secretary’s
Office in the Company’s office building:
1. The financial statements signed and stamped by the Company’s legal representative, Chief
Financial Officer, and the person-in-charge of the Company’s accounting organ.
2. The original copy of the Independent Auditor’s Report signed and stamped by the certified public
accountants and stamped by the CPA firm.
3. The originals of all the Company’s announcements and documents disclosed to the public during
the Reporting Period on the media designated by the CSRC for information disclosure.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Definitions
Term Definition
Foshan Electrical and Lighting Co., Ltd. and its consolidated subsidiaries,
The “Company”, “listed company”, “FSL” or “we”
except where the context otherwise requires
Rising Group Guangdong Rising Holdings Group Co., Ltd.
Electronics Group Guangdong Electronics Information Industry Group Ltd.
Guangdong Rising Capital Investment Co., Ltd. (formerly known as
Rising Capital
“Guangdong Rising Finance Holding Co., Ltd.”)
Shenzhen Rising Investment Shenzhen Rising Investment Development Co., Ltd.
Hong Kong Rising Investment Rising Investment Development Limited
Hongkong Wah Shing Hongkong Wah Shing Holding Company Limited
NationStar Optoelectronics Foshan NationStar Optoelectronics Co., Ltd.
Sigma Foshan Sigma Venture Capital Co., Ltd.
Nanning Liaowang Nanning Liaowang Auto Lamp Co., Ltd.
CSRC China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
General meeting General meeting of Foshan Electrical and Lighting Co., Ltd.
Board of Directors The board of directors of Foshan Electrical and Lighting Co., Ltd.
Supervisory Committee The supervisory committee of Foshan Electrical and Lighting Co., Ltd.
Annual report auditor Zhongzheng Tiantong Certified Public Accountants LLP
Expressed in the Chinese currency of Renminbi, expressed in tens of thousands
RMB, RMB’0,000, RMB’00,000,000
of Renminbi, expressed in hundreds of millions of Renminbi
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name FSL, FSL-B Stock code 000541/200541
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 佛山电器照明股份有限公司
Abbr. 佛山照明
Company name in English (if
FOSHAN ELECTRICAL AND LIGHTING CO.,LTD
any)
Abbr. (if any) FSL
Legal representative Wu Shenghui
Registered address No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Zip code 528000
Changes of registered address N/A
Office address No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China
Zip code 528000
Company website www.chinafsl.com
Email address gzfsligh@pub.foshan.gd.cn
II Contact Information
Board Secretary Securities Representative
Name Huang Zhenhuan Huang Yufen
No. 64, Fenjiang North Road, Chancheng No. 64, Fenjiang North Road, Chancheng
Address District, Foshan City, Guangdong District, Foshan City, Guangdong
Province, P.R.China Province, P.R.China
Tel. （0757）82810239 （0757）82966028
Fax （0757）82816276 （0757）82816276
Email address fsldsh@chinafsl.com fslhyf@163.com
III Media for Information Disclosure and Place where this Report Is Lodged
Stock exchange website where this Report is disclosed http://www.cninfo.com.cn
Media and website where this Report is disclosed China Securities Journal, Ta Kung Pao (HK), and http://www.cninfo.com.cn
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Board Office, FSL Office Building, No. 64, Fenjiang North Road,
Place where this Report is lodged
Chancheng District, Foshan City, Guangdong Province, P.R.China
IV Change to Company Registered Information
Unified social credit code 91440000190352575W
Change to principal activity of the
Unchanged
Company since going public (if any)
In April 2006, the State-owned Assets Supervision and Administration Commission
(SASAC) of Foshan Municipal People's Government, the former controlling
shareholder of the Company, transferred 13.47% of shares it held in the Company to
OSRAM Prosperity Holding Company Limited (later renamed as "OSRAM Holding
Company Limited"), and at the same time, SASAC of Foshan Municipal People's
Government transferred 10.50% of shares it held in the Company to Prosperity Lamps
& Components Limited. Upon completion of such transfer, the biggest shareholder of
the Company was OSRAM Prosperity Holding Company Limited, and the Company
had no any controlling shareholder or actual controller. In December 2015, OSRAM of
Germany transferred 100% equity it held in OSRAM Holding Company Limited
(OSRAM Holding Company Limited held 13.47% of shares of the Company, being the
biggest shareholder of the Company and later renamed as "Hongkong Wah Shing
Every change of controlling shareholder
Holding Company Limited") to Electronics Group. In addit ion, Electronics Group and
since incorporation (if any)
its parties acting in concert (Rising Capital, Shenzhen Rising Investment and Hong
Kong Rising Investment), held 23.144% of the shares of the Company through
increasing their shareholding of the Company. Electronics Group and its parties acting
in concert became the controlling shareholder of the Company and Electronics Group
is a wholly-owned subsidiary of Rising Holdings Group. In December 2021,
wholly-owned subsidiaries of Rising Holdings Group, Rising Capital and Shenzhen
Rising Investment transferred 5.94% of shares they held in the Company to Rising
Holdings Group through transfer by agreement for no compensation. Therefore, Rising
Holdings Group and its parties acting in concert held 30% of shares in the Company.
As of the date of this Report, due to the retirement of certain shares repurchased by the
Company, Rising Holdings Group and its parties acting in concert hold 30.82% of
shares in the Company.
V Other Information
The independent audit firm hired by the Company:
Name Zhongzheng Tiantong Certified Public Accountants LLP
Office address 13/F, Tower B, Jinyun Building, A43 Xizhimen Avenue North, Haidian District, Beijing
Accountants writing signatures Feng Wei and Li Qiongqian
The independent sponsor hired by the Company to exercise constant supervision over the Company in the
Reporting Period:
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in
the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
2021-over-2020
2021 2020 2019
change (%)
Operating revenue (RMB) 4,772,690,469.14 3,744,914,452.72 27.44% 3,337,576,747.66
Net profit attributable to the listed
250,091,965.87 316,914,185.34 -21.09% 296,077,926.11
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before
150,010,381.60 276,795,046.07 -45.80% 283,753,154.31
exceptional gains and losses
(RMB)
Net cash generated from/used in
-277,025,085.26 394,828,331.90 -170.16% 509,889,792.05
operating activities (RMB)
Basic earnings per share 0.1854 0.2349 -21.07% 0.2195
(RMB/share)
Diluted earnings per share 0.1836 0.2327
-21.10% 0.2174
(RMB/share)
Weighted average return on equity
4.23% 5.82% -1.59% 6.18%
(%)
Change of 31
December 2021 over
31 December 2021 31 December 2020 31 December 2019
31 December 2020
(%)
Total assets (RMB) 9,699,592,528.61 8,519,336,914.11 13.85% 6,477,955,373.32
Equity attributable to the listed
5,800,558,588.34 6,263,921,304.54 -7.40% 4,944,201,236.25
company’s shareholders (RMB)
Note: The Company repurchased some shares during 2021. For details, see “2. Share repurchase” under “XVI Other Significant
Events” of Part VI of this Report. According to Preparation Rule 9 on Information Disclosure for Companies Offering Their
Securities to the Public—Calculation and Disclosure of ROE and EPS (2010 Revision), EPS of comparative periods have been
recalculated based on the adjusted shares.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before
and after exceptional gains and losses was negative for the last three accounting years, and the latest independent
auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern.
□ Yes √ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before
and after exceptional gains and losses was negative.
□ Yes √ No
VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 825,678,013.99 1,129,664,102.21 1,291,797,822.97 1,525,550,529.97
Net profit attributable to the listed
42,203,399.57 68,352,143.36 81,457,735.74 58,078,687.20
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 39,266,019.69 59,684,487.82 49,859,285.46 1,200,588.63
exceptional gains and losses
Net cash generated from/used in
48,558,082.07 -2,778,441.55 -99,365,759.87 -223,438,965.91
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs
materially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2021 2020 2019 Note
Gain or loss on disposal of non-current
assets (inclusive of impairment allowance 82,233,742.26 7,466,798.65 -413,275.62
write-offs)
Government subsidies charged to current
profit or loss (exclusive of government
subsidies consistently given in the
15,971,903.24 25,372,941.13 6,485,365.31
Company’s ordinary course of business at
fixed quotas or amounts as per government
policies or standards)
Capital occupation charges on non-financial
enterprises that are recognized in profit or 881,704.19 1,337,410.12
loss
Current profit or loss on subsidiaries
obtained in business combinations involving
-5,613,743.03 -5,104,980.13
entities under common control from the
period-beginning to combination dates, net
Gain or loss on fair-value changes on
held-for-trading financial assets and
liabilities & income from disposal of
held-for-trading financial assets and
10,663,119.44 8,463,850.00 15,574,400.00
liabilities and available-for-sale financial
assets (exclusive of the effective portion of
hedges that arise in the Company’s ordinary
course of business)
Reversed portions of impairment allowances
for receivables which are tested individually 9,156,396.52
for impairment
Non-operating income and expense other
10,640,975.11 -123,367.66 -2,543,083.02
than the above
Less: Income tax effects 17,224,178.81 5,643,715.91 2,635,263.29
Non-controlling interests effects (net of tax) 3,085,681.16 297,430.55 -961,608.55
Total 100,081,584.27 40,119,139.27 12,324,771.80 --
Details of other items that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
No such cases for the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part III Management Discussion and Analysis
I Industry Overview for the Reporting Period
At present, the lighting industry is experiencing a gradual growth slowdown and significant structural
overcapacity. With rigidly increasing operating costs, the profit margins of lighting enterprises have been
squeezed to a certain extent. From the perspective of the global market, with the fluctuations in the RMB-to-USD
exchange rate and the Covid-19 pandemic not entirely under control across the world, the lighting industry is
facing many uncertainties in export, and many export-oriented enterprises are turning to the domestic market,
exacerbating the competition in the domestic market. Under the dual pressures from market demand and fierce
competition, the lighting industry, dominated by micro-, small- and medium-sized enterprises, will see deep
shuffling and accelerated industrial chain integration. Enterprises with advantages in capital and manufacturing
will have the opportunity to expand their market share by integrating high-quality targets with channels,
technologies and prospects, and quickly enhance their scales.
Generally speaking, China’s lighting industry is insufficiently centralized with no overwhelmingly superior
enterprises despite an enlarging market share of competitive brands. Upon years of development, we have become
a leading and quite competitive lighting enterprise with strong competitiveness in brand, production scale, channel,
R&D, etc.
II Principal Activity of the Company in the Reporting Period
1. The Company’s Principal Activities or Products
We design, manufacture and market high-quality, green and energy-efficient lighting products, auto lamps, and
electrical products, as well as provide complete lighting, electrical, and auto lamp solutions. Our products mainly
include LED, traditional lighting products, auto lamps, switches and sockets. Our “FSL” and “Fenjiang” brands
have been certified as “Famous China Brands”.
2. Main business models
(1) Procurement model
We mainly procure raw materials such as LED lamp beads, electronic components, aluminum substrate, plastic
parts, metal materials by way of tendering and bidding. A tendering and bidding supervisory committee consisting
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
of personnel from key departments has been put in place. For every kind of our main raw materials, we usually
have a few suppliers to choose from in procurement so that the procurement prices would be fair, the supply of
raw materials in time and the good quality of the raw materials ensured.
(2) Production models
① Production of the conventional products
Concerning the conventional products, we analyze sales of every month, predict future market demand and take
into account the safe inventory line so as to formulate a production plan for the coming month. And our
workshops produce according to the plan to avoid extra stock and at the same time ensure that there is enough for
sale.
② Production according to orders
Different from the conventional lighting products which are of little variation in specifications, LED lighting
products are at a fast pace of renewal and different customers often have different requirements regarding the
products’ appearances and performance indexes. Therefore, we have to organize individualized production for
some orders for LED lighting products, export orders in particular. For this kind of orders, we formulate our
production plans based on them and then make procurement plans according to the production plans, which will
help effectively control the stock and the procurement prices of raw materials, reduce capital occupation and
improve our operating efficiency to the maximum.
③ Combination of independent production and outsourcing
With a high production capacity, we produce most of our products and parts on our own. Only a small portion of
parts and low-tech products is outsourced to sub-manufacturers, who will produce in strict accordance with our
requirements. We will also tag along their production processes and examine carefully the quality of the products
finished. In this way, our supply of products is guaranteed.
(3) Sales model
In terms of domestic sale, the Company adopts the sale mode of dealer distribution and direct supply for
engineering projects. In terms of channels, the Company boasts hardware store, home decoration, engineering,
industrial lighting, e-commerce & retail sales channels. In the factory-installed market, auto lamp products are
provided directly to automobile manufacturers; and in the aftermarket, products are mainly sold by dealers.
For overseas markets, we adopt OEM and OBM models and also sell under our own brands (through agents).
3. Main driving forces for growth
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
During the Reporting Period, the Covid-19 pandemic was not entirely under control across the world, and the
downward pressure on the economy kept mounting. However, China’s policies of “Carbon Emission Peak and
Carbon Neutrality”, new infrastructure, new urbanization, major construction projects, new energy vehicles, etc.
have brought new development opportunities for the country’s lighting industry and auto lamp segment.
Upholding the overall idea of "stabilizing the fundamentals and expanding new businesses", the Company
continuously strengthened the innovation driver and promoted the change of the marketing model. It tackled
problems of capital operation, optimized the industrial layout, intensified management and improvement, and
vigorously explored the segmented market. In 2021, the Company acquired Nanning Liaowang, which provided
strong support for the Company to rapidly enter the OEM market and make the automobile vehicle lamp business
of the Company stronger and bigger. Meanwhile, with the evolution of the industrial competition model,
consumers are getting increasingly concerned with product quality and brand. As a result, companies with weak
competitiveness will be gradually elbowed out of the market while large enterprises or enterprises with core
competitiveness will have more market opportunities. By virtue of its advantages in technology, brand, channel
and scale, the Company has continued to promote the technical upgrading of main products, improve product
quality, beef up market expansion and optimize the business portfolio through sustained spending on R&D and
technical innovation. Meanwhile, it has gained an advantageous position in the process of enhancing market
concentration by increasing the level of production automation, effectively controlling purchase costs and ramping
up production efficiency.
III Core Competitiveness Analysis
The Company's core competitiveness is mainly reflected in the following four aspects:
Channel advantage
The Company has been sticking to the market strategy of deeply cultivating and refining channels. Over years of
development and experience, the Company has been equipped with five major sales channels in domestic market
(hardware distribution, home, e-commerce & retail sales, engineering, and industrial lighting channels), forming a
marketing network covering the whole country; in foreign market, the Company has made active steps to develop
international market business, sold products to more than 120 countries and regions in North America, Europe,
Southeast Asia, Africa and Oceania, and kept improving overseas sales channel. By virtue of its powerful and
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
comprehensive sales channels, the Company has enabled its products to enter market rapidly, substantially
enhancing its market development abilities and competitiveness.
Brand advantage
The Company has accumulated more than 60 years' experience in the lighting industry and enjoyed continuously
increasing influence and brand value for its "FSL". For 16 consecutive years, the Company has been included in
the list of "China's 500 Most Valuable Brands". In 2021, the value of FSL brand reached RMB22,865 million. In
recent years, with the enhancement of its development positioning, product design and user experience, the
Company has initiated the strategy of brand upgrading and carried out promotion by centering around the new
"Professional, Healthy, Fashionable and Intelligent". In addition, it has accelerated brand building through
high-end mainstream media platform, Internet emerging media and offline terminal advertising respectively,
maximized the brand and product communication effect, formed a comprehensive and diversified publicity
position, and driven the transition of “FSL” from an industrial brand to a popular brand to maintain the brand
vitality and competitiveness. The brand "FSL" has become one of the most influential and popular industrial
brands in China, and the powerful brand influence has played a key role in driving the sustained growth of the
Company’s sales.
R&D technical advantage
The Company values the R&D of new products and the development of innovation and R&D teams, and has
established a systematic and scientifically independent science and technology innovation system, and a team of
well-structured, collaborative and efficient talents. It has further increased spending on technology and
independent product innovation and introduced first-class R&D equipment and facilities from home and abroad to
provide high-quality conditions for scientific and technological innovation. The Company is a national high-tech
company, and its testing center has the CNAS-approved qualification. In addition, the Company has built
innovative platforms such as "Guangdong Engineering Technology Development Center", "Guangdong Industrial
Design Center", "Guangdong Enterprise Technology Center", and "Lighting Research Institute". Besides, the
Company has won the titles of "National IP Advantaged Enterprise" and "Guangdong IP Demonstration
Enterprise". The Company has built a "Guangdong Province Doctor Workstation" to explore and intensify efforts
in the cutting-edge technology of LEDs, strengthen key technology research and basic research, and form
technical barriers with proprietary intellectual property rights in lighting, spectroscopic, electrical, IoT, AI and
many other fields. and has been cumulatively granted 922 valid patents. Also, it has led or participated in the
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
revision of 66 standards at all levels. The Company actively integrates internal and external resources and
collaborates with Tsinghua University, Fudan University, Sun Yat-sen University, South China University of
Technology, Institute of Deep-Sea Science and Engineering, CAS and other scientific research institutes to
establish in-depth industrial and research cooperation, so as to promote key technological breakthroughs and
transformation of scientific and technological achievements. Meanwhile, the Company has formed a smooth R&D
talent cultivation channel to provide a strong guarantee for the Company to maintain technological leadership and
continuous product innovation.
Scale advantage
As one of the enterprises to first step into the industry of producing and selling lighting products, the Company
forms a capability of mass manufacturing by years of experience accumulation. After years of continuous
investment, the Company has greatly improved its production automation level. The large-scale and centralized
production brings obvious economic benefits to the Company, which not only shows in manufacture cost of
products, but also shows in aspects such as raw material procurement and product pricing.
Advantage of a vertical and integrated LED industrial chain
In February 2022, the Company completed the acquisition of NATIONSTAR, held 21.48% shares of
NATIONSTAR, and became a shareholder of NATIONSTAR. The business of NATIONSTAR covers the
upstream LED chip manufacturing and midstream LED packaging in the LED industrial chain. Through this
resource integration, the Company has a complete and refined LED industrial chain covering upstream LED chip
manufacturing, midstream LED packaging and downstream LED application products, thus strengthening the
competitiveness and presence of the Company in the industry.
IV Core Business Analysis
1. Overview
Faced with the complicated and severe situation such as the rising prices of raw materials, the sharp rise of export
logistics cost, the appreciation of RMB and the shortage of key supplies in 2021, the Company, upholding the
overall idea of "stabilizing the fundamentals and expanding new businesses", forged ahead and intensified efforts in
production and operation by continuously strengthening innovation drive, promoting marketing model reform,
optimizing the business portfolio, and promoting management improvement. As a result, the Company achieved a
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
record high in operating revenue. During the Reporting Period, the Company recorded operating revenue of
RMB4772.6905 million, up by 27.44 % year-on-year (YoY) and a net profit attributable to shareholders of the listed
company of RMB250.092 million, down by 21.09% YoY.
In 2021, the Company mainly focused on the following tasks:
1. Enhanced innovation of R&D technology.
The Company adhered to innovation-driven development, and vigorously enhanced R&D and innovation. Also, it
continued to increase investment in R&D, and invested RMB233 million in R&D in the year, accounting for
4.88% of operating revenue. Throughout the year, the Company has developed a total of 425 new products,
creating sales of about RMB700 million and applied for 283 patents, 207 of which were authorized. Also, four
products were awarded international bid acceptance certificates, and 21 international, industry and group
standards were formulated. Meanwhile, the Company has vigorously promoted the construction of innovation
platforms, and built provincial platforms such as the "Doctor Workstation" and "Corporate T echnology Center".
Additionally, its Testing Center was accredited by US Energy Star, and the innovation platform has played an
increasing important supporting role. The Company also deepened industrial and university research cooperation,
strengthened cooperation with universities and research institutes such as the Institute of Deep-Sea Science and
Engineering of Chinese Academy of Sciences, Tsinghua University and Fudan University, and jointly carried out
research on new materials, new technologies, intelligent control and other topics, promoted the breakthrough and
reserve of key technologies, and constantly enhanced research and development and innovation capabilities. The
Research and Development Center of the Company won the "National Worker Pioneer" in 2021, and was
shortlisted into the top 50 divisions of the Guangdong-Hong Kong-Macao Greater Bay Area High Value Patent
Cultivation Layout Competition.
2. Improved industrial optimization layout.
The Company focused on market demand, vigorously optimized the industrial layout, and actively explored new
businesses. In terms of marine lighting, the Company has developed a series of products for deep-sea lighting,
fish-collecting lighting and aquaculture lighting with the Institute of Deep-Sea Science and Engineering of
Chinese Academy of Sciences and Dalian Ocean University. The Company established a subsidiary in Hainan, set
up and deployed marine lighting and other related business teams to conduct market development and channel
layout. In terms of intelligent lighting, the Company introduced smart office, smart education, smart home system,
5G smart lamppost solutions in light of different application scenarios, and launched a batch of intelligent
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
products together with notable platform companies. In terms of health lighting, the Company, taking the
construction of light health laboratory as an opportunity, focused on the fields of vision protection, rhythm health,
disinfection and sterilization, and introduced a range of new health lighting products. The reading and writing
desk lamp obtained the five-star evaluation of Chinese audio-visual health products and human comfort evaluation
issued by China Association for Medical Devices Industry and the clinical report issued by Zhongshan
Ophthalmic Center, Sun Yat-sen University. In terms of animal and plant lighting, the Company has introduced
programs for animal and plant lighting and disinfection solution in various application scenarios, developed basic
products such as culture fill light lamp, plant growth flying saucer lamp and lamp tube, and Chinese herbal
medicine spectrum programme. In terms of lighting electronic FMCG, the Company has developed 112 products
with intelligent sensing, portable mobile and entertainment functions. In terms of airport light ing, the Company
has continuously advanced the research and development of lighting products in the terminal area and airport
ground transportation area, and developed products of 37 specification under nine major categories. These six
segments have laid a solid foundation for the sustainable development of the Company in the future.
3. Strengthened market development.
The Company adopted a target-oriented approach, made great efforts to promote the development of large
customer projects and independent brands, and increased market volume. Also, it intensified efforts to complete
large customer projects, set up special teams to focus on large customer projects in the fields of animal and plant
lighting, educational lighting, rail transit, etc., with multiple major projects being implemented one after another.
The Company has enhanced cooperation with overseas major customers, exploring more business opportunities. It
vigorously explored overseas markets, opened up many influential new customers, and successfully entered a
number of mainstream supermarkets in Europe and the largest building materials supermarket chain in South
America. Also, the own-branded lighting, electrical and auto lamp products of the Company realized sales in
Southeast Asia, Middle East and Oceania respectively. The Company continued to promote the reform of
marketing model, strictly regulated regional market price system, and solved the problems of development and
bad competition in regional market. It continuously promoted the construction of provincial service centers and
enhanced the market service and development capacities of service centers. Also, the Company promoted the
reform of domestic provincial marketing management system.
4. Intensified operation.
First, the Company made efforts to reduce costs. It accelerated the automation of production and promoted
18
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
automatic production and process flow management, minor changes of process technology and other measures
through automated transformation of lamps, lamp tubes and other assembly lines and application of product line
for intelligent bulb manufacturing, so as to reduce personnel, cut intermediate links, and greatly improve
efficiency production. The Company also reduced material cost by purchasing large quantity for lower price,
bidding for lower price and new material replacement through centralized purchasing. Second, the Company
sought to reduce inventory. It built an inventory management and control mechanism, clarified inventory
management and control tasks, followed up and supervised the inventory each month to reduce inventory. Third,
the Company took measures to control risks. It strengthened contract management, conducted strict credit review
for each amount, and implemented customer asset pledge and established accounts receivable early warning
mechanisms to enhance accounts receivable collection and prevent fund risks.
5. Fortified capital operation.
During the Reporting Period, the Company successfully completed the merger and acquisition of Nanning
Liaowang, which provided strong support for the Company to enter the OEM industrial chain, build up
automotive lighting sector and further expand its business overseas. With the help of the Company, Nanning
Liaowang actively explored new customers, successfully became a new supplier of certain major OEMs, and
accelerated the introduction of medium- and high-end R&D and sale talents. Besides, Nanning Liaowang has
made breakthroughs in the integration of display and luminaire technology, assembly size chain CAE analysis and
other technologies, and constantly strengthened its R&D strength, laying a solid foundation for itself to become a
supplier of more medium- and high-end OEMs more quickly and better. During the Reporting Period, the
Company went through the decision-making process for the major asset restructuring project of acquisition of
equity of NATIONSTAR.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
2021 2020
As % of total As % of total
Change (%)
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 4,772,690,469.14 100% 3,744,914,452.72 100% 27.44%
19
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
By operating division
Lighting products
4,772,690,469.14 100.00% 3,744,914,452.72 100.00% 27.44%
and luminaries
By product category
LED products 2,988,460,170.89 62.62% 2,826,795,772.25 75.48% 5.72%
Traditional lighting
597,103,329.41 12.51% 581,481,348.04 15.53% 2.69%
products
Auto lamps 899,064,914.20 18.84% 185,907,625.69 4.96% 383.61%
Electrical products 122,634,832.36 2.57% 105,652,219.59 2.82% 16.07%
Other 165,427,222.28 3.47% 45,077,487.15 1.20% 266.98%
By operating segment
Domestic 3,273,811,238.64 68.59% 2,264,373,046.87 60.47% 44.58%
Overseas 1,498,879,230.50 31.41% 1,480,541,405.85 39.53% 1.24%
By distribution model
Direct sales 43,652,588.73 0.91% 48,371,189.85 1.29% -9.75%
Distribution 4,563,610,658.13 95.62% 3,651,465,775.72 97.50% 24.98%
other 165,427,222.28 3.47% 45,077,487.15 1.20% 266.98%
(2) Operating Division, Product Category, Operating Segment and Distribution Model Contributing over
10% of Operating Revenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB
YoY change in YoY change in
Operating Gross profit YoY change in
Cost of sales operating revenue gross profit
revenue margin cost of sales (%)
(%) margin (%)
By operating division
Lighting products 16.98% 27.44% 32.24% -3.01%
4,772,690,469.14 3,962,183,323.47
and luminaries
By product category
LED products 2,988,460,170.89 2,524,850,293.04 15.51% 5.72% 9.01% -2.55%
Traditional 20.55% 2.69% 11.74% -6.44%
597,103,329.41 474,386,396.24
lighting products
Auto lamps 899,064,914.20 747,331,339.98 16.88% 383.61% 404.26% -3.40%
Electrical 26.80% 16.07% 30.45% -8.07%
122,634,832.36 89,772,637.68
products
Other 165,427,222.28 125,842,656.53 23.93% 266.98% 225.89% 9.59%
20
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
By operating segment
Domestic 3,273,811,238.64 2,639,556,650.24 19.37% 44.58% 51.57% -3.72%
Overseas 1,498,879,230.50 1,322,626,673.23 11.76% 1.24% 5.41% -3.49%
By distribution model
Direct sales 43,652,588.73 29,629,037.23 32.13% -9.75% -17.71% 6.56%
Distribution 4,563,610,658.13 3,806,711,629.71 16.59% 24.98% 30.29% -3.40%
other 165,427,222.28 125,842,656.53 23.93% 266.98% 225.89% 9.59%
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating division Item Unit 2021 2020 Change (%)
Unit sales Piece 673,457,301 716,506,189 -6.01%
Lighting products
Output Piece 687,092,615 714,484,762 -3.83%
and luminaries
Inventory Piece 112,960,123 99,324,809 13.73%
Any over 30% YoY movements in the data above and why:
□ Applicable √ Not applicable
(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
By operating division and product category
Unit: RMB
2021 2020
Operating division Item As % of total cost As % of total cost Change (%)
Cost of sales Cost of sales
of sales (%) of sales (%)
Lighting products
3,962,183,323.47 100.00% 2,996,273,910.80 100.00% 32.24%
and luminaries
Lighting products
Raw materials 3,001,186,699.23 75.75% 2,230,736,822.88 74.45% 34.54%
and luminaries
Lighting products
Labor cost 476,659,230.59 12.03% 447,002,407.48 14.92% 6.63%
and luminaries
21
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Lighting products Depreciation
358,494,737.12 9.05% 279,919,016.68 9.34% 28.07%
and luminaries and other
Lighting products
Other 125,842,656.53 3.18% 38,615,663.76 1.29% 225.89%
and luminaries
Unit: RMB
2021 2020
Product category Item As % of total cost As % of total cost Change (%)
Cost of sales Cost of sales
of sales (%) of sales (%)
LED lighting 2,067,044,284.57 52.17% 15.46%
Raw materials 1,790,215,086.03 59.75%
products
LED lighting 278,057,829.97 7.02% -14.81%
Labor cost 326,408,017.07 10.89%
products
LED lighting Depreciation and 179,748,178.50 4.54% -9.89%
199,466,678.95 6.66%
products other
LED lighting
Subtotal 2,524,850,293.04 63.72% 2,316,089,782.05 77.30% 9.01%
products
Traditional 326,913,472.47 8.25% 18.09%
Raw materials 276,836,739.94 9.24%
lighting products
Traditional 98,778,080.95 2.49% 17.30%
Labor cost 84,211,159.40 2.81%
lighting products
Traditional Depreciation and 48,694,842.82 1.23% -23.32%
63,501,003.52 2.12%
lighting products other
Traditional
Subtotal 474,386,396.24 11.97% 424,548,902.86 14.17% 11.74%
lighting products
Auto lamps Raw materials 535,110,159.03 13.51% 108,505,008.56 3.62% 393.17%
Auto lamps Labor cost 89,481,090.61 2.26% 28,617,438.10 0.96% 212.68%
Depreciation and
Auto lamps 122,740,090.34 3.10% 11,079,929.95 0.37% 1,007.77%
other
Auto lamps Subtotal 747,331,339.98 18.86% 148,202,376.61 4.95% 404.26%
Electrical
Raw materials 72,118,783.16 1.82% 55,179,988.35 1.84% 30.70%
products
Electrical
Labor cost 10,342,229.06 0.26% 7,765,792.91 0.26% 33.18%
products
Electrical Depreciation and
7,311,625.46 0.18% 5,871,404.26 0.20% 24.53%
products other
Electrical
Subtotal 89,772,637.68 2.27% 68,817,185.52 2.30% 30.45%
products
Other products Other 125,842,656.53 3.18% 38,615,663.76 1.29% 225.89%
22
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
and services
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
For details, see “VII YoY Changes to the Scope of the Consolidated Financial Statements” in Part VI of this
Report.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 1,032,503,083.81
Total sales to top five customers as % of total sales of the 21.64%
Reporting Period (%)
Total sales to related parties among top five customers as
0.00%
% of total sales of the Reporting Period (%)
Information about top five customers:
Sales revenue contributed for
No. Customer As % of total sales revenue (%)
the Reporting Period (RMB)
1 Customer A 442,978,447.77 9.28%
2 Customer B 278,031,461.29 5.83%
3 Customer C 131,200,529.71 2.75%
4 Customer D 96,974,946.12 2.03%
5 Customer E 83,317,698.92 1.75%
Total -- 1,032,503,083.81 21.64%
Other information about major customers:
√ Applicable □ Not applicable
None of the top five customers is a related party of the Company.
Major suppliers:
Total purchases from top five suppliers (RMB) 220,364,648.80
23
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Total purchases from top five suppliers as % of total 6.67%
purchases of the Reporting Period (%)
Total purchases from related parties among top five 1.29%
suppliers as % of total purchases of the Reporting Period
(%)
Information about top five suppliers:
Purchase in the Reporting
No. Supplier As % of total purchases (%)
Period (RMB)
1 Supplier A 49,647,217.33 1.50%
2 Supplier B 45,804,291.12 1.39%
3 Supplier C 42,644,701.72 1.29%
4 Supplier D 42,333,486.34 1.28%
5 Supplier E 39,934,952.29 1.21%
Total -- 220,364,648.80 6.67%
Other information about major suppliers:
√ Applicable □ Not applicable
Except for supplier B, none of the other suppliers is a related party of the Company.
3. Expense
Unit: RMB
2021 2020 Change (%) Reason for any significant change
Selling expense 170,281,041.34 145,219,700.35 17.26%
Acquisition in the current period of
Nanning Liaowang, which was not
Administrative expense 206,336,111.81 155,365,373.75 32.81%
under common control with the
Company
Lower interest income from bank
Finance costs 3,120,029.73 -5,623,285.45 155.48%
deposits in the current period
It is mainly due to the continuous
increase in investment in research and
development by the Company, the
expansion of the R&D team, the
R&D expense 203,681,619.16 108,885,296.71 87.06% increase in R&D projects compared
with the previous period, and the
combination of subsidiary Nanning
Liaowang not under the same control
in the current period.
24
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
4. R&D Investments
√ Applicable □ Not applicable
Names of main Expected impact on the future
Project objectives Project progress Objectives to be achieved
R&D projects development of the Company
It has the functions of Accelerate the layout of smart
Smart home is based on the intelligent lighting control, lighting sub-sectors, make
Internet of Things system, intelligent electrical appliance every effort to break through
Research on key
which changes the system control, security monitoring differentiation and functional
technologies of
from the original single system and home theater product innovation, empower
smart home
control to the two-way R&D completed system. Improve the safety, business channels such as
controller and
intelligent dialogue between convenience, comfort and smart home, smart FSL, smart
application of LED
people and things, things and artistry of the home, and education, smart business and
luminaries
things, and realizes an realize an environmentally smart road as a whole, and
intelligent ecosystem. friendly and energy-saving foster new business growth
living environment. points.
The lamps used for fishing actively integrate into the
Achieve the advantages of
boats are mainly traditional field of health lighting,
Research and high light efficiency, low
metal halide lamps, which continuously speed up the
application of key energy consumption, high
feature high energy rapid transformation of
technologies of reliability, long life and easy
consumption, low light Ongoing innovation achievements from
high reliability LED maintenance, and lay a solid
utilization rate and short demand to products, from
luminaries for foundation for the subsequent
service life, and are difficult theory to market, and
marine lighting intelligent fishing lamp and
to realize intelligent cultivate new business growth
lamp system.
operation; points.
Research on use LED lamps as light
expand the product line in the
disinfection sources to realize the
achieve safe and healthy field of health disinfection
technology of functions of purification, Ongoing
disinfection effect. lighting, and enhance the
visible antibacterial and antiviral in
brand influence.
photocatalyst light environment space.
Improve the high temperature
Establish and reform an LED
resistance, high reliability and
automobile headlamp and its
intelligent control technology
intelligent control system
of LED automobile
Research and production line through the
headlamps, realize the
development of key application of the project
Develop intelligent, safe and integration of driving,
technologies and products, and upgrade LED
reliable LED automobile To be accepted communication and parameter
industrialization of headlamp modules, LED
lamps for the market. acquisition technologies, and
intelligent LED headlamp plastic parts,
form LED automobile
automobile lamps painting and distribution
headlamps and their
production lines to enhance
intelligent control systems to
the Company's market
realize industrialization and
competitiveness.
successfully push to the
25
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
market.
improve the technical ability
of the Company to equip
intelligent ADB high beam in
Develop an intelligent high
the middle and high-end
beam module, which can
Improve the intelligent models, and enable the
effectively use the high
development ability of the Company to better occupy the
24-Pixel intelligent beam mode by switching the
Company through the design middle and high-end market.
ADB high beam high beam mode under Ongoing
and development regarding After the completion of the
module different driving modes, and
electronic software, system 24-pixel ADB functional
improve the driving safety of
and optics. sample, the Company has an
automobiles. Make driving
ADB framework that can be
more comfortable.
equipped with major OEMs to
develop and mass-produce
ADB modules.
Details about R&D personnel:
2021 2020 Change (%)
Number of R&D personnel 1226 856 43.22%
R&D personnel as % of total 13.20% 10.81% 2.39%
employees
Educational background —— —— ——
Bachelor 609 373 63.27%
Master 28 12 133.33%
Doctor 4 0
Junior college and below 589 471 25.05%
Age structure —— —— ——
Below 30 521 423 23.17%
30~40 447 266 68.05%
Over 40 258 167 54.49%
Details about R&D investments:
2021 2020 Change (%)
R&D investments (RMB) 232,707,972.02 161,198,331.61 44.36%
R&D investments as % of 4.88% 4.30% 0.58%
operating revenue
Capitalized R&D investments
0.00 0.00
(RMB)
26
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Capitalized R&D investments
0.00% 0.00%
as % of total R&D investments
R&D investment calculated in accordance with the Administrative Measures for the Determination of High and
New Tech Enterprises and other relevant provisions, including R&D investment included in cost of sales and
expensed R&D spending in accordance with accounting standards. In 2021, the Company's R&D investment was
RMB232,707,972.02, accounting for 4.88% of the operating revenue, of which the revenue formed after the
external sales of the Company's medium- and small-scale trial production products was included in the main
business revenue, the expenditure of RMB29,026,400 was included in the main cost of sales, and the expenditure
of RMB203,681,600 was included in the R&D expense item.
Reason for any significant change to the composition of R&D personnel and impact:
□ Applicable √ Not applicable
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:
□ Applicable √ Not applicable
5. Cash Flows
Unit: RMB
Item 2021 2020 Change (%)
Subtotal of cash generated from
4,544,248,307.83 3,574,410,231.32 27.13%
operating activities
Subtotal of cash used in
4,821,273,393.09 3,179,581,899.42 51.63%
operating activities
Net cash generated from/used in
-277,025,085.26 394,828,331.90 -170.16%
operating activities
Subtotal of cash generated from
1,914,743,798.27 467,212,335.49 309.82%
investing activities
Subtotal of cash used in
941,892,466.14 544,306,623.11 73.04%
investing activities
Net cash generated from/used in
972,851,332.13 -77,094,287.62 1,361.90%
investing activities
Subtotal of cash generated from
127,386,000.00 48,300,000.00 163.74%
financing activities
Subtotal of cash used in
554,227,366.75 536,686,783.37 3.27%
financing activities
Net cash generated from/used in
-426,841,366.75 -488,386,783.37 12.60%
financing activities
27
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Net increase in cash and cash
263,360,932.74 -175,350,823.84 250.19%
equivalents
Explanation of why any of the data above varies significantly:
√ Applicable □ Not applicable
1. Net cash generated from operating activities decreased by170.16% year on year, mainly due to the increase in
cash payments due to the increase in raw material prices and the increase in taxes and levies paid due to the sale of
some shareholdings in the current period.
2. Net cash generated from investing activities increased 1,361.90% year on year, primarily driven by an increase
in disinvestment as a result of the sale of some shareholdings in the current period.
3. Net cash generated from financing activities increased12.60% year on year, primarily due to increased
borrowings obtained in the current period.
Explanation of why net cash generated from/used in operating activities varies significantly from net profit for the
Reporting Period:
√ Applicable □ Not applicable
There is a gap of RMB544,322,520.56 between net cash generated from operating activities of
RMB-277,025,085.26and net profit of RMB267,297,435.30 in the year, mainly due to the increase in cash
payments due to the increase in raw material prices and the increase in taxes and levies paid due to the sale of
some shareholdings in the current period.
V Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
Amount As % of gross profit Main source/Reason Recurrent or not
36,121,053.68 12.36% Dividend income from other equity
investments held during the period,
Return on investment Not
and gains on forward forex
settlement contracts
Gain/loss on changes 4,649,669.44 1.59% Gain/loss on changes in fair value of
Not
in fair value derivative financial instruments
Asset impairments -30,891,621.47 -10.57% Inventory valuation allowances Not
Non-operating income 13,186,956.38 4.51% Income from counter-party default Not
28
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Non-operating 1,188,471.54 0.41% Loss on retirement of non-current
Not
expense assets
16,311,903.24 5.58% Receipt of continuing government
Other income Not
grants
Credit impairment -4,657,215.52 -1.59%
Allowances for doubtful accounts Not
loss
Asset disposal income 77,713,637.77 26.58% Disposal of immovable properties Not
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2021 1 January 2021 Change in
As % of total As % of total percentag Reason for any significant change
Amount Amount
assets assets e (%)
1,384,218,544. Sale of some shareholdings in the
Monetary assets 14.27% 981,249,699.49 11.51% 2.76%
27 current period
Acquisition of subsidiary Nanning
Accounts 1,452,728,276. 1,134,233,235. Liaowang in the current period which
14.98% 13.31% 1.67%
receivable 48 70 was not under common control with
the Company
Contract assets 8,561,303.10 0.09% 0.00% 0.09%
Acquisition of subsidiary Nanning
1,063,489,341. Liaowang in the current period which
Inventory 10.96% 735,685,116.91 8.63% 2.33%
00 was not under common control with
the Company
Change of some of the self-used
Investment
43,347,824.34 0.45% 0.00% 0.45% properties to investment properties in
property
the current period
Long-term equity 181,545,123.0
1.87% 181,365,016.32 2.13% -0.26%
investments 9
Acquisition of subsidiary Nanning
1,323,076,326. Liaowang in the current period which
Fixed assets 13.64% 685,707,548.55 8.05% 5.59%
60 was not under common control with
the Company
Construction in 730,595,319.4 Increase in infrastructure investment
7.53% 503,941,120.31 5.91% 1.62%
progress 2 projects in the current period
Right-of-use
13,497,139.00 0.14% 3,943,088.30 0.05% 0.09%
assets
29
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Receipt of bank loan and acquisition of
Short-term 226,779,997.0 subsidiary Nanning Liaowang in the
2.34% 0.00% 2.34%
borrowings 1 current period which was not under
common control with the Company
Contract 0.77% 0.10%
84,818,285.22 0.87% 65,777,726.45
liabilities
Lease liabilities 7,862,803.22 0.08% 2,192,806.19 0.03% 0.05%
Indicate by tick mark whether overseas assets account for a high proportion of total assets.
□ Applicable √ Not applicable
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss on Cumulative
Impairment
fair-value fair-value Purchased in Sold in the
Beginning allowance for Other Ending
Item changes in the changes the Reporting Reporting
amount the Reporting changes amount
Reporting charged to Period Period
Period
Period equity
Financial
assets
2. 6,332,900.00 -1,683,230.56 1,176,008.7
Derivative 4 5,825,678.1
financial 8
assets
4. 3,305,501,030 -322,793,550. 1,158,465,60 9,402,110.68 1,517,248,80
Investments .06 14 6.86 5.45
1,474,860,7
in other
85.15
equity
instruments
Subtotal of 3,311,833,930 -324,476,780. 1,158,465,60 9,402,110.68 1,517,248,80 1,176,008.7 1,480,686,4
financial .06 70 6.86 5.45 4 63.33
assets
Total of the 3,311,833,930 -324,476,780. 1,158,465,60 9,402,110.68 1,517,248,80 1,176,008.7 1,480,686,4
above .06 70 6.86 5.45 4 63.33
Financial 0.00
0.00
liabilities
Contents of other changes:
The increase is mainly due to the acquisition in the current period of Nanning Liaowang, which was not under common control w ith
the Company.
30
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Note: Gain/loss on fair-value changes recorded in equity in the current period was inclusive of value-added taxes
payable arising from the sale of shares of the stocks including Gotion High-tech, Xiamen Bank, etc.
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Unit: RMB
Item Ending carrying value Reason for restriction
Monetary assets 245,575,069.72 Security deposits for notes and
performance bonds
Notes receivable 275,626,604.28 In pledge for notes pool
Fixed assets 277,849,723.49 As mortgage and guarantee for related
party, see XIV (III) “Guarantees” in Part
Intangible assets 11,274,770.33 X
Long-term prepaid expense 2,773,669.04
Total 813,099,836.86
VII Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Investment amount in the Reporting Period Investment amount in the same period of
Change (%)
(RMB) last year (RMB)
693,880,163.76 328,313,442.49 111.35%
2. Major Equity Investments Made in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Name Status Investm Whethe
of Investm Shareh Fundin Investm as on ent r Date of Disclos
Main Investe Predict
investe ent olding g Partner ent Product the date return involve disclos ure
busines d ed
e method percent Resour s Duratio type of the in the d in any ure (if index
ses amount return
enterpri s age ces n balance current legal any) (if any)
se sheet period actions
Fozhao Manufa Wholly
Newly 200,00
(Haina cturing 100.00 Self-fu Long-te -owned Incorpo 13,141. 13,141.
establis 0,000.0 None No N/A
n) and % nded rm subsidi rated 64 64
hed 0
Technol marketi ary
31
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
ogy ng of
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ment disclose
design, d on
product http://w
32
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
ion ww.cni
sale; nfo.co
mold m.cn
design
and
manufa
cturing;
plastic
parts
process
ing;
import
and
export
busines
s of
general
busines
s
project
commo
dity
and
technol
ogy
under
self-ope
ration
and
agency
modes
693,88
14,603, 14,603,
Total -- -- 0,163.7 -- -- -- -- -- -- -- -- --
268.70 268.70
6
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
33
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Unit: RMB
Gain/Lo
Accumu
ss on
lated
fair-valu Purchas Gain/los
Beginni fair-valu Sold in
Initial Measure e ed in s in Ending
Security Security Security ng e Reporti Account Funding
investm ment changes Reporti Reporti carrying
type code name carrying changes ng ing title source
ent cost method in ng ng value
value charged Period
Reporti Period Period
to
ng
equity
Period
367,881 803,565 Investm
Domesti
,685.17 ,100.63 1,258,6 ents in
cally/Ov Gotion Fair 1,778,2
83,899,1 35,648. 887,464 other Self-fun
erseas 002074 High-tec value 18,182.
18.12 42 ,218.75 equity ded
listed h method 00
instrum
stock
ents
-10,221, Investm
Domesti
957.98 63,779, ents in
cally/Ov China Fair
74,001, 590.48 3,894,8 other Self-fun
erseas 601818 Everbrig value
548.46 18.34 equity ded
listed ht Bank method
instrum
stock
ents
-692,39 353,361 19,748, 575,955 Investm
Domesti
8,112.25 ,994.91 179,873 551.68 ,944.40 ents in
cally/Ov Fair 1,448,2
Xiamen 222,593 ,066.55 other Self-fun
erseas 601187 value 27,123.
Bank ,949.49 equity ded
listed method 20
instrum
stock
ents
1,538,51 1,538,51 10,940, Investm
Domesti
Nationst 1.32 1.32 622.00 ents in
cally/Ov Fair
ar 9,402,11 9,402,11 other Self-fun
erseas 002449 value 0.00
Optoele 0.68 0.68 equity ded
listed method
ctronics instrum
stock
ents
Foshan
branch Investm
Domesti
of ents in
cally/Ov Fair
Guangd 500,000 500,000 500,000 other Self-fun
erseas N/A value
ong .00 .00 .00 equity ded
listed method
Develop instrum
stock
ment ents
Bank
34
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Domesti
Held-for
cally/Ov Lifan Fair
1,176,0 1,176,0 382,769 1,558,7 -trading
erseas 601777 Technol value Other
08.74 08.74 .44 78.18 financia
listed ogy method
l assets
stock
3,302,1 -332,81 1,158,4 9,402,11 1,502,2 23,643, 1,476,4
317,571
Total -- 22,862. 7,104.3 65,606. 0.68 88,305. 370.02 19,563. -- --
,187.03
40 0 86 45 33
Disclosure date of
announcement on Board’s
consent for securities
investments
Disclosure date of
announcement on general
meeting’s consent for
securities investments (if
any)
Note: The increase is mainly due to the acquisition of subsidiary Nanning Liaowang in the current period which
was not under common control with the Company.
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Unit: USD’0,000
Ending
Actua
investm
l
Relation Related- Impairm ent as %
Initial Beginni Purchas gain/l
ship party Type of Sold in ent Ending of the
Operatin investm Beginni Ending ng ed in oss in
with the transacti derivativ Reportin allowan investm Compan
g party ent ng date date investm Reportin Repor
Compan on or e g Period ce (if ent y’s
amount ent g Period ting
y not any) ending
Perio
net
d
assets
Foshan
branch 48.59
of the 25 29
Not General
Agricult Not 600 August March 600 600
related forward
ural 2020 2021
Bank of
China
Foshan Not General 28 29
Not 300 300 300
branch related forward October January 10.40
35
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
of the 2020 2021
Industri
al and
Commer
cial
Bank of
China
Foshan 1.45
branch
of the
Industri 3 29
Not General
al and Not 200 Decemb January 200 200
related forward
Commer er 2020 2021
cial
Bank of
China
Foshan
branch 19.61
of the
Industri 30 23
Not General
al and Not 300 Septemb Februar 300 300
related forward
Commer er 2020 y 2021
cial
Bank of
China
Foshan
branch 22.24
of the
Industri 20
Not General 23 April
al and Not 600 October 600 600
related forward 2021
Commer 2020
cial
Bank of
China
Foshan 1.10
branch
of Bank 15 25
Not General
of Not 300 January Februar 300 300
related forward
Commu 2021 y 2021
nication
s
Foshan Not General 21 25 0.49
Not 200 200 200
branch related forward January Februar
36
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
of the 2021 y 2021
Industri
al and
Commer
cial
Bank of
China
Foshan -1.18
branch
of the
Not General 8 March 29 April
Agricult Not 400 400 400
related forward 2021 2021
ural
Bank of
China
Foshan -0.38
branch
of the
Industri 25
Not General 29 April
al and Not 300 March 300 300
related forward 2021
Commer 2021
cial
Bank of
China
Foshan 1.57
branch Not General 23 April 27 May
Not 400 400 400
of Bank related forward 2021 2021
of China
Foshan
branch 15.34
of the
Industri 8
Not General 4 June
al and Not 800 Decemb 800 800
related forward 2021
Commer er 2021
cial
Bank of
China
Foshan 6.06
branch
of the 16
Not General 11 June
Industri Not 800 Novemb 800 800
related forward 2021
al and er 2021
Commer
cial
37
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Bank of
China
Foshan
22
branch Not General 30 June 54.07
Not 2,000 Decemb 2,000 2,000
of Bank related forward 2021
er 2021
of China
Foshan
branch 12.27
of the 19 23
Not General
Agricult Not 600 August Novemb 600 600
related forward
ural 2021 er 2021
Bank of
China
Foshan
branch
of the 16 22
Not General
Agricult Not 180 Septemb March 180 180
related forward
ural er 2021 2022
Bank of
China
Foshan
branch
of the 22 24
Not General
Agricult Not 280 Septemb March 280 280
related forward
ural er 2021 2022
Bank of
China
Foshan
branch
of the
Industri 28
Not General 1 April
al and Not 350 Septemb 350 350
related forward 2022
Commer er 2021
cial
Bank of
China
Foshan
branch
12
of the Not General 14 April
Not 360 October 360 360
Agricult related forward 2022
2021
ural
Bank of
38
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
China
Foshan
branch
of the
Industri 20
Not General 1 June
al and Not 700 October 700 700
related forward 2022
Commer 2021
cial
Bank of
China
Foshan
branch
of the
Industri 3
Not General 7 June
al and Not 260 Novemb 260 260
related forward 2022
Commer er 2021
cial
Bank of
China
Foshan
branch
of the
Industri 29
Not General 5 July
al and Not 1,000 Decemb 1,000 1,000
related forward 2022
Commer er 2021
cial
Bank of
China
191.6
Total 10,930 -- -- 2,000 8,930 7,800 0 3,130 0.00%
3
Funding source All self-funded
Legal matters involved (if applicable) N/A
Disclosure date of board
28 January 2021
announcement approving derivative
27 August 2021
investment (if any)
Disclosure date of general meeting
announcement approving derivative
investment (if any)
Analysis of risks and control Risk Analysis of Forward Exchange Settlement Business: 1. Risk of exchange rate
measures associated with derivative fluctuations. In the case of large fluctuations in the exchange rate, the quoted price of the
investments held in Reporting Period bank’s forward exchange rate may be lower than the Company’s quoted exchange rate to the
(including but not limited to market customer, which will make the Company unable to lock the quoted exchange rate to the
39
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
risk, liquidity risk, credit risk, customer or the bank’s forward exchange rate may deviate from the exchange rate at the
operational risk, legal risk, etc.) time of the Company’s actual receipt and payment, and causes exchange losses. 2. Risk of
customer default. The customer’s accounts receivable may be overdue, and the payment for
goods cannot be recovered within the predictable payback period, which will result in the
loss of the Company due to the delayed forward settlement. 3. Risk of payback prediction.
The marketing department shall made corresponding payback prediction based on customer
orders and expected orders. However, during the actual implementation process, customers
may adjust their orders and predictions, which will result in the Company’s incorrect
payback prediction and cause the risk of delayed delivery of forward exchange settlement.
Adopted Risk Control Measures: 1. The Company will strengthen the research and analysis
of the exchange rate. When the exchange rate fluctuates greatly, it will adjust the business
strategy in a timely manner to stabilize the export business and avoid exchange losses to the
utmost. 2. The Management System for Forward Settlement and Sales of Foreign Exchanges
approved by the Board of Directors of the Company stipulates that all forward foreign
exchange settlement businesses of the Company shall be based on the normal production
and operation, and relied on specific business operations to avoid and prevent various
exchange rate risks. However, speculative transaction and interest arbitrage are not allowed.
At the same time, the system clearly defines the operating principles, approval authority,
responsible department and responsible person, internal operation procedures, information
isolation measures, internal risk reporting system, risk management procedures, and
information disclosure related to the forward settlement business as well. In fact, the system
is conducive to strengthen the management of the Company’s forward foreign exchange
settlement business and prevent investment risks. 3. In order to prevent any delay in the
forward exchange settlement, the Company will strengthen the management of accounts
receivable, actively collect receivables, and avoid any overdue receivables. In the meantime,
the Company plans to increase the export purchases and purchase corresponding credit
insurance so as to reduce the risk of default and customer default. 4. The Company’s
forward foreign exchange settlement transactions must be based on the Company’s foreign
exchange earnings prediction. Besides, the Company shall strictly control the scale of its
forward foreign exchange settlement bus iness, and manage all risks that the Company may
face within a controllable range. 5. The internal audit department of the Company shall
check the actual signing and execution situation of all trading contracts on a regular or
irregular basis.
The Company carries out recognition and measurement in accordance with the Accounting
Standard for Business Enterprises No. 22—Recognition and Measurement of Financial
Changes in market prices or fair value
Instruments, the Accounting Standard for Business Enterprises No. 24—Hedges, the
of derivative investments in
Accounting Standard for Business Enterprises No. 37—Presentation of Financial Instrument
Reporting Period (fair value analysis
and other applicable regulations. Fair value is arrived at based on the price provided by
should include measurement method
pricing service providers such as banks or the price obtained. Fair value measurement and
and related assumptions and
recognition are carried out on a monthly basis. Changes in the fair value of forward
parameters)
exchange settlement contracts entered into by the Company are mainly attributable to
difference arising from exchange rate fluctuations.
Major changes in accounting policies N/A
40
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
and specific accounting principles
adopted for derivative investments in
Reporting Period compared to last
reporting period
Opinions of the Independent Directors: The forward foreign exchange settlement
transactions conducted by the Company are based on normal production and operation, are
supported by specific businesses, aim to avoid and prevent foreign exchange risks associated
with export businesses, do not involve speculative operations and are consistent with the
Opinion of independent directors on
needs of the Company's operation and development. The Company has established relevant
derivative investments and risk
business management policies and risk control and prevention measures. The risk is
control
controllable. The proposal was passed following a lawful, valid decision-making procedure,
has no negative impact on the Company's normal operation and business development and
does not undermine the interest of the Company and its shareholders. Therefore, the
Company's conducting forward foreign exchange settlement transactions is approved.
5. Use of Funds Raised
□ Applicable √ Not applicable
No such cases in the Reporting Period
VIII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
√ Applicable □ Not applicable
Relatio
Net Ratio
nship
profit of the
betwee Credito Execute
contrib net
n the Owners r’s d as
uted to profit
transact hip of rights schedul
the contrib
ion the and ed or Index
Transac Compa Effect uted by Related
party asset liabiliti not; if to
Transac tion ny from on the the sale Pricing -party
Asset Date of and the involve es not, Disclos disclose
tion price the Compa of the principl transact
sold sale Compa d has involve give ure date d
party (RMB’ period- ny (see asset to e ion or
ny been all d have reasons informa
0,000) begin note 3) the not
(applica transfer been all and tion
to the Compa
ble for red or transfer measur
date of ny’s
related- not red or es
sale total
party not taken
(RMB’ profit
transact
0,000) (%)
ions)
Central Part of 150,22 2,364.3 The Market 27 Announ
2021 0.00% Not N/A Yes Yes N/A
ized the 8.83 4 sale prices August cement
41
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
bidding Compa would of the 2021 No.
on the ny’s not stocks 2021-0
second shareho affect when 56 on
ary ldings the reducin Board
market in Compa g the Resolut
Gotion ny’s shareho ions
High-te busines ldings Regardi
ch Co., s ng the
Ltd., continu Interim
China ity or Report
Everbri manage disclose
ght ment d on
Bank, stability http://w
and . ww.cni
Xiamen nfo.co
Bank m.cn
Note: In conformity with the new financial instrument standards effective on 1 January 2019, the Company
recorded the investment in Gotion High-tech, Everbright Bank, and Xiamen Bank as non-trading equity instrument
investment at fair value through other comprehensive income. The decrease did not affect the Company's profit in
the current period. The net profit contributed by the asset to the Company from the period-begin to the date of sale
was dividends received in the current period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
IX Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the
Company’s net profit:
Unit: RMB
Relationship
Principal Registered Operating Operating
Name with the Total assets Net assets Net profit
activity capital revenue profit
Company
FSL
Chanchang 72,782,944.0
Subsidiary Manufacturing 295,908,457. 167,282,654. 315,044,707. 22,624,286.1 18,959,568.4
Optoelectroni 0
61 33 95 2 9
cs Co., Ltd.
Foshan
Subsidiary Manufacturing 500,000.00
Taimei Times 153,402,445. 38,168,506.6 147,525,074. 3,258,273.89 2,474,926.17
42
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Lamps Co., 48 0 10
Ltd.
FSL
(Xinxiang) 35,418,439.7
Subsidiary Manufacturing 64,956,562.4 54,550,766.9 42,482,443.8 804,842.87
Lighting Co., 6 1,053,970.31
9 0 8
Ltd.
FSL Lighting
15,000,000.0
Equipment Subsidiary Manufacturing 20,430,403.8 19,425,794.3 20,296,271.6 657,076.08 131,862.68
0
Co., Ltd. 0 8 4
Nanjing
Fozhao
Lighting 41,683,200.0
Subsidiary Manufacturing 147,620,249. 76,488,172.2 34,233,638.0 10,491,331.8
Components 0 7,515,946.18
37 2 4 5
Manufacturin
g Co., Ltd.
FSL Zhida
Electric 50,000,000.0
Subsidiary Manufacturing 139,272,155. 62,592,379.3 164,800,910.
Technology 0 6,120,518.94 5,129,689.55
63 3 54
Co., Ltd.
FSL Lighting
Subsidiary Manufacturing 195,812.50 803,224.12 -71,781.13 -79,031.34 -79,031.34
GmbH 1,899,067.72
Foshan
Hortilite 17,158,000.0
Subsidiary Manufacturing 73,778,585.2 34,394,375.8 81,332,587.1
Optoelectroni 0 3,899,949.94 2,888,499.38
8 3 8
cs Co.,Ltd.
Fozhao
(Hainan) 200,000,000. 153,422,521. 150,013,141.
Subsidiary Manufacturing 3,383,898.90 20,401.12 13,141.64
Technology 00 40 60
Co., Ltd.
Foshan
Kelian New Investment and
170,000,000.
Energy Subsidiary technology 657,056,361. 155,388,149. 20,006,978.0 723,879.33 530,180.08
00
Technology development 77 77 3
Co., Ltd.
Nanning
Liaowang 35,055,700.0 2,164,227,57 835,748,803. 707,022,757. 28,145,655.6 28,862,888.6
Subsidiary Manufacturing
Auto Lamp 0 7.12 15 31 1 3
Co., Ltd.
Note: the operating income, operating profit and net profit of Nanning Liaowang lamp Co., Ltd. are the annual
amount, which is the amount after it is included in the scope of consolidated financial statements
43
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Subsidiaries obtained or disposed in the Reporting Period:
√Applicable □ Not applicable
How the subsidiary was obtained or Impact on overall operations and
Name
disposed of in the Reporting Period performance
No significant impact during the Reporting
Fozhao (Hainan) Technology Co., Ltd. Newly established
Period
Provides the Company with fast access to
the industrial chains of automobile
manufacturers, gives a strong boost to the
Company’s auto lighting division, and
Nanning Liaowang Auto Lamp Co., Ltd. Acquired
contributed RMB707.0228 million and
RMB14.5901 million to the Company’s
operating revenue and net profit
respectively during the Reporting Period
FSL New Light Source Technology Co.,
De-registered No significant impact
Ltd.
Hunan Keda New Energy Investment and
Consolidated No significant impact
Development Co., Ltd.
Information about major majority- and minority-owned subsidiaries:
—FSL Chanchang Optoelectronics Co., Ltd. (renamed on 19 June 2018 from “Foshan Chanchang Electric
Appliances (Gaoming) Co., Ltd.”), which is a Sino-foreign joint venture invested and established by the Company
and Prosperity Lamps and Components Ltd, had obtained license for business corporation on 23 August 2005
through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District, Foshan with
document “MWJMY Zi [2005] No. 79”. The Company holds 70% equities of the said company; therefore the said
subsidiary was included into the scope of the consolidated financial statements since the date of foundation.
On 23 August 2016, the Company and Prosperity Lamps and Components Ltd signed the equity transfer
agreement. The Company purchased 30% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd.
held by Prosperity Lamps and Components Ltd. After the purchasing, the Company held 100% equity of Foshan
Chanchang Electric Appliances (Gaoming) Co., Ltd.
—Foshan Taimei Times Lamps Co., Ltd., which is a Sino-foreign joint venture invested and established by the
Company and Reback North America Investment Limited, had obtained license for Business Corporation on 5
December 2005 through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District,
Foshan with document “MWJMY Zi [2005] No. 97”. The Company holds 70% equities of the said company;
44
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
therefore the said subsidiary was included into the scope of the consolidated financial statements since the date of
foundation.
—FSL (Xinxiang) Lighting Co., Ltd. is a limited liability company which is invested and established by the
Company, obtaining its license for Business Corporation on 17 April 2009. The Company holds 100% equities of
the said company, therefore the said subsidiary was included into the scope of the consolidated financial
statements since date of foundation.
On 27 August 2013, the 3rd Meeting of the 7th Board of Directors reviewed and approved to invest another
RMB2 million (land in an industrial park in Xinxiang, Henan Province and monetary funds) in FSL (Xinxiang)
Lighting, increasing the registered capital of FSL (Xinxiang) Lighting to RMB35,418,439.76.
—Foshan Lighting Lamps and Lanterns Co., Ltd. is a limited liability company invested and established by the
Company with the registered capital of RMB15 million, which had obtained its license for Business Corporation
on 8 May 2013. And the Company holds 100% equities of this company. Therefore the said subsidiary was
included into the scope of the consolidated financial statements since the date of foundation.
—In accordance with the equity transfer agreement signed between the Company and Prosperity Lamps and
Components Ltd. on 27 August 2008, Prosperity Lamps and Components Ltd. transferred 100% equities of
Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. (formerly known as “Prosperity (Nanjing)
Lighting Components Co., Ltd.”, and changed name to “Nanjing Fozhao Lighting Components Manufacturing
Co., Ltd.” on 15 November 2010.) to the Company. Therefore, Nanjing Fozhao Lighting Components
Manufacturing Co., Ltd. became a wholly-owned subsidiary of the Company. The said subsidiary was included
into the scope of the consolidated financial statements since the merger date.
—FSL Zhida Electric Technology Co., Ltd. (FSL Zhida) was incorporated by the Company, Foshan Zhibida
Enterprise Management Co., Ltd. and Dongguan Baida Semiconductor Material Co., Ltd. on a joint investment
basis. FSL Zhida obtained its business license on 21 October 2016. Holding a stake of 51% in it, the Company has
included FSL Zhida in its consolidated financial statements since the date of FSL Zhida’s incorporation.
—FSL Lighting GmbH is a Limited Liability company invested and set up in German with registered capital
Euro25,000. It got the business license on 30 November 2017 whose 100% stock equity is held by the Company,
and it is included into the scope of consolidated financial statement from the date of establishment. As of the end
of the Reporting Period, the company is handling the relevant procedures for liquidation and cancellation.
—Foshan Haolaite was incorporated by the Company and Foshan NationStar, with a registered capital of
RMB17,158,000 contributed by the Company and Foshan NationStar and the corporate business license granted
45
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
on 30 July 2020. The Company owns 51 percent of the equity of Foshan Haolaite, which has been included in the
scope of the consolidated financial statements of the Company since its day of incorporation.
—The 100 percent of the equity of Hunan Keda was transferred from Guangdong Huajian to the Company under
an equity transfer agreement between the Company and Guangdong Huajian signed on 21 December 2020,
whereby Hunan Keda has become a wholly owned subsidiary of the Company. Hunan Keda has been included in
the scope of the consolidated financial statements of the Company since the day the Company assumed actual
control over Hunan Keda. The Company held the 15th meeting of the 9th Board of Directors on 16 August 2021,
where the proposal for Merger of Hunan Keda New Energy Investment and Development Co., Ltd., a
Wholly-owned Subsidiary, by Absorption, was deliberated and adopted. In November 2021, the industrial and
commercial cancellation of Hunan Keda involved in the merger by absorption has been completed. After the
merger by absorption, Foshan Kelian New Energy Technology Co., Ltd. was changed from sub-subsidiary to a
wholly-owned subsidiary of the Company.
—Nanning Liaowang Auto Lamp Co., Ltd. signed an equity agreement with its existing shareholders in July 2021,
and acquired Nanning Liaowang through equity acquisition and capital increase and share expansion. After the
transaction is completed, the Company eventually held 53.79% of the shares of Nanning Liaowang, and Nanning
Liaowang became the controlling subsidiary of the Company. The Company shall include Nanning Liaowang in
the scope of consolidated financial statements from the date when the Company obtains its actual control right.
X Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
XI Prospects
(I) Development trend of the Industry
1. Competitive landscape in the industry
The lighting industry saw a slowdown in growth and increasingly fierce market competition in recent years
following the fast development of the previous years. In addition, the increasing raw material and labor costs have
brought a big pressure on the rapid development and profitability of enterprises. However, as lighting products are
developing in the direction of being more smart, individualized and customized, enterprises with competitive
technology, brand, financial resources and capabilities will survive and prevail through the survival-of-the-fittest
mechanism of market competition, and the industry is expected to experience accelerated mergers, acquisitions
46
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
and restructuring. Mergers and acquisitions enable enterprises to expand their business space, increase their
existing market share or create a larger market space in specific market segments, thereby increasing the degree of
concentration of the industry. The lighting industry will have a competitive landscape in which "the big becomes
bigger, the strong becomes stronger."
2. Development trend of the industry
(1) Intelligent lighting market embraces faster development
With the development of communication, control and sensor technologies, the popularization of intelligent
lighting related concepts, and the improvement of consumers' pursuit of quality of life, intelligent lighting will
usher in a period of rapid development. According to the forecast of Qianzhan Industry Research Institute, the
market size of China's intelligent lighting industry will reach RMB43.1 billion in 2022, with an annual growth rate
of about 23%. Intelligent lighting has brought a new experience to people's life and work. Besides saving energy,
it can also adjust people's mood and relieve people's mood. As household appliances enter the era of
interconnection, intelligent lighting solutions will become a new development direction of the industry.
(2) The industry has entered the mature stage and innovation is key to development
After the decade-plus of fast development, the LED industry, under the impact of both internal and external
environment, is experiencing a slow growth in overall market size. The technologies for all links of the industry
chain have gradually become mature. And the industry has entered the mature stage. Enterprises cannot maintain
their competitive advantages and increase their market share simply through the means of price and economy of
scale. They must keep developing new application and new products through innovation so as to expand the
market. The scaling-up and commercialization of new technologies will drive the LED industry to a new stage of
development.
(3) Market segments boast broad development prospects
With the continuous deepening of carbon peaking and carbon neutrality in China, efforts are made to encourage
infrastructure construction and rural revitalization. Besides, the acceleration of smart cities and the maturity of
related technologies will facilitate the development of intelligent lighting, health lighting, marine lighting, 5G
smart lampposts, animal and plant lighting and other fields, and the new business segmentation will bring new
growth opportunities to the industry.
(II) The Company's strategies for future development
The Company will take technology and services as two top-priority fronts, focus on brand and value and center its
47
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
efforts on upgrading to medium- to high-end smart manufacturing, transitioning to a provider of products and
integrated solutions and transcending to "smart, healthy, green and human-oriented lighting." The Company will
step up efforts on the application end, further exploit the Internet-of-Things (IoT) ecosphere and niche markets,
develop more new application scenarios and products, continuously improve our core competitiveness and
accelerate the new round of development.
(III) Work Plan for 2022
1. Promote product innovation
(1) The Company will strengthen cooperation with authoritative R&D institutions, universities and leading
enterprises in sub-sectors in the industry, and unswervingly make breakthroughs in product innovation in two
directions: Differentiation and functionality.
(2) The Company will optimize the product structure, comprehensively sort out existing products, focus on the
research and development and production of high-end intelligent products of lamps and lanterns and products in
the new business segmentation, increase the proportion of high value-added products, and accelerate the
transformation from selling products to selling overall solutions and services.
2. Carry out the marketing mode reform
(1) The Company adopts a market-oriented approach and speed up the construction of market-oriented marketing
mechanism. Moreover, the Company will deepen the reform of the provincial management system, promote the
pre-positioning of management, supervision and coordination functions, and strengthen channel coordination. It
will continue to promote the service center model, pay great attention to regional control and price system
reconstruction, and realize the pre-market of service functions.
(2) The Company will tackle difficulties in winning major customers and projects and expand incremental
markets.
(3) The Company will strengthen the publicity and channel construction of overseas independent brands, and
increase the overseas proportion of independent brands.
3. Implement cost control
(1) Through the bidding and price comparison of Sunshine Procurement Platform, the Company conducts
procurement in an intensive, informationized and standardized fashion, improves the screening, access and exit
mechanism of core suppliers, formulates differentiated supplier management strategy, implements new material
substitution, and take multiple measures to reduce the procurement cost.
48
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(2) The Company focuses on improving the intelligent rate of production equipment, labor productivity and
excellent rate of products. With intelligent manufacturing and intelligent logistics as the core, the Company
improves the serialization, standardization and modularization of core components and materials of products,
plans production lines and introduces automation equipment, so as to continuously promote the construction of
intelligent manufacturing and digital workshop in high-lighting parks and realize intensive and flexible large-scale
production.
(3) The Company strengthens inventory management, establishes a dynamic rolling sales forecasting mechanism
according to market demand and actual production, reasonably formulates peak-shifting production plans, and
minimizes inventory backlog.
(IV) Potential risks
1. Risks associated with the uncertainties of the macroeconomy
At present, the global Covid-19 pandemic has not been effectively controlled, global economic growth is still
under great pressure and uncertainty, which may have an adverse impact on the development of the industry.
2. Risk of intensified market competition
The lighting industry is an industry with global competition. In particular, domestic enterprises in the downstream
lighting application sector face not only the competition from international lighting companies with well-known
brands but also the competition from home appliances enterprises, electronics enterprises and IC enterprises in the
midstream and upstream of the LED industry as these enterprises keep expanding into the lighting application
sector. The Company will be facing a market environment with increasingly fierce competition.
3. Risk of fluctuations in raw material prices
The Company's main raw materials include LED lamp beads, electronic components, aluminum substrates, plastic
parts, metal materials, etc., and the price fluctuations of main raw materials will have an impact on the Company's
production costs. If the price of raw materials continues to rise in the future, it may adversely affect the
Company's production and operation.
4. Risk of exchange rate fluctuation
Overseas sales account for around 30% of the Company’s total sales, which are mainly settled in USD. Exchange
rate fluctuations could lead to higher exchange loss, which will have an adverse impact on the Company’s net
49
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
profit. A significant appreciation of the RMB will negatively impact the Company's performance.
XII Communications with the Investment Community such as Researches, Inquiries and
Interviews
□ Applicable √ Not applicable
No such cases for the Reporting Period.
50
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part IV Corporate Governance
I General Information of Corporate Governance
During the Reporting Period, in strict accordance with relevant requirements of Company Law, Securities Law,
Code of Corporate Governance of Listed Companies and Rules of Stock Listing of Shenzhen Stock Exchange as
well as other relevant laws, rules and regulations, the Company continuously perfected the corporate governance
structure and set up an effective corporate governance system. At present, the Company has set up governance
structure of responsible Shareholders’ General Meeting, the Board of Directors, the Supervisory Committee and
managers, who performed right of decision-making, execution and supervision respectively according to their
duties; besides, the Company set up special committees of the Board of Directors and system for independent
directors. The Company strengthened information disclosure of principal shareholders and persons
acting-in-concert, forbidden shareholders of the Company to misapply their rights. The Company separated from
the principal shareholder in personnel, assets, business, financial affairs and organizational, and was absolutely
impendent. The Company timely revised and perfected various systems in accordance with the latest issued laws
& rules and relevant regulations of CSRC and Shenzhen Stock Exchange. And the corporate governance is
basically in line with the requirements of relevant laws, regulations and regulatory documents.
Indicate by tick market whether there is any material incompliance with the applicable laws, regulations, or rules
issued by the CSRC governing the governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.
II The Company’s Inde pendence from Its Controlling Shareholder and Actual Controller in
Asset, Personnel, Financial Affairs, Organization and Business
The Company is completely separated from its controlling shareholder in aspects such as business, personnel,
assets, institutions and finance and possesses independent and complete business and self-dependent operating
ability.
51
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
1. As for the business, the Company is independent of the controlling shareholders and the subordinate enterprises
and owns the independent business departments and management system as well as possesses of impendent and
entire business and self-dependent operating ability.
2. As for the personnel, the Company formulates the independent management system such as the labor, personnel
and the salary, possesses the independent personnel department and the operating management team. The Senior
Executives of the Company are serving at the Company in full time and receiving the salary from the Company.
3. As for the assets, the assets of the Company are independent and entire with clear ownership, and possesses the
independent production system, BOP system and the supporting facilities, as well as possesses the legal
ownership of the land, factories, equipments related to the production and operating and the assets such as the
trademark, patent and the non-patent technology, and possesses the entire control and govern power of all the
assets of the Company without any behavior such as any controlling shareholder occupies the assets of the
Company.
4. As for the institutions, the Company set up the independent and entire organizations and institutions, and the
construction as well as the operating of the corporate governance institutions is executed strictly executed
according to the Articles of Association, and the production and operating as well as the offices are entirely
independent from the controlling shareholders with any situation of working under one roof with the controlling
shareholders.。
5. As for the finance, the Company set up the independent finance department and builds up the independent and
normative accounting and financial control system according to the requirements of the ASBE, set up the
independent bank account and pays the taxes legally and independently and the Company could make the
financial decisions independently without any situation of the shareholding intervenes the capital usage.
III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Meeting Type Investor Convened date Disclosure date Resolutions of the
52
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
participation ratio meeting
Resolutions of the
The 2020 Annual Annual General
44.37% 21 May 2021 22 May 2021 2020 Annual
General Meeting Meeting
General Meeting
Resolutions of the 1st
The 1st Extraordinary
Extraordinary Extraordinary
General Meeting of 43.09% 13 September 2021 14 September 2021
General Meeting General Meeting of
2021
2021
The 2nd Resolutions of the
Extraordinary Extraordinary 2nd Extraordinary
42.72% 24 November 2021 25 November 2021
General Meeting of General Meeting General Meeting of
2021 2021
The 3rd Resolutions of the
Extraordinary Extraordinary 3rd Extraordinary
45.40% 31 December 2021 1 January 2022
General Meeting of General Meeting General Meeting of
2021 2021
2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting
Rights
□ Applicable √ Not applicable
V Directors, Supervisors and Senior Manage ment
1. General Information
Increas Decreas
Beginni Restrict Other
e in the e in the Ending Reason
Incumb ng ed increas
Office Start of End of Share Reporti Reporti shareho for
Name ent/For Gender Age shareho shares e/decre
title tenure tenure options ng ng lding share
mer lding granted ase
Period Period (share) changes
(share) (share) (share)
(share) (share)
Wu Board 24 23
Incumb
Shengh Chairm Male 51 August August 00 0 0 0 0 0
ent
ui an 2020 2023
Vice 23
24
Zhuang Board Incumb August 11,903, 11,903,
Male 70 August 0 0 0 0 0
Jianyi Chairm ent 2023 509 509
2020
an
24 23
Lei Directo Incumb
Male 54 August August 00 0 0 0 0 0
Zihe r & GM ent
2020 2023
53
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Zhang 24 23
Directo Incumb
Xianfen Male 51 August August 00 0 0 0 0 0
r ent
g 2020 2023
24 23
Cheng Directo Incumb
Male 47 August August 11,550 0 0 0 0 0 11,550
Ke r ent
2020 2023
Huang 24 23
Directo Incumb
Zhiyon Male 52 August August 00 0 0 0 0 0
r ent
g 2020 2023
Indepen 23
24
Dou dent Incumb August
Male 62 August 00 0 0 0 0 0
Linping Directo ent 2023
2020
r
Indepen 13 23
Li dent Incumb Septem August
Male 60 00 0 0 0 0 0
Xiyuan Directo ent ber 2023
r 2021
Indepen 13 23
Zhang
dent Incumb Septem August
Rensho Male 56 00 0 0 0 0 0
Directo ent ber 2023
u
r 2021
24 23
Li Supervi Incumb
Male 34 August August 00 0 0 0 0 0
Yizhi sor ent
2020 2023
24 23
Zhuang Supervi Incumb
Male 36 August August 00 0 0 0 0 0
Junjie sor ent
2020 2023
Ye 24 23
Supervi Incumb
Zhengh Male 48 August August 77,561 0 0 0 0 0 77,561
sor ent
ong 2020 2023
24 23
Lin Supervi Incumb
Male 52 August August 22,583 0 0 0 0 0 22,583
Qing sor ent
2020 2023
Zhang Executi 24 23
Incumb
Xuequa veVice Male 44 August August 73,052 0 0 0 0 0 73,052
ent
n GM 2020 2023
Tang 24 23
Incumb
Qiongla CFO Female 51 August August 75,940 0 0 0 0 0 75,940
ent
n 2020 2023
24 23
Wei Vice Incumb Male 52 105,22 0 0 0 0 0 105,22
August August
54
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Bin GM ent 2020 2023 6 6
Jiao 24 23
Vice Incumb
Zhigan Male 49 August August 90,399 0 0 0 0 0 90,399
GM ent
g 2020 2023
24 23
Chen Vice Incumb
Male 49 August August 66,066 0 0 0 0 0 66,066
Yu GM ent
2020 2023
24 23
Zhang Vice Incumb
Male 47 August August 77,596 0 0 0 0 0 77,596
Yong GM ent
2020 2023
Xu 24 23
Vice Incumb
Xiaopin Male 51 August August 37,270 0 0 0 0 0 37,270
GM ent
g 2020 2023
Huang Board 23
Incumb 19 May
Zhenhu Secreta Male 34 August 00 0 0 0 0 0
ent 2021
an ry 2023
Indepen 13
24
Zhang dent Septem
Former Female 72 August 00 0 0 0 0 0
Nan Directo ber
2020
r 2021
Indepen 13
24
dent Septem
Lu Rui Former Male 46 August 00 0 0 0 0 0
Directo ber
2020
r 2021
Chairm
an of
27
Li the 24
Decem
Huasha Supervi Former Male 58 August 00 0 0 0 0 0
ber
n sory 2020
2021
Commi
ttee
12,540, 12,540,
Total -- -- -- -- -- -- 0 0 0 0 0 --
752 752
Indicate by tick mark whether any director, supervisor or senior management resigned during the Reporting
Period.
√ Yes □ No
In July 2021, independent directors Ms. Zhang Nan and Mr. Lu Rui resigned for personal reasons. In December
2021, Chairman of the Supervisory Committee Mr. Li Huashan resigned for reasons of job adjustment.
55
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Change of directors, supervisors and senior management:
√Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Huang Zhenhuan Board Secretary Appointed 19 May 2021 Appointed by the Board of Directors
Independent
Li Xiyuan Elected 13 September 2021 Elected by general meeting
Director
Independent
Zhang Renshou Elected 13 September 2021 Elected by general meeting
Director
Independent
Zhang Nan Resigned 13 September 2021 Personal reasons
Director
Independent
Lu Rui Resigned 13 September 2021 Personal reasons
Director
Chairman of the
Li Huashan Supervisory Resigned 27 December 2021 Job adjustment
Committee
2. Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors,
supervisors and senior management:
1. Working Experience of the Directors
Mr. Wu Shenghui: Han nationality, was born in July 1970. He is a member of the CPC and has no right of
permanent residence in a foreign country. He finished a part-time postgraduate program. Previously, he has served
as Senior Staff Member and then Principal Staff Member of Guuangdong Provincial Commission for Discipline
Inspection, Assistant Manager and then Manager of the Human Resources Department and then Manager of the
Department of Party and Mass Work and Personnel of Guangdong Rising Holdings Group Co., Ltd., and CP C
Committee Secretary, then Full-Time Deputy Secretary and then Director of Shenzhen Zhongjin Lingnan
Nonfemet Company Limited. He became CPC Committee Member and Secretary of the Company in April 2020
and became President of the Board of Directors of the Company in May 2020.
Mr. Zhuang Jianyi: born in 1951, with a bachelor’s degree and MBA. He now acts as the Chairman of Hong
Kong Youchang Lighting Equipment, and has been engaged in the electric light source equipment production as
well as the trading business for about 40 years. From 1995 to 2010, he acted as the Directors, the Vice Chairman
and the Chairman of the Company. And he serves as a vice chairman of the Company since December 2015.
56
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Mr. Lei Zihe: Han nationality, was born in August 1967. He is a member of the CPC and has no right of
permanent residence in a foreign country. He finished a postgraduate program and bears a professional title of
Senior Engineer. Previously, he has served as Assistant Manager of the Quality Management Department, then
Manager of the Technical Department, then Director of the No. 1 Device Factory, and then Manager of the Second
Marketing Department of Foshan Optoelectronic Devices Company, Assistant to the General Manager and then
Secretary of the Board of Directors of Foshan NationStar Optoelectronic Technology Co., Ltd., CPC Committee
Member, then Vice General Manager and General Manager of the RGB Device Division, then Director, and then
Executive General Manager of Foshan NationStar Optoelectronics Co., Ltd., and President of the Board of
Directors of Foshan NationStar Semiconductor Technology Co., Ltd.. He became CPC Committee Member and
Deputy Secretary of the Company in April 2020 and became Director and General Manager of the Company in
May 2020.
Mr. Zhang Xianfeng: Han nationality, was born in July 1970. He is a member of the CPC and has no right of
permanent residence in a foreign country. He finished a MBA program at Renmin University of China and bears
professional titles of Senior Political Mentor and Economist. Previously, he has served as Assistant Departmental
Manager and then Departmental Manager of China Guangdong International Economic and Technological
Cooperation (Group) Company, Assistant Director and then Director of the General Office of Guangdong
Xinguang International Group Co., Ltd., Assistant Manager of the Human Resources Department, then Assistant
Manager of the Department of Party and Mass Work and Personnel, then Assistant Director of the CPC
Committee's General Office, and then Manager of the Department of Party and Mass Work of Guangdong Rising
Holdings Group Co., Ltd.. He became CPC Committee Member and Deputy Secretary of the Company in June
2020, became Chairman of the Labor Union of the Company in July 2020, and became Director of the Company
in August 2020.
Mr. Cheng Ke: Han nationality, born in February 1974, a member of the Communist Party of China and an
auditor with the bachelor’s degree. He once acted as the Vice-Minister and the Minister of the Financing Plan
Department and Vice Minister of Audit Department in Guangdong Rising Holdings Group Co., Ltd., Vice GM of
Hubei Ashennan Expressway Development Co., Ltd., the Executive Deputy GM of Hubei Gdrising Han-E
Expressway Co., Ltd. and Hubei Han-Cai Expressway Co., Ltd., the Director of Guangdong Rising Finance Co.,
Ltd and Rising Investment Development Limited. And now acts as the Full-time Director accredited to the
Company by Capital Operation Department of Guangdong Rising Holdings Group Co., Ltd., Director of
57
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Guangdong Fenghua Advanced Technology Holding Co., Ltd and Foshan NationStar Optoelectronics Co., Ltd. He
serves as a Director of the Company since December 2015.
Mr. Huang Zhiyong: Han nationality, born in August 1969, a member of the Communist Party of China and an
engineer. He graduated from Xidian University with a bachelor’s degree of Electronic Devices Structures. He
once acted as the Vice GM of Shenzhen Primatronix (Nanho) Electronics Ltd., the Minister of Enterprise
Development Department, the GM Assistant and Vice GM in Guangdong Electronics Information Industry Group
Ltd. He now acts as a member of CPC, Deputy Secretary of CPC and Chairman of Labor Union in Guangdong
Electronics Information Industry Group Ltd. And he serves as a Director of the Company since December 2015.
Li Xiyuan: Male, born in March 1961, member of the Communist Party of China, no permanent residence abroad,
doctoral degree, professor-level senior engineer. He has served as deputy director of the Construction
Management Office of the Northern Section of Beijing-Zhuhai Expressway in Guangdong Province, Deputy
Director of Infrastructure Management Department of Guangdong Provincial Communication Group Co., Ltd.,
General Manager of Guangdong Gaintop Highway Engineering Construction Group Co., Ltd., General Manager
and Chairman of Guangdong Provincial Expressway Development Co., Ltd., Chairman of Guangdong Road and
Bridge Construction Development Co., Ltd., Director of Guangdong Construction Engineering Group Co., Ltd.,
Guangdong Province Navigation Group Co., Ltd., Guangdong Namyue Group Co., Ltd. and Guangdong
Provincial Railway Construction Investment Group Co., Ltd. He is currently an external director of Guangzhou
Port Group Co., Ltd. and an independent director of Dongguan Development (Holdings) Co., Ltd. He has been an
independent director of the Company since September 2021.
Zhang Renshou: Male, born in May 1965, Ph.D., professor, doctoral supervisor, no permanent residence abroad,
doctoral degree. He has served as lecturer and associate professor of Guangzhou Foreign Language Training
Center of Ministry of Petroleum Industry and China University of Petroleum, Editor of Development Research
Center of People's Government of Guangdong Province, Professor of Accounting Department of School of
Management of Guangzhou University and independent director of Jiangmen Rural Commercial Bank Company
Limited. He also serves as: Member of the Expert Group of the Budget Committee of Guangzhou Municipal
People's Congress, Member of the Expert Group of the Economic Committee of Guangzhou Municipal People's
Congress, Member of the 8th Committee of Guangdong Social Sciences Association, Member of the Academic
Committee of Research Center for Guangdong Local Public Finance, Professional Advisory Committee Member
of Guangdong Statistics Bureau, Member of the Academic Committee of Guangdong Coastal Economic Belt
58
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Development Research Center, President of Guangdong South China Economic Development Research
Association, Major Administrative Decision Demonstration Expert and Innovation and Entrepreneurship
Development Expert of Shaoguan Municipal People's Government of Guangdong Province, and Special
Researcher of Guangzhou Taxation Bureau of State Taxation Administration of the People's Republic of China.
He has been an independent director of the Company since September 2021.
Mr. Dou Linping: Han nationality, was born in August 1959. He is of Chinese nationality and has no right of
permanent residence in a foreign country. He received a bachelor's degree and bears a professional title of Senior
Engineer. Previously, he has served as Director of the Office of Design Standards and then Vice Director of
Beijing Luminaries Research Institution, Deputy Secretary-General and Managing Director of China Association
of Lighting Industry, and Managing Director and Secretary-General of China Illuminating Engineering Society. At
present, he serves as Vice Director-General of China Solid State Lighting Alliance and Independent Director of
Hengdian Group TOSPO Lighting Co., Ltd. and Beijing New Space Technology Co., Ltd.. He serves as an
independent director of the Company since August 2020.
2. Working Experience of the Supervisors
Mr. Li Yizhi: Han nationality, was born in March 1987. He is a member of the CPC. He received a bachelor's
degree ，intermediate accountant and is an Association of Chartered Certified Accountants (ACCA) certified
accountant. Previously, he has worked at the Guangzhou Office of WUYIGE Certified Public Accountants LLP
(special general partnership) as an Audit Assistant, at the Guandong Office of Pan-China Certified Public
Accountants LLP (special general partnership) as a Project Manager, at the Shenzhen Office of
PricewaterhouseCoopers Zhong Tian LLP (special general partnership) as an auditor, and at the Guangdong
Office of China Central Public Accounting Firm (special general partnership) as a Project Manager. At present, he
serves as Supervisor of the Finance Department (Settlement Center) of Guangdong Rising Holdings Group Co.,
Ltd.. He serves as a supervisor of the Company since August 2020.
Mr. Zhuang Junjie: Born in September 1985, a Hong Kong permanent resident. He graduated with a bachelor’s
degree and once acted as the Consultant Manager of Accenture Software and now acts as the Director of Hong
Kong Prosperity Lighting Equipment Co., Ltd. And he serves as a supervisor of the Company since December
2015.
Mr. Ye Zhenghong: Born in June 1973, a member of the Communist Party of China with a college degree. He
59
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
joined the Company from July 1995; worked in the Machine Repair Shop from July 1995 to June 1997; worked in
the Mechanical Power Department from July 1997 to January 2001; acted as Equipment Management Director in
T8 Fluorescent Lamp Factory from February 2001 to January 2005; acted as Director of Machine Repair Workshop
from May 2005 to January 2007; acted as Chief Officer of Machinery Dynamic Department from May 2006 to
December 2007; and acted as factory director of T8 Fluorescent Lamp Factory from January 2008 to February 2016;
and acted as Chief Officer of Production Department from March 2016 to March 2019; and acted as the director of
E-Commerce Business Department from April 2019 to June 2020; and acted as the vice GM of FSL Zhida Electric
Technology Co., Ltd. from November 2016 to February 2020, and acted as the GM of FSL Zhida Electric
Technology Co., Ltd. from March 2020 to March 2021; and has acted as the Chairman of the Board of FSL Zhida
Electric Technology Co., Ltd. since April 2021; the Chairman of the 5th Supervisory Committee and the Employee
Supervisor of the 6th, 7th, 8th and 9th Supervisory Committee.
Mr. Lin Qing: born in September 1969, member of the Communist Party of China, undergraduate degree, electric
light source engineer; has been working in the company since August 1991; worked as mercury lamp workshop
technician and workshop director from June 1996 to February 2002; as the workshop director and factory director of
the fluorescent lamp factory from March 2002 to September 2009; as the director of Technology Department from
October 2009 to September 2020 ; as the Technical Director of the R&D and Technology Department since October
2020; in July 2015, elected as a discipline committee member of the company’s CPC committee. And he serves as
an Employee Supervisor of the Company since September 2016.
3. Working experience of the Senior Management Staff
Mr. Lei Zihe: Han nationality, was born in August 1967. He is a member of the CPC and has no right of
permanent residence in a foreign country. He finished a postgraduate program and bears a professional title of
Senior Engineer. Previously, he has served as Assistant Manager of the Quality Management Department, then
Manager of the Technical Department, then Director of the No. 1 Device Factory, and then Manager of the
Second Marketing Department of Foshan Optoelectronic Devices Company, Assistant to the General Manager
and then Secretary of the Board of Directors of Foshan NationStar Optoelectronic Technology Co., Ltd., CPC
Committee Member, then Vice General Manager and General Manager of the RGB Device Division, then
Director, and then Executive General Manager of Foshan NationStar Optoelectronics Co., Ltd., and President of
the Board of Directors of Foshan NationStar Semiconductor Technology Co., Ltd.. He became CPC Committee
60
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Member and Deputy Secretary of the Company in April 2020 and became Director and General Manager of the
Company in May 2020.
Mr. Zhang Xuequan: Born in December 1977, a member of the Communist Party of China, MBA of Lingnan
College of Sun Yat-Sen University. He joined the Company in 1996. He worked in the former Iodine-tungsten
Lamp Workshop from October to December 1996; worked in the Technology Department and then the Quality
Control Department from January 1997 to August 2002; acted as the Workshop Manager of Lamp Workshop from
September 2002 to May 2008; acted as the Department Director of the Business Management Department of the
Company from June 2008 to August 2016. He has concurrently acted as the Office Director from February 2016
to December 2018. He has been the Party Branch Secretary for the Administrative Office of the Company from
July 2010 to June 2017, and a member of the party committee of the Company since July 2015. He was a
supervisor of the Company from May 2013 to August 2016 and has been a vice GM of the Company since August
2016; Act as the Deputy General Manager of the Company since March 2020.
Mr. Zhang Yong: Born in June 1974, a member of the Communist Party of China and a senior engineer with a
bachelor degree. He joined in the Company in July 1997. and successively acted as Deputy Director and Director of
Lamp Filament Appliance Workshop from October 1999 to June 2008; acted as Factory Director of Gaoming
Fluorescent Lamp Factory and Factory Director of Gaoming Branch Factory from July 2008 to December 2008;
respectively acted as Department Director of Product Department, OEM Department, Mechanical Dynamics
Department and Infrastructure Department from January 2009 to December 2012; acted as General Manager
Assistant from March 2013 to August 2016. He was a supervisor and the Chairman of the Board of Supervisors of
the Company from September 2013 to August 2016; served as the chairman of the Labor Union of the Company
from September 2013 to May 2019; acted as the Deputy Party Secretary from July 2015 to 27 December 2021; and
has been a vice GM of the Company since August 2016.
Mr. Wei Bin: Born in May 1969, a member of the Communist Party of China and a Senior engineer of electronic
engineering technology with a Master’s degree. He joined in the Company in 1991, and responsible for the product
development of the graduate school of the Company from March 1992 to December 1996, acted as Workshop
Manager of Energy Saving Lamp Workshop from January 1997 to December 2004, acted as Workshop Manager of
HID Workshop from January to December 2005, acted as Workshop Manager of T5 Workshop from January 2006
to November 2008, acted as the Department Director of the Technology Department from November 2008 to
August 2009 and acted as Vice GM of the Company from September 2009.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Mr. Chen Yu: Born in December 1972, a member of the Communist Party of China and an engineer with a
bachelor’s degree. He entered the Company in 1994. And acted as workshop manager of parabolic reflector, coating
film, energy saving lamp, factory director of the branch factory of Gaoming and workshop manager of general bulbs
from January 1997 to December 2012, acted as Director of Production Department, OEM Department and
Mechanical Dynamics Department from January to August 2013, acted as Director of Production Department and
OEM Department from September 2013 to May 2014 as well as acted as Vice GM of the Company from May 2014.
Ms. Tang Qionglan: born in March 1970, member of the Communist Party of China, bachelor degree, China
Certified Public Accountant, served as audit manager of BDO China Shu Lun Pan Certified Public Accountants
LLP Foshan Branch; as Deputy Manager of the Finance Department, Manager, Chief Financial Officer, Deputy
General Manager and Chief Financial Officer of Foshan NationStar Optoelectronics Co., Ltd.. and serves as the
Chief Financial Officer of the Company since January 2016.
Mr. Jiao Zhigang: Born in May 1972, a member of the Communist Party of China with a bachelor’s degree. He
entered the Company in 1994. He acted as Warehouse Director of the Company from August 1995 to September
2013, acted as Department Director of Human Resources Department from May 2010 to September 2013; acted as
Supervisor from March 2007 to September 2013, and as Chairman of the Supervisory of the Company from May
2010 to September 2013. He acted as Vice GM of the Company in September 2013.
Mr. Xu Xiaoping: born in July 1970, member of the Communist Party of China, postgraduate degree, engineer.
Worked as Deputy General Manager and General Manager of Guangdong Fenghua Advanced Technology Holding
Co., Ltd. Xin’gu Branch, also as the General Manager of Guangdong Fenghua Semiconductor Technology Co., Ltd.,
and Deputy Director of Headquarters Operations Center; as the General Manager of Guangdong Fenghua Advanced
Technology Holding Co., Ltd. Lihua Branch from March 2015 to January 2016; won the first prize of scientific and
technological progress of Zhaoqing in 2008; won the title of the “Ninth Batch of Top Talents of Zhaoqing” in 2010;
served as Deputy General Manager of the Company since January 2016.
Huang Zhenhuan: Born in December 1987, he holds a master's degree in finance, is a financial economist, and
has obtained the qualification certificate of Secretary of the Board of Directors issued by Shenzhen Stock
Exchange. He used to be the sponsor of Assets Department, Assistant General Manager of Investment Department
and General Manager of Finance Department of Guangzhou Guangyong State-owned Asset Sales Co., Ltd.,
General Manager of Guangzhou Guangyong Equity Investment Fund Management Co., Ltd., General Manager of
Corporate Finance Department III (Industry Center) of Minsheng Bank Guangzhou Branch, Investment Director
62
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
of Guangdong Rising Financial Holding Co., Ltd., and Senior Director of Capital Operation Department of
Guangdong Rising Holdings Group Co., Ltd. He has served as Board Secretary of the Company since May 2021.
Offices held concurrently in shareholding entities:
√Applicable □Not applicable
Office held in the Remuneration or
Name Shareholding entity shareholding Start of tenure End of tenure allowance from the
entity shareholding entity
Full-time director
accredited to the
Guangdong Rising Holdings Group
Cheng Ke listed company by Yes
Co., Ltd.
capital operation
department
Deputy Secretary
Guangdong Electronics Information of CPC, Chairman
Huang Zhiyong Yes
Industry Group Ltd. of the Labor
Union
Head of the
Financial
Guangdong Rising Holdings Group
Li Yizhi Department Yes
Co., Ltd.
(Settlement
Center)
Prosperity Lamps & Components Chairman of the
Zhuang Jianyi Yes
Limited Board
Prosperity Lamps & Components
Zhuang Junjie Director Yes
Limited
Offices held concurrently in other entities:
√Applicable □Not applicable
Remuneration or
Office held in
Name Other entity Start of tenure End of tenure allowance from
the entity
the entity
Professor at
the
Zhang Renshou Guangzhou University Yes
Accounting
Department
CHINA SOLED STATE LIGHTING Vice
Dou Linping Yes
ALLIANCE Chairman
63
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors
and senior management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors
and senior management:
The Remuneration & Appraisal Committee under the Board of Directors decided the 2020 remunerations for the
leadership team members in accordance with the Measures for Managing the Remuneration of the Leadership
Team Members, the particulars on completing current main financial indexes & operating goals, as well as the
fulfillment of job responsibilities by them, before submitting the remuneration plan to the Board of Directors for
approval.
The total remuneration (before tax) actually paid to the directors, supervisors and senior management staff for
2021 were RMB16.6599 million.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
Total before-tax
Any
Incumbent/Forme remuneration
Name Office title Gender Age remuneration
r from the
from related party
Company
Wu Shenghui Board Chairman Male 51 Incumbent 150.35 No
Vice Board
Zhuang Jianyi Male 70 Incumbent Yes
Chairman
Lei Zihe Director & GM Male 54 Incumbent 142.51 No
Zhang Xianfeng Director Male 51 Incumbent 111.85 No
Cheng Ke Director Male 47 Incumbent Yes
Huang Zhiyong Director Male 52 Incumbent Yes
Independent
Li Xiyuan Male 60 Incumbent No
Director
Independent
Zhang Renshou Male 56 Incumbent 4.2 No
Director
Dou Linping Independent Male 62 Incumbent 14.4 No
64
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Director
Li Yizhi Supervisor Male 34 Incumbent Yes
Zhuang Junjie Supervisor Male 36 Incumbent Yes
Ye Zhenghong Supervisor Male 48 Incumbent 47.7 No
Lin Qing Supervisor Male 52 Incumbent 41.92 No
ExecutiveVice
Zhang Xuequan Male 44 Incumbent 141.3 No
GM
Zhang Yong Vice GM Male 47 Incumbent 139.69 No
Wei Bin Vice GM Male 52 Incumbent 133.53 No
Chen Yu Vice GM Male 49 Incumbent 140.99 No
Tang Qionglan CFO Female 51 Incumbent 130.27 No
Jiao Zhigang Vice GM Male 49 Incumbent 131.97 No
Xu Xiaoping Vice GM Male 51 Incumbent 151.36 No
Huang Zhenhuan Board Secretary Male 34 Incumbent 30.67 No
Independent
Zhang Nan Female 72 Former 10.2 No
Director
Independent
Lu Rui Male 46 Former 10.2 No
Director
Chairman of the
Li Huashan Supervisory Male 58 Former 132.88 No
Committee
Total -- -- -- -- 1,665.99 --
VI Performance of Duty by Directors in the Reporting Period
1. Board Meetings Convened during the Reporting Period
Meeting Convened date Disclosure date Resolution
Announcement on Resolutions
The 8th Meeting of the 9th Board
27 January 2021 28 January 2021 of the 8th Meeting of the 9th
of Directors
Board of Directors
Announcement on Resolutions
The 9th Meeting of the 9th Board
7 April 2021 9 April 2021 of the 9th Meeting of the 9th
of Directors
Board of Directors
Announcement on Resolutions
The 10th Meeting of the 9th
14 April 2021 15 April 2021 of the 10th Meeting of the 9th
Board of Directors
Board of Directors
The 11th Meeting of the 9th 23 April 2021 26 April 2021 Announcement on Resolutions
65
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Board of Directors of the 11th Meeting of the 9th
Board of Directors
Announcement on Resolutions
The 12th Meeting of the 9th
19 May 2021 20 May 2021 of the 12th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 13th Meeting of the 9th
21 May 2021 22 May 2021 of the 13th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 14th Meeting of the 9th
23 June 2021 24 June 2021 of the 14th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 15th Meeting of the 9th
16 August 2021 17 August 2021 of the 15th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 16th Meeting of the 9th
25 August 2021 27 August 2021 of the 16th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 17th Meeting of the 9th
28 September 2021 30 September 2021 of the 17th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 18th Meeting of the 9th
13 October 2021 14 October 2021 of the 18th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 19th Meeting of the 9th
27 October 2021 28 October 2021 of the 19th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 20th Meeting of the 9th
29 October 2021 30 October 2021 of the 20th Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 21st Meeting of the 9th
8 November 2021 9 November 2021 of the 21st Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 22nd Meeting of the 9th
16 November 2021 17 November 2021 of the 22nd Meeting of the 9th
Board of Directors
Board of Directors
Announcement on Resolutions
The 23rd Meeting of the 9th
23 November 2021 24 November 2021 of the 23 rd Meeting of the 9th
Board of Directors
Board of Directors
The 24th Meeting of the 9th Announcement on Resolutions
15 December 2021 16 December 2021
Board of Directors of the 24th Meeting of the 9th
66
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Board of Directors
Announcement on Resolutions
The 25th Meeting of the 9th
29 December 2021 30 December 2021 of the 25th Meeting of the 9th
Board of Directors
Board of Directors
2. Attendance of Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
Total number Board The director
Board
of board Board meetings Board failed to attend
meetings General
meetings the meetings attended by meetings the two
Director attended meetings
director was attended on way of director failed consecutive
through a attended
eligible to site telecommunica to attend board meetings
proxy
attend tion (yes/no)
Wu Shenghui 18 3 15 0 0 No 4
Zhuang Jianyi 18 0 18 0 0 No 4
Lei Zihe 18 3 15 0 0 No 4
Zhang Xianfeng 18 3 15 0 0 No 4
Cheng Ke 18 3 15 0 0 No 4
Huang Zhiyong 18 3 15 0 0 No 1
Dou Linping 18 2 16 0 0 No 4
Li Xiyuan 9 1 8 0 0 No 2
Zhang Renshou 9 1 8 0 0 No 1
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.
√ Yes □ No
Suggestions from directors adopted or not adopted by the Company:
During the Reporting Period, the directors of the Company worked to fulfill their functions and duties, actively
67
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
attended Board of Directors meetings and Shareholders’ General Meetings, offered advices and suggestions and
performed their rights, functions, duties, and obligations as defined in the Company Law, the Securities Law and
the Articles of Association. They fulfilled their role as a director, upheld the legitimate rights and interests of the
Company and its shareholders, promoted further improvement in corporate governance and effectively facilitated
regulatory compliance of the Company's operation. During the Reporting Period, the directors of the Company
actively performed their functions and duties, made full use of their professional knowledge, worked diligently to
fulfill their duties and offered many invaluable advices and suggestions on the Company's management
decision-making and major matters based on their in-depth understanding of the Company's operations. They
made resolutions on the Company's significant matters such as profit distribution, capital operation, asset disposal,
and related-party transactions. They played their due role in improving the Company's supervision mechanism,
promoting improvement in the Company's risk control capacity and upholding the legitimate rights and interests
of the Company and its shareholders.
VII Performance of Duty by Specialized Committees under the Board in the Reporting Period
Meetings Contents Opinion and Objection (if
Committee Members Convened date Other activities
convened reviewed advice any)
2020 Financial
Audit and
Internal
Control Audit
Report; 2021
Financial
Budget Report;
23 March 2021 Approved
Zhang and 2020
Renshou, Li Annual Work
The Audit Xiyuan, Dou Report and
3
Committee Linping, Cheng 2021 Work
Ke, and Huang Plan of the
Zhiyong Audit
Department
Work Report of
the Audit
16 August Department for
Approved
2021 Q1 2021;
Proposal on
Formulating
68
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
the Internal
Audit System
Work Report of
the Audit
Department for
H1 2021; and
5 November Proposal on
Approved
2021 Renewing the
Engagement of
Auditing
Agency for
2021
Proposal on
Appraisal P lan
12 November for 2020
Approved
2021 Remunerations
for Leadership
Team Members
Proposal on
Adjustment to
Zhang
Allowances for
The Renshou, Li
Independent
Remuneration Xiyuan, Dou
2 Directors; and
and Appraisal Linping, Zhang
Proposal on
Committee Xianfeng, and
Termination of
Cheng Ke 24 December
the Approved
2021
Establishment
of Equity
Incentive
System for
Middle and
Senior
Management
Proposal on
Appointment
Li Xiyuan, 13 May 2021 Approved
of Board
Zhang
Secretary
The Renshou, Dou
Nomination Linping, Lei Proposal on
2
Nomination of
Committee Zihe, and
16 August Li Xiyuan and
Zhang Approved
2021 Zhang Renshou
Xianfeng
as Candidate
Independent
69
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Directors
VIII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in
the Reporting Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
IX Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company at the
5,740
period-end
Number of in-service employees of main subsidiaries at the
3,547
period-end
Total number of in-service employees at the period-end 9,287
Total number of employees with remuneration in this Reporting
9,287
Period
Number of retirees to whom the Company or its main
242
subsidiaries need to pay retirement pension
Functions
Function Number of employees
Production 6,618
Sales 861
Technical 940
Financial 74
Administrative 794
Total 9,287
Educational backgrounds
Educational background Number of employees
Master and above 65
Bachelor 1,134
Junior college 1,357
Technical secondary school and high school 1,717
70
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Below high school 5,014
Total 9,287
Note: “Number of retirees to whom the Company or its main subsidiaries need to pay retirement pension” in the
table above refer to retirees of subsidiary Nanning Liaowang, and the payments to them mainly comprise living
allowances, festival allowances, etc. The amount paid by Nanning Liaowang stands at RMB645,900 per year.
This is a historical issue coming from before the Company’s acquisition of Nanning Liaowang. Starting from 1
January 2021, the number of the retirees and the annually paid amount have ceased to increase.
2. Employee Remuneration Policy
Adhering to the principle of "giving priority to efficiency, giving consideration to fairness, creating and sharing
together", the Company takes value creation as the guide, constructs four sets of salary systems of management,
R&D, sales and production, determines salary grades according to different positions and their characteristics, and
inclines salary distribution to core talents and key positions, so as to maximize the enthusiasm of employees.
3. Employee Training Plans
The Company pays attention to personnel training and employee career development and has established the
Starlight Lecture Hall. In light of the Company's development needs and post nature, the Company has built up a
complete training plan, and carried out a series of trainings such as R&D, marketing, production and management
by combining offline and offline learning platforms. Also, it organized training camps for internal lecturers, and
established a training system with multiple levels, channels, fields and ways to promote employees' skills
upgrading, ability advancement and quality improvement.
4. Labor Outsourcing
□ Applicable √ Not applicable
X Profit Distributions to Shareholders (in the Form of Cash and/or Stock)
How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated,
executed or revised in the Reporting Period:
√ Applicable □ Not applicable
According to the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of Listed
71
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Companies (Zheng-Jian-Fa [2012] No. 37) and the Guangdong CSRC Notice on Further Implementing
Regulations Related to Dividend Distribution of Listed Companies (Guang-Dong-Zheng-Jian [2012] No. 91), in
order to further standardize the dividend mechanism, promote a scientific, sustained and stable dividend
mechanism and protect legal rights and interests of investors, in 2012, the Company convened a general meeting
to revise the dividend-related contents in its Articles of Association and specify the dividend conditions, the
lowest dividend ratio, the decision-making procedure, etc.. Meanwhile, it formulated the Management Rules for
Profit Distribution and the Return for Shareholder Plan for the Coming Three Years (2021-2023), specifying the
arrangements and forms of dividends, the cash dividend planning and the distribution intervals, which further
improved the decision-making and supervision procedures for dividend distribution. According to the Company’s
Articles of Association, the profit distributed in cash shall not be less than 30% of the distributable profit achieved
in the year.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and
Yes
played their due role
Non-controlling interests are able to fully express their opinion
Yes
and desire and their legal rights and interests are fully protected
In case of adjusting or changing the cash dividend policy, the
conditions and procedures involved are in compliance with Yes
applicable regulations and transparent
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for shareholders despite
the facts that the Company has made profits in the Reporting Period and the profits of the Company as the parent
distributable to shareholders are positive.
□ Applicable √ Not applicable
Final dividend plan for the Reporting Period:
√Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
72
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Dividend for every 10 shares (RMB) (tax inclusive) 1.00
Additional shares to be converted from capital
0
reserve for every 10 shares (share)
Total shares as the basis for the profit distribution
1,348,994,647
proposal (share)
Cash dividends (RMB) (tax inclusive) 134,899,464.70
Cash dividends in other forms (such as share
249,744,793.06
repurchase) (RMB)
Total cash dividends (including those in other
384,644,257.76
forms) (RMB)
Distributable profit (RMB) 2,738,229,003.27
Total cash dividends (including those in other
100%
forms) as % of total profit distribution
Cash dividend policy
Where it is difficult to determine the development stage of the Company but it has plans for considerable spending, in profit
distribution, cash dividends shall reach at least 20% in the total profit to be distributed.
Details about the proposal for profit distribution and converting capital reserve into share capital
As audited by Zhongzheng Tiantong Certified Public Accountants LLP, the after-tax net profits of RMB241,148,689.36 of the
Company as the parent for 2021, plus the beginning retained profits of RMB1,591,884,733.49, minus the distributed profits of
RMB135,847,668.70 for 2020, plus RMB1,041,043,249.12 of cumulative fair value changes which had been previously recognized
in other comprehensive income but were transferred to retained profits in the current period as a result of the sale of shareholdings
in the current period, equal the ending profits distributable to shareholders of RMB2,738,229,003.27 for 2021. The Board of
Directors has proposed to allocate profits for 2021 as follows: based on the share capital of 1,348,994,647 shares (the total share
capital of 1,361,994,647 shares minus the remaining 13,000,000 A-shares repurchased in the share repurchase account at the
disclosure date of the 2021 Annual Report, a cash dividend of RMB1 (tax inclusive and dividends for B-share holders to be paid in
the Hong Kong dollars) per 10 shares is to be distributed to the shareholders. The retained profits will be carried forward into the
next year. Where any change occurs to the total shares entitled to the final dividend due to any new issue, grant of equity incentives,
etc. when the final dividend plan is implemented, the dividend per share shall remain the same while the total payout amount shall
be adjusted accordingly.
Note: “Cash dividends in other forms (such as share repurchase)” in the table above is arrived at based on the
funds (exclusive of transaction costs) used to repurchase A- and B-shares during 2021 using the RMB:HKD
exchange rate at 17 December 2021, the last trading day of the valid period of the repurchase.
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
73
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
XII Formulation and Imple mentation of Internal Control System during the Reporting
Period
1. Internal control formulation and implementation
During the Reporting Period, the Company, in accordance with the Basic Standards for Internal Control and its
supporting guidelines, as well as the actual situation, further revised and improved the relevant internal control
systems, adjusted the internal organizational structure and job responsibilities, and established a relatively
effective internal control system, so as to effectively prevent and discover deviations in the process of operation
and management in time, and provide guarantee for the legal compliance and asset safety of operation and
management.
The Board of Directors of the Company has an Audit Committee, which is responsible for reviewing the internal
control of the Company, supervising the effective implementation of internal control and self-evaluation of
internal control, and cooperating with internal control audit and other related matters. The internal audit
department of the Company is responsible for the internal audit supervision of the Company, including
supervising and inspecting the implementation of the internal control system of the Company, regularly or
irregularly conducting routine audits or special audits on finance, internal control, major projects and their
businesses, and putting forward suggestions for improving internal control to control and prevent risks. If the
Audit Department finds major defects in internal control in the process of supervision and inspection, it has the
right to report directly to the Audit Committee of the Board of Directors and the Board of Supervisors.
According to the identification of major defects in the Company's internal control, there were no major defects in
the internal control of financial reports and non-financial reports in 2021.
2. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
XIII Management and Control of Subsidiaries by the Company during the Reporting Period
Problems
Name of Settlement Follow-up
Integration plan Integration progress encountered in Solutions taken
company progress settlement plan
integration
Nanning The company After the Company
Liaowang Auto empowers empowered Nanning None None None None
Lamp Co., Ltd. Nanning Liaowang in terms of
74
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(Nanning Liaowang in talents, capital,
Liaowang) talents, capital, technology,
technology, management and
management, informationization,
informationizatio Nanning Liaowang
n and other introduced a group of
aspects to help middle and high-end
Nanning talents, made
Liaowang breakthroughs in some
develop faster. important technology
research and
development, reduced
financial expenses,
optimized internal
management and
improved
informationization
level.
XIV Self-Evaluation Report or Inde pendent Auditor’s Report on Internal Control
1. Internal Control Self-Evaluation Report
Disclosure date of the internal control
1 April 2022
self-evaluation report
Index to the disclosed internal control
See www.cninfo.com.cn for the Internal Control Self-Evaluation Report 2021
self-evaluation report
Evaluated entities’ combined assets as
100.00%
% of consolidated total assets
Evaluated entities’ combined
operating revenue as % of 100.00%
consolidated operating revenue
Identification standards for internal control weaknesses
Weaknesses in internal control over financial Weaknesses in internal control not related to
Type
reporting financial reporting
Defect with one of the following Defect with one of the following
characteristics should be recognized as a characteristics should be recognized as a
serious defect: 1. the defect involved with the serious defect: 1. being punished for
malpractices of the Directors, the Supervisors seriously violating the national laws, the
Nature standard
and the Senior Executives; 2. the controlled administrative laws and regulations and the
environment is invalid; 3. the CPA discovered normative documents; 2. the Company
any significant misstatement from the current suffers a serious economic loss due to any
financial report while the internal control serious errors made in decision-making
75
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
could not discover the mistake during the caused by serious lack of decision-making
operating process; 4. the supervision from the procedures on significant events or unfair
Corporate Audit Committee and the internal decision-making; 3. the Company’s
audit institution on the internal control. If reputation has been unrepairably damaged by
there met with one of the situation of the any conduct in violation of laws and
following, should be recognized as an regulations which produces a far-reaching
important defect: 1. the recognized important negative impact and draws the public’s
defect is not solved during the reasonable attention widely; 4. the major business
period; 2. corrects the published financial involved with the production and operating
report; 3. the function of the internal audit of of the Company lack of the system control or
the Company is invalid; 4. the control of the system control is invalid; 5. the results of
whether execute the selection and the the internal control assessment turn out to
application of the accounting policies include any serious defects and such defects
according to the Generally Accepted fail to be rectified effectively within 12
Accounting Principles is invalid. months. Defects with the following
characteristics should be recognized as
important defects: 1. owing to partly lack of
the decision-making process on significant
events and the undemocratic
decision-making process which caused the
decision-making mistake that led the
Company face with certain economic losses;
2. the negative influences owning to the
unlawful acts and the irregularities h involve
with wide range and cause public concern
among the partial regions which bring
certain harms to the reputation of the
Company; 3. the system of the major
business involved with the production and
operating of the Company is incomplete or
partially invalid; 4. the results of the internal
control assessment turn out to include any
serious defects and such defects fail to be
rectified effectively within 6 months.
Based on the data of the 2020 consolidated According to the quantitative criterion of the
statements, the quantitative criterion of internal control defects of the financial
confirming the important degree of the report, the quantitative criterion of the
misstatement (including the false negatives) internal control defects assessment of the
from of the consolidated statements of the non-financial report confirmed by the
Quantitative standard
listed companies is as follows: serious defect: Company is as follows: serious defect:
misstatement ≥1.0% of the total assets misstatement ≥1.0% of the total assets
amount; important defects: 0.5% of the total amount; important defects: 0.5% of the total
assets amount ≤misstatement＜1.0% of the assets amount ≤misstatement＜1.0% of the
total assets amount; common defects: total assets amount; common defects:
76
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
misstatement ＜ 0.5% of the total assets misstatement ＜ 0.5% of the total assets
amount. amount.
Number of material weaknesses in
internal control over financial 0
reporting
Number of material weaknesses in
internal control not related to financial 0
reporting
Number of serious weaknesses in
internal control over financial 0
reporting
Number of serious weaknesses in
internal control not related to financial 0
reporting
2. Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
Zhongzheng Tiantong Certified Public Accountants LLP considered that: Foshan Electrical and Lighting Co., Ltd. maintained
effective internal control of the financial report in all significant aspects according to the Basic Standards for Internal Control and
relevant regulations.
Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 1 April 2022
Index to such report disclosed See www.cninfo.com.cn for the Auditor’s Report on Internal Control
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial None
reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the
Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent
with the internal control self-evaluation report issued by the Company’s Board.
√ Yes □ No
77
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
XV Rectifications of Proble ms Identified by Self-inspection in the Special Action for Listed
Company Governance
According to the requirements of the regulatory authorities, the Company carried out special self-examination
activities on corporate governance from 2018 to 2020, and conducted self-examination item by item in various
aspects according to the Company Law, Securities Law, Stock Listing Rules of the Shenzhen Stock Exchange and
other relevant laws and regulations, normative documents and the Articles of Association of the Company. Upon
self-examination, it was found that the Board of Directors and the Supervisory Committee did not change in time
upon expiration of term of office, and some directors, supervisors and senior management personnel of the
Company sometimes did not attend or attend the shareholders' meeting as nonvoting attendees.
Rectification: On 24 August 2020, the Company held the first extraordinary general meeting in 2020 and elected
the 9th Board of Directors and Board of Supervisors. The term of office of directors and supervisors was three
years until 24 August 2023, and the change of Board of Directors and Board of Supervisors was completed.
Subsequently, the Company will strictly implement the Company Law, Securities Law and other laws and
regulations and the Articles of Association, continue to enhance shareholder communication before the re-election
of the Board of Directors and the Supervisory Committee, and complete the re-election of the Board of Directors
and the Supervisory Committee in compliance with applicable regulations. At the same time, when the
shareholders' meeting is held, all directors, supervisors and senior management personnel of the Company are
required to attend or attend the meeting as non-voting attendees. If the directors, supervisors and senior
management personnel cannot attend or attend the meeting as non-voting attendees, they shall submit a written
leave report to the Board of Directors.
78
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part V Environmental and Social Responsibility
I Major Environme ntal Issues
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the
environmental protection authorities.
√ Yes □ No
Name of
Major and Discharge Pollutant Total
Company or Discharge Outlet Outlet Total Actual Excessive
Characterist Concentrati Discharge Discharge
Subsidiary Method Quantity Distribution Discharge Discharge
ic Pollutants on Standards Approved
Company
Emission
Foshan
Standards
Electrical
Discharged for Air
and
in an SO2: 289 Pollutants SO2: 9.208 SO2: 39.937
Lighting SO2 1 In the plant 3
None
organized mg/m in Glass t/y t/y
Co., Ltd.
manner Industry
Gaoming
(DB44/2159
Branch
-2019)
Emission
Foshan
Standards
Electrical
Discharged for Air
and
in an Oxynitride: Pollutants Oxynitride: Oxynitride:
Lighting Oxynitride 1 In the plant 3
None
organized 550mg/m in Glass 50.576 t/y 83.549 t/y
Co., Ltd.
manner Industry
Gaoming
(DB44/2159
Branch
-2019)
Xylene,
SO2,
nitrogen Integrated
Liuzhou oxide, Discharged Emission
Discharged
Guige benzene, upon Standards
in an
Lighting toluene, 1 In the plant reaching of Air No limit No limit None
organized
Technology particulate applicable Pollutants
manner
Co., Ltd. matter, standards (GB16297-
volatile 1996)
organic
matter
Liuzhou Volatile Discharged Discharged Integrated
2 In the plant No limit No limit None
Guige organic in an upon Emission
79
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Lighting compounds un-organize reaching Standards
Technology d manner applicable of Air
Co., Ltd. standards Pollutants
(GB16297-
1996)
Construction and operation of pollution control facilities:
Date of Date of
Total Design Actual Operation
Construction Operation
No. Facility Investment Operator Processes Capacity Capacity Hours
(MM/YYY (MM/YYYY 3 3
(RMB0,000) (m /h) (m /h) (h/d)
Y) )
Semi-dry flue
Desulfurizat
gas
ion,
desulphurization
denitration, November December Independent
1 500 (SDFGD) + 60,000 60,000 24
and dust 2015 2015 operations
electric
removal
precipitation +
system
SCR denitration
2 RTO 360 November March 2017 Independent Dry filter+RTO 10000 10000 24
oxidation 2016 operations catalytic
furnace combustion
3 Activated 60 March 2019 November Independent Filter cotton+ 60712 60712 24
carbon 2019 operations activated carbon
adsorption adsorption
device device+22.5m
vent
Assessment of the environmental impact of construction projects and other administrative licenses of
environmental protection:
Document Name of Administrative License of
No. Approver Date of Approval Approval No.
Environmental Protection
Approval for Environmental Impact Report on Environmental Protection
1 New Project of Foshan Electrical and Lighting Bureau of Gaoming 3 November 2004 /
Co., Ltd. Gaoming Branch District, Foshan City
Environmental Protection Acceptance Opinions Environmental Protection
2 on Phase I of Foshan Electrical and Lighting Bureau of Gaoming 28 August 2008 MHY [2008] No. 26
Co., Ltd. Gaoming Branch District, Foshan City
Acceptance Opinions on Flue Gas Emission Environmental Protection
3 Continuous Monitoring System of Foshan Bureau of Gaoming 22 February 2010 MHY [2010] No. 8
Electrical and Lighting Co., Ltd. Gaoming District, Foshan City
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Branch
Approval for Environmental Impact Report on
Environmental Protection
Energy-saving Lamp Expansion Project of MHGYB [2013] No.
4 Bureau of Gaoming 30 August 2013
Foshan Electrical and Lighting Co., Ltd. 030
District, Foshan City
Gaoming Branch
Environmental Transport
Letter of Environmental Protection Acceptance
and Urban Management
Opinions on Energy-saving Lamp Expansion MGY
5 Bureau of Gaoming 19 February 2014
Project of Foshan Electrical and Lighting Co., [2014] No. 2
District (Environmental
Ltd. Gaoming Branch
Protection)
Approval from Environmental Protection
Bureau of Gaoming District, Foshan City, of Environmental Protection
6 Environmental Impact Report on Expansion Bureau of Gaoming 13 February 2015 MHS [2015] No. 14
Project of Foshan Electrical and Lighting Co., District, Foshan City
Ltd. Gaoming Branch
Approval from Environmental Protection
Bureau of Gaoming District, Foshan City, of Environmental Protection
7 Kiln Expansion and Flue Gas Control and Bureau of Gaoming 26 November 2015 MHS [2015] No. 157
Remediation Project of Foshan Electrical and District, Foshan City
Lighting Co., Ltd. Gaoming Branch
Letter from Environmental Protection Bureau of
Gaoming District, Foshan City of
Environmental Protection
Environmental Protection Acceptance Opinions
8 Bureau of Gaoming 24 December 2015 MHY [2015] No. 83
on Kiln Expansion and Flue Gas Control and
District, Foshan City
Remediation Project of Foshan Electrical and
Lighting Co., Ltd. Gaoming Branch
Approval from Environmental Protection
Bureau of Gaoming District, Foshan City, of
Environmental Protection
Environmental Impact Report on New LED
9 Bureau of Gaoming 30 September 2017 MHS [2017] No. 138
Luminaries R&D Production Base Construction
District, Foshan City
Project of Foshan Electrical and Lighting Co.,
Ltd. Gaoming Branch
Approval from Environmental Protection
Bureau of Gaoming District, Foshan City, of
Environmental Protection
Environmental Impact Report on Glass Kiln
10 Bureau of Gaoming 14 January 2019 MHS [2019] No. 11
(Change) Construction Project of Foshan
District, Foshan City
Electrical and Lighting Co., Ltd. Gaoming
Branch
Letter from Foshan Municipal Ecology and
Ecology and Environment
11 Environment Bureau of Environmental 12 September 2019 FMHY [2019] No. 126
Bureau of Foshan City
Protection Acceptance Opinions on Solid Waste
81
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Pollution Prevention and Control Facility for
New LED Luminaries R&D Production Base
Construction Project (Phase I) of Foshan
Electrical and Lighting Co., Ltd.
Ecology and Environment 91440600784850061B
12 Sewage Discharge License 1 June 2020
Bureau of Foshan City 001U
Reply on the Environmental Impact Report of
Liuzhou Guige Lighting Technology Co., Ltd. Liuzhou Environmental
13 25 September 2015 LHS Zi [2015] No. 134
with an Annual Output of 1.35 Million Sets of Protection Bureau
Auto Parts (Motor Vehicle Lamps)
Reply on Completion Acceptance of
Liuzhou Liudong New
Environmental Protection Facilities of Liuzhou
Area Administrative LDSPHB Zi [2019]
14 Guige Lighting Technology Co., Ltd. with an 28 October 2019
Examination and Approval No. 70
Annual Output of 1.35 Million Sets of Auto
Bureau
Parts (Motor Vehicle Lamps) (Solid Waste)
Liuzhou Liudong New
Area Administrative 914502000836092085
15 Sewage Discharge License 18 July 2020
Examination and Approval 001V
Bureau
Contingency plan for environmental emergencies
The Company formulated the Contingency Plan for Environmental Emergencies of Foshan Electrical and
Lighting Co., Ltd. Gaoming Branch (Including Risk Assessment Report and Material Survey of Environmental
Emergencies in August 2017, had it reviewed by experts on 13 September 2017, and had it filed with the Foshan
Municipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2017-094-L) on 24
October 2017.
This document was revised in August 2020, reviewed by experts again on 7 September 2020, and filed with the
Foshan Municipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440608-2020-056-M) on 25
September 2020.
In June 2018, Liuzhou Guige Lighting Technology Co., Ltd. completed the preparation of the Emergency Plan for
Environmental Emergencies of Liuzhou Guige Lighting Technology Co., Ltd. (including the Risk Assessment
Report for Environmental Emergencies and the Investigation Report for Emergency Resources for Environmental
Emergencies), which was reviewed by experts and released, and filed with Liudong Branch of Liuzhou
Environmental Protection Bureau on 29 August 2018 (No. 450203-2018-022-1). In August 2021, the Emergency
Plan for Environmental Emergencies of Liuzhou Guige Lighting Technology Co., Ltd. (including the Risk
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Assessment Report for Environmental Emergencies and the Investigation Report for Emergency Resources for
Environmental Emergencies) was updated and compiled, passed the expert review and released, and on 27
December 2021, the Emergency Plan was filed with the Ecological Environment Bureau of Liudong New Area,
Liuzhou City (No. 450203-2021-0019-L).
Environmental self-monitoring plan
Foshan Electrical and Lighting Co., Ltd. Gaoming Branch developed an environmental self-monitoring plan,
numbered: FSLFMF001, at the beginning of the year. It entrusted a third-party environmental testing agency, GD
Veizhong Testing Technique Co., Ltd. (Veizhong Testing), to perform the annual inspection of the exhaust outlet.
All the inspection results were lower than the standard limits. Meanwhile, it accepted the annual supervision and
monitoring by local environmental protection departments. All the monitoring results were lower than the
standard limits.
Liuzhou Guige Lighting Technology Co., Ltd. has put in place the Self-monitoring Plan of Liuzhou Guige
Lighting Technology Co., Ltd. It entrusted a third-party environmental testing agency, Guangxi Zhongzhen
Testing Technology Co., Ltd., to perform the annual inspection of the exhaust outlet. All the inspection results
were lower than the standard limits. Meanwhile, it accepted the annual supervision and monitoring by local
environmental protection departments. All the monitoring results were lower than the standard limits.
Administrative punishments received with respect to environmental issues in the Reporting Period:
Impact on the
The Reason for
Incompliance Punishment Company’s Rectification
Company/subsidiary punishment
operations
N/A N/A N/A N/A N/A N/A
Other environment-related information that should be disclosed:
None.
Measures taken during the Reporting Period to reduce carbon emissions and the impact:
√Applicable □Not applicable
During the Reporting Period, the Company reduced electricity consumption under the same output value by
selecting high-efficiency and energy-saving equipment. The Company insists on constantly publicizing
environmental protection knowledge to employees, improving their awareness of environmental protection, and
83
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
realizing the sustainable development goal of harmonious coexistence between enterprises and the environment
through the joint efforts of all employees.
Other relevant information:
None.
II Social Responsibility
We have always attached importance to the accomplishment of our social value. With “provide returns for
shareholders, provide a platform for employees, create value for customers and create prosperity for the society”
as our mission, we take on the social responsibilities to protect the interests of our creditors, employees, customers,
suppliers and community. We have been utilizing resources in a scientific, rational way, effectively protecting the
natural environment and safeguarding social safety so as to promote common, harmonious and sustainable
development of the Company and the society.
1. Protection of the rights and interests of our shareholders and creditors
We continuously improve our corporate governance structure, regulate our operation and enhance our ma
nagement on information disclosure and investor relations. We treat all our investors fairly and justly, en
sure their rights to know about, participate in and vote on the significant events of the Company, and sa
feguard the legal rights and interests of all our shareholders, especially our minority shareholders.
2. Protection of the rights and interests of our employees
Considering employees the most valuable resource for our survival and development, we constantly impro
ve our employment system, improve the compensation packages for our employees and attach importance
to talent cultivation so as to provide opportunities and space for the sustainable development of our em
ployees as well as realize the common development of the employees and the Company. We also pay at
tention to the health of our employees, attach importance to production safety and labor protection, and i
mprove the working and living conditions for our employees so as to formulate harmonious and stable l
abor relations.
3. Protection of the rights and interests of our customers and consumers
We have been upholding the “Customer First” principle in our provision of quality products and services
to customers. We operate honestly and disallow any unfair trade practice against commercial ethics, mar
ket rules and the fair competition principle. We also improve our product quality and after-sales services
84
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
and try to build a win-win relationship with our customers.
4. Protection of the rights and interests of our suppliers
We respect and protect the legal rights and interests of our suppliers, carefully protect their secret and p
roprietary information, encourage and push them to continuously improve the quality of their products an
d services through creating an environment for open and fair competition among them so as to realize
mutual benefits and mutual development of the suppliers and the Company.
5. Production Safety, Environmental Protection and Sustainable Development
The Company sees production safety, environmental protection and energy conservation as an important p
art of its strategy of sustainable development. It implements accountability systems in relation environme
ntal protection and production safety in strict accordance with the applicable laws and regulations. In add
ition, it is ISO9001-(a quality management system), IATF16949-(a quality management system), ISO1400
1-(an environment management system), ISO45001-(a management system for occupational health and saf
ety) and ISO50001-(an energy management system) certified. In 2018, upon the review and publication b
y the Ministry of Industry and Information Technology, the Company was certified as one of the second
batch of National Demonstration Entity of Green Factory.
6. Public relations and welfare
We attach importance to the realization of our social value and see creating a prosperous society as a c
ommitment that we should take on, trying to boost the local economy through our own development. W
e have been granted by the local government the title of “Foshan Over-100-Million Tax Payer” for man
y years due to our contributions in boosting the harmonious development of the Company and the comm
unity.
III Efforts in Poverty Alleviation and Rural Revitalization
During the Reporting Period, the Company actively responded to the call to consolidate the achievements of
poverty alleviation and revitalize the countryside, and carried out the work of helping farmers with consumption
to facilitate rural revitalization. During the Reporting Period, the Company actively purchased characteristic
agricultural products from Wuhua County, Meizhou City, with a purchase amount of nearly RMB1 million.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part VI Significant Events
I Fulfillme nt of Commitme nts
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well
as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end
√ Applicable □ Not applicable
Date of Term of
Type of Fulfillme
Commitment Promisor Details of commitment commitme commitme
commitment nt
nt making nt
Electronics Group and Hong
Kong Rising Investment have
made commitments as follows
to avoid horizontal competition
with the Company: 1. They
shall conduct supervision and
restraint on the production and
operation activities of
themselves and their relevant
enterprises so that besides the
enterprise above that is in
horizontal competition with the
Commitments
Company for now, if the
made in Electronics
About products or business of them or
acquisition Group and 4
avoidance of their relevant enterprises
documents or Hong Kong December Long-term Ongoing
horizontal become the same with or
shareholding Rising 2015
competition similar to those of the Company
alteration Investment
or its subsidiaries in the future,
documents
they shall take the following
measures: (1) If the Company
thinks necessary, they and their
relevant enterprises shall reduce
and wholly transfer their
relevant assets and business;
and (2) If the Company thinks
necessary, it is given the
priority to acquire first, by
proper means, the relevant
assets and business of them and
their relevant enterprises. 2. All
86
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
the commitments made by them
to eliminate or avoid horizontal
competition with the Company
are also applicable to their
directly or indirectly controlled
subsidiaries. They are obliged
to urge and make sure that other
subsidiaries execute what’s
prescribed in the relevant
document and faithfully honor
all the relevant commitments. 3.
If they or their directly or
indirectly controlled
subsidiaries break the aforesaid
commitments and thus cause a
loss for the Company, they shall
compensate the Company on a
rational basis.
1. Rising Group will take active
measures to avoid any business
or activity that competes or may
compete with the principal
business of the Company and its
auxiliary enterprises, and urge
the Promisor to control
enterprises to avoid any
business or activity that
competes or may compete with
About the principal business of the
avoidance of Company and its auxiliary
4
horizontal enterprises. 2. If Rising Group
Rising Group November Long-term Ongoing
competition and its controlled enterprises
2021
are given the opportunity to
engage in new business that
constitutes or may constitute
horizontal competition with the
principal businesses of the
Company and its auxiliary
enterprises, Rising Group will
make every effort to make the
business opportunity first
available to the Company or its
auxiliary enterprises on
reasonable and fair terms and
87
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
conditions on the premise that
conditions permit and in the
interest of the listed company.
Electronics Group and Hong
Kong Rising Investment have
made a commitment that during
their direct or indirect holding of
the Company’s shares, they shall
1. strictly abide by the regulatory
documents of the CSRC and the
SZSE, the Company’s Articles of
Association, etc. and not harm the
interests of the Company or other
shareholders of the Company in
their production and operation
activities by taking advantage of
their position as the controlling
shareholder and actual controller;
2. make sure that they or their
other controlled subsidiaries,
branch offices, jointly-run or
associated companies (the
About reduction
Electronics Group "Relevant Enterprises" for short)
and regulation 4 December
and Hong Kong will try their best to avoid or Long-term Ongoing
of related-party 2015
Rising Investment reduce related-party transactions
transactions
with the Company or the
Company’s subsidiaries; 3. strictly
follow the market principle of
justness, fairness and equal value
exchange for necessary and
unavoidable related-party
transactions between them and
their Relevant Enterprises and the
Company, and withdraw from
voting when a related-party
transaction with them or their
Relevant Enterprises is being
voted on at a general meeting or a
board meeting, and execute the
relevant approval procedure and
information disclosure duties
pursuant to the applicable laws,
regulations and regulatory
documents. Where the aforesaid
88
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
commitments are broken and a
loss is thus caused for the
Company, its subsidiaries or the
Company’s other shareholders,
they shall be obliged to
compensate.
1. strictly abide by the regulatory
documents of the CSRC and the
SZSE, the Company’s Articles of
Association, etc. and not harm the
interests of the Company or other
shareholders of the Company in
their production and operation
activities by taking advantage of
their position as the controlling
shareholder and actual controller;
2. make sure that they or their
other controlled subsidiaries,
branch offices, jointly-run or
associated companies (the
"Relevant Enterprises" for short)
will try their best to avoid or
reduce related-party transactions
with the Company or the 4 November
Rising Group Long-term Ongoing
Company’s subsidiaries; 3. strictly 2021
follow the market principle of
justness, fairness and equal value
exchange for necessary and
unavoidable related-party
transactions between them and
their Relevant Enterprises and the
Company, and withdraw from
voting when a related-party
transaction with them or their
Relevant Enterprises is being
voted on at a general meeting or a
board meeting, and execute the
relevant approval procedure and
information disclosure duties
pursuant to the applicable laws,
regulations and regulatory
documents.
Electronics Group In order to ensure the
About 4 December Long-term Ongoing
and Hong Kong independence of the Company in
89
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Rising Investment independence business, personnel, asset, 2015
organization and finance,
Electronics Group and Hong
Kong Rising Investment have
made the following commitments:
1. They will ensure the
independence of the Company in
business: (1) They promise that
the Company will have the assets,
personnel, qualifications and
capabilities for it to operate
independently as well as the
ability of independent, sustainable
operation in the market. (2) They
promise not to intervene in the
Company’s business activities
other than the execution of their
rights as the Company’s
shareholders. (3) They promise
that they and their related parties
will not be engaged in business
that is substantially in competition
with the Company’s business. And
(4) They promise that they and
their related parties will try their
best to reduce related-party
transactions between them and the
Company; for necessary and
unavoidable related-party
transactions, they promise to
operate fairly following the
market-oriented principle and at
fair prices, and execute the
transaction procedure and the duty
of information disclosure pursuant
to the applicable laws, regulations
and regulatory documents. 2.
They will ensure the
independence of the Company in
personnel: (1) They promise that
the Company’s GM, deputy GMs,
CFO, Company Secretary and
other senior management
personnel will work only for and
90
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
receive remuneration from the
Company, not holding any
positions in them or their other
controlled subsidiaries other than
director and supervisor. (2) They
promise the Company’s absolute
independence from their related
parties in labor, human resource
and salary management. And (3)
They promise to follow the legal
procedure in their
recommendation of directors,
supervisors and senior
management personnel to the
Company and not to hire or
dismiss employees beyond the
Company’s Board of Directors
and General Meeting. 3. They will
ensure the independence and
completeness of the Company in
asset: (1) They promise that the
Company will have a production
system, an auxiliary production
system and supporting facilities
for its operation; legally have the
ownership or use rights of the
land, plants, machines,
trademarks, patents and
non-patented technology in
relation to its production and
operation; and have independent
systems for the procurement of
raw materials and the sale of its
products. (2) They promise that
the Company will have
independent and complete assets
all under the Company’s control
and independently owned and
operated by the Company. And (3)
They promise that they and their
other controlled subsidiaries will
not illegally occupy the
Company’s funds and assets in
any way, or use the Company’s
91
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
assets to provide guarantees for
the debts of themselves or their
other controlled subsidiaries with.
4. They will ensure the
independence of the Company in
organization: (1) They promise
that the Company has a sound
corporate governance structure as
a joint-stock company with an
independent and complete
organization structure. And (2)
They promise that the operational
and management organs within
the Company will independently
execute their functions according
to laws, regulations and the
Company’s Articles of
Association. And 5. They will
ensure the independence of the
Company in finance: (1) They
promise that the Company will
have an independent financial
department and financial
accounting system with
normative, independent financial
accounting rules. (2) They
promise that the Company will
have independent bank accounts
and not share bank accounts with
its related parties. (3) They
promise that the Company’s
financial personnel do not hold
concurrent positions in its related
parties. (4) They promise that the
Company will independently pay
its tax according to law. And (5)
They promise that the Company
can make financial decisions
independently and that they will
not illegally intervene in the
Company’s use of its funds.
To maintain the independence of
4 November
Rising Group the Company, Rising Group has Long-term Ongoing
2021
made the following commitments:
92
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
1. It will ensure the personnel
independence of the Company. It
promises to ensure personnel
independence with the Company,
and GM, deputy GMs, CFO,
Company Secretary and other
senior management personnel of
the Company will not hold
positions other than directors and
supervisors in the enterprises
wholly owned, controlled or
actually controlled by it and its
subsidiaries (hereinafter referred
to as "subsidiaries"), and will not
receive salaries from it or its
subsidiaries. The Company’s
financial personnel do not hold
concurrent positions in it or its
subsidiaries. 2. It will ensure the
asset independence and integrity
of the Company: (1) It promises
that the Company will have
independent and complete assets.
And (2) It promises that it and its
subsidiaries will not illegally
occupy the Company’s funds and
assets in any way. 3. It will ensure
the financial independence of the
Company: (1) It promises that the
Company will have an
independent financial department
and financial accounting system.
(2) It promises that the Company
will have a standardized and
independent financial accounting
system. (3) It promises that the
Company will have independent
bank accounts and not share bank
accounts with it. (4) It promises
that the Company’s financial
personnel do not hold concurrent
positions in it or its subsidiaries.
And (5) It promises that the
Company can make financial
93
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
decisions independently and that
they will not illegally intervene in
the Company’s use of its funds. 4.
It will ensure the independence of
the Company in organization: (1)
It promises that the Company can
operate independently with an
independent and complete
organization structure. (2) It
promises that the office and
production and business premises
of the Company are separated
from those of Rising Group. And
(3) It promises that the Board of
Directors, the Board of
Supervisors and various
functional departments of the
Company operate independently,
and there is no subordinate
relationship with the functional
departments of Rising Group. And
5 It will ensure the independence
of the Company in business: (1) It
promises that the Company will
have independence in business.
And (2) It promises that the
Company will have the assets,
personnel, qualifications and
capabilities for it to operate
independently as well as the
ability of independent, sustainable
operation in the market.
FSL 1. They shall conduct
supervision and restraint on the
production and operation
activities of themselves and
Commitments
About their relevant enterprises so that
made in 27
avoidance of besides the enterprise above
shareholding October Long-term Ongoing
horizontal that is in horizontal competition
alteration 2021
competition with NATIONSTAR for now, if
documents
the products or business of them
or their relevant enterprises
become the same with or
similar to those of
94
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
NATIONSTAR or its
subsidiaries in the future, they
shall take the following
measures: (1) If NATIONSTAR
thinks necessary, they and their
relevant enterprises shall reduce
and wholly transfer their
relevant assets and business;
and (2) If NATIONSTAR thinks
necessary, it is given the
priority to acquire first, by
proper means, the relevant
assets and business of them and
their relevant enterprises. 2. All
the commitments made by them
to eliminate or avoid horizontal
competition with FSL are also
applicable to their directly or
indirectly controlled
subsidiaries. They are obliged
to urge and make sure that other
subsidiaries execute what’s
prescribed in the relevant
document and faithfully honor
all the relevant commitments. 3.
If they or their directly or
indirectly controlled
subsidiaries break the aforesaid
commitments and thus cause a
loss for NATIONSTAR, they
shall compensate
NATIONSTAR on a rational
basis.
FSL 1. FSL and enterprises under its 7 October Long-term Ongoing
control (except NATIONSTAR 2021
and its subsidiaries) will reduce
and standardize related
Commitments About transactions with
made in reduction and NATIONSTAR and its
subsidiaries.
shareholding regulation of
alteration related-party 2. In case of any inevitable or
documents transactions reasonably justified related
party transactions, FSL and
enterprises under its control
(exceFpt NATIONSTAR and its
95
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
subsidiaries) will strictly abide
by the market principles,
conduct related party
transactions with
NATIONSTAR fairly and
reasonably based on the general
principles of equality, mutual
benefit, equal value and
compensation, and perform
legal procedures in accordance
with laws, regulations,
normative documents and
relevant regulations of
NATIONSTAR.
FSL In order to promote the 7 October Long-term Ongoing
standardized management of 2021
NATIONSTAR, legally and
compliantly exercise
shareholders' rights and fulfill
corresponding obligations, and
take practical and effective
measures to ensure the
independence of
NATIONSTAR in personnel,
assets, finance, institutions and
business, the Promisor
promises:
(I) It will ensure the
independence of
NATIONSTAR in personnel
1. FSL promises that GM,
About deputy GMs, CFO, Company
Secretary and other senior
maintaining
management personnel of
independence NATIONSTAR will not hold
any positions in FSL and other
of the listed enterprises under its control
company (except NATIONSTAR and its
controlled enterprises, the same
below) other than director and
supervisor, and not receive
salaries from in FSL and other
enterprises under its control;
2. It will ensure
NATIONSTAR’s absolute
independence from FSL and
enterprises under its control in
labor, human resource and
salary management.
(II) It will ensure the
independence of
NATIONSTAR in asset
1. FSL promises that
NATIONSTAR will have
independent and complete
96
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
operating assets related to
operation;
2. FSL promises that the funds,
assets and other resources of
NATIONSTAR will not be
illegally occupied.
(III) It will ensure the
independence of
NATIONSTAR in finance
1. It promises that
NATIONSTAR will have an
independent financial
department, and independent
financial accounting system and
financial accounting rules.
2. It promises that
NATIONSTAR will have
independent bank accounts and
not share bank accounts with
FSL and other enterprises under
its control;
3. It promises that the financial
personnel of NATIONSTAR do
not work part-time and receive
salaries in FSL and other
enterprises under its control;
4. It promises that
NATIONSTAR will
independently pay its tax
according to law;
And (5) It promises that
NATIONSTAR can make
financial decisions
independently and that it will
not illegally intervene in
NATIONSTAR’s use of its
funds.
(IV) It will ensure the
independence of
NATIONSTAR in organization
It promises that the listed
company has a sound corporate
governance structure as a
joint-stock company with an
independent and complete
organization structure.
(V) It will ensure the
independence of
NATIONSTAR in business
It promise that NATIONSTAR
remains independent in
procurement, production, sales
and intellectual property rights,
and that NATIONSTAR will
have the assets, personnel,
qualifications and capabilities
for it to operate independently
as well as the ability of
independent, sustainable
97
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
operation in the market.
Commitments FSL About 1. FSL does not disclose the
made during absence of relevant insider information of
asset insider trading this trading or make use of the
restructuring insider information for insider
trading; 2. As of the issuance
date of the Report on Major
Asset Purchase and Related
Party Trading of Foshan
From the
Electrical and Lighting Co.,
time when
Ltd. (Draft), FSL has not been
the
placed on file for investigation
Company
or criminal investigation due to
plans the
suspected insider trading related
major
to this trading, and has not been
asset
subject to administrative 27
restructuri
punishment by the CSRC or October Ongoing
ng to the
criminal responsibility 2021
date when
investigated by judicial organs
the major
according to law for insider
asset
trading related to any major
restructuri
asset restructuring, and has not
ng is
been prohibited from engaging
completed
in any major asset restructuring
.
of listed companies according
to Article 13 of the Interim
Provisions on Strengthening the
Supervision of Abnormal Stock
Trading Related to Major Asset
Restructuring of Listed
Companies in the last 36
months.
1. FSL is not subject to any
About
securities and futures crimes as
compliance To 6
stipulated in Article 6 of Several
with Several months
Provisions on the Reduction of
Provisions on after the
Shares by Shareholders,
the Reduction 27 implement
Directors and Supervisors of
FSL of Shares by October ation of Ongoing
Listed Companies. During the
Shareholders, 2021 major
period when the CSRC or the
Directors and asset
judicial organ filed a case for
Supervisors of restructuri
investigation, and less than six
Listed ng
months after the administrative
Companies
penalty decision and criminal
98
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
judgment were made, there was
no situation that the shares of
NATIONSTAR could not be
reduced due to violation of the
rules of stock exchanges and
public censure by stock
exchanges for less than three
months. 2. If the commitment
maker still holds shares in
NATIONSTAR after this
transaction, the commitment
maker shall be subject to the
following regulations:
(1) Within the six months
following the completion of this
transaction, if the commitment
maker intends to reduce by way
of centralized bidding at the
stock exchange the shares
obtained in this transaction, the
commitment maker shall report
to the stock exchange and
disclose the shareholding
reduction plan (which will be
kept for record by the stock
exchange) 15 trading days
before the first sale.
(2) Within the six months
following the completion of this
transaction, if the commitment
maker intends to reduce by way
of centralized bidding at the
stock exchange within three
months the shares obtained in
this transaction, the total shares
reduced shall not exceed 1% of
NATIONSTAR’s total shares.
1. As of the date of issuance of Within the
the letter of commitment, the three
listed company has not received 27 years
About legal
FSL any criminal punishment or October preceding Expired
compliance
administrative punishment 2021 the date of
related to the securities market issuance
in the last three years, and has of the
99
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
not been subject to any major letter of
civil lawsuit or arbitration commitme
related to economic disputes. nt
The listed company has no (inclusive)
other major acts of dishonesty
publicly condemned by any
stock exchange in the last 12
months; the listed company has
been in good faith, and has not
failed to repay large debts on
schedule, failed to fulfill its
commitments, been taken
administrative supervision
measures by the CSRC, or been
disciplined by any stock
exchange. 2. Up to the date of
this Letter of Commitment, the
listed company has not been
investigated by the judicial
organ for suspected crimes or
by the CSRC for suspected
violations of laws and
regulations, nor has it been
investigated for suspected
involvement in insider trading
in relation to major asset
restructuring with pending
conclusion, in the last three
years.
3. Up to the date of this Letter
of Commitment, the existing
directors, supervisors and senior
management of the listed
company had held offices in the
company in a way that is in
compliance with the applicable
laws, administrative
regulations, regulatory
documents and the company’s
Articles of Association. No
current or former government
officials, party cadres at
universities have had full-time
or part-time jobs in the
100
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
company in an illegal manner.
1. FSL has provided relevant
information and documents
(including but not limited to
original written materials,
duplicate materials or oral
testimony, etc.) related to this
trading to the intermediaries
providing professional services
of auditing, valuation, legal and
financial consultancy for this
trading. FSL promises that the
copies or photocopies of the
documents and materials
provided are consistent with the
originals, and that the signatures
About the and seals of the documents and
truthfulness, materials are authentic, and the
accuracy and signatories of the documents
completeness have been legally authorized
27
of the and effectively signed the
FSL October Long-term Ongoing
information documents; that the provided
2021
provided information and documents are
during this authentic, accurate and
major asset complete and that there are no
restructuring false records, misleading
statements or material
omissions. FSL also promises to
bear individual and joint and
several liability. 2. The
commitment maker promises
that the information provided is
true, accurate and complete.
Where any investor suffers a
loss as a result of any
misrepresentation, misleading
statement or material omission
in the information provided, the
commitment maker shall be
liable for compensation
according to law.
Director and About 1. They promise not to transfer
27
senior measures to benefits to other units or Long-term Ongoing
October
management fill up returns individuals free of charge or
101
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
office of FSL for risks under unfair conditions, and not 2021
arising from to harm the interests of the
diluting Company in any other ways; 2.
immediate They promise to restrain
return in position-related consumption
major asset behavior; 3. They promise not
restructuring to use the Company's assets to
engage in investment and
consumption activities
unrelated to the performance of
duties; 4. They promise that the
future remuneration system
formulated by the Board of
Directors or the Remuneration
and Assessment Committee will
be linked to the implementation
of the Company's measures to
fill up returns; 5. If the
Company formulates an equity
incentive plan in the future,
they will actively promote the
exercise conditions of the future
equity incentive plan to be
linked with the implementation
of the Company's measures to
fill up returns; 6. From the date
of issuance of these
commitments to the completion
of this major asset restructuring
of the Company, if the CSRC
makes other new regulatory
provisions on measures to fill
up returns and the relevant
commitments, and these
commitments cannot meet these
provisions of the CSRC, they
promise to issue supplementary
commitments in accordance
with the latest regulations of the
CSRC at that time. 7. They
promise to earnestly fulfill the
compensation measures
formulated by the Company and
any commitments it made. If
102
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
they violate any of these
commitments and cause losses
to the Company or investors,
they are willing to bear
corresponding legal
responsibilities to the Company
or investors according to law.
1. They promise that there will
be no share reduction plan from
the date of issuance of this
Letter of Commitments to the
completion of this trading, and
they will not reduce its FSL
shares (if any) in any other way.
2. If FSL implements ex-rights
behaviors such as share
conversion, share offering and
share allotment from the date of
issuance of this Letter of
Commitments to the completion
of this trading, the newly added
shares obtained by them will
also be subject to the above
About
commitments related to not
Director and non-reduction
reducing share holdings. 3. 28 Until this
senior of FSL shares
Where FSL or any other September trading is Ongoing
management during major
investor suffers a loss as a result 2021 completed
office of FSL asset
of my violation of the aforesaid
restructuring
commitment, I shall be liable
for compensation to FSL and
investors according to law.
They promise that they have the
right to enter into this Letter of
Commitments, and once this
Letter of Commitments is
entered into by them, it will
constitute an effective, legal and
binding responsibility upon
them, and this Letter of
Commitments will remain valid
and irrevocable. They promise
to strictly fulfill all
commitments in this Letter of
Commitments. In case of
103
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
violation of this Letter of
Commitments, they will bear
relevant legal responsibilities.
1. They do not disclose the
relevant insider information of
this trading or make use of the
insider information for insider
trading; 2. They have not been
placed on file for investigation
or criminal investigation due to
suspected insider trading related From the
to this trading, and have not time when
been subject to administrative the
punishment by the CSRC or Company
criminal responsibility plans the
investigated by judicial organs major
Director and according to law for insider asset
About 27
senior trading related to major asset restructuri
absence of October Ongoing
management of restructuring, and has not been ng to the
insider trading 2021
FSL prohibited from engaging in any date when
major asset restructuring of the major
listed companies according to asset
Article 13 of the Interim restructuri
Provisions on Strengthening the ng is
Supervision of Abnormal Stock completed
Trading Related to Major Asset .
Restructuring of Listed
Companies in the last 36
months. 3. In case of violation
of the above commitments, they
will bear all losses caused to the
listed company and its
shareholders.
1. As of the date of issuance of Within
the Letter of Commitments, three
they have and abide by the years
qualifications and obligations preceding
Directors and
stipulated in the Company Law 28 the date of
senior About legal
of the People's Republic of September the Expired
management of compliance
China and other laws, 2021 issuance
FSL
regulations, normative of the
documents and the Articles of letter of
Association of the Company, commitme
and their employments are nt
104
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
made through legal procedures. (inclusion
They do not hold any )
concurrent positions prohibited
by relevant laws, regulations,
normative documents, Articles
of Association, relevant
regulatory authorities and
part-time units (if any). 2. As of
the date of issuance of the
Letter of Commitments, they
have not violated the relevant
provisions of the Company Law
of the People's Republic of
China, have not been subject to
any criminal punishment in the
last 36 months, have not been
subject to administrative
punishment by the CSRC, have
not been subject to any public
censure by any stock exchange
in the last 12 months and have
not been subject to any
outstanding or foreseeable
major litigation or arbitration
cases related to economic
disputes in the last 36 months.
3. As of the date of issuance of
the Letter of Commitments,
they have been in good faith,
have no other major acts of
dishonesty and have not failed
to repay large debts on
schedule, failed to fulfill their
commitments, been taken
administrative supervision
measures by the CSRC, or been
disciplined by any stock
exchange in the last 36 months.
About the 1. They have provided relevant
Directors and truthfulness, information and documents
27
senior accuracy and (including but not limited to
October Long-term Ongoing
management of completeness original written materials,
2021
FSL of the duplicate materials or oral
information testimony, etc.) related to this
105
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
provided trading to the intermediaries
during this providing professional services
major asset of auditing, assessment, legal
restructuring and financial consultancy for
this trading. They promise that
the copies or photocopies of the
documents and materials
provided are consistent with the
originals, and that the signatures
and seals of the documents and
materials are authentic, and the
signatories of the documents
have been legally authorized
and effectively signed the
documents; that the provided
information and documents are
authentic, accurate and
complete and that there are no
false records, misleading
statements or material
omissions. They also promise to
bear individual and joint and
several liability. 2. They
promise that the information
provided is true, accurate and
complete. In case of any losses
caused to investors due to any
false presentations, misleading
statements or material
omissions in the information
provided, they will be liable for
compensation according to law.
3. Where the information
provided or disclosed by them
in this trading is suspected of
false records, misleading
statements or material
omissions, and they are filed for
investigation by the judicial
organ or by the CSRC, the
shares with interests in the
listed company will not be
transferred until the
investigation conclusion is
106
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
formed.
1. They promise not to interfere
in the operation and
management activities of the
listed company beyond their
authority and not to encroach on
the interests of the listed
company. 2. From the date of
issuance of these commitments
to the completion of this trading
of the listed company, if the
CSRC makes new regulatory
requirements on measures to fill
up returns and commitments of
relevant personnel, and the
above commitments cannot
meet these new regulatory
Rising Group, requirements of the CSRC, they
Rising Capital, promise to issue supplementary
Electronics commitments according to the
Group, About latest regulations of the CSRC
Hongkong Wah effective at that time. 3. They promise to 27
Shing, Hong performance earnestly fulfill the measures to October Long-term Ongoing
Kong Rising of measures to fill up returns formulated by the 2021
Investment and fill up returns listed company and any
Shenzhen commitments made by them. If
Rising they violate these commitments
Investment and causes losses to the listed
company or investors, they are
willing to bear the
compensation responsibility for
the listed company or investors
according to law. As one of the
subjects responsible for the
measures to fill up returns, if
they violate the above
commitments or refuses to
fulfill the above commitments,
they agree that the securities
regulatory agencies such as the
CSRC and the SZSE will
punish them or take relevant
regulatory measures in
accordance with the relevant
107
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
regulations and rules they
formulated or issued.
1. They promise that there will
be no share reduction plan from
the date of issuance of this
Letter of Commitments to the
completion of this trading, and
they will not reduce its FSL
shares in any other way (except
the transfer or transfer between
Rising Group and its
Rising Group,
wholly-owned subsidiaries). 2.
Rising Capital,
If FSL implements ex-rights
Electronics
About behaviors such as share
Group,
non-reduction conversion, share offering and Until the
Hongkong Wah 28
of FSL shares share allotment from the date of completio
Shing, Hong September Ongoing
during major issuance of this Letter of n of this
Kong Rising 2021
asset Commitments to the completion trading
Investment and
restructuring of this trading, the newly added
Shenzhen
shares obtained by them will
Rising
also be subject to the above
Investment
commitments related to not
reducing share holdings. 3.
Where FSL or any other
investor suffers a loss as a result
of our violation of the aforesaid
commitment, we shall be liable
for compensation to FSL and
investors according to law.
1. They shall conduct
supervision and restraint on the
production and operation
activities of themselves and
their relevant enterprises so that
Rising Group, About
besides the enterprise above 27
Rising Capital, avoidance of
that is in horizontal competition October Long-term Ongoing
and Hongkong horizontal
with FSL for now, if the 2021
Wah Shing competition
products or business of them or
their relevant enterprises
become the same with or
similar to those of FSL or its
subsidiaries in the future, they
108
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
shall take the following
measures: (1) If FSL thinks
necessary, they and their
relevant enterprises shall reduce
and wholly transfer their
relevant assets and business;
and (2) If FSL thinks necessary,
it is given the priority to acquire
first, by proper means, the
relevant assets and business of
them and their relevant
enterprises. 2. All the
commitments made by them to
eliminate or avoid horizontal
competition with FSL are also
applicable to their directly or
indirectly controlled
subsidiaries. They are obliged
to urge and make sure that other
subsidiaries execute what’s
prescribed in the relevant
document and faithfully honor
all the relevant commitments. 3.
If they or their directly or
indirectly controlled
subsidiaries break the aforesaid
commitments and thus cause a
loss for FSL, they shall
compensate FSL on a rational
basis.
They have made a commitment
that during their direct or
indirect holding of FSL’s
shares, they shall 1. strictly
abide by the regulatory
About
Rising Group, documents of the CSRC and the
regulation and 27
Rising Capital, SZSE, FSL’s Articles of
reduction of October Long-term Ongoing
and Hongkong Association, etc. and not harm
related-party 2021
Wah Shing the interests of the Company or
transactions
other shareholders of FSL in
their production and operation
activities by taking advantage
of their position as the
controlling shareholder and
109
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
actual controller; 2. make sure
that they or their other
controlled subsidiaries, branch
offices, jointly-run or associated
companies (the "Relevant
Enterprises" for short) will try
their best to avoid or reduce
related-party transactions with
FSL or FSL’s subsidiaries; 3.
strictly follow the market
principle of justness, fairness
and equal value exchange for
necessary and unavoidable
related-party transactions
between them and their
Relevant Enterprises and FSL,
and withdraw from voting when
a related-party transaction with
them or their Relevant
Enterprises is being voted on at
a general meeting or a board
meeting, and execute the
relevant approval procedure and
information disclosure duties
pursuant to the applicable laws,
regulations and regulatory
documents. Where the aforesaid
commitments are broken and a
loss is thus caused for FSL, its
subsidiaries or FSL’s other
shareholders, they shall be
obliged to compensate.
Explanation As of the issuance date of the
Within the
about not Report on Major Asset
three
prohibited Purchase and Related Party
years
Shenzhen from Trading of Foshan Electrical
preceding
Rising participating and Lighting Co., Ltd. (Draft),
27 the date of
Hongkong Wah in of any they have not been placed on
October issuance Expired
Shing, and major asset file for investigation or criminal
2021 of the
Hongkong Wah restructuring investigation due to suspected
letter of
Shing of listed insider trading related to this
commitme
companies as trading, and has not been
nt
stipulated in subject to administrative
(inclusive)
Article 13 of punishment by the CSRC or
110
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
the Interim criminal responsibility
Provisions on investigated by judicial organs
Strengthening according to law for insider
the trading related to any major
Supervision of asset restructuring in the last 36
Abnormal months. The relevant entities of
Stock Trading this trading are not prevented
Related to from participating in any major
Major Asset asset restructuring of listed
Restructuring companies according to Article
of Listed 13 of the Interim Provisions on
Companies Strengthening the Supervision
of Abnormal Stock Trading
Related to Major Asset
Restructuring of Listed
Companies.
1. They have not been
investigated by the judicial
organ for suspected crimes or
by the CSRC for suspected
violations of laws and
regulations, and there is no
administrative punishment Within the
(except those obviously three
Shenzhen
unrelated to the securities years
Rising
market) or criminal punishment preceding
Investment,
in the last three years; 2. They 27 the date of
Hong Kong About legal
have not failed to repay large October issuance Expired
Rising compliance
debts on schedule, failed to 2021 of the
Investment, and
fulfill their commitments, been letter of
Hongkong Wah
taken administrative commitme
Shing
supervision measures by the nt
CSRC, or been disciplined by (inclusive)
any stock exchange, have not
been publicly condemned by
any stock exchange, have no
other major acts of dishonesty
and have no any other bad
record in the last three years.
Directors, Explanation As of the issuance date of the Within the
supervisors and about not Report on Major Asset 27 three
senior prohibited Purchase and Related Party October years Expired
management from Trading of Foshan Electrical 2021 preceding
personnel of participating and Lighting Co., Ltd. (Draft), the date of
111
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Shenzhen in of any they have not been placed on issuance
Rising major asset file for investigation or criminal of the
Investment, restructuring investigation due to suspected letter of
Hong Kong of listed insider trading related to this commitme
Rising companies as trading, and has not been nt
Investment, and stipulated in subject to administrative (inclusive)
Hongkong Wah Article 13 of punishment by the CSRC or
Shing the Interim criminal responsibility
Provisions on investigated by judicial organs
Strengthening according to law for insider
the trading related to any major
Supervision of asset restructuring in the last 36
Abnormal months. The relevant entities of
Stock Trading this trading are not prevented
Related to from participating in any major
Major Asset asset restructuring of listed
Restructuring companies according to Article
of Listed 13 of the Interim Provisions on
Companies Strengthening the Supervision
of Abnormal Stock Trading
Related to Major Asset
Restructuring of Listed
Companies.
If NATIONSTAR is subject to
administrative penalties such as
accountability and fines by
relevant competent departments
About
after the completion of this
compensation
trading due to the illegal acts of
Rising Group, for possible
NATIONSTAR before the 27
Electronics violations of
completion of this acquisition, October Long-term Ongoing
Group, and laws and
they promise to fully bear the 2021
Rising Capital regulations by
losses of NATIONSTAR or
NATIONSTA
FSL, as well as the expenses
R
and fees under punishment or
recourse, to ensure that
NATIONSTAR or FSL will not
suffer any economic losses.
About 1. During the preliminary
Rising Group, explanation of negotiation between the listed Until the
27
Electronics confidentiality company and the counterparty completio
October Ongoing
Group, and measures and on this trading, necessary and n of this
2021
Rising Capital confidentiality sufficient confidentiality trading
system measures were taken to limit the
112
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
adopted for scope of knowledge of relevant
this trading sensitive information.
According to the requirements
of the SZSE, the listed company
has completed the submission
and online reporting of the
memorandum of trading
process, relevant materials of
insider information insiders.
The listed company has hired
independent financial advisers,
legal advisers, audit institutions,
valuation institutions and other
intermediaries, and signed
confidentiality agreements or
appointment agreements with
confidentiality clauses with the
above intermediaries, clearly
stipulating the scope of
confidential information and the
confidentiality responsibilities
of each intermediary.
2. In communicating with the
transaction counterparties, the
listed company made clear to
them that they shall be strictly
confidential about the relevant
information, shall not leak the
information to others, and shall
not trading in shares of the
listed company with the
information.
3. When discussing the
problems, solutions,
suggestions, ideas and solutions
with respect to the transaction,
the transaction counterparties
did not leak the restructuring
information to any other
irrelevant entities or
individuals.
4. Before the listed company
discloses information in relation
to the transaction, the
113
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
transaction counterparties
strictly abided by the
confidentiality obligation and
did not conduct any insider
trading using the information.
1. They promise that the
information provided is true,
accurate and complete, and
there are no false records,
misleading statements or
material omissions. 2. They
have provided relevant
information and documents
(including but not limited to
original written materials,
duplicate materials or oral
testimony, etc.) related to this
trading to the intermediaries.
They promise that the copies or
photocopies of the documents
About the
and materials provided are
truthfulness,
consistent with the originals,
accuracy and
and that the signatures and seals
Rising Group, completeness
of the documents and materials 27
Electronics of the
are authentic, and the October Long-term Ongoing
Group, and information
signatories of the documents 2021
Rising Capital provided
have been legally authorized
during this
and effectively signed the
major asset
documents; that there are no
restructuring
false records, misleading
statements or material
omissions. 3. They promise that
the explanations and
confirmations issued by them
are true, accurate and complete,
and there are no false records,
misleading statements or
material omissions. 4. During
this trading, they will disclose
the information about this
trading in a timely manner in
accordance with relevant laws
and regulations, the CSRC and
the SZSE, and ensure the
114
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
authenticity, accuracy and
completeness of such
information. 5. They shall bear
legal responsibility for the
authenticity, accuracy and
completeness of the
information, documents,
materials, explanations and
confirmations provided. In case
of any violation or losses
caused to the listed company,
investors, parties to the trading
and intermediaries participating
in this trading, they will be
liable for compensation
according to law. 6. Where the
information provided or
disclosed by them in this
trading is suspected of false
records, misleading statements
or material omissions, and they
are filed for investigation by the
judicial organ or by the CSRC,
the shares with interests in the
listed company will not be
transferred until the
investigation conclusion is
formed.
Statement As of the issuance date of the
about not Report on Major Asset
prohibited Purchase and Related Party
Within the
from Trading of Foshan Electrical
three
participating and Lighting Co., Ltd. (Draft),
years
in of any the counterparties of this
preceding
Rising Group, major asset restructuring have not been
27 the date of
Electronics restructuring placed on file for investigation
October issuance Expired
Group, and of listed or criminal investigation due to
2021 of the
Rising Capital companies as suspected insider trading related
letter of
stipulated in to this trading, and has not been
commitme
Article 13 of subject to administrative
nt
the Interim punishment by the CSRC or
(inclusive)
Provisions on criminal responsibility
Strengthening investigated by judicial organs
the according to law for insider
115
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Supervision of trading related to any major
Abnormal asset restructuring in the last 36
Stock Trading months. The relevant entities of
Related to this trading do not disclose the
Major Asset insider information of this
Restructuring restructuring or use the insider
of Listed information of this restructuring
Companies to conduct trading. In case of
any violations to the above
commitments, the relevant
subjects of this trading will bear
corresponding compensation
liabilities.
Electronics Group promises that
the 100% equity of Sigma it
held is clear in ownership and is
not subject to any dispute or
potential dispute, and there is
no situation affecting its legal
existence; the above shares are
not subject to any other pledges,
guarantees or third-party
interests or restrictions and
About the
there is no pending or potential
clarity of the
litigation, arbitration and any 27
Electronics underlying
other administrative or judicial October Long-term Ongoing
Group assets of this
procedure that may lead to the 2021
major asset
seizure, freezing, expropriation
restructuring
or restriction of transfer of the
above-mentioned equity by the
relevant judicial or
administrative organs. There is
no entrusted shareholding or
trust shareholding, restriction or
prohibition of transfer of the
above-mentioned equity
controlled by Electronics
Group.
Rising Group promises that
About the
46,260,021 shares of
clarity of the 27
NATIONSTAR it held is clear
Rising Group underlying October Long-term Ongoing
in ownership and is not subject
assets of this 2021
to any dispute or potential
major asset
dispute, and there is no situation
116
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
restructuring affecting its legal existence; the
above shares are not subject to
any other pledges, guarantees or
third-party interests or
restrictions and there is no
pending or potential litigation,
arbitration and any other
administrative or judicial
procedure that may lead to the
seizure, freezing, expropriation
or restriction of transfer of the
above-mentioned equity by the
relevant judicial or
administrative organs There is
no entrusted shareholding or
trust shareholding, restriction or
prohibition of transfer of the
above-mentioned equity
controlled by Rising Group.
Rising Capital promises that
5,791,924 shares of
NATIONSTAR it held is clear
in ownership and is not subject
to any dispute or potential
dispute, and there is no situation
affecting its legal existence; and
there is no pending or potential
About the
litigation, arbitration and any
clarity of the
other administrative or judicial 27
underlying
Rising Capital procedure that may lead to the October Long-term Ongoing
assets of this
seizure, freezing, expropriation 2021
major asset
or restriction of transfer of the
restructuring
above-mentioned equity by the
relevant judicial or
administrative organs. There is
no entrusted shareholding or
trust shareholding, restriction or
prohibition of transfer of the
above-mentioned equity
controlled by Rising Capital.
About They are not subject to any
Rising Group 27 Until the
compliance of securities and futures crimes as
and Rising October completio Ongoing
this major stipulated in Article 6 of Several
Capital 2021 n of this
asset Provisions on the Reduction of
117
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
restructuring Shares by Shareholders, trading
with Several Directors and Supervisors of
Provisions on Listed Companies. During the
the Reduction period when the CSRC or the
of Shares by judicial organ filed a case for
Shareholders, investigation, and less than six
Directors and months after the administrative
Supervisors of penalty decision and criminal
Listed judgment were made, there was
Companies no situation that the shares of
NATIONSTAR could not be
reduced due to violation of the
rules of stock exchanges and
public censure by stock
exchanges for less than three
months. 2. In case of any
violation or losses caused to
NATIONSTAR, investors,
parties to the trading and
intermediaries participating in
this trading, they will be liable
for compensation according to
law.
1. Rising Capital has not been
investigated by the judicial organ
for suspected crimes or by the
CSRC for suspected violations of
laws and regulations, and there is
no administrative punishment
(except those obviously unrelated Within five
to the securities market) or years
criminal punishment in the last preceding
five years; 2. Rising Capital has the date of
About legal 27 October
Rising Capital not failed to repay large debts on the issuance Expired
compliance 2021
schedule, failed to fulfill its of the letter
commitments, been taken of
administrative supervision commitment
measures by the CSRC, or been (inclusive)
disciplined by any stock
exchange, has not been publicly
condemned by any stock
exchange, has no other major acts
of dishonesty and has no any
other bad record in the last five
118
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
years. 3. The main management
personnel of Rising Capital have
not received administrative
punishment or criminal
punishment related to the
securities market, and have not
involved in major civil litigation
or arbitration related to economic
disputes in the last five years. 4.
The main management personnel
of Rising Capital have not failed
to repay large debts on schedule,
failed to fulfill their commitments,
been taken administrative
supervision measures by the
CSRC or been disciplined by any
stock exchange in the last five
years.
1. Electronics Group has not been
investigated by the judicial organ
for suspected crimes or by the
CSRC for suspected violations of
laws and regulations, and there is
no administrative punishment
(except those obviously unrelated
to the securities market) or
criminal punishment in the last
Within five
five years; 2. Electronics Group
years
has not failed to repay large debts
preceding
on schedule, failed to fulfill its
the date of
commitments, been taken 27 October
Electronics Group the issuance Expired
administrative supervision 2021
of the letter
measures by the CSRC, or been
of
disciplined by any stock
commitment
exchange, has not been publicly
(inclusion)
condemned by any stock
exchange, has no other major acts
of dishonesty and has no any
other bad record in the last five
years. 3. On 20 November 2019,
Guangdong Regulatory Bureau of
the CSRC issued an
administrative penalty decision
([2019] No. 13), giving Liu Ke,
119
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
then director of Guang Dong
Fenghua Advanced Technology
(Holding) Co., Ltd. (now
chairman of Electronics Group), a
warning and a fine of RMB30,000
over the case of illegal
information disclosure of Guang
Dong Fenghua Advanced
Technology (Holding) Co., Ltd.
Except as aforesaid, the main
management personnel of
Electronics Group have not
received administrative
punishment or criminal
punishment related to the
securities market, and have not
involved in major civil litigation
or arbitration related to economic
disputes in the last five years; 4.
Except as aforesaid, the main
management personnel of
Electronics Group have not failed
to repay large debts on schedule,
failed to fulfill their commitments,
been taken administrative
supervision measures by the
CSRC or been disciplined by any
stock exchange in the last five
years.
1. Rising Group has not been
investigated by the judicial organ
for suspected crimes or by the
CSRC for suspected violations of Within five
laws and regulations, and there is years
no administrative punishment preceding
(except those obviously unrelated the date of
27 October
Rising Group to the securities market) or the issuance Expired
2021
criminal punishment in the last of the letter
five years; 2. Rising Group has of
not failed to repay large debts on commitment
schedule, failed to fulfill its (inclusion)
commitments, been taken
administrative supervision
measures by the CSRC, or been
120
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
disciplined by any stock
exchange, has not been publicly
condemned by any stock
exchange, has no other major acts
of dishonesty and has no any
other bad record in the last five
years. 3. According to the
announcement of Guangdong
Discipline Inspection and
Supervision Network on October
18, 2021, Yu Gang, a member of
the Party Committee and deputy
general manager of Rising Group,
is suspected of serious
disciplinary violations and is
currently undergoing disciplinary
review and supervision by the
Supervision Committee of
Guangdong Provincial
Commission for Discipline
Inspection. As of the date of
issuance of this Letter of
Commitments, there is no result
of disciplinary review and
supervision. Except as aforesaid,
the main management personnel
of Rising Group have not received
administrative punishment or
criminal punishment related to the
securities market, and have not
involved in major civil litigation
or arbitration related to economic
disputes in the last five years. 4.
The main management personnel
of Rising Group have not failed to
repay large debts on schedule,
failed to fulfill their commitments,
been taken administrative
supervision measures by the
CSRC or been disciplined by any
stock exchange in the last five
years.
Electronics About the 1. As of the date of issuance of 27 Until the
Ongoing
Group release of the Letter of Commitments, October completio
121
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
credit Sigma has signed the Maximum 2021 n of this
guarantee Guarantee Contract (Contract trading
No.: XYYBZ (BY) No.
201906280001-1) and the
Maximum Pledge Contract for
Stocks of Listed Companies
(Contract No.: XXYZZ (BY)
No. 201906280001-2) with
Guangzhou Branch of Industrial
Bank Co., Ltd. Sigma will
provide the maximum guarantee
and pledge guarantee for the
debt of Electronics Group, with
the guarantee amount of
RMB400 million (in words:
RMB Four Hundred Million),
and the guarantee will be valid
from June 28, 2019 to June 27,
2022. Electronics Group
promises that on the date of
issuance of this Letter of
Commitment, all the loans
involved in the Maximum
Guarantee Contract and the
Maximum Pledge Contract for
Stocks of Listed Companies
have been repaid, there is no
debt based on the guarantee
under the above contracts, and
39,876,500 shares of
NATIONSTAR held by Sigma
have been released from ple dge.
At the same time, Electronics
Group further makes an
irrevocable commitment that it
will not add any new loans to
Guangzhou Branch of Industrial
Bank Co., Ltd. as a borrower
before the expiration date of the
Maximum Guarantee Contract
and the Maximum Pledge
Contract for Stocks of Listed
Companies, so as to ensure that
Sigma will not actually assume
122
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
any guarantee responsibilities
due to the above guarantee
contracts. 2. Electronics Group
promises that it will not arrange
for Sigma to add any form of
guarantee before the completion
of the delivery of Sigma's
equity in this trading. 3. In case
of any violations of the above
commitments, Electronics
Group shall solve and eliminate
the above situation within ten
days, and bear corresponding
legal responsibilities to Sigma
and FSL.
They promise that they will not
disclose the relevant insider
information of this trading or
make use of the insider
information for insider trading;
2. As of the issuance date of the
Report on Major Asset
Purchase and Related Party
Trading of Foshan Electrical
and Lighting Co., Ltd. (Draft), From the
they have not been placed on date of the
Key file for investigation or criminal issuance
management investigation due to suspected of the
personnel of About insider trading related to this 27 letter of
Rising Group, absence of trading, and have not been October commitme Ongoing
Electronics insider trading subject to administrative 2021 nt until
Group, and punishment by the CSRC or the
Rising Capital criminal responsibility completio
investigated by judicial organs n of this
according to law for insider trading
trading related to any major
asset restructuring, and have not
been prohibited from engaging
in any major asset restructuring
of listed companies according
to Article 13 of the Interim
Provisions on Strengthening the
Supervision of Abnormal Stock
Trading Related to Major Asset
123
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Restructuring of Listed
Companies in the last 36
months; 3. In case of violation
of the above commitments, they
will bear all losses caused to the
listed company and its
shareholders.
Within
NATIONSTAR and Sigma have
five years
not been investigated by
preceding
judicial organs for suspected
the date of
About crimes or by the CSRC for
27 the
NATIONSTAR explanation suspected violations of laws and
October issuance Expired
and Sigma on legal regulations, and have not been
2021 of the
compliance subject to major administrative
letter of
punishment or criminal
commitme
punishment in the last five
nt
years.
(inclusive)
NATIONSTAR has provided
the necessary, true, accurate,
complete and effective
documents, materials or oral
statements and explanations for
this trading at this stage, and
there is no concealment,
falsehood or material omission.
The copies or photocopies of
About
the documents provided are
statement and
consistent with the original
commitment
materials or originals. The
of 27
signatures and seals on the
NATIONSTAR truthfulness, October Long-term Ongoing
documents and materials
accuracy and 2021
provided are authentic, and
completeness
NATIONSTAR has fulfilled the
of information
legal procedures required for
provided
such signatures and seals and
obtained legal authorization. All
the facts stated and explained
are consistent with the facts that
happened. As this transaction
proceeds, the Company shall
provide needed information and
documents as required by
applicable laws, regulations,
124
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
rules and requirements of
CSRC and the stock exchange,
and continue to guarantee the
truthfulness, accuracy,
completeness and validity of the
information and documents
provided. The Company
promises and guarantees the
truthfulness, accuracy and
completeness of the information
provided or disclosed with
respect to this transaction. It
guarantees that there are no
misrepresentations, misleading
statements or material
omissions. And it shall be
individually and jointly liable
for that.
Among 79,753,050 shares of
tradable shares with unlimited
selling conditions of
NATIONSTAR held by Sigma,
39,876, 500 shares were
pledged for Guangdong
Electronics Information
Industry Group Ltd. As of the
date of issuance of this
commitment, the pledge of the
About the
above shares has been released.
clarity of the
However, the Maximum Pledge
ownership of 27
Contract for Stocks of Listed
Sigma the underlying October Long-term Ongoing
Companies (No.: XXYZZ (BY)
assets of this 2021
No. 201906280001-2) signed
major asset
by Sigma and Guangzhou
restructuring
Branch of Industrial Bank Co.,
Ltd. has not been dissolved.
Guangdong Electronics
Information Industry Group
Ltd. has promised that it will
not add any new loans to
Guangzhou Branch of Industrial
Bank Co., Ltd. as a borrower
during the validity period of the
guarantee, and that it will not
125
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
substantially assume any
guarantee responsibility due to
the Maximum Pledge Contract
for Stocks of Listed Companies.
Except as aforesaid, the asset
ownership of Sigma is clear,
there is no dispute or potential
dispute, and there is no situation
affecting the legal existence.
There is no entrusted
shareholding or trust
shareholding, restriction or
prohibition of transfer of the
above-mentioned equity
controlled by Rising Group.
1. Sigma promises that all its
registered capital has been paid
in. 2. Sigma promises that all
About no existing shareholders contribute
27
ownership their own funds to hold shares,
Sigma October Long-term Ongoing
dispute in there is no situation such as
2021
equity holding shares on behalf of
them, and there is no dispute or
potential dispute between
shareholders over their shares.
As of the date of issuance of
this statement, Sigma and its
wholly-owned and controlled
subsidiaries have no
outstanding or foreseeable
major lawsuits, arbitrations and Before the
About
administrative penalties that date of the
explanation
have a significant adverse 27 issuance
on litigation
Sigma impact on this trading. As of the October of the Expired
and
date of issuance of this note, the 2021 letter of
administrative
directors, supervisors and senior commitme
punishment
management personnel of nt
Sigma have no pending or
foreseeable major lawsuits,
arbitrations and administrative
penalties that have a significant
adverse impact on this trading.
Sigma About 1. Sigma has provided relevant 27 Long-term Ongoing
126
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
statement and information and documents October
commitment (including but not limited to 2021
of original written materials,
truthfulness, duplicate materials or oral
accuracy and testimony, etc.) related to this
completeness trading to the intermediaries
of information providing professional services
provided of auditing, valuation, legal and
financial consultancy for this
trading. Sigma promises that the
copies or photocopies of the
documents and materials
provided are consistent with the
originals, and that the signatures
and seals of the documents and
materials are authentic, and the
signatories of the documents
have been legally authorized
and effectively signed the
documents; that the provided
information and documents are
authentic, accurate and
complete and that there are no
false records, misleading
statements or material
omissions. Sigma also promises
to bear individual and joint and
several liability. 2. Sigma
promises that the information
provided is true, accurate and
complete. In case of any losses
caused to investors due to any
false presentations, misleading
statements or material
omissions in the information
provided, Sigma will be liable
for compensation according to
law.
Directors, They have not been investigated Within
supervisors and by judicial organs for suspected five years
27
senior About legal crimes or by the CSRC for preceding
October Expired
management compliance suspected violations of laws and the date of
2021
personnel of regulations, and have not been the
NATIONSTAR subject to major administrative issuance
127
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
and Sigma punishment or criminal of the
punishment in the last five letter of
years. commitme
nt
Commitments
FSL’s profit distributed in cash
made to
About cash shall not be less than 30% of the 27 May
minority FSL Long-term Ongoing
dividends distributable profit realized in 2009
shareholders of
the year.
the Company
Whether the
commitments
Yes
were timely
performed
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still
within the forecast period, explain why the forecast has been reached for the Reporting Period.
□Applicable √ Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties
for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Explanations Given by the Board of Directors Regarding the Inde pendent Auditor's
“Modified Opinion” on the Financial Statements of the Latest Period
□ Applicable √ Not applicable
V Explanations Given by the Board of Directors, the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Period
□ Applicable √ Not applicable
128
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
VI YoY Changes to Accounting Policies, Estimates and Correction of Material Accounting
Errors
√Applicable □ Not applicable
Refer to Part X Financial Statements-V Important Accounting Policies and Estimations-44. Changes in Main
Accounting Policies and Estimates for details.
VII YoY Changes to the Scope of the Consolidated Financial Statements
√Applicable □ Not applicable
Compared with the previous period, the consolidated scope of financial statements in this period is increased,
including two subsidiaries of Nanning Liaowang lamp Co., Ltd. and fozhao (Hainan) Technology Co., Ltd., as
well as five subsidiaries of Liuzhou Guige Photoelectric Technology Co., Ltd., Liuzhou Guige Fuxuan
Technology Co., Ltd., Chongqing Guinuo photoelectric technology Co., Ltd., Qingdao Guige photoelectric Co.,
Ltd. and Indonesia Liaowang lamp Co., Ltd, Reduce two subsidiaries of Foshan Electric lighting new light source
technology Co., Ltd. and Hunan Keda new energy investment and Development Co., Ltd. for details, see note VIII
"change of consolidation scope" and note IX "equity in other entities".
VIII Engage ment and Disengagement of Independent Auditor
Current independent auditor:
Name of the domestic independent auditor Zhongzheng Tiantong Certified Public Accountants LLP
The Company’s payment to the domestic independent auditor
162
(RMB’0,000)
How many consecutive years the domestic independent auditor
6
has provided audit service for the Company
Names of the certified public accountants from the domestic
Feng Wei, Li Qiongqian
independent auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants
from the domestic independent auditor have provided audit 1
service for the Company
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
√ Applicable □ Not applicable
In the Reporting Period, the Company engaged Beijing Zhongzheng Tiantong Certified Public Accountants LLP as
its internal control auditor with the total audit fees of RMB500,000.
129
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
IX Possibility of Delisting after Disclosure of this Report
□ Applicable √ Not applicable
X Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI Major Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Punishme nts and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
√Applicable □ Not applicable
In the Reporting Period, the Company and its controlling shareholder and actual controller were not involved in any
unsatisfied court judgments, large-amount overdue liabilities or the like.
XIV Major Related-Party Transactions
1. Continuing Related-Party Transactions
√Applicable □ Not applicable
Obtaina
As % of
ble
total Approv
Relation Transact market Index to
Total value of ed Over the Method
ship Type of Specific Pricing ion price for disclose
Related value all transacti approve of Disclos
with the transacti transacti principl price(R same-ty d
party (RMB’0 same-ty on line d line or settleme ure date
Compan on on e MB’0,0 pe informa
,000) pe (RMB’0 not nt
y 00) transacti tion
transacti ,000)
ons(RM
ons
B’0,000
130
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
)
Purchasi
ng
Bank
Foshan products
Under transfer
NationSta and Purchas
same s or 28 www.c
r receivin e of Market 4,264.4 4,264.4 4,264.4
actual 1.55% 12,000 Not bank January ninfo.c
Optoelect g labor material price 7 7 7
controll accepta 2021 om.cn
ronics service s
er nce
Co., Ltd. from
notes
related
party
Purchasi
Guangdo ng
Bank
ng products
Under transfer
Fenghua and Purchas
same s or 28 www.c
Advanced receivin e of Market
actual 785.86 785.86 0.28% 1,500 Not bank 785.86 January ninfo.c
Technolo g labor material price
controll accepta 2021 om.cn
gy service s
er nce
Holding from
notes
Co., Ltd. related
party
Purchasi
Shareho ng
Bank
lder that products
Prosperity transfer
holds and Purchas
Lamps & s or 28 www.c
over 5% receivin e of Market
Compone 265.44 265.44 0.10% 1,300 Not bank 265.44 January ninfo.c
shares g labor material price
nts accepta 2021 om.cn
of the service s
Limited nce
Compan from
notes
y related
party
Acting-i
Purchasi
n-conce
ng
rt party Bank
Hangzhou products
of a 5% transfer
Times and Purchas
greater s or
Lighting receivin e of Market
sharehol 64.65 64.65 0.02% Not bank 64.65 N/A
and g labor material price
der of accepta
Electrical service s
the nce
Co., Ltd. from
Compan notes
related
y
party
131
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Purchasi
ng
Guangdo Bank
products
ng Under transfer
and Purchas
Electronic same s or 28 www.c
receivin e of Market
Technolo actual 115.19 115.19 1.83% 300 Not bank 115.19 January ninfo.c
g labor equipme price
gy controll accepta 2021 om.cn
service nt
Research er nce
from
Institute notes
related
party
Purchasi
Jiangmen ng
Bank
Dongjian products
Under transfer
g and
same Receivin s or
Environm receivin Market
actual g labor 26.94 26.94 21.83% Not bank 26.94 N/A
ental g labor price
controll service accepta
Technolo service
er nce
gy Co, from
notes
Ltd. related
party
Purchasi
ng
Foshan Bank
products
Fulong Under transfer
and
Environm same Receivin s or
receivin Market
ental actual g labor 2.55 2.55 2.06% Not bank 2.55 N/A
g labor price
Technolo controll service accepta
service
gy Co., er nce
from
Ltd. notes
related
party
Zhuhai
Doumen
Purchasi
District
ng
Yongxing Bank
products
sheng Under transfer
and
Environm same Receivin s or
receivin Market
ental actual g labor 0.57 0.57 0.46% Not bank 0.57 N/A
g labor price
Industrial controll service accepta
service
Wastes er nce
from
Recycling notes
related
Compreh
party
ensive
Treatment
132
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Co., Ltd.
Purchasi
ng
Guangdo Bank
products
ng Under transfer
and
Electronic same Receivin s or
receivin Market
Technolo actual g labor 0.27 0.27 0.03% Not bank 0.27 N/A
g labor price
gy controll service accepta
service
Research er nce
from
Institute notes
related
party
Acting-i
Purchasi
n-conce
ng
rt party Bank
products
of a 5% transfer
Prosperity and Purchas
greater s or
Electrical receivin e of Market
sharehol 139.46 139.46 0.05% Not bank 139.46 N/A
(China) g labor material price
der of accepta
Co., Ltd. service s
the nce
from
Compan notes
related
y
party
Purchasi
ng
Bank
Guangdo products
Under transfer
ng Yixin and
same Receivin s or
Changche receivin Market 1,648.9 1,648.9 1,648.9
actual g labor 26.22% Not bank N/A
ng g labor price 6 6 6
controll service accepta
Construct service
er nce
ion Group from
notes
related
party
Purchasi
ng
Bank
Guangdo products
Under transfer
ng and
same Receivin s or
Zhongnan receivin Market 6,043.0 6,043.0 6,043.0
actual g labor 26.66% Not bank N/A
Construct g labor price 4 4 4
controll service accepta
ion Co., service
er nce
Ltd. from
notes
related
party
133
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Purchasi
ng
Bank
products
Shenzhen Under transfer
and
yuepeng same Receivin s or
receivin Market
Construct actual g labor 23.42 23.42 0.10% Not bank 23.42 N/A
g labor price
ion Co., controll service accepta
service
Ltd er nce
from
notes
related
party
Selling
Guangdo
products Bank
ng New
Under and transfer
Electronic
same providin s or 28 www.c
s Selling Market 3,751.6 3,751.6 3,751.6
actual g labor 0.79% 3,800 Not bank January ninfo.c
Informati products price 2 2 2
controll service accepta 2021 om.cn
on
er to nce
Import&E
related notes
xport Ltd.
party
Selling
Shareho
products Bank
lder that
Prosperity and transfer
holds
Lamps & providin s or 28 www.c
over 5% Selling Market 2,544.2 2,544.2 2,544.2
Compone g labor 0.53% 3,600 Not bank January ninfo.c
shares products price 5 5 5
nts service accepta 2021 om.cn
of the
Limited to nce
Compan
related notes
y
party
Selling
Guangdo products Bank
ng Rising Under and transfer
Rare same providin s or 28 www.c
Selling Market
Metals-E actual g labor 810.10 810.1 0.17% 1,500 Not bank 810.10 January ninfo.c
products price
O controll service accepta 2021 om.cn
Materials er to nce
Ltd. related notes
party
Guangdo Selling Bank
Under
ng Yixin products transfer
same 28 www.c
Changche and Selling Market s or
actual 308.96 308.96 0.06% 3,000 Not 308.96 January ninfo.c
ng providin products price bank
controll 2021 om.cn
Construct g labor accepta
er
ion Group service nce
134
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
to notes
related
party
Selling
products Bank
Guangdo
Under and transfer
ng
same providin s or
Zhongnan Selling Market
actual g labor 186.31 186.31 0.04% Not bank 186.31 N/A
Construct products price
controll service accepta
ion Co.,
er to nce
Ltd.
related notes
party
Selling
products Bank
Shenzhen Under and transfer
Zhongjin same providin s or 28 www.c
Selling Market
Lingnan actual g labor 310.44 310.44 0.07% 1,000 Not bank 310.44 January ninfo.c
products price
Nonfemet controll service accepta 2021 om.cn
Co. Ltd. er to nce
related notes
party
Selling
Guangdo products Bank
ng Under and transfer
Heshun same providin s or
Selling Market
Property actual g labor 7.35 7.35 0.00% Not bank 7.35 N/A
products price
Managem controll service accepta
ent Co., er to nce
Ltd. related notes
party
Selling
Guangdo
products Bank
ng
Under and transfer
Zhongjin
same providin s or
Lingnan Selling Market
actual g labor 4.97 4.97 0.00% Not bank 4.97 N/A
Junpeng products price
controll service accepta
Intelligent
er to nce
Equipmen
related notes
t Co., Ltd.
party
Guangdo Under Selling Bank
ng same products Selling Market transfer
22.57 22.57 0.00% Not 22.57 N/A
Zhongjin actual and products price s or
Lingnan controll providin bank
135
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Equipmen er g labor accepta
t service nce
Technolo to notes
gy Co., related
Ltd. party
Guangdo Selling
ng products Bank
Zhongjin Under and transfer
Lingnan same providin s or
Selling Market
Engineeri actual g labor 10.86 10.86 0.00% Not bank 10.86 N/A
products price
ng controll service accepta
Technolo er to nce
gy Co., related notes
Ltd. party
Selling
products Bank
Guangdo and transfer
ng Rising Actual providin s or
Selling Market
Holdings controll g labor 3.02 3.02 0.00% Not bank 3.02 N/A
products price
Group er service accepta
Co., Ltd. to nce
related notes
party
Acting-i
n-conce Selling
rt party products Bank
of a 5% and transfer
Prosperity
greater providin s or
Electrical Selling Market
sharehol g labor 2.70 2.7 0.00% Not bank 2.70 N/A
(China) products price
der of service accepta
Co., Ltd.
the to nce
Compan related notes
y party
Guangdo Selling
ng products Bank
Electronic Under and transfer
s same providin s or
Selling Market
Informati actual g labor 0.80 0.8 0.00% Not bank 0.80 N/A
products price
on controll service accepta
Industry er to nce
Group related notes
Ltd. party
136
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Selling
Guangzho products Bank
u Huajian Under and transfer
Engineeri same providin s or 28 www.c
Selling Market
ng actual g labor 0.61 0.61 0.00% 3,600 Not bank 0.61 January ninfo.c
products price
Construct controll service accepta 2021 om.cn
ion er to nce
Co.,Ltd. related notes
party
Selling
products Bank
Under and transfer
Primatron
same providin s or
ix Nanho Selling Market
actual g labor 0.09 0.09 0.00% Not bank 0.09 N/A
Technolo products price
controll service accepta
gy Ltd.
er to nce
related notes
party
Selling
products Bank
Guangdo
Under and transfer
ng Rising
same providin s or
South Selling Market
actual g labor 1.44 1.44 0.00% Not bank 1.44 N/A
Construct products price
controll service accepta
ion Co.,
er to nce
Ltd.
related notes
party
Selling
products Bank
NationSta
Under and transfer
r
same providin s or
Optoelect Selling Market
actual g labor 164.30 164.3 0.03% Not bank 164.30 N/A
ronics products price
controll service accepta
(Germany
er to nce
) Co., Ltd.
related notes
party
Guangdo Selling Bank
ng Under products transfer
Heshun same and s or
Selling Market
Property actual providin 61.92 61.92 0.01% Not bank 61.92 N/A
products price
Managem controll g labor accepta
ent Co., er service nce
Ltd. to notes
137
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
related
party
21,573.
Total -- -- -- 31,600 -- -- -- -- --
13
Large-amount sales return in detail N/A
In January 2021, the Company estimated the total value of its continuing transactions with
related parties Foshan NationStar Optoelectronics Co., Ltd., Guangdong Fenghua Advanced
Technology Holding Co., Ltd., Rising Investment Development Limited and its
majority-owned subsidiaries, Prosperity Lamps & Components Limited and its
majority-owned subsidiaries, Guangdong Electronic Technology Research Institute,
Give the actual situation in the
Guangdong New Electronics Information Import&Export Ltd., Guangdong Huajian
Reporting Period (if any) where an
Enterprise Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Real
estimate had been made for the total
Estate Group Co., Ltd. and its majority-owned subsidiaries, Guangzhou Rising Non-ferrous
value of continuing related-party
Metal Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Property
transactions by type to occur in the
Group Co., Ltd. and its majority-owned subsidiaries, Guangdong Rising Investment Group
Reporting Period
and its majority-owned subsidiaries, Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. and its
majority-owned subsidiaries. Concerning the purchases from its related parties, the actual
amount in 2021 was RMB133.8082 million, accounting for 73. 93% of the estimate for 2021.
As for the sales to its related parties, the actual amount in 2021 was RMB81.92 31million,
accounting for 34.86% of the estimate for 2021.
Reason for any significant difference
between the transaction price and the N/A
market reference price (if applicable)
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
√ Applicable □ Not applicable
Book Estimated
Content value of value of Transacti
Transacti
Related Related of related the the on gains
Related Pricing on price Settlemen Date of Disclosur
relationsh party party transferre transferre and losses
party policy (RMB’0, t method disclosure e index
ip name transactio d assets d assets (RMB’0,
000)
n (RMB’0, (RMB’0, 000)
000) 000)
The Refer to Title of
Company the announce
Rising acquired valuation ment:
Guangdo
Group is 46,260,02 in the Report on
ng Rising Equity 50,099.60 28
the actual 1 shares Valuation Related-p
Holdings acquisitio 27,824.28 -55,974.6 53,245.28 Cash 0 October
controller of Report on arty
Group n 3 2021
of the NationSta the Transacti
Co., Ltd.
Company r Valuation on
Optoelect Project in regarding
ronics which Major
138
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
held by Foshan Assets
Rising Electrical Restructu
Group and ring
Lighting (Draft);
Co., Ltd. published
Plans to on:
Purchase Cninfo
52,051,94 (http://w
5 Shares ww.cninf
of Foshan o.com.cn/
Nationsta ).
r
Optoelect
ronics
Co., Ltd.
Held by
Guangdo
ng Rising
Holdings
Group
Co., Ltd.
and
Guangdo
ng Rising
Finance
Holding
Co., Ltd.
issued by
China
United
Internatio
nal
Appraisal
Consultin
g Co.,
Ltd., and
shall be
determine
d by both
parties
through
negotiatio
n
Guangdo Rising Equity The Refer to 3,483.70 6,272.65- 6,666.5 Cash 0 28 Title of
139
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
ng Rising Capital is acquisitio Company the 7,008.23 October announce
Capital a n acquired valuation 2021 ment:
Investme wholly-o 5,791,924 in the Report on
nt Co., wned shares of Valuation Related-p
Ltd. subsidiary NationSta Report on arty
of Rising r the Transacti
Group Optoelect Valuation on
ronics Project in regarding
held by which Major
Rising Foshan Assets
Group Electrical Restructu
and ring
Lighting (Draft);
Co., Ltd. published
Plans to on:
Purchase Cninfo
52,051,94 (http://w
5 Shares ww.cninf
of Foshan o.com.cn/
Nationsta ).
r
Optoelect
ronics
Co., Ltd.
Held by
Guangdo
ng Rising
Holdings
Group
Co., Ltd.
and
Guangdo
ng Rising
Finance
Holding
Co., Ltd.
issued by
China
United
Internatio
nal
Appraisal
Consultin
g Co.,
140
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Ltd., and
shall be
determine
d by both
parties
through
negotiatio
n
Title of
announce
The ment:
Company Report on
acquired Related-p
100% of arty
Guangdo equity of Transacti
Electronic Value of
ng Sigma on
s Group is shares of
Electronic (holding regarding
a NationSta
s Equity 79,753,05 86,372.55 28 Major
wholly-o r
Informati acquisitio 0 shares 47,969.53 -96,501.1 91,798.02 Cash 0 October Assets
wned Optoelect
on n of 9 2021 Restructu
subsidiary ronics
Industry NationSta ring
of Rising held by
Group r (Draft);
Group Sigma
Ltd. Optoelect published
ronics) on:
held by Cninfo
Electronic (http://w
s Group ww.cninf
o.com.cn/
).
Reasons for considerable differences
between the transaction price and the book None
value or estimated value (if applicable)
In 2021, NationStar Optoelectronics was not included in the Company’s consolidated
financial statements. The Company has made a prepayment of around RMB450 million
Impact on the Company's operating results
to the former shareholders of NationStar Optoelectronics for the acquisition of a 30%
and financial conditions
interest from them, which has resulted in a significant impact on the cash flows of the
Company in 2021.
The actual performance during the
Reporting Period if the related-party
transaction is conditioned on the N/A
performance.
141
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
√ Applicable □ Not applicable
Non-operating amounts due to and from related parties or not
□ Yes √ No
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies
√ Applicable □ Not applicable
Deposit business
Daily Actual amount
Beginning
maximum Interest rate Total deposited Total Ending balance
Related party Relationship balance
limits range in withdrawn (RMB’0,000)
(RMB’0,000)
(RMB’0,000) (RMB’0,000) (RMB’0,000)
Controlled by
Guangdong
the same
Rising Finance 30,000 1.75%-3.30% 30,082.70 331,309.03 331,913.98 29,477.75
controlling
Co., Ltd.
shareholder
Note: Due to a business combination under common control in December 2020, the Company recorded into the beginning balance
the RMB827,000 that was deposited by subsidiary Foshan Kelian New Energy Technology Co., Ltd. in Guangdong Rising Finance
Co., Ltd., which has been transferred out in January 2021.
Credit or other finance business
Total amount Actual amount
Related party Related relationship Type of business
(RMB’0,000) (RMB’0,000)
Guangdong Rising Finance Controlled by the same
Credit 40,000 0
Co., Ltd. controlling shareholder
6. Transactions with Related Parties by Finance Company Controlled by the Company
□ Applicable √ Not applicable
142
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
7. Other Major Related-Party Transactions
√ Applicable □ Not applicable
1. Upon review and approval at the Shareholders' General Meeting for 2020, the Company will use its equity fund of
no more than RMB300 million to purchase shares of no more than 5% of the current total share capital of Foshan
NationStar Optoelectronics Co., Ltd. (NationStar) in the secondary market (including but not limited to the ways
permitted by laws and regulations like call auction and bulk commodity trading), when appropriate. On 16 June
2021, the Company purchased 1,014,900 shares of NationStar at the cost of RMB9,402,100.
2. The Company bid for the Phase II office building project of the production base at Gaoming Headquarters in
March 2021. Upon bidding, review, and announcement, the consortium composed of Guangdong Yixin
Changcheng Construction Group Co., Ltd. (primary) and Guangdong Architectural Design & Research Institute Co.,
Ltd. (member) won the project at RMB175,025,600. Guangdong Yixin Changcheng Construction Group Co., Ltd. is
a tier-2 wholly owned subsidiary of Guangdong Rising Holdings Group Co., Ltd. which is the controller shareholder
of the Company. The Company had a connected transaction regarding the "General Contracting of Design and
Construction of Phase II Office Building Project of Production Base at Gaoming Headquarters of Foshan Electrical
and Lighting Co., Ltd. (FSL)" won by the consortium of Guangdong Yixin Changcheng Construction Group Co.,
Ltd., in accordance with relevant regulations.
3. The Company bid for the general contracting of design and construction of the decoration engineering project of
Foshan Kelian Building in April 2021. Upon bidding, review, and announcement, the consortium composed of
Guangdong Zhongnan Construction Co., Ltd. (primary) and Guangdong Architectural Design & Research Institute
Co., Ltd. (member) won the project at the offer of RMB189,070,200. Guangdong Zhongnan Construction Co., Ltd.
is a tier-2 wholly owned subsidiary of Guangdong Rising Holdings Group Co., Ltd. which is the controller
shareholder of the Company. The Company had a connected transaction regarding the "General Contracting of
Design and Construction of Decoration Engineering Project of Foshan Kelian Building" won by the consortium of
Guangdong Zhongnan Construction Co., Ltd., in accordance with relevant regulations.
4. In June, 2021, the Company conducted a public tender for the renovation project of Staff Apartments 1, 2, 3, 4 and
Shop No. 18 in Gaoming Headquarters Production Base. After performing the corresponding procedures of bid
opening, evaluation and publicity, the winning bidder was determined to be Guangdong Zhongnan Construction
Real Estate Development General Company (hereinafter referred to as "Zhongnan Construction"), with a total bid
amount of RMB25,709,006. Zhongnan Construction is a second-level wholly-owned subsidiary of Guangdong
143
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Rising Holdings Group Co., Ltd. (Rising Group), the controlling shareholder of the Company. According to Article
10.1.3 of the Stock Listing Rules of the Shenzhen Stock Exchange, Zhongnan Construction won the bid for the
"Decoration Project of Staff Apartments 1, 2, 3, 4 and Shop No. 18 in Gaoming Headquarters Production Base of
Foshan Electrical and Lighting Co., Ltd." to form a related party transaction.
Index to the current announcement about the said related-party transaction disclosed:
Title of announcement Disclosure date Disclosure website
Announcement on the Related-Party Transaction
regarding Purchase of Some Shares of Nationstar 26 April 2021 www.cninfo.com.cn
Optoelectronics
Announcement on a Related-Party Transaction Due to
6 May 2021 www.cninfo.com.cn
Public Bidding
Announcement on a Related-Party Transaction Due to
9 July 2021 www.cninfo.com.cn
Public Bidding
Announcement on a Related-Party Transaction Due to
17 August 2021 www.cninfo.com.cn
Public Bidding
XV Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
144
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
2. Major guarantees
√ Applicable □ Not applicable
Unit: RMB'0,000
Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosure
Guarante
date of the Counter
Actual Actual Having e for a
guarantee Line of Type of Collateral guarant Term of
Obligor occurrence guarantee expired or related
line guarantee guarantee (if any) ee (if guarantee
date amount not party or
announcem any)
not
ent
Total approved line for Total actual amount of
such guarantees in the such guarantees in the
Reporting Period (A1) Reporting Period (A2)
Total approved line for Total actual balance of
such guarantees at the such guarantees at the
end of the Reporting end of the Reporting
Period (A3) Period (A4)
Guarantees provided by the Company as the parent for its subsidiaries
Disclosure
Guarante
date of the Counter
Actual Actual Having e for a
guarantee Line of Type of Collateral guarant Term of
Obligor occurrence guarantee expired or related
line guarantee guarantee (if any) ee (if guarantee
date amount not party or
announcem any)
not
ent
Total approved line for Total actual amount of
such guarantees in the such guarantees in the
Reporting Period (B1) Reporting Period (B2)
Total approved line for Total actual balance of
such guarantees at the such guarantees at the
end of the Reporting end of the Reporting
Period (B3) Period (B4)
Guarantees provided between subsidiaries
Disclosure Guarante
Counter
date of the Actual Actual Having e for a
Line of Type of Collateral guarant Term of
Obligor guarantee occurrence guarantee expired or related
guarantee guarantee (if any) ee (if guarantee
line date amount not party or
any)
announcem not
145
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
ent
Liuzhou 26 January 5,000.00 None None Not Not
Guige 2021
Optoelectro
2019/12/3
nics 24 June Joint-liabili
0-2024/12
Technology 2021 ty
/30
Co.,
Ltd.(Note:1
)
Liuzhou 10 Novemb 1,000.00 None None Yes Not
Guige er 2020
Optoelectro
2019/12/3
nics 24 June 15,000.00 Joint-liabili
0-2024/12
Technology 2021 ty
/30
Co.,
Ltd.(Note:1
)
Liuzhou 10 Decemb 1,000.00 None None Yes Not
Guige er 2020
Optoelectro
2019/12/3
nics 24 June Joint-liabili
0-2024/12
Technology 2021 ty
/30
Co.,
Ltd.(Note:1
)
Nanning 1 February 4,770.00 Yes None Not Not
Liaowang 2021 2019/12/3
24 June Joint-liabili
Auto Lamp 0-2024/12
2021 ty;mortgage
Co., Ltd. /30
(Note 2)
Nanning 26 August 850.00 Joint-liabili None None Yes Not
Liaowang 2020 ty 2019/12/3
24 June 20,000.00
Auto Lamp 0-2024/12
2021
Co., Ltd. /30
(Note 2)
Nanning 16 Septem 2,000.00 Joint-liabili None None Yes Not
Liaowang ber 2020 ty 2019/12/3
24 June
Auto Lamp 0-2024/12
2021
Co., Ltd. /30
(Note 2)
Total approved line for Total actual amount of 14,620
such guarantees in the such guarantees in the
146
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Reporting Period (C1) Reporting Period (C2)
Total approved line for Total actual balance of 9,770
such guarantees at the such guarantees at the
end of the Reporting end of the Reporting
Period (C3) Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in Total actual guarantee 14,620
the Reporting Period amount in the Reporting
(A1+B1+C1) Period (A2+B2+C2)
Total actual guarantee 9,770
Total approved guarantee line at
balance at the end of the
the end of the Reporting Period
Reporting Period
(A3+B3+C3)
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as %
1.68%
of the Company’s net assets
Of which:
Balance of guarantees provided for shareholders,
actual controller and their related parties (D)
Balance of debt guarantees provided directly or
indirectly for obligors with an over 70% debt/asset
ratio (E)
Amount by which the total guarantee amount
exceeds 50% of the Company’s net assets (F)
Total of the three amounts above (D+E+F)
Joint responsibilities possibly borne or already
borne in the Reporting Period for undue guarantees
(if any)
Provision of external guarantees in breach of the
prescribed procedures (if any)
Note :Chongqing Guinuo Lighting Technology Co., Ltd. (“Chongqing Guinuo”), Qingdao Guige Lighting Technology Co., Ltd.
(“Qingdao Lighting”) and Liuzhou Guige Lighting Technology Co., Ltd. (“Liuzhou Lighting”) are all wholly-owned subsidiaries of
Nanning Liaowang Auto Lamp Co., Ltd. (“Nanning Liaowang”). The aforesaid guarantees all occurred before the Company’s
acquisition of Nanning Liaowang, and have been disclosed in the Company’s Announcement on the Acquisition of Nanning
Liaowang Auto Lamp Co., Ltd. dated 24 June 2021. As of 31 December 2021, guarantees between Nanning Liaowang and its
subsidiaries are set out in “3. Other” under “XIV Commitments and contingencies” of Part X.
Note 1: Nanning Liaowang provided guarantees for Liuzhou Lighting.
Note 2: Qingdao Lighting, Liuzhou Lighting and Chongqing Guinuo provided guarantees for Nanning Liaowang.
147
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overview of cash entrusted for wealth management during the Reporting Period
Unit: RMB'0,000
Provision for
Unrecovered impairment on
Type Funding source Amount Undue amount
overdue amount unrecovered
overdue amount
Bank financial
Self-owned funds 40,000 32,191 0 0
products
Others Self-owned funds 30,000 0 0 0
Total 70,000 32,191 0 0
High-risk wealth management transactions with a significant single amount, or with low security and low liquidity:
√ Applicable □ Not applicable
Unit: RMB’0,000
Index
to
transa
Annua Allow Prescr
Actual Receip Plan ction
Type of lized Expect ance ibed
Source Deter gain/lo t/paym for summ
Type wealth Begin Use of yield ed for proced
Truste Princi of Endin minati ss in ent of more ary
of manag ning princi rate yield impair ure
e pal princi g date on of Report such transa and
trustee ement date pal for (if ment execut
pal yield ing gain/lo ction other
product refere any) (if ed or
Period ss or not infor
nce any) not
matio
n (if
any)
Repay
ment
Not
Guang of
princip
zhou 27 princi
al-prot Self-o 3 To be
Rural Dece pal
Bank ected 20,000 wned Januar Other 3.80% 14.58 10.41 receiv Yes Yes
Comm mber with
with funds y 2022 ed
ercial 2021 yield
floatin
Bank upon
g yield
maturi
ty
148
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Repay
ment
Not
of
princip
Bank 29 princi
al-prot Self-o 5 To be
of Dece pal
Bank ected 10,000 wned Januar Other 3.60% 6.9 1.48 receiv Yes Yes
Guang mber with
with funds y 2022 ed
zhou 2021 yield
floatin
upon
g yield
maturi
ty
Repay
ment
Not
Guang of
princip
zhou 30 princi
al-prot Self-o 6 To be
Rural Dece pal
Bank ected 1,000 wned Januar Other 3.80% 0.73 receiv Yes Yes
Comm mber with
with funds y 2022 ed
ercial 2021 yield
floatin
Bank upon
g yield
maturi
ty
Jimo Non-gu
Branc arantee 13 Credit Withdr
30 To be
h of d Self-fu Septe or's awal
Bank 791 June 3.00% 36.00 35.99 recove Yes Yes
Industr floatin nded mber rights at any
2022 red
ial g 2021 assets time
Bank income
Nanni
ng
Branc
h Non-gu
Busine arantee 13 Credit Withdr
30 To be
ss d Self-fu Septe or's awal
Bank 400 June 3.00% 3.50 3.37 recove Yes Yes
Depart floatin nded mber rights at any
2022 red
ment g 2021 assets time
of income
Industr
ial
Bank
Total 32,191 -- -- -- -- -- -- 61.71 51.25 -- -- -- --
Situation where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
149
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
4. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Other Significant Events
√ Applicable □ Not applicable
1. Major asset restructuring
The Company held the 19th meeting of the ninth Board of Directors and the Third Extraordinary General Meeting of
Shareholders for the year 2021 on 27 October 2021 and 31 December 2021, respectively, where the “Report on
Major Asset Purchase and Related Party Trading of Foshan Electrical and Lighting Co., Ltd. (Draft) and Its
Summary” and other proposals related to this trading was deliberated and adopted. It was agreed that the Company
will purchase 100% equity of Foshan Sigma Venture Capital Co., Ltd. (hereinafter referred to as "Sigma") held by
Electronics Group (Sigma holds 79,753,050 shares of NationStar Optoelectronics) and 52,051,945 tradable shares
of NationStar Optoelectronics held by Rising Holdings Group and Rising Capital in total. As of 25 February 2022,
the Company has paid all the transfer price, and the transfer of the underlying assets involved in this major asset
restructuring has been completed, and the Company has become the controlling shareholder of NationStar
Optoelectronics.
2. Share repurchase
The Third Extraordinary Shareholders’ General Meeting for 2020 of the Company reviewed and passed the
Proposal on Repurchasing Some A and B Shares of the Company on 18 December 2020. The Company formulated
and disclosed the repurchase report in line with relevant regulations. See the Report on Repurchasing Some A and B
Shares of the Company published on Cninfo (www.cninfo.com.cn) on 24 December 2020. As of 18 December 2021,
the Company accumulatively repurchased 31,952,995 A-Shares and 18,398,512 B-Shares, respectively, by way of
centralized bidding, representing 3.60% of the total share capital. RMB201,955,600 (excluding the transaction cost)
and HKD58,588,200 (excluding the transaction cost) were spent for the repurchase of the A and B Shares,
respectively. The implementation period of this share repurchase has expired.
The Company held the 26th Meeting of the Ninth Board of Directors on 14 January 2022, where the Proposal on
Retirement of Some Shares in the Company's Repurchase Special Securities Account was deliberated and approved.
The Board of Directors agreed to use the repurchased 13 million A shares for the equity incentive plan. After
150
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
deducting the 13 million A shares used for the equity incentive plan, the remaining 18,952,995 A shares and
18,398,512 B shares would be retired, totalling 37,351,507 shares. On 8 February 2022, the above-mentioned
shares were retired, and the total share capital of the Company was changed from 1,399,346,154 shares to
1,361,994,647 shares.
3. Sales of shares of other listed companies
In 2021, the Company sold 28,139,100 shares of Gotion High-tech at the price of RMB45.21 per share totaling
RMB1,260,021,700 (with taxes and fees not deducted yet). Upon the decrease, it held 17,316,375 shares of Gotion
High-tech, representing 1.35% of the total share capital. In 2021, the Company sold 26,242,300 shares of Xiamen
Bank at the price of RMB6.88 per share totaling RMB180,074,800 (with taxes and fees not deducted yet). Upon the
decrease, it held 83,471,876 shares of Xiamen Bank, representing 3.17% of the total share capital. In 2021, the
Company sold 18,546,754 shares of Everbright Bank at the price of RMB3.44 per share totaling RMB63,851,100
(with taxes and fees not deducted yet). Upon the decrease, it no longer held shares of Everbright Bank. In
conformity with the new financial instrument standards effective on 1 January 2019, the Company recorded the
investment in Gotion High-tech, Xiamen Bank and Everbright Bank as non-trading equity instrument investment at
fair value through other comprehensive income. The decrease did not affect the Company's profit in the current
period.
XVII Significant Events of Subsidiaries
√ Applicable □ Not applicable
1. Deregistration of New Light Source
On 17 July 2020, the Company held the 41st Meeting of the Eighth Board of Directors, where the Proposal on
Deregistration of Wholly Owned Subsidiaries was deliberated and approved, and the Board of Directors agreed to
deregister Foshan Electrical and Lighting Co., Ltd., a wholly owned subsidiary. In September 2021, the Company
received the Notice of Approval for Deregistration Registration issued by Foshan Municipal Market Supervision
Administration, and the deregistration registration procedures of New Light Source have been completed. New
Light Source has been excluded in the scope of the consolidated financial statements since the day the company
registration cancellation procedure was completed.
2. Merger of Hunan Keda by absorption
The Company held the 15th meeting of the ninth Board of Directors on 16 August 2021, where the Proposal for
151
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Merger of the Wholly-owned Subsidiary Hunan Keda New Energy Investment and Development Co., Ltd. by
Absorption, was deliberated and adopted. In order to streamline corporate management, reduce management costs
and improve operational efficiency, the Board of Directors agreed that the Company should merge Hunan Keda
New Energy Investment and Development Co., Ltd., a wholly-owned subsidiary by absorption. Upon completion of
this merger by absorption, Hunan Keda's independent legal personality will be cancelled, and all assets, creditor's
rights and debts, business, personnel and all other rights and obligations of Hunan Keda will be inherited by the
Company according to law. In November 2021, the Company received the Notice of Approval for Deregistration
Registration ((GX) DJNZH Zi [2021] No. 20795) issued by Changsha High-tech Industrial Development Zone
Management Committee, approving deregistration registration of Hunan Keda. The industrial and commercial
deregistration of Hunan Keda involved in this merger by absorption has been completed.
3. Expropriation of land and above-ground housing of Nanjing Fozhao
The Company held the 24th Meeting of the Ninth Board of Directors on 15 December 2021, where the Proposal on
Expropriation of Land and Above-ground Housing of the Wholly-owned Subsidiary Nanjing Fozhao Lighting
Equipment Manufacturing Co., Ltd., was deliberated and adopted. The Board of Directors agreed that Nanjing
Lishui District People's Government expropriates the land use rights and above-land housing of Nanjing Fozhao
Lighting Equipment Manufacturing Co., Ltd. (hereinafter referred to as "Nanjing Fozhao"), a wholly-owned
subsidiary of the Company, at a compensation amount of RMB183,855,895, and Nanjing Fozhao signed an
expropriation and compensation agreement with Lishui County House Dismantling, Moving & Resettling
Development Co., Ltd., the implementing unit of the housing expropriation. As of 31 December 2021, Nanjing
Fozhao has received 30% of the compensation, that is, RMB55,160,000.00, and the land use right certificate and
house ownership certificate of the assets involved have been cancelled. As of the date of this report, the site
handover is still in progress.
4. Cancellation of FSL LIGHTING GmbH
On October 22, 2021, FSL held an office meeting of the general manager, where the proposal for cancellation of
its wholly-owned subsidiary FSL LIGHTING GmbH was deliberated and adopted. As of the end of the reporting
period, the Company is handling the relevant procedures for liquidation and cancellation.
152
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares as
Shares as
dividend
dividend
Percentag New converted Percentag
Shares converted Other Subtotal Shares
e (%) issues from e (%)
from
capital
profit
reserves
13,169,19 13,169,19
1. Restricted shares 0.94% 0 0 0.94%
6 6
1.1 Shares held by state
1.2 Shares held by
1 0.00% 2,415,538 2,415,538 2,415,539 0.17%
state-owned legal persons
1.3 Shares held by other -2,415,53 -2,415,53
4,241,563 0.30% 1,826,025 0.13%
domestic investors 8 8
Among which: Shares held by -2,415,53 -2,415,53
3,753,972 0.27% 1,338,434 0.10%
domestic legal persons 8 8
Shares held
487,591 0.03% 487,591 0.03%
by domestic natural persons
1.4 Shares held by foreign
8,927,632 0.64% 8,927,632 0.64%
investors
Among which: Shares held by
foreign legal persons
Shares held by
8,927,632 0.64% 8,927,632 0.64%
foreign natural persons
1,386,176, 1,386,176
2. Unrestricted shares 99.06% 99.06%
958 ,958
2.1 RMB-denominated 1,073,038, 1,073,038
76.68% 76.68%
ordinary shares 507 ,507
2.2 Domestically listed 313,138,4 313,138,4
22.38% 22.38%
foreign shares 51 51
2.3 Overseas listed foreign
153
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
shares
2.4 Other
1,399,346, 1,399,346
3. Total shares 100.00% 0 0 100.00%
154 ,154
Reasons for share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s
ordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
154
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Number of
Number of preferred
Number of
ordinary shareholders with
preferred
Number of shareholders at resumed voting
shareholders with
ordinary 69,896 the month-end 69,546 0 rights at the 0
resumed voting
shareholders prior to the month-end prior
rights (if any) (see
disclosure of this to the disclosure
note 8)
Report of this Report (if
any) (see note 8)
5% or greater shareholders or top 10 shareholders
Increase/d Shares in pledge, marked or
Shareholdi Total shares ecrease in Restricted frozen
Name of Nature of Unrestricted
ng held at the the shares
shareholder shareholder shares held
percentage period-end Reporting held Status Shares
Period
Hongkong Wah
Foreign legal
Shing Holding 13.47% 188,496,430 188,496,430 In pledge 92,363,251
person
Company Limited
Prosperity Lamps
Foreign legal
& Components 10.50% 146,934,857 146,934,857
person
Limited
Guangdong
Electronics
State-owned
Information 8.77% 122,694,246 122,694,246 In pledge 32,532,815
legal person
Industry Group
Ltd.
Guangdong Rising
State-owned 83,130,89
Holdings Group 5.94% 83,130,898 83,130,898
legal person 8
Co., Ltd.
Essence
International Foreign legal
2.54% 35,586,037 2,535,909 35,586,037
Securities (Hong person
Kong) Co., Ltd.
Central Huijin
State-owned
Asset Management 2.37% 33,161,800 -717,100 33,161,800
legal person
Co., Ltd.
155
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Rising Investment
Foreign legal
Development 1.82% 25,482,252 25,482,252
person
Limited
China Merchants
State-owned
Securities (Hong 1.03% 14,448,307 484,913 14,448,307
legal person
Kong) Co., Ltd
Foreign natural
Zhuang Jianyi 0.85% 11,903,509 8,927,632 2,975,877
person
DBS VICKERS
(HONG KONG) Foreign legal
0.70% 9,744,456 -8,893,199 9,744,456
LTD A/C person
CLIENTS
Strategic investors or general
corporations becoming top-ten
Naught
shareholders due to placing of new
shares (if any) (see Note 3)
Among the top 10 shareholders, Hongkong Wah Shing Holding Company Limited, Guangdong
Rising Holdings Group Co., Ltd., Guangdong Electronics Information Industry Group Ltd. and
Rising Investment Development Limited are acting-in-concert parties; and Prosperity Lamps &
Related or acting-in-concert parties
Components Limited and Zhuang Jianyi are acting-in-concert parties. Apart from that, it is
among the shareholders above
unknown whether there is among the top 10 shareholders any other related parties or
acting-in-concert parties as defined in the Administrative Measures for the Acquisition of
Listed Companies.
Above shareholders involved in
entrusting/being entrusted with
Naught
voting rights and giving up voting
rights
As of 18 December 2021, the implementation period of this share repurchase has expired. As
Special account for share
of the period-end, the Company had repurchased a total of 31,952,995 A-Shares and
repurchases (if any) among the top
18,398,512 B-shares of the Company through centralized bidding. The repurchased shares
10 shareholders (see note 10)
account for 3.60% of the Company's total share capital.
Top 10 unrestricted shareholders
Type of shares
Name of shareholder Unrestricted shares at the Period-end
Type Shares
RMB-deno
Hongkong Wah Shing Holding minated
188,496,430 188,496,430
Company Limited ordinary
stock
RMB-deno
Prosperity Lamps & Components
146,934,857 minated 146,934,857
Limited
ordinary
156
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
stock
RMB-deno
Guangdong Electronics Information minated
122,694,246 122,694,246
Industry Group Ltd. ordinary
stock
RMB-deno
Guangdong Rising Holdings Group minated
83,130,898 83,130,898
Co., Ltd. ordinary
stock
Domesticall
Essence International Securities
35,586,037 y listed 35,586,037
(Hong Kong) Co., Ltd.
foreign stock
RMB-deno
Central Huijin Asset Management minated
33,161,800 33,161,800
Co., Ltd. ordinary
stock
Domesticall
Rising Investment Development
25,482,252 y listed 25,482,252
Limited
foreign stock
Domesticall
China Merchants Securities (Hong
14,448,307 y listed 14,448,307
Kong) Co., Ltd
foreign stock
Domesticall
DBS VICKERS (HONG KONG)
9,744,456 y listed 9,744,456
LTD A/C CLIENTS
foreign stock
RMB-deno
minated
Zhang Shaowu 9,300,050 9,300,050
ordinary
stock
Related or acting-in-concert parties Among the top 10 unrestricted ordinary shareholders, Hong Kong Wah Shing Holding
among the top 10 unrestricted Company Limited, Guangdong Rising Holdings Group Co., Ltd., Guangdong Electronics
ordinary shareholders, as well as Information Industry Group Ltd., and Rising Investment Development Limited are
between the top 10 unrestricted acting-in-concert parties; Apart from that, it is unknown whether there is among the top 10
ordinary shareholders and the top 10 shareholders any other related parties or acting-in-concert parties as defined in the
ordinary shareholders Administrative Measures for the Acquisition of Listed Companies.
Top 10 ordinary shareholders
involved in securities margin trading None
(if any) (see note 4)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary
shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
157
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: legal person
Legal
Name of controlling Unified social credit
representative/perso Date of establishment Principal activity
shareholder code
n in charge
Asset management and operation,
equity management and operation,
investment operation, and
management and re-investment of
investment earnings; other business
authorized by the state-owned
assets administration of the
Guangdong Province; contractor
service for overseas projects and
domestic projects calling for
Guangdong Rising international bids, contractor
Holdings Group Co., Liu Weidong 23 December 1999 91440000719283849E service for survey, consulting,
Ltd. design and supervision of the
aforesaid overseas projects, export
of equipment and materials for the
aforesaid overseas projects, and
dispatch of contract workers for the
aforesaid overseas projects;
property rental service; and
exploitation, sale and deep
processing of rare earth (operated
by the branches with the relevant
licenses).
Development, production and sale
of electronics, IT products and
electrical appliances, operation of
electronic information networks
Guangdong Electronics
and computers, electronic computer
Information Industry Liu Ke 19 October 2000 91440000725458764N
technology service, and equipment
Group Ltd.
and venue rental service; sale of
electronic computers and fittings,
electronic components, electron
devices, and electrical machinery
158
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
and equipment; wholesale of coal;
energy performance contracting
service, development and
consulting service of energy-saving
technology, and manufacture and
installation of energy-saving
equipment; parking lot operation
(188 Yueken Road, Tianhe District,
Guangzhou, Guangdong Province,
P.R.China); import and export of
goods; and training of professional
and technical personnel (Limited to
branch operation); .technical
services.
Rising Investment
Yao Shu 11 July 2001 764105 Investment and asset management
Development Limited
At the end of the Reporting Period, Guangdong Rising Holdings Group Co., Ltd. and its parties acting in
concert. directly or indirectly held the following stakes in other listed companies at home or abroad:
Shareholdings of 1. a 42.87% stake of 129,372,517 shares in Rising Nonferrous (stock code: 600259);
controlling shareholder
2. a 33.72% stake of 1,230,807,848 shares in Zhongjin Lingnan Nonfemet (stock code: 000060);
in other listed companies
3. a 20.50% stake of 183,495,085 shares in Fenghua Advanced (stock code: 000636);
at home or abroad in
4. a 21.48% stake of 132,819,895 shares in NationStar Optoe lectronics (stock code: 002449);
reporting period
5. a 25.72% stake of 226,147,494 A shares and H shares in Dongjiang Environment (stock code: 002672);
6. a 6.14% stake of 91,507,138,699 shares in China Telecom (stock code: 601728、00728. HK).
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets management
Type of the actual controller: legal person
Legal
Date of Unified social credit
Name of actual controller representative/perso Principal activity
establishment code
n in charge
Asset management and operation,
Guangdong Rising Holdings equity management and operation,
Liu Weidong 23 December 1999 719283849
Group Co., Ltd. investment operation, and
management and re-investment of
159
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
investment earnings; other business
authorized by the state-owned assets
administration of the Guangdong
Province; contractor service for
overseas projects and domestic
projects calling for international bids,
contractor service for survey,
consulting, design and supervision of
the aforesaid overseas projects,
export of equipment and materials for
the aforesaid overseas projects, and
dispatch of contract workers for the
aforesaid overseas projects; property
rental service; and exploitation, sale
and deep processing of rare earth
(operated by the branches with the
relevant licenses).
At the end of the Reporting Period, Guangdong Rising Holdings Group Co., Ltd. and its parties acting
in concert. directly or indirectly held the following stakes in other listed companies at home or abroad:
Shareholdings of the actual 1. a 42.87% stake of 129,372,517 shares in Rising Nonferrous (stock code: 600259);
controller in other listed 2. a 33.72% stake of 1,230,807,848 shares in Zhongjin Lingnan Nonfemet (stock code: 000060);
companies at home or 3. a 20.50% stake of 183,495,085 shares in Fenghua Advanced (stock code: 000636);
abroad in this Reporting 4. a 21.48% stake of 132,819,895 shares in NationStar Optoelectronics (stock code: 002449);
Period 5. a 25.72% stake of 226,147,494 A shares and H shares in Dongjiang Environment (stock code:
002672);
6. a 6.14% stake of 91,507,138,699 shares in China Telecom (stock code: 601728、 00728. HK).
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company:
160
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Note: The diagram above shows how the actual controller owned the Company as at 31 December 2021. So far,
the total share capital of the Company has decreased from 1,399,346,154 shares to 1,361,994,647 shares due to the
retirement in February 2022 of 37,351,507 shares repurchased by the Company. As of the disclosure date of this
Report, the combined interest of the Company held by the actual controller is 30.82%.
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset
management.
□ Applicable √ Not applicable
4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or the Largest
Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held by
Them
□ Applicable √ Not applicable
161
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
5. Other 10% or Greater Corporate Shareholders
√ Applicable □ Not applicable
Legal representative / Date of
Name of corporate shareholder Registered capital Business scope
company principal establishment
Import and export of
electronics, electric lighting
products, lamps, electric
Prosperity Lamps &
Zhuang Jianyi 28 April 1978 HKD2 million lighting equipment, etc., and
Components Limited
design, installation and
after-sales service of lighting
solutions
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
IV Specific Implementation of Share Repurchases in the Reporting Period
Progress on any share repurchases
Applicable □ Not applicable
Number of
shares
repurchased as
Number of
Number of Amount of all % of the
Disclosure time As % of total Term of shares
shares to be repurchased Usage underlying
of plan share capital repurchase repurchased
repurchased shares stocks involved
(share)
in the equity
incentive plan
(if any)
According to The total Not exceeding All B shares
the lower limit amount of 12 months repurchased
of the total funds for since this shall be
amount of repurchasing A repurchase plan cancelled
A-share shares is not has been according to
3 December
repurchase of 3.54%-6.66% less than reviewed and law. The 50,351,507 None
2020
RMB200 RMB200 approved on repurchased A
million and the million the shares are
upper limit of (inclusive) and shareholders’ planned to be
the price of not more than meeting of the no less than 9
repurchased RMB350 Company million shares
162
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
shares of million and no more
RMB8.52/shar (inclusive). The than 13.99
e, it is total amount of million shares
estimated that funds for for the equity
the number of repurchasing B incentive plan,
A-share shares is not and no less than
repurchased less than 14.4741
shares is about HKD100 million shares
23.4741 million and no more
million shares. (inclusive) and than 27.0898
According to not more than million shares
the upper limit HKD200 are planned to
of the total million be cancelled.
amount of (inclusive),
A-share which is
repurchase of converted
RMB350 according to
million, it is the central
estimated that parity of HKD
the number of to RMB
A-share exchange rate
repurchases is on 2 December
41.0798 2020: HKD1 =
million shares. RMB0.84635,
According to equivalent to
the lower limit RMB not less
of the total than
amount of RMB84.635
B-share million
repurchase of (inclusive) and
HKD100 not more than
million RMB169.27
(equivalent to million
RMB84.635 (inclusive).
million) and
the upper limit
of the price of
repurchased
shares of
HKD3.84/share
, it is estimated
that the number
of B-share
repurchase is
163
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
26.0416
million shares.
According to
the maximum
amount of
B-share
repurchase of
HKD200
million
(equivalent to
RMB169.27
million), it is
estimated that
the number of
B-share
repurchase is
52.0833
million shares.
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
164
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part VIII Preferred Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
165
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part IX Corporate Bonds
□ Applicable √ Not applicable
166
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Part X Financial Statements
I Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing this report 30 March 2022
Name of the independent auditor Zhongzheng Tiantong Certified Public Accountants LLP
No. of independent auditor’s report ZZTT (2022) Auditor’s Report No. 0700003
Names of certified public accountants Feng Wei, Li Qiongqian
Independent Auditor’s Report
To the Shareholders of Foshan Electrical and Lighting Co., Ltd.
I Opinion
We have audited the financial statements of Foshan Electrical and Lighting Co., Ltd. (the “Company”), which
comprise the consolidated balance sheets and balance sheet of the Company as the parent as of 31 December 2021,
the consolidated income statement and income statement of the Company as the parent, consolidated cash flow
statement and cash flow statement of the Company as the parent and consolidated statement of changes in owners’
equity and statement of changes in owners’ equity of the Company as the parent for the year then ended, as well as
the notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated and
parent company financial position of the Company at 31 December 2021, and the consolidated and the company as
the parent operating results and cash flows for the year then ended, in conformity with the Chinese Accounting
Standards (CAS).
II Basis for Opinion
We conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of Financial
Statements section of our report. We are independent of the Company in accordance with the China Code of Ethics
for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with the said
Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
III Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. And key audit matter identified in our audit is summarized as follows:
(I) Business combination not under the same control
167
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
1. Description
As stated in the notes to the consolidated financial statements "VIII. Changes in the Scope of Consolidation (I)" and
"XVII. Notes to Major Items in the Financial Statements of the Parent Company (III)", FSL acquired 53.79% equity
of Nanning Liaowang Auto Lamp Co., Ltd. (hereinafter referred to as "Nanning Liaowang") in August 2021 by
acquiring the equity of the original shareholders and making additional investment. In view of the fact that the
judgment of the acquisition date and the determination of the fair value of identifiable assets and liabilities on the
acquisition date involve more management's estimation and judgment, we determined the business combination not
under the same control as a key audit item.
2. Response to audit
In view of the business combination of FSL not under the same control, we have implemented the following main
procedures:
(1) Learning and testing the design and implementation of internal control system related to investment activities in
an effort to confirm the effectiveness of internal control operation. (2) Inquiring the management to learn the
commercial substance of this equity transaction matter and assess its rationality. (3) Obtaining and consulting the
equity transfer agreement, resolutions of shareholders' meeting and board of directors related to equity acquisition,
equity payment documents, control right transfer procedures and other documents, and Check whether the relevant
legal procedures are completed, and comprehensively judge the rationality of the management's determination of
the purchase date. (4) Obtaining the asset evaluation report produced by a third-party evaluation institution, evaluate
the competence, professionalism and objectivity of the appraiser, and review the accuracy and rationality of the
parameters used during the evaluation process. (5) Check the accuracy of accounting treatment related to purchase
date and consolidated cost.(6) Evaluating the adequacy and appropriateness of the disclosure of the equity
acquisition in the financial statements.
(II) Revenue recognition
1. Description
As stated in the notes to the consolidated financial statements "V. Important Accounting Policies and Accounting
Estimates (39)" and "VII. Notes to Major Items of the Consolidated Financial Statements (61)", FSL achieved
operating revenue of RMB4,772,690,469.14 in 2021, an increase of RMB1,027,776,016.42 or 27.44% over the
previous period. As operating revenue is one of the key performance indicators of FSL, there is an inherent risk that
revenue will be manipulated to achieve the target or expected level. Thus, we determined that revenue is recognized
as a key audit item.
2. Response to audit
In terms of revenue recognition of FSL, we performed the following main procedures: (1) Learning and testing the
design and implementation of FSL’s key internal controls related to revenue recognition in an effort to confirm the
effectiveness of internal control operation. (2) Sales contracts will be sample-checked to identify terms and
conditions on the transfer of the control of commodities and assess whether the Company complies with the new
accounting standards in terms of the time of recognition of revenue. (3) Collecting FSL's revenue transactions to
check the invoices, shipping documents and customs clearance documents and assess whether the revenues are
recorded in the appropriate accounting periods. (4) Obtaining letters of confirmation from customers to check the
exactness and completeness of the data about the balances of accounts receivable. (5) Checking the industrial and
commercial registration information of customers through public information platforms, including a list of the
related parties of each customer for checking the related-party relationship between FSL and customers. (6)
168
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Carrying out cut-off test on revenue, selecting samples of revenue recognition tradings before and after the balance
sheet date, obtaining relevant data such as outbound delivery orders, and evaluating whether revenue is recognized
in an appropriate period. (7) Analyzing the revenue and gross profit according to the product type, and judging
whether there is abnormal fluctuation in the current income amount. (8) Obtaining the record of return and exchange
to check whether there is any major abnormal return and exchange. (9) Checking the record of the revenue
transactions in the current period for exactness and completeness by using other audit procedures such as checking
the payment collections and sales returns subsequent to the current period and the letters of reconciliation between
FSL and customers.
IV Other Information
The Company’s management is responsible for the other information. The other information comprises all of the
information included in the Company’s 2021 Annual Report other than the financial statements and our auditor’s
report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
V Responsibilities of Management and Those Charged with Governance for Financial Statements
The Company’s management is responsible for the preparation of the financial statements that give a fair view in
accordance with CAS, and for designing, implementing and maintaining such internal control as the management
determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the management either intends to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI Auditor’s Responsibilities for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
169
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required by CAS to draw users’ attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, we should express modified opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for the direction,
supervision and performance of the Company audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any noteworthy deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
Beijing Zhongzheng Tiantong Certified Chinese CPA:
Public Accountants LLP （Engagement Partner）
Feng Wei
Chinese CPA:
Beijing China
Li Qiongqian
30 March 2022
170
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Foshan Electrical and Lighting Co., Ltd.
31 December 2021
Unit: RMB
Item 31 December 2021 31 December 2020
Current assets:
Monetary assets 1,384,218,544.27 981,249,699.49
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 328,248,125.61 407,619,201.36
Derivative financial assets
Notes receivable 594,208,093.58 140,972,143.00
Accounts receivable 1,452,728,276.48 1,134,233,235.70
Accounts receivable financing
Prepayments 20,119,957.02 11,994,745.05
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 34,082,909.41 20,194,968.19
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
Inventories 1,063,489,341.00 735,685,116.91
Contract assets 8,561,303.10
Assets held for sale 23,831,992.10
Current portion of non-current assets
Other current assets 85,693,988.74 175,090,368.85
Total current assets 4,995,182,531.31 3,607,039,478.55
171
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 181,545,123.09 181,365,016.32
Investments in other equity
1,474,860,785.15 3,305,501,030.06
instruments
Other non-current financial assets
Investment property 43,347,824.34
Fixed assets 1,323,076,326.60 685,707,548.55
Construction in progress 730,595,319.42 503,941,120.31
Productive living assets
Oil and gas assets
Right-of-use assets 13,497,139.00
Intangible assets 271,673,951.80 170,693,873.30
Development costs
Goodwill 16,211,469.82
Long-term prepaid expense 125,238,940.05 13,411,226.23
Deferred income tax assets 54,211,287.28 40,253,777.17
Other non-current assets 470,151,830.75 11,423,843.62
Total non-current assets 4,704,409,997.30 4,912,297,435.56
Total assets 9,699,592,528.61 8,519,336,914.11
Current liabilities:
Short-term borrowings 226,779,997.01
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 826,164,918.71 480,971,214.80
Accounts payable 1,554,585,231.38 1,059,674,020.99
Advances from customers 8,106,923.79 1,285,357.28
Contract liabilities 84,818,285.22 65,777,726.45
Financial assets sold under repurchase
agreements
172
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of securities
Employee benefits payable 88,925,889.20 82,485,090.47
Taxes payable 82,011,059.45 18,876,657.51
Other payables 298,811,112.73 76,668,330.66
Including: Interest payable
Dividends payable 15,646.07
Handling charges and commissions
payable
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
27,279,273.54
liabilities
Other current liabilities 8,038,471.15 5,503,702.07
Total current liabilities 3,205,521,162.18 1,791,242,100.23
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 7,862,803.22
Long-term payables
Long-term employee benefits payable
Provisions 7,671,948.69
Deferred income 14,414,666.71
Deferred income tax liabilities 187,691,340.19 414,670,609.97
Other non-current liabilities 22,653.46 1,244,064.84
Total non-current liabilities 217,663,412.27 415,914,674.81
Total liabilities 3,423,184,574.45 2,207,156,775.04
Owners’ equity:
Share capital 1,399,346,154.00 1,399,346,154.00
173
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 12,071,920.14 15,157,514.90
Less: Treasury stock 250,600,874.54
Other comprehensive income 984,638,432.01 2,349,388,533.61
Specific reserve
Surplus reserves 741,353,347.96 741,567,039.55
General reserve
Retained earnings 2,913,749,608.77 1,758,462,062.48
Total equity attributable to owners of the 5,800,558,588.34
6,263,921,304.54
Company as the parent
Non-controlling interests 475,849,365.82 48,258,834.53
Total owners’ equity 6,276,407,954.16 6,312,180,139.07
Total liabilities and owners’ equity 9,699,592,528.61 8,519,336,914.11
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
Person-in-charge of the Company’s accounting organ: Liang Yuefei
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2021 31 December 2020
Current assets:
Monetary assets 1,017,365,290.91 896,261,882.77
Held-for-trading financial assets 304,385,804.11 407,619,201.36
Derivative financial assets
Notes receivable 72,114,026.44 137,477,199.21
Accounts receivable 1,058,935,664.33 1,030,713,074.22
Accounts receivable financing
Prepayments 9,292,256.82 9,581,302.45
Other receivables 511,056,231.24 462,284,585.09
Including: Interest receivable
Dividends receivable
Inventories 617,905,747.50 615,106,650.81
174
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Contract assets 8,561,303.10
Assets held for sale
Current portion of non-current assets
Other current assets 36,097,001.14 139,275,518.71
Total current assets 3,635,713,325.59 3,698,319,414.62
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 1,243,081,889.11 536,949,311.73
Investments in other equity
1,474,860,785.15 3,305,501,030.06
instruments
Other non-current financial assets
Investment property 43,347,824.34
Fixed assets 576,386,630.08 628,174,755.88
Construction in progress 120,514,314.18 54,652,119.14
Productive living assets
Oil and gas assets
Right-of-use assets 9,827,757.94
Intangible assets 123,089,721.51 122,391,701.60
Development costs
Goodwill
Long-term prepaid expense 31,897,595.21 11,651,100.48
Deferred income tax assets 31,373,123.07 31,403,727.94
Other non-current assets 460,618,564.04 7,548,885.47
Total non-current assets 4,114,998,204.63 4,698,272,632.30
Total assets 7,750,711,530.22 8,396,592,046.92
Current liabilities:
Short-term borrowings 127,596,999.82
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 445,480,718.92 484,230,566.21
Accounts payable 949,520,447.82 1,108,208,382.75
Advances from customers 6,857,142.86
175
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Contract liabilities 64,120,388.15 53,572,800.70
Employee benefits payable 51,520,068.31 62,075,512.08
Taxes payable 57,207,865.54 7,819,839.48
Other payables 223,535,108.76 171,916,835.73
Including: Interest payable
Dividends payable
Liabilities directly associated with
assets held for sale
Current portion of non-current
2,800,876.97
liabilities
Other current liabilities 5,920,593.62 4,483,279.11
Total current liabilities 1,934,560,210.77 1,892,307,216.06
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 7,026,880.97
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income
Deferred income tax liabilities 173,532,376.03 414,670,609.97
Other non-current liabilities
Total non-current liabilities 180,559,257.00 414,670,609.97
Total liabilities 2,115,119,467.77 2,306,977,826.03
Owners’ equity:
Share capital 1,399,346,154.00 1,399,346,154.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 22,568,665.93 7,426,635.62
Less: Treasury stock 250,600,874.54
Other comprehensive income 984,695,765.83 2,349,389,658.23
Specific reserve
176
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Surplus reserves 741,353,347.96 741,567,039.55
Retained earnings 2,738,229,003.27 1,591,884,733.49
Total owners’ equity 5,635,592,062.45 6,089,614,220.89
Total liabilities and owners’ equity 7,750,711,530.22 8,396,592,046.92
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
Person-in-charge of the Company’s accounting organ: Liang Yuefei
3. Consolidated Income Statement
Unit: RMB
Item 2021 2020
1. Revenue 4,772,690,469.14 3,744,914,452.72
Including: Operating revenue 4,772,690,469.14 3,744,914,452.72
Interest income
Insurance premium income
Handling charge and
commission income
2. Costs and expenses 4,591,588,279.47 3,438,752,837.39
Including: Cost of sales 3,962,212,033.47 2,996,273,910.80
Interest expense
Handling charge and
commission expense
Surrenders
Net insurance claims paid
Net amount provided as
insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
expense
Taxes and surcharges 45,957,443.96 38,631,841.23
Selling expense 170,281,041.34 145,219,700.35
Administrative expense 206,336,111.81 155,365,373.75
R&D expense 203,681,619.16 108,885,296.71
Finance costs 3,120,029.73 -5,623,285.45
Including: Interest
5,790,716.89
expense
177
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Interest income 16,201,526.00 37,650,815.03
Add: Other income 16,311,903.24 28,989,528.20
Return on investment (“-” for loss) 36,121,053.68 44,236,204.90
Including: Share of profit or loss
2,260,497.27 2,351,681.39
of joint ventures and associates
Income from the derecognition
of financial assets at amortized cost (“-”
for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
4,649,669.44 4,785,700.00
for loss)
Credit impairment loss (“-” for loss) -4,657,215.52 -16,109,592.36
Asset impairment loss (“-” for loss) -30,891,621.47 -7,581,307.74
Asset disposal income (“-” for loss) 77,713,637.77 9,090,874.79
3. Operating profit (“-” for loss) 280,349,616.81 369,573,023.12
Add: Non-operating income 13,186,956.38 2,164,694.19
Less: Non-operating expense 1,188,471.54 3,854,417.99
4. Profit before tax (“-” for loss) 292,348,101.65 367,883,299.32
Less: Income tax expense 25,050,666.35 45,714,707.53
5. Net profit (“-” for net loss) 267,297,435.30 322,168,591.79
5.1 By operating continuity
5.1.1 Net profit from continuing
267,297,435.30 322,168,591.79
operations (“-” for net loss)
5.1.2 Net profit from discontinued
operations (“-” for net loss)
5.2 By ownership
5.2.1 Net profit attributable to
250,091,965.87 316,914,185.34
owners of the Company as the parent
5.2.1 Net profit attributable to
17,205,469.43 5,254,406.45
non-controlling interests
6. Other comprehensive income, net of tax -323,678,183.01 1,573,128,185.42
Attributable to owners of the Company
-323,706,852.48 1,573,128,185.42
as the parent
6.1 Items that will not be reclassified
-323,650,643.28 1,573,146,670.33
to profit or loss
6.1.1 Changes caused by
178
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
remeasurements on defined benefit
schemes
6.1.2 Other comprehensive
income that will not be reclassified to
profit or loss under the equity method
6.1.3 Changes in the fair value of
-323,650,643.28 1,573,146,670.33
investments in other equity instruments
6.1.4 Changes in the fair value
arising from changes in own credit risk
6.1.5 Other
6.2 Items that will be reclassified to
-56,209.20 -18,484.91
profit or loss
6.2.1 Other comprehensive
income that will be reclassified to profit or
loss under the equity method
6.2.2 Changes in the fair value of
investments in other debt obligations
6.2.3 Other comprehensive
income arising from the reclassification of
financial assets
6.2.4 Credit impairment allowance
for investments in other debt obligations
6.2.5 Reserve for cash flow hedges
6.2.6 Differences arising from the
translation of foreign
-56,209.20 -18,484.91
currency-denominated financial
statements
6.2.7 Other
Attributable to non-controlling interests 28,669.47
7. Total comprehensive income -56,380,747.71 1,895,296,777.21
Attributable to owners of the Company
-73,614,886.61 1,890,042,370.76
as the parent
Attributable to non-controlling interests 17,234,138.90 5,254,406.45
8. Earnings per share
8.1 Basic earnings per share 0.1854 0.2349
8.2 Diluted earnings per share 0.1836 0.2327
Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before the
combinations was RMB0.00, with the amount for last year being RMB0.00.
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
179
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Person-in-charge of the Company’s accounting organ: Liang Yuefei
4. Income Statement of the Company as the Parent
Unit: RMB
Item 2021 2020
1. Operating revenue 3,718,308,372.46 3,490,267,102.53
Less: Cost of sales 3,154,039,179.53 2,860,949,556.76
Taxes and surcharges 33,093,843.08 32,375,835.55
Selling expense 147,260,099.98 126,810,307.11
Administrative expense 148,755,543.99 129,489,381.94
R&D expense 141,658,884.16 96,789,792.55
Finance costs -176,513.65 -4,922,225.34
Including: Interest expense 1,265,956.56
Interest income 15,062,071.87 36,942,203.37
Add: Other income 9,664,951.38 27,001,177.15
Return on investment (“-” for loss) 78,883,660.55 87,972,948.71
Including: Share of profit or
2,260,497.27 2,351,681.39
loss of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
4,266,900.00 4,785,700.00
for loss)
Credit impairment loss (“-” for
-5,389,224.73 -10,299,990.56
loss)
Asset impairment loss (“-” for
-13,439,357.01 -6,366,924.12
loss)
Asset disposal income (“-” for
76,410,098.79 9,090,874.79
loss)
2. Operating profit (“-” for loss) 244,074,364.35 360,958,239.93
Add: Non-operating income 11,385,484.38 1,892,869.67
Less: Non-operating expense 552,333.59 2,969,626.09
3. Profit before tax (“-” for loss) 254,907,515.14 359,881,483.51
Less: Income tax expense 13,758,825.78 32,625,529.64
4. Net profit (“-” for net loss) 241,148,689.36 327,255,953.87
180
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
4.1 Net profit from continuing
241,148,689.36 327,255,953.87
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income, net of
-323,650,643.28 1,573,146,670.33
tax
5.1 Items that will not be reclassified
-323,650,643.28 1,573,146,670.33
to profit or loss
5.1.1 Changes caused by
remeasurements on defined benefit
schemes
5.1.2 Other comprehensive income
that will not be reclassified to profit or
loss under the equity method
5.1.3 Changes in the fair value of
-323,650,643.28 1,573,146,670.33
investments in other equity instruments
5.1.4 Changes in the fair value
arising from changes in own credit risk
5.1.5 Other
5.2 Items that will be reclassified to
profit or loss
5.2.1 Other comprehensive income
that will be reclassified to profit or loss
under the equity method
5.2.2 Changes in the fair value of
investments in other debt obligations
5.2.3 Other comprehensive income
arising from the reclassification of
financial assets
5.2.4 Credit impairment allowance
for investments in other debt obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the
translation of foreign
currency-denominated financial
statements
5.2.7 Other
6. Total comprehensive income -82,501,953.92 1,900,402,624.20
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
181
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
Person-in-charge of the Company’s accounting organ: Liang Yuefei
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2021 2020
1. Cash flows from operating activities:
Proceeds from sale of commodities
4,285,672,614.47 3,342,410,171.83
and rendering of services
Net increase in customer deposits and
interbank deposits
Net increase in borrowings from the
central bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Interest, handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Net proceeds from acting trading of
securities
Tax rebates 87,549,907.00 112,333,842.35
Cash generated from other operating
171,025,786.36 119,666,217.14
activities
Subtotal of cash generated from
4,544,248,307.83 3,574,410,231.32
operating activities
Payments for commodities and
3,427,906,318.91 2,077,887,848.58
services
Net increase in loans and advances to
customers
Net increase in deposits in the central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
182
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Net increase in interbank loans
granted
Interest, handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 831,530,484.58 690,837,445.67
Taxes paid 331,339,000.56 203,087,061.81
Cash used in other operating activities 230,497,589.04 207,769,543.36
Subtotal of cash used in operating 4,821,273,393.09
3,179,581,899.42
activities
Net cash generated from/used in -277,025,085.26
394,828,331.90
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 1,700,278,266.95 405,000,000.00
Return on investment 44,567,889.06 52,397,663.37
Net proceeds from the disposal of
fixed assets, intangible assets and other 114,907,595.26 9,814,672.12
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
54,990,047.00
activities
Subtotal of cash generated from
1,914,743,798.27 467,212,335.49
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other 326,012,276.21 232,678,180.62
long-lived assets
Payments for investments 484,531,545.66 311,628,442.49
Net increase in pledged loans granted
Net payments for the acquisition of
131,348,644.27
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
941,892,466.14 544,306,623.11
activities
Net cash generated from/used in
972,851,332.13 -77,094,287.62
investing activities
3. Cash flows from financing activities:
Capital contributions received 300,000.00
Including: Capital contributions by
300,000.00
non-controlling interests to subsidiaries
183
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Borrowings raised 127,386,000.00 48,000,000.00
Cash generated from other financing
activities
Subtotal of cash generated from
127,386,000.00 48,300,000.00
financing activities
Repayment of borrowings 113,682,766.67 277,807,744.88
Interest and dividends paid 139,734,157.74 258,879,038.49
Including: Dividends paid by
subsidiaries to non-controlling interests
Cash used in other financing activities 300,810,442.34
Subtotal of cash used in financing
554,227,366.75 536,686,783.37
activities
Net cash generated from/used in
-426,841,366.75 -488,386,783.37
financing activities
4. Effect of foreign exchange rates
-5,623,947.38 -4,698,084.75
changes on cash and cash equivalents
5. Net increase in cash and cash
263,360,932.74 -175,350,823.84
equivalents
Add: Cash and cash equivalents,
875,728,218.57 1,051,079,042.41
beginning of the period
6. Cash and cash equivalents, end of the
1,139,089,151.31 875,728,218.57
period
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
Person-in-charge of the Company’s accounting organ: Liang Yuefei
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2021 2020
1. Cash flows from operating activities:
Proceeds from sale of commodities
3,675,366,946.16 3,158,187,056.43
and rendering of services
Tax rebates 87,497,039.45 112,333,842.35
Cash generated from other operating
90,141,698.38 100,553,598.15
activities
Subtotal of cash generated from
3,853,005,683.99 3,371,074,496.93
operating activities
Payments for commodities and
3,127,675,269.69 2,140,803,641.40
services
184
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Cash paid to and for employees 598,949,378.79 531,803,255.67
Taxes paid 264,570,561.48 151,834,032.77
Cash used in other operating activities 158,324,765.43 187,443,912.27
Subtotal of cash used in operating 4,149,519,975.39
3,011,884,842.11
activities
Net cash generated from/used in -296,514,291.40
359,189,654.82
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 1,700,278,266.95 407,744,500.00
Return on investment 45,162,968.14 95,949,228.67
Net proceeds from the disposal of
fixed assets, intangible assets and other 114,426,514.66 9,787,055.02
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from
1,859,867,749.75 513,480,783.69
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other 116,516,470.65 183,152,607.04
long-lived assets
Payments for investments 1,123,715,946.11 328,313,442.49
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
1,240,232,416.76 511,466,049.53
activities
Net cash generated from/used in
619,635,332.99 2,014,734.16
investing activities
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised 127,386,000.00
Cash generated from other financing
activities
Subtotal of cash generated from
127,386,000.00
financing activities
Repayment of borrowings 277,807,744.88
Interest and dividends paid 135,847,668.70 258,879,038.49
Cash used in other financing activities 250,814,566.13
185
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Subtotal of cash used in financing 386,662,234.83
536,686,783.37
activities
Net cash generated from/used in -259,276,234.83
-536,686,783.37
financing activities
4. Effect of foreign exchange rates
-5,283,585.19 -4,630,938.55
changes on cash and cash equivalents
5. Net increase in cash and cash 58,561,221.57
-180,113,332.94
equivalents
Add: Cash and cash equivalents, 803,264,792.72
983,378,125.66
beginning of the period
6. Cash and cash equivalents, end of the 861,826,014.29
803,264,792.72
period
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
Person-in-charge of the Company’s accounting organ: Liang Yuefei
7. Consolidated Statements of Changes in Owners’ Equity
2021
Unit: RMB
2021
Equity attributable to owners of the Company as the parent
Other equity Other Non-c
Total
instruments Less: compr Surplu Retain ontroll
Item Capital Specifi Genera owners
Share
Treasu ehensi s ed Subtot ing
Prefe Perpe ’
capita reserve c l Other
ry ve reserve earnin al interes
rred tual equity
l Other s reserve reserve
stock incom s gs ts
share bond
s s e
1,399
1. Balance as at 15,157 2,349, 741,56 1,758, 6,263, 48,258 6,312,
,346,
the end of the ,514.9 388,53 7,039. 462,06 921,30 ,834.5 180,13
154.0
prior year 0 3.61 55 2.48 4.54 3 9.07
0
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction of
previous error
Adjustment
for business
186
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
combination
under common
control
Other
adjustments
1,399
2. Balance as at 15,157 2,349, 741,56 1,758, 6,263, 48,258 6,312,
,346,
the beginning of ,514.9 388,53 7,039. 462,06 921,30 ,834.5 180,13
154.0
the year 0 3.61 55 2.48 4.54 3 9.07
0
3. Increase/ -463,3 427,59 -35,77
250,60 -1,364, 1,155,
decrease in the -3,085, -213,6 62,716 0,531. 2,184.
0,874. 750,10 287,54
period (“-” for 594.76 91.59 .20 29 91
54 1.60 6.29
decrease)
3.1 Total -323,7 250,09 -73,61 17,234 -56,38
comprehensive 06,852 1,965. 4,886. ,138.9 0,747.
income .48 87 61 0 71
3.2 Capital -253,9 410,35 156,45
250,60
increased and -3,085, -213,6 00,160 6,392. 6,231.
0,874.
reduced by 594.76 91.59 .89 39 50
54
owners
3.2.1 -250,6
250,60 -250,6
Ordinary shares 00,874
0,874. 00,874
increased by .54
54 .54
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
-3,299, 410,35 407,05
-3,085, -213,6
3.2.4 Other 286.35 6,392. 7,106.
594.76 91.59
39 04
-135,8 -135,8 -135,8
3.3 Profit
47,668 47,668 47,668
distribution
.70 .70 .70
3.3.1
Appropriation to
187
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
surplus reserves
3.3.2
Appropriation to
general reserve
3.3.3
-135,8 -135,8 -135,8
Appropriation to
47,668 47,668 47,668
owners (or
.70 .70 .70
shareholders)
3.3.4 Other
3.4 Transfers -1,041, 1,041,
within owners’ 043,24 043,24
equity 9.12 9.12
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by surplus
reserves
3.4.4
Changes in
defined benefit
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
-1,041, 1,041,
income
043,24 043,24
transferred to
9.12 9.12
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
188
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
period
3.5.2 Used
in the period
3.6 Other
1,399 5,800, 475,84 6,276,
4. Balance as at 12,071 250,60 984,63 741,35 2,913,
,346, 558,58 9,365. 407,95
the end of the ,920.1 0,874. 8,432. 3,347. 749,60
154.0 8.34 82 4.16
period 4 54 01 96 8.77
0
2020
Unit: RMB
2020
Equity attributable to owners of the Company as the parent
Other equity Other Non-co
instruments Less: compr Surplu Retain ntrollin Total
Item Capital Specifi Genera
Share
Treasu ehensi s ed Subtot g owners’
Prefe Perp
capita reserve c l Other
ry ve reserve earnin al interest equity
rred etual
l Other s reserve reserve
stock incom s gs s
share bond
s s e
1,399
1. Balance as at 231,60 776,26 836,55 1,700, 4,944, 4,970,8
,346, 26,674,
the end of the 8,173. 0,348. 9,645. 426,91 201,23 75,664.
154.0 428.08
prior year 07 19 36 5.63 6.25 33
0
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction
of previous
error
Adjustment
for business
combination
under common
control
Other
adjustments
1,399
2. Balance as at 231,60 776,26 836,55 1,700, 4,944, 4,970,8
,346, 26,674,
the beginning 8,173. 0,348. 9,645. 426,91 201,23 75,664.
154.0 428.08
of the year 07 19 36 5.63 6.25 33
0
189
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3. Increase/
-216,4 1,573, -94,99 58,035 1,319, 1,341,3
decrease in the 21,584,
50,658 128,18 2,605. ,146.8 720,06 04,474.
period (“-” for 406.45
.17 5.42 81 5 8.29 74
decrease)
3.1 Total 1,573, 316,91 1,890, 1,895,2
5,254,4
comprehensive 128,18 4,185. 042,37 96,777.
06.45
income 5.42 34 0.76 21
3.2 Capital
-216,4 -94,99 -311,4 -295,11
increased and 16,330,
50,658 2,605. 43,263 3,263.9
reduced by 000.00
.17 81 .98 8
owners
3.2.1
Ordinary shares 16,330, 16,330,
increased by 000.00 000.00
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
-216,4 -94,99 -311,4 -311,44
3.2.4
50,658 2,605. 43,263 3,263.9
Other
.17 81 .98 8
-258,8 -258,8 -258,87
3.3 Profit
79,038 79,038 9,038.4
distribution
.49 .49 9
3.3.1
Appropriation
to surplus
reserves
3.3.2
Appropriation
to general
reserve
3.3.3 -258,8 -258,8 -258,87
Appropriation 79,038 79,038 9,038.4
to owners (or .49 .49 9
190
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
shareholders)
3.3.4 Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by
surplus reserves
3.4.4
Changes in
defined benefit
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balance as at 1,399 15,157 2,349, 741,56 1,758, 6,263, 6,312,1
48,258,
the end of the ,346, ,514.9 388,53 7,039. 462,06 921,30 80,139.
834.53
period 154.0 0 3.61 55 2.48 4.54 07
191
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
0
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qiongla n
Person-in-charge of the Company’s accounting organ: Liang Yuefei
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2021
Unit: RMB
2021
Other equity
Other Retaine
instruments Less: Total
Item Share Capital compreh Specific Surplus d
Preferr Perpet Treasury Other owners’
capital reserves ensive reserve reserves earning
ed ual Other stock equity
income s
shares bonds
1. Balance as at 1,399,3 1,591,8
7,426,63 2,349,38 741,567, 6,089,614,
the end of the 46,154. 84,733.
5.62 9,658.23 039.55 220.89
prior year 00 49
Add: Adjustment
for change in
accounting
policy
Adjustment for
correction of
previous error
Other
adjustments
2. Balance as at 1,399,3 1,591,8
7,426,63 2,349,38 741,567, 6,089,614,
the beginning of 46,154. 84,733.
5.62 9,658.23 039.55 220.89
the year 00 49
3. Increase/
-1,364,6 1,146,3
decrease in the 15,142,0 250,600, -213,691 -454,022,1
93,892.4 44,269.
period (“-” for 30.31 874.54 .59 58.44
0 78
decrease)
3.1 Total 241,14
-323,650 -82,501,95
comprehensive 8,689.3
,643.28 3.92
income 6
3.2 Capital
increased and 15,142,0 250,600, -213,691 -235,672,5
reduced by 30.31 874.54 .59 35.82
owners
192
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3.2.1
Ordinary shares 250,600, -250,600,8
increased by 874.54 74.54
owners
3.2.2
Capital increased
by holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
15,142,0 -213,691 14,928,33
3.2.4 Other
30.31 .59 8.72
-135,84
3.3 Profit -135,847,6
7,668.7
distribution 68.70
0
3.3.1
Appropriation to
surplus reserves
3.3.2
-135,84
Appropriation to -135,847,6
7,668.7
owners (or 68.70
0
shareholders)
3.3.3 Other
3.4 Transfers -1,041,0 1,041,0
within owners’ 43,249.1 43,249.
equity 2 12
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by surplus
reserves
193
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3.4.4
Changes in
defined benefit
schemes
transferred to
retained earnings
3.4.5 Other
comprehensive -1,041,0 1,041,0
income 43,249.1 43,249.
transferred to 2 12
retained earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used in
the period
3.6 Other
4. Balance as at 1,399,3 2,738,2
22,568,6 250,600, 984,695, 741,353, 5,635,592,
the end of the 46,154. 29,003.
65.93 874.54 765.83 347.96 062.45
period 00 27
2020
Unit: RMB
2020
Other equity
Other
instruments Less: Total
Item Share Capital compre Specific Surplus Retained
Preferr Perpet Treasur Other owners’
capital reserves hensive reserve reserves earnings
ed ual Other y stock equity
income
shares bonds
1. Balance as at 1,399,
166,211, 776,242 836,559 1,523,507 4,701,868,3
the end of the 346,15
779.15 ,987.90 ,645.36 ,818.11 84.52
prior year 4.00
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction of
previous error
194
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Other
adjustments
2. Balance as at 1,399,
166,211, 776,242 836,559 1,523,507 4,701,868,3
the beginning of 346,15
779.15 ,987.90 ,645.36 ,818.11 84.52
the year 4.00
3. Increase/
-158,78 1,573,1
decrease in the -94,992, 68,376,91 1,387,745,8
5,143.5 46,670.
period (“-” for 605.81 5.38 36.37
3 33
decrease)
3.1 Total 1,573,1
327,255,9 1,900,402,6
comprehensive 46,670.
53.87 24.20
income 33
3.2 Capital
-158,78
increased and -94,992, -253,777,74
5,143.5
reduced by 605.81 9.34
3
owners
3.2.1
Ordinary shares
increased by
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
-158,78
-94,992, -253,777,74
3.2.4 Other 5,143.5
605.81 9.34
3
3.3 Profit -258,879, -258,879,03
distribution 038.49 8.49
3.3.1
Appropriation
to surplus
reserves
3.3.2
-258,879, -258,879,03
Appropriation
038.49 8.49
to owners (or
195
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
shareholders)
3.3.3 Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by
surplus reserves
3.4.4
Changes in
defined benefit
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balance as at 1,399, 2,349,3
7,426,6 741,567 1,591,884 6,089,614,2
the end of the 346,15 89,658.
35.62 ,039.55 ,733.49 20.89
period 4.00 23
196
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan
Person-in-charge of the Company’s accounting organ: Liang Yuefei
III Company profile
Foshan Electrical and Lighting Co., Ltd. (hereinafter referred to as “the Company”), a joint-stock limited
company jointly founded by Foshan Electrical and Lighting Company, Nanhai Wuzhuang Color Glazed Brick
Field, and Foshan Poyang Printing Industrial Co. on 20 October 1992 by raising funds under the approval of YGS
(1992) No. 63 Document issued by the Joint Examination Group for Experimental Enterprises in Stock System of
Guangdong Province and the Economic System Reform Commission of Guangdong Province, is an enterprise
with its shares held by both the corporate and the natural persons. As approved by China Securities Regulatory
Commission with Document (1993) No. 33, the Company publicly issued 19.3 million shares of social public
shares (A shares) to the public in October 1993, and was listed in Shenzhen Stock Exchange for trade on 23
November 1993. The Company was approved to issue 50,000,000 B shares on 23 July 1995. And, as approved to
change into a foreign-invested stock limited company on 26 August 1996 by (1996) WJMZEHZ No. 466
Document issued by the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China.
On 11 December 2000, as approved by China Securities Regulatory Commission with ZJGS Zi [2000] No. 175
Document, the Company additionally issued 55,000,000 A shares. At approved by the Shareholders’ General
Meeting 2006, 2007, 2008, 2014 and 2017 the Company implemented the plan of capitalization of capital reserve,
after the transfer, the registered capital of the Company has increased to RMB1,399,346,154.00.
Credibility code of the Company: 91440000190352575W.
Legal representative: Mr. Wu Shenghui
Address: No. 64, Fenjiang North Road, Foshan, Guangdong Province
Main business of the company and its subsidiaries (hereinafter referred to as “the Company”): lighting products,
electro technical products and vehicle lamp products .
The business term of the Company is long-term, which was calculated from the date of issuance of License of
Business Corporation.
The Financial Report was approved and authorized for issue by the Board of Directors on 30 March 2022.
The consolidation scope of the financial statement during the Reporting Period including the Company and FSL
Chanchang Optoelectronics Co., Ltd. ( referred to as “Chanchang Company”), Foshan Taimei Times Lamps and
Lanterns Co., Ltd. ( referred to as “Taimei Company”), Nanjing Fozhao Lighting Components Co., Ltd. ( referred
to as “Nanjing Fozhao”), FSL (Xinxiang) Lighting Co., Ltd. ( referred to as “Xinxiang Company”), Foshan
Lighting Lamps & Components Co., Ltd. ( referred to as “Lamps & Components Company”), FSL Zhida Electric
Technology Co., Ltd ( referred to as “Zhida Company”), FSL LIGHTING GMBH (referred to as “FSL
LIGHTING”), Foshan Hortilite Optoelectronics Co.,Ltd. (referred to as “Hortilite Company”), Fozhao (Hainan)
Technology Co., Ltd. (referred to as “Hainan Technology”), Foshan Kelian New Energy Technology Co., Ltd.
(referred to as “Foshan Kelian”) and Nanning Liaowang Auto Lamp Co., Ltd. (referred to as “Nanning
Liaowang”), in total 11 subsidiaries and Liuzhou Guige Lighting Technology Co., Ltd. (referred to as “Liuzhou
Lighting”), Liuzhou Guige Foreshine Technology Co., Ltd. (referred to as “Liuzhou Foreshine”), Chongqing
197
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Guinuo Lighting Technology Co., Ltd. (referred to as “Chongqing Guinuo”), Qingdao Guige Lighting Technology
Co., Ltd. (referred to as “Qingdao Lighting”) and Indonesia Liaowang Auto Lamp Co., Ltd. (referred to as
“Indonesia Liaowang”) in total five sub-subsidiary.
Compared with the previous period, the consolidation scope of the current financial statements added two
subsidiaries of Nanning Liaowang and Hainan Technology, and five sub-subsidiaries of Liuzhou Guige Lighting,
Liuzhou Guige Foreshine, Chongqing Guinuo, Qingdao Lighting and Indonesia Liaowang, and deleted two
subsidiaries, Foshan Electric Lighting New Light Source Technology Co., Ltd. (referred to as "New Light Source")
and Hunan Keda New Energy Investment and Development Co., Ltd. (referred to as "Hunan Keda"). For details,
please refer to Note VIII "Changes in the Scope of Consolidation" and Note IX "Interests in Other Subjects".
IV Basis for Preparation of Financial Statements
1. Preparation Basis
The financial statements of the Company are based on the continuing operation, and are confirmed and measured
according to the actual transactions and events, the Accounting Standards for Business Enterprises - Basic
Standards, other various specific accounting standards, the application guide, the interpretation of accounting
standards for business enterprises (hereinafter referred to as the Accounting Standards for Business Enterprises).
And based on the following important accounting policies, and accounting estimations, they are prepared
according to the relevant regulations of Rules for the Information Disclosure of Companies Publicly Issuing
Securities No. 15 - General Provisions on Financial Reporting of China Securities Regulatory Commission
(Revised in 2014). Except the Cash Flow Statement prepared under the principle of cash basis, the rest of financial
statement of the Company are prepared under the principle of accrual basis.
The Company didn’t find anything like being suspicious of the ability of continuing operation within 12 months
from the end of the Reporting Period with all available information.
2. Continuation
The Company has no matters affecting the continuing operation of the Company and is expected to have the
ability to continue to operate in the next 12 months. The financial statements of the Company are prepared on the
basis of continuing operation.
V Important Accounting Policies and Estimations
Reminders of the specific accounting policies and accounting estimations:
The Company confirmed the specific accounting policies and estimations according to production and operation
features, mainly reflecting in the method of provision for expected credit loss of accounts receivables (Note 12.
Accounts Receivable), depreciation of fixed assets and amortization of intangible assets (Note 24. Fixed Assets
and Note 30. Intangible Assets), and recognition of revenue (Note 39. Revenue), etc.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with the Accounting Standards for Business
Enterprises, which factually and completely present the Company’s and the consolidated financial positions,
business results and cash flows, as well as other relevant information.
198
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
2. Fiscal Year
A fiscal year starts on January 1st and ends on December 31st according to the Gregorian calendar.
3. Operating Cycle
An operating cycle for the Company is 12 months, which is also the classification criterion for the liquidity of its
assets and liabilities.
4. Recording Currency
Renminbi is the recording currency for the statements of the Company, and the financial statements are listed and
presented by Renminbi.
5. Accounting Treatment Methods for Business Combinations under the Same Control or not under the
Same Control
1. Business Combinations under the Same Control
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes
payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the
book value among final controller’s consolidated financial statement of the owner's equity of the merged
enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the
long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the
debts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient to
dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,
regard the share of the book value among final controller’s consolidated financial statement of the owner's equity
of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocks
issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity
investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is
insufficient to dilute, the retained earnings shall be adjusted.
2. Business Combinations not under the Same Control
The Company measured the paid assets as the consideration of business combination and liabilities happened or
undertaken by fair value. The difference between fair value and its book value shall be included into the current
losses and gains. The Company distributed combined cost on the purchasing date.
The difference of the combination cost greater than the fair value of the identifiable net assets of the acquiree
acquired is recognized as goodwill; the difference of the combination cost less than the fair value of the
identifiable net assets of the acquiree acquired is included into current losses and gains.
As for the assets other than intangible assets acquired from the acquiree in a business combination (not limited to
the assets which have been recognized by the acquiree), if the economic benefits brought by them are likely to
flow into the Company and their fair values can be measured reliably, they shall be separately recognized and
measured in light of their fair values; intangible asset whose fair value can be measured reliably shall be
separately recognized as an intangible asset and shall measured in light of its fair value; As for the liabilities other
than contingent liabilities acquired from the acquiree, if the performance of the relevant obligations is likely to
result in any out-flow of economic benefits from the Company, and their fair values can be measured reliably,
199
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
they shall be separately recognized and measured in light of their fair values; As for the contingent liabilities of
the acquiree, if their fair values can be measured reliably, they shall separately recognized as liabilities and shall
be measured in light of their fair values.
6. Methods for Preparing Consolidated Financial Statements
1. Principle of Determining the Scope of Consolidation
The scope of consolidation of the consolidated financial statements of the Company is determined on the basis of
control. Control means that the investors has the right to invest in the investee and enjoy a variable return through
the participation of the relevant activities of the investee, and has the ability to use the power over the investee to
affect the amount of its return. The Company includes the subsidiaries with actual right of control (including
separate entity controlled by the Parent Company) into consolidated financial statements.
2. Principles, Procedures and Methods for the Preparation of Consolidated Statements
(1) Principles, Procedures and Methods for the Preparation of Consolidated Statements
All subsidiaries included into the scope of consolidated financial statements adopted same accounting policies and
fiscal year with the Company. If the accounting policies and fiscal year of the subsidiaries are different to the
Company’s, necessary adjustment should be made in accordance with the Company’s accounting policies and
fiscal year when consolidated financial statements are prepared.
The consolidated financial statements are based on the financial statements of the Parent Company and
subsidiaries included into the consolidated scope. The consolidated financial statements are prepared by the
Company who makes adjustment to long-term equity investment to subsidiaries by equity method according to
other relevant materials after the offset of the share held by the Parent Company in the equity capital investment
of the Parent Company and owner’s equity of subsidiaries and the significant transactions and intrabranch within
the Company.
For the balance formed because the current loss shared by the minority shareholders of the subsidiary is more than
the share enjoyed by the minority shareholders of the subsidiary in the initial shareholders’ equity, if the Articles
of Corporation or Agreement didn’t stipulate that minority shareholders should be responsible for it, then the
balance need to offset the shareholders’ equity of the Company; if the Articles of Corporation or Agreement
stipulated that minority shareholders should be responsible for it, then the balance need to offset the minority
shareholders’ equity.
(2) Treatment Method of Increasing or Disposing Subsidiaries during the Reporting Period
During the Reporting Period, if the subsidiaries were added due to Business combinations under the same control,
then initial book balance of consolidated balance sheet need to be adjusted; the income, expenses, and profits of
subsidiaries from the combination’s period-begin to the end of the reporting period need to be included into
consolidated income statement; the cash flow of subsidiaries from the combination’s period-begin to the end of
the reporting period need to be included into consolidated cash flow statement. if the subsidiaries were added due
to Business combinations not under the same control, then initial book balance of consolidated balance sheet
doesn’t need to be adjusted; the income, expenses, and profits of subsidiaries from the purchasing date to the end
of the reporting period need to be included into consolidated income statement; the cash flow of subsidiaries from
purchasing date to the end of the reporting period need to be included into consolidated cash flow statement.
During the Reporting Period, if the Company disposed the subsidiaries, then the income, expenses, and profits of
subsidiaries from period-begin to the disposal date need to be included into consolidated income statement; the
cash flow of subsidiaries from period-begin to the disposal date need to be included into consolidated cash flow
statement.
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7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above and be divided into
joint operations and joint ventures.
When the Company is the joint venture party of the joint operations, should recognize the following items related
to the interests share of the joint operations:
(1) Recognize the assets individually held and the assets jointly held by recognizing according to the holding
share;
(2) Recognize the liabilities undertook individually and the liabilities jointly held by recognizing according to the
holding share;
(3) Recognize the revenues occurred from selling the output share of the joint operations enjoy by the Company;
(4) Recognize the revenues occurred from selling the assets of the joint operations according to the holding share;
(5) Recognize the expenses individually occurred and the expenses occurred from the joint operations according
to the holding share of the Company.
When the Company is the joint operation party of the joint ventures, should recognize the investment of the joint
ventures as the long-term equity investment and be measured according g to the said methods of the notes of the
long-term equity investment of the financial statement.
8. Recognition Standard for Cash and Cash Equivalents
In the Company’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for
cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,
which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign Currency and Accounting Method for Foreign Currency
1. Foreign Currency Business
Foreign currency shall be recognized by employing systematic and reasonable methods, and shall be translated
into the amount in the functional currency at the exchange rate which is approximate to the spot exchange rate of
the transaction date. On the balance sheet date, the foreign currency monetary items shall be translated at the spot
exchange rate. The balance of exchange arising from the difference between the spot exchange rate on the balance
sheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date shall be
recorded into the profits and losses at the current period except that the balance of exchange arising from foreign
currency borrowings for the purchase and construction or production of qualified assets shall be capitalized. The
foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange
rate on the transaction date.
2. Translation of Foreign Currency Financial Statements
The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet
date. Among the owner’s equity items, except for the items as “undistributed profits”, other items shall be
translated at the spot exchange rate at the time when they are incurred. The revenues and the expenses items of the
income statement should be translated according to the spot rate on the exchange date.
The difference of the foreign currency financial statements occurred from the above translation should be listed
under the “other comprehensive income” item of the owners’ equity of the consolidated financial statement. As
for the foreign currency items which actually form into the net investment of the foreign operation, the exchange
difference occurred from the exchange rate changes should be listed under the “other comprehensive income” of
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the owners’ equity among the consolidated financial statement when compile the consolidated financial statement.
When disposing the foreign operation, as for the discounted difference of the foreign financial statement related to
the foreign operation should be transferred in the current gains and losses according to the proportion. The foreign
cash flow adopts the spot exchange rate on the occurring date of the cash flow. And the influenced amount of the
exchange rate changes should be individually listed among the cash flow statement.
10. Financial Instruments
Financial instruments refer to the contracts that constitute a company’s financial assets and the financial liabilities
or equity instruments of other units.
1. Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a financial asset or financial
liability.
A financial asset (or part of a financial asset or part of a group of similar financial assets) that meets the following
conditions should be derecognized, or in other words, be written off from its account and balance sheet:
1) The right to receive cash flow from the financial asset has expired;
2) The right to receive cash flow from the financial asset has been transferred, or the “transfer” agreement
specifies the obligation to duly pay the full amount of cash flow received to a third party; and (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.
A financial liability that has been fulfilled, canceled or expired should be derecognized. If a financial liability is
replaced with another financial liability by the same creditor on almost entirely different terms materially, or the
terms for an existing liability have been almost fully revised materially, such replacement or revision should be
treated as derecognition of the original liability and recognition of the new liability, and the difference should be
included into current profits/losses.
A financial asset traded in a conventional manner should be recognized and derecognized by trade-date
accounting. The trading of financial assets in a conventional manner means that financial assets are received or
delivered by the deadline as specified in regulations or general practice according to contract provisions. Trade
date refers to the date committed by the Company to buy or sell a financial asset.
2. Classification and measurement of financial assets
The Company classifies the financial assets when initially recognized into financial assets measured at amortized
cost, financial assets measured by the fair value and the changes recorded in other comprehensive income and
financial assets at fair value through profit or loss based on the business model for financial assets management
and characteristics of contractual cash flow of financial assets. Financial assets initially recognized shall be
measured at their fair values. For accounts receivable and notes receivable excluding major financing or without
regard to financing over one year generated from ales of commodities or provision of labor services, the initial
measurement shall be conducted based on the transaction price.
For financial assets at fair value through profit or loss, the transaction expenses thereof shall be directly included
into the current profit or loss; for other financial assets, the transaction expenses thereof shall be included into the
initially recognized amount.
The subsequent measurement of financial assets depends on the classification thereof:
(1) Debt instrument investments measured at amortized cost
Financial assets meeting the following conditions at the same time shall be classified as financial assets measured
at amortized cost: the business mode of the Company to manage such financial assets targets at collecting the
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contractual cash flow. The contract of such financial assets stipulates that the cash flow generated in the specific
date is the payment of the interest based on the principal and outstanding principal amount. The interest income
for this kind of financial assets shall be recognized by effective interest method, and the gains or losses generated
from the derecognition, modification or impairment shall all be included into the current profit or loss. This kind
of financial assets mainly consist of monetary capital, accounts receivable and notes receivable, other receivables,
investments in debt obligations and long-term receivables. The Company presents the investments in debt
obligations due within one year since the balance sheet date and long-term receivables as current portion of
non-current assets and the original investments in debt obligations with maturity date within one year as other
current assets.
(2) Investments in debt instruments measured at fair value and changes thereof recorded into other comprehensive
income
Financial assets meeting the following conditions at the same time shall be classified as financial assets measured
at fair value and changes thereof recorded into other comprehensive income: the business mode of the Company
to manage such financial assets takes contract cash flow collected as target and selling as target. The contract of
such financial assets stipulates that the cash flow generated in the specific date is the payment of the interest based
on the principal and outstanding principal amount. The interest income for this kind of financial assets shall be
recognized by effective interest method. All changes in fair value should be included into other comprehensive
income except for interest income, impairment losses and exchange differences, which should be recognized as
current profits/losses. When a financial asset is derecognized, the cumulative gains or losses included into other
comprehensive income previously should be transferred out and included into current profits/losses. Such
financial assets should be presented as other credit investments. Other credit investments that will mature within
one year from the date of balance sheet should be presented as non-current assets due within one year, and other
credit investments with the original maturity date coming within one year should be presented as other current
assets.
(3) Equity instrument investment measured at fair value with changes included into other comprehensive income
The Company irrevocably chooses to designate part of non-trading equity instrument investments as financial
assets measured at fair value with changes included into other comprehensive income. Only related dividend
income (excluding the dividend income confirmed to be recovered as part of investment costs) will be recognized
into current profits/losses, while subsequent changes in fair value will be recognized into other comprehensive
income without the withdrawal of impairment provisions required. When a financial asset is derecognized, the
cumulative gains or losses included into other comprehensive income previously should be recognized into
retained earnings. Such financial assets should be presented as other equity investments.
A financial asset that meets one of the following conditions is classified as a trading financial asset: The financial
asset has been acquired in order to be sold or repurchased in the near future; the financial asset is part of an
identifiable financial instrument portfolio under centralized management, and there is evidence proving that the
company has recently adopted a short-term profit model; it is a derivative instrument, but derivative instruments
that are designated as and are effective hedging instruments and those conforming with financial guarantee
contracts are excluded.
(4) Financial assets at fair value through profit or loss
The Company classifies financial assets except for above-mentioned financial assets measured with amortized
cost and financial assets measured with fair value whose change is included into other comprehensive income into
financial assets at fair value through profit or loss. The subsequent measurement of such kind of financial assets
shall be conducted by fair value method and all changes in fair value shall be recorded into the current profit or
loss. Such financial assets shall be presented as trading financial assets, and those will due over one year since the
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balance sheet date and expectedly held over one year shall be presented as other non-current financial assets.
3. Classification and measurement of financial liabilities
The Company’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value
through profit or loss, other financial liabilities and derivative instruments designated as effective hedging
instruments. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately
recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are
included in the initial recognition amounts.
The subsequent measurement of financial liabilities depends on the classification thereof:
(1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include trading financial liabilities (including the derivative
instruments belonging to financial liabilities) and financial liabilities designated at the initial recognition to be
measured by the fair value and their changes are recorded in the current profit or loss.
A financial liability that meets one of the following conditions is classified as a trading financial liability: The
financial liability has been undertaken in order to be sold or repurchased in the near future; the financial liability is
part of an identifiable financial instrument portfolio under centralized management, and there is evidence proving
that the company has recently adopted a short-term profit model; it is a derivative instrument, but derivative
instruments that are designated as and are effective hedging instruments and those conforming with financial
guarantee contracts are excluded. Trading financial liabilities (including derivative instruments classified as
financial liabilities) should be subsequently measured at fair value, and all changes in fair value should be
recorded into current profits/losses, except for those related to hedging accounting.
(2) Other financial liabilities
For such kind of financial liabilities, the subsequent measurement shall be conducted by effective interest method
based on the amortized cost.
4. Impairment of financial instruments
Based on expected credit losses, the Company carries out impairment treatment on financial assets measured at
amortized cost and debt instrument investments measured at fair value with changes included into other
comprehensive income, rental receivables, contract assets and financial assets and recognizes bad debt provision.
Credit losses refer to the difference between all contract cash flows discounted by the original actual interest rate
receivable according to contracts and all cash flows expected to be received by the Company, which is the present
value of all cash shortfalls. The financial assets purchased by or originating from the Company with credit
impairment should be discounted by the actual interest rate of the financial assets after credit adjustment.
In respect of receivable accounts that do not contain significant financing components, the Company uses the
simplified measurement method to measure bad debt provision by the amount equivalent to the expected credit
losses of the whole duration.
In respect of receivable accounts that contain significant financing components, the Company opts to use the
simplified measurement method to measure bad debt provision by the amount equivalent to the expected credit
losses for the whole duration.
For other financial assets and financial guarantee contracts than the above using the simplified measurement
method, the Company on the balance sheet date assesses whether their credit risks have increased substantially
since the initial recognition. If the credit risks have not increased substantially since the initial recognition and are
in the first stage, the Company will measure bad debt provision by the amount equivalent to the expected credit
losses for the next 12 months and calculate interest income by the book balance and the actual interest rate; if the
credit risks have increased obviously without credit impairment since the initial recognition and are in the second
stage, the Company will measure bad debt provision by the amount equivalent to the expected credit losses for the
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whole duration and calculate interest income by the book balance and the actual interest rate; if the credit risks
have increased substantially with credit impairment since the initial recognition and are in the third stage, the
Company will measure bad debt provision by the amount equivalent to the expected credit losses for the whole
duration and calculate interest income by the amortized cost and the actual interest rate. For financial instruments
with only low credit risks on the balance sheet date, the Company assumes that their credit risks have not
increased substantially since the initial recognition.
The Company 1) assesses expected credit losses of financial assets with credit impairment based on individual
items; 2) assesses expected credit losses of financial assets that are not derecognized but with changes in contract
cash flows due to revision of or renegotiation on contracts by the Company and the counterparty, based on
individual items; 3) assesses expected credit losses of other financial assets based on age combination.
The Company considers related past matters, current conditions, the reasonableness of the forecast on future
economic conditions and well-founded information when assessing expected credit losses.
The Company’s information of the judgment standards for remarkable increase in credit risks, definition of assets
with incurred credit impairment and assumption of measurement on expected credit losses is disclosed in this
Note 12 Accounts Receivable.
When no longer reasonably expects to recover all or partial contractual cash flow of financial assets, the Company
directly writes down the carrying amount of the financial assets.
5. Financial instruments offset
a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet when
the following conditions are met at the same time: When the Company has a legal right that is currently
enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net
basis, or to realize the financial asset and settle the financial liability simultaneously.
6. Financial guarantee contract
A financial guarantee contract refers to a contract in which a specific debtor shall compensate the contract holder
suffering the losses when the debtor is unable to repay the debt in due course according to the debt instrument
terms. Financial guarantee contracts are measured at fair value at the initial recognition. After the initial
recognition, all financial guarantee contracts should be subsequently measured by the higher amount between the
amount of bad debt provision for expected credit losses recognized on the balance sheet date and the balance of
the initially recognized amount deducting the cumulative amortization recognized according to the income
recognition principle, except for the financial guarantee contracts designated as financial liabilities measured at
fair value with changes recorded into current profits/losses.
7. Derivative financial instruments
The Company uses derivative financial instruments, which are initially measured at the fair value on the signature
date of the derivative transaction contract and subsequently measured at their fair value. A derivative financial
instrument with a positive fair value is recognized as an asset and that with a negative fair value is recognized as a
liability. Gains or losses from changes in the fair value of derivative instruments are directly recognized into
current profits/losses.
For the financial assets that are not derecognized but with changes in contract cash flows due to revision of or
renegotiation on contracts by the Company and the counterparty, the Company recalculates the book balance of
the financial assets according to the renegotiated or revised contract cash flows by the discounted value of the
original actual interest rate (or the actual interest rate after credit adjustment). Relevant gains or losses are
recorded into current profits/losses. Costs or expenses for the revision of financial assets are adjusted to the
revised book balance of financial assets and amortized in the remaining period of the revised financial assets.
8. Transfer of financial assets
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As for the Company transferred nearly all of the risks and rewards related to the ownership of a financial asset to
the transferee, should derecognize the financial assets; as for maintained nearly all of the risks and rewards related
to the ownership of a financial asset, should continue to recognize the transferred financial assets.
Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a
financial asset, it shall deal with it according to the circumstances as follows, respectively: (1) If it gives up its
control over the financial asset, it shall stop recognizing the financial asset and recognize the assets and liabilities
generated; (2) If it does not give up its control over the financial asset, it shall, according to the extent of its
continuous involvement in the transferred financial asset, recognize the related financial asset and recognize the
relevant liability accordingly.
11. Notes Receivable
Category Accounting estimate policy
Bank’s acceptance bill The Company evaluates that the portfolio has relatively low credit risks, and
generally no provision for impairment is made.
12. Accounts Receivable
The Company withdraws the impairment loss for accounts receivable excluding significant financing component
with the simplified method.
1. Accounts Receivable with Significant Single Amount for which the Expected Credit Loss is Made Individually
Definition or amount criteria for an account Making separate expected credit loss for accounts receivable with a significant
receivable with a significant single amount single amount
Making separate expected credit loss for accounts For an account receivable with a significant single amount, the impairment test
receivable with a significant single amount shall be carried out on it separately. If there is any objective evidence of
impairment, the impairment loss is recognized and the expected credit loss is made
according to the difference between the present value of the account receivable’s
future cash flows and its carrying amount.
2. Accounts Receivable for which the Expected Credit Loss is Withdrawn by Credit Risk Characteristics
Group name Withdrawal method of expected credit loss
Common transaction group Aging analysis method
Internal transaction group Other methods
In the groups, those adopting aging analysis method to withdraw expected credit loss:
Aging Withdrawal proportion of expected credit loss
Within 1 year (including 1 year) 3%
1 to 2 years 10%
2 to 3 years 30%
3 to 4 years 50%
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4 to 5 years 80%
Over 5 years 100%
3. Accounts Receivable with an Insignificant Single Amount but for which the Expected Credit Loss is Made
Independently
Reason of individually withdrawing expected credit loss There are definite evidences indicate the obvious difference of thee
return ability
Withdrawal method for expected credit loss Recognizing the impairment loss and withdrawing the expected credit
loss according to the difference between the present value of the account
receivable’s future cash flows and its carrying amount.
13. Accounts Receivable Financing
Not applicable
14. Other Receivables
Recognition method and accounting treatment for expected credit losses of other receivables
Refer to Note 12 Accounts Receivable for details about the recognition method and accounting treatment for
expected credit losses of other receivables which is the same as that of accounts receivable.
15. Inventories
1. Classification of Inventory
Inventory refers to finished products, goods in process, and materials consumed in the production process or the
provision of labor services held by the Company for sale in daily activities, mainly including raw materials, goods
in process, materials in transit, finished products, commodities, turnover materials, and commissioned processing
materials. Turnover materials include low-value consumables and packaging.
2. Pricing Method of Inventory Sent Out
The inventory is valued at actual cost when acquired, and inventory costs include procurement costs, processing
costs and other costs. The weighted average method is used when receiving or sending out inventory.
3. Basis for Determining the Net Realizable Value of Inventory and the Method of Withdrawal for Inventory
Impairment
Net realizable value refers to the estimated selling price of the inventory minus the estimated cost to be incurred at
the time of completion, the estimated selling expenses and the relevant taxes and fees in daily activities. In
determining the net realizable value of inventory, the conclusive evidence obtained is used as the basis and the
purpose of holding the inventory and the impact of the events after the balance sheet date should be taken into
account.
For finished products, the materials used for sale and other goods used for direct sale, the net realizable value is
determined by the estimated selling price of the inventory minus the estimated selling expenses and related taxes
in the process of normal production and operation.
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For materials inventory needs to be processed, the net realizable value is determined by the estimated selling price
of the finished products minus the estimated cost to be incurred, the estimated sales costs and the relevant taxes
and fees in the process of normal production and operation.
4. Inventory System
The inventory system of the Company is perpetual inventory.
5. Amortization Method of Turnover Materials
Low-value consumables are amortized in one-off method.
The packaging is amortized in one-off method.
16. Contract Assets
The Company presents the right possessed to collect consideration from customers unconditionally (only
depending on the passing of time) as accounts receivable, and the right to charge the consideration through
transferring any commodity to clients which depends on other factors except the passing of time as contract assets.
As for the recognition method and accounting treatment for expected losses of contract assets, please refer to Note
12. Accounts Receivable.
17. Contract Cost
Not applicable
18. Assets Held for Sale
1. Assets Held for Sale
When a company relies mainly on selling (including the exchanges of non-monetary assets with commercial
substance) instead of continuing to use a non-current asset or disposal group to recover its book value, the
non-current asset or disposal group is classified as asset held for sale. The non-current assets mentioned above do
not include investment properties that are subsequently measured by the fair value model, biological assets
measured by fair value less net selling costs, assets formed from employee remuneration, financial assets, deferred
income tax assets and rights generated from insurance contracts.
Disposal group refers to a group of assets that are disposed of together as a whole through sale or other means in a
transaction, and the liabilities directly related to these assets transferred in the transaction. In certain
circumstances, the disposal group includes goodwill obtained in business combination.
The Company recognizes non-current assets or disposal groups that meet both of the following conditions as held
for sale: ① Assets or disposal groups can be sold immediately under current conditions based on the practice of
selling such assets or disposal groups in similar transactions; ② Sales are highly likely to occur, that is, the
Company has already made a resolution on a sale plan and obtained a certain purchase commitment, and the sale
is expected to will be completed within one year, and the sale has been approved if relevant regulations require
relevant authority or regulatory authority of the Company to approve it.
Non-current assets or disposal groups specifically obtained by the Company for resale will be classified by the
Company as a held-for-sale category on the acquisition date when they meet the stipulated conditions of
“expected to be sold within one year” on the acquisition date, and may well satisfy the category of held-for-sale
within a short time (which is usually 3 months).
If one of the following circumstances cannot be controlled by the Company and the transaction between
non-related parties fails to be completed within one year, and there is sufficient evidence that the Company still
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promises to sell the non-current assets or disposal groups, the Company should continue to classify the
non-current assets or disposal groups as held-for-sale: ①The purchaser or other party unexpectedly sets
conditions that lead to extension of the sale. The Company has already acted on these conditions in a timely
manner and it is expected to be able to successfully deal with the conditions that led to the extension of the sale
within one year after the conditions were set. ②Due to unusual circumstances, the non-current assets or disposal
groups held for sale failed to be sold within one year. In the first year, the Company has taken necessary measures
for these new conditions and the assets or disposal groups meet the conditions of held-for-sale again.
If the Company loses control of a subsidiary due to the sale of investments to its subsidiaries, whether or not the
Company retains part of the equity investment after the sale, when the proposed sale of the investment to the
subsidiary meets the conditions of held- for-sale, the investment to the subsidiary will be classified as
held-for-sale in the individual financial statement of the parent company, and all the assets and liabilities of the
subsidiary will be classified as held-for-sale in the consolidated financial statement.
When the company initially measures or re-measures non-current assets or disposal groups held for sale on the
balance sheet date, if the book value is higher than the fair value minus the net amount of the sale costs, the book
value will be written down to the net amount of fair value minus the sale costs, and the amount written down will
be recognized as impairment loss of assets and included in the current profit and loss, and provision for
impairment of held-for-sale assets will be made. For the confirmed amount of impairment loss of assets of the
disposal groups held for sale, the book value of goodwill of the disposal groups will be offset first, and then the
book value of various non-current assets in the disposal groups will be offset according to the proportions.
If the net amount that the fair value of the non-current assets or disposal groups held for sale on the follow-up
balance sheet date minus the sale costs increases, the previous written-down amount will be restored, and reversed
to the asset impairment loss confirmed after the assets being classified as held-for-sale. The reversed amount will
be included in the current profit or loss. The book value of goodwill that has been deducted cannot be reversed.
Non-current assets held for sale or non-current assets in the disposal group are not subject to depreciation or
amortization. Interest and other expenses of liabilities in the disposal group held for sale will be confirmed as
before.
When a non-current asset or disposal group ceases be classified as held-for-sale or a non-current asset is removed
out from the held-for-sale disposal group due to failure in meeting the classification conditions for the category of
held-for-sale, it will be measured by one of the followings whichever is lower:
① The book value before being classified as held for sale will be adjusted according to the depreciation,
amortization or impairment that would have been recognized under the assumption that it was not classified as
held for sale;
② The recoverable amount.
2. Termination of Operation
Termination of operation refers to a separately identifiable constituent part that satisfies one of the following
conditions that has been disposed of by the Company or is classified as held-for-sale:
(1) This constituent part represents an independent main business or a separate main business area.
(2) This constituent part is part of an associated plan that is intended to be disposed of in an independent main
business or a separate major business area.
(3) This constituent part is a subsidiary that is specifically acquired for resale.
3. Presentation
In the balance sheet, the Company distinguishes the non-current assets held for sale or the assets in the disposal
group held for sale separately from other assets, and distinguish the liabilities in the disposal group held for sale
separately from other liabilities. The non-current assets held for sale or the assets in the disposal group held for
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sale are not be offset against the liabilities in the disposal group held for sale. They are presented as current assets
and current liabilities respectively.
The Company lists profit and loss from continuing operations and profit and loss from operating profits in the
income statement. For the termination of operations for the current period, the Company restates the information
originally presented as profit or loss of continuing operation in the current financial statements to profit or loss of
termination of the comparable accounting period. If the termination of operation no longer meets the conditions of
held-for-sale, the Company restates the information originally presented as a profit and loss of termination in the
current financial statements to profit or loss of continuing operation of the comparable accounting period.
19. Investments in Debt Obligations
Not applicable
20. Other Investments in Debt Obligations
Not applicable
21. Long-term Receivables
Not applicable
22. Long-term Equity Investments
Long-term equity investment refers to the Company’s long-term equity investment with control, joint control or
significant influence on the investee.
Joint control refers to the control that is common to an arrangement in accordance with the relevant agreement,
and the relevant activities of the arrangement must be agreed upon by the participant who has shared the control.
Significant influence refers to the Company has the power to participate in decision-making on the financial and
operating policies of the investee, but can’t control or jointly control the formulation of these policies with other
parties.
1. Investment Cost Recognition for Long-term Equity Investments
(1) For the merger of enterprises under the same control, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment,
and the direct relevant expenses occurred for the merger of enterprises shall be included into the profits and losses
of the current period.
(2) For the merger of enterprises not under the same control, The combination costs shall be the fair values, on the
acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the
Company in exchange for the control on the acquiree, and all relevant direct costs incurred to the acquirer for the
business combination. Where any future event that is likely to affect the combination costs is stipulated in the
combination contract or agreement, if it is likely to occur and its effects on the combination costs can be measured
reliably, the Company shall record the said amount into the combination costs.
(3) The cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid. The cost consists of the expenses directly relevant to the obtainment of the long-term
equity investment, taxes and other necessary expenses.
(4) The cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
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value of the equity securities issued.
(5) The cost of a long-term investment obtained by the exchange of non-monetary assets (having commercial
nature) shall be recognized base on taking the fair value and relevant payable taxes as the cost of the assets
received.
(6) The cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at the
fair value.
2. Subsequent Measurement of Long-term Equity Investment and Recognized Method of Profit/Loss
The long-term equity investment with joint control (except for the common operator) or significant influence on
the investee is accounted by equity method. In addition, the Company's financial statements use cost method to
calculate long-term equity investments that can control the investee.
(1) Long-term Equity Investment Accounted by Cost Method
When the cost method is used for accounting, the long-term equity investment is priced at the initial investment
cost, and the cost of the long-term equity investment is adjusted according to additional investment or recovered
investment. Except the price actually paid when acquired investment or cash dividends or profits that have been
declared but not yet paid included in the consideration, current investment income is recognized by the cash
dividends or profits declared by the investee.
(2) Long-term Equity Investment Accounted by Equity Method
When the equity method is used for accounting, if the initial investment cost of the long-term equity investment is
greater than the fair value of the investee’s identifiable net assets, the initial investment cost of the long-term
equity investment shall not be adjusted; if the initial investment cost is less than the fair value of the investee’s
identifiable net assets, the difference shall be recorded into the current profits and losses, and the cost of the
long-term equity investment shall be adjusted at the same time.
When the equity method is used for accounting, the investment income and other comprehensive income shall be
recognized separately according to the net profit or loss and other comprehensive income realized by the investee,
and the book value of the long-term equity investment shall be adjusted at the same time. The part entitled shall be
calculated according to the profits or cash dividends declared by the investee, and the book value of the long-term
equity investment shall be reduced accordingly. For other changes in the owner’s equity other than the net profit
or loss, other comprehensive income and profit distribution of the investee, the book value of the long-term equity
investment shall be adjusted and included in the capital reserve. When the share of the net profit or loss of the
investee is recognized, the net profit of the investee shall be adjusted and recognized according to the fair value of
the identifiable assets of the investee when the investment is made. If the accounting policies and accounting
periods adopted by the investee are inconsistent with the Company, the financial statements of the investee shall
be adjusted according to the accounting policies and accounting periods of the Company and the investment
income and other comprehensive income shall be recognized accordingly. For the transactions between the
Company and associates and joint ventures, if the assets made or sold don’t constitute business, the unrealized
gains and losses of the internal transactions are offset by the proportion attributable to the Company, and the
investment gains and losses are recognized accordingly. However, the loss of unrealized internal transactions
incurred by the Company and the investee attributable to the impairment loss of the transferred assets shall not be
offset. If the assets made to associates or joint ventures constitute business, and the investor makes long-term
equity investment but does not obtain the control, the fair value of the investment shall be taken as the initial
investment cost of the new long-term equity investment, and the difference between initial investment and the
book value of the investment is fully recognized in profit or loss for the current period. If the assets sold by the
Company to joint ventures or associates constitute business, the difference between the consideration and the book
value of the business shall be fully credited to the current profits and losses. If the assets purchased by Company
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from joint ventures or associates constitute business, conduct accounting treatment in accordance with the
provisions of Accounting Standard for Business Enterprises No. 20 - Business combination, and the profits or
losses related to the transaction shall be recognized in full.
When the net loss incurred by the investee is recognized, the book value of the long-term equity investment and
other long-term equity that substantially constitute the net investment in the investee shall be written down to zero.
In addition, if the Company has an obligation to bear additional losses to the investee, the estimated liabilities are
recognized in accordance with the obligations assumed and included in the current investment losses. If the
investee has realized net profit in later period, the Company will resume the recognition of the income share after
the income share has made up the unrecognized loss share.
(3) Acquisition of Minority Interests
In the preparation of the consolidated financial statements, capital reserve shall be adjusted according to the
difference between the long-term equity investment increased due to the purchase of minority interests and the
share of the net assets held by the subsidiary from the date of purchase (or the date of combination) calculated
according to the proportion of the new shareholding ratio, and retained earnings shall be adjusted if the capital
reserve is insufficient to offset.
(4) Disposal of Long-term Equity Investment
In the consolidated financial statements, the parent company partially disposes of the long-term equity investment
in the subsidiary without the loss of control, and the difference between the disposal price and the net assets of the
subsidiary corresponding to the disposal of the long-term equity investment is included in the shareholders’ equity.
If the disposal of long-term equity investment in subsidiaries results in the loss of control over the subsidiaries,
handle in accordance with the relevant accounting policies described in NotesⅥ. “Principles, Procedures and
Methods for the Preparation of Consolidated Statements” .
In other cases, the difference between the book value and the actual acquisition price shall be recorded into the
current profits and losses for the disposal of the long-term equity investment.
For long-term equity investment accounted by the equity method and residual equity after disposal still accounted
by the equity method, other comprehensive income originally included in the shareholders’ equity shall be treated
in the same basis of the investee directly disposing related assets or liabilities by corresponding proportion. The
owner’s equity recognized by the change of the owner’s equity of the investee other than the net profit or loss,
other comprehensive income and profit distribution is carried forward proportionally into the current profits and
losses.
For long-term equity investment accounted by the cost method and residual equity after disposal still accounted by
the cost method, other comprehensive income accounted by equity method or recognized by financial instrument
and accounted and recognized by measurement criteria before the acquisition of the control over the investee is
treated in the same basis of the investee directly disposing related assets or liabilities, and carried forward
proportionately into the current profits and losses. Other changes of owner’s equity in net assets of the investee
accounted and recognized by the equity method other than the net profit or loss, other comprehensive income and
profit distribution are carried forward proportionally into the current profits and losses.
3. Impairment Provisions for Long-term Equity Investments
For the relevant testing method and provision making method, see Notes 31. Impairment of Long-term Assets.
23. Investment Property
Measurement model for investment property
Cost method measurement
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Method for depreciation or amortization
The Company's investment real estates include leased land use rights, leased buildings, and land use rights held and
ready to be transferred after appreciation. Investment real estate is initially measured according to cost, and then
measured by cost model.
1. Recognition of investment real estate
Investment real estate can only be recognized if it meets the following conditions at the same time: (1) Economic
benefits related to investment real estate are likely to flow into enterprises. (2) The cost of the investment real estate
can be measured reliably.
2. Initial measurement of investment real estate
(1) The cost of purchased investment real estate includes the purchase price, relevant taxes and fees and other
expenses directly attributable to the asset.
(2) The cost of self-construction of investment real estate consists of the necessary expenses incurred before the
construction of the asset reaches the predetermined serviceable condition.
(3) The cost of investment real estate acquired by other means shall be determined in accordance with relevant
accounting standards.
(4) Subsequent expenditures related to investment real estate, if they meet the confirmation conditions of investment
real estate, shall be included in the cost of investment real estate; those that do not meet the recognition conditions
are included in the current profits and losses when they occur.
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3. Subsequent measurement of investment real estate
The Company adopts the cost model to carry out subsequent measurement of investment real estate on the balance
sheet date. According to the relevant provisions of Accounting Standard for Business Enterprises No.4-Fixed Assets
and Accounting Standard for Business Enterprises No.6-Intangible Assets, the investment real estate is amortized or
depreciated according to the life average method within the expected useful life.
4. Conversion of investment real estate
The Company has conclusive evidence that the use of real estate has changed, and the investment real estate is
converted into other assets, or other assets are converted into investment real estate, and the book value before the
conversion of real estate is taken as the recorded value after the conversion.
24. Fixed Assets
(1) Recognition Conditions
Fixed assets of the Company refers to the tangible assets that simultaneously possess the features as follows: they
are held for the sake of producing commodities, rendering labor service, renting or business management; and their
useful life is in excess of one accounting year and unit price is higher. No fixed assets may be recognized unless it
simultaneously meets the conditions as follows: ① The economic benefits pertinent to the fixed asset are likely to
flow into the Company; and ② The cost of the fixed asset can be measured reliably. The Company's fixed assets
are initially measured at cost. Specifically, the costs of purchased fixed assets include the purchase price, relevant
taxes and fees, and other expenditures incurred before the fixed assets reach the pre-determined serviceable
condition that can be directly attributable to the assets. The costs of self-built fixed assets contain the necessary
expenditures incurred before the assets built reach their pre-determined serviceable condition. If the amount paid for
the purchase of fixed assets witnesses postponed payment due to that the normal credit conditions are exceeded and
is actually financing in nature, the costs of such fixed assets shall be determined on the basis of the present value of
the purchase price. The difference between the actual amount paid and the present value of the purchase price,
except for the difference that should be capitalized, shall be recognized as profit and loss of the current period during
the credit period.
(2) Depreciation Method
Expected net salvage
Category of fixed assets Method Useful life Annual deprecation
value
Housing and building Average method of
3—30 years 1%-5% 31.67%-3.17%
useful life
Machinery equipments Average method of
2—10 years 1%-5% 47.50%-9.50%
useful life
Transportation vehicle Average method of
5—10 years 1%-5% 19.00%-9.50%
useful life
Average method of
Electronic equipment 2—8 years 1%-5% 47.50%-11.88%
useful life
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(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
25. Construction in Progress
1. Pricing of Construction in Progress
The constructions are accounted according to the actual costs incurred. The constructions shall be carried forward
into fixed assets at the actual cost when reach intended usable condition. The borrowing expenses eligible for
capitalization incurred before the delivery of the construction are included in the construction cost; after the
delivery, the relevant interest expense shall be recorded into the current profits and losses.
2. Standard and Time of Construction in Progress Carrying Forward into Fixed Assets
The Company’s construction in progress is carried forward into fixed assets when the construction completes and
reaches intended usable condition. The criteria for determining the intended usable condition shall meet one of the
following:
(1) The physical construction (including installation) of fixed assets has been completed or substantially
completed;
(2) Has been produced or run for trial, and the results indicate that the assets can run normally or can produce
stable products stably, or the results of the trial operation show that it can operate normally;
(3) The amount of the expenditure on the fixed assets constructed is little or almost no longer occurring;
(4) The fixed assets purchased have reached the design or contract requirements, or basically in line with the
design or contract requirements.
3. Provision for Impairment of Construction in ProgressPlease refer to Note 31 Impairment of Long-term Assets,
for details of impairment test methods and impairment provision methods of construction in progress.
26. Borrowing Costs
The borrowing costs refer to interest and other related costs incurred by the Company as a result of borrowings,
including interest on borrowings, amortization of discounts or premiums, ancillary expenses and exchange
differences arising from foreign currency borrowings. The borrowing costs incurred by the Company directly
attributable to the acquisition, construction or production of assets eligible for capitalization are capitalized and
included in the cost of the relevant assets. Other borrowing costs are recognized as expenses according to the
amount at the time of occurrence, and are included in the current profits and losses.
1. Principle of capitalization of borrowing costs
Borrowing costs can be capitalized when all the following conditions are met: Asset expenditure has already
occurred; borrowing costs have already occurred; construction or production activities necessary to bring the
assets to the intended useable or sellable status have already begun.
2. Capitalization period of borrowing costs
Capitalization period refers to the period from the capitalization of borrowing costs starting to the end of
capitalization, excluding the period when capitalization is suspended.
If assets that meet the conditions of capitalization are interrupted abnormally in the course of construction or
production, and the interruption time exceeds 3 consecutive months, the capitalization of borrowing costs shall be
suspended. The borrowing costs incurred during the interruption are recognized as expenses and included in
current profits and losses until the acquisition or construction of the assets is resumed. The capitalization of the
borrowing costs continues if the interruption is a procedure necessary for the purchase or production of assets
eligible for capitalization to meet the intended useable or sellable status.
The borrowing costs shall cease to be capitalized when the purchased or produced assets that meet the conditions
of capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligible
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for capitalization meet the intended useable or sellable status can be included in the current profits and losses
when incurred.
3. Calculation method of capitalized amount of borrowing costs
During the period of capitalization, the capitalization amount of interests (including amortization of discounts or
premiums) for each accounting period is determined in accordance with the following provisions:
(1) For special borrowings for the acquisition or construction of assets eligible for capitalization, the interest
expenses actually incurred in the current period of borrowings shall be recognized after deducting the interest
income obtained by depositing the unused borrowing funds into the bank or investment income obtained from
temporary investment.
(2) Where the general borrowing is occupied for the acquisition or construction of assets eligible for capitalization,
the Company multiplies the weighted average of the asset expenditure of the accumulated asset expenditure
exceeding the special borrowing by the capitalization rate of the general borrowing to calculate the amount of
interest that should be capitalized for general borrowings. The capitalization rate is determined based on the
weighted average interest rate of general borrowings.
27. Living Assets
Not applicable
28. Oil and Gas Assets
Not applicable
29. Right-of-use Assets
On the start date of the lease term, the Company recognizes its right to use the leasehold property in the lease term
as right-of-use assets, including: The initial measurement amount of the lease obligation; the lease payment paid
on or before the start date of the lease term. If there is a lease incentive, the amount related to the lease incentive
taken should be deducted. the initial direct cost incurred by the lessee; the estimated cost that the lessee will use to
pull down and remove the leasehold property, and restore the site of the leasehold property or restore the
leasehold property to the state agreed in the lease clauses. Then, the Company will depreciate the right-of-use
assets with the straight-line method. If it is reasonably certain that the ownership of the leasehold property will be
obtained at the end of the lease term, the Company will depreciate the leasehold property over its remaining
service life. If it is not reasonably certain that the ownership of the leasehold property will be obtained at the end
of the lease term, the Company will depreciate the leased asset(s) over the lease term or the remaining service life,
whichever is shorter. When the Company re-calculates the lease obligation using the present value (PV) of the
changed lease payment and correspondingly adjusts the book value of the right-of-use assets, if the book value is
already reduced to zero, yet the lease obligation still needs to be reduced further, the Company will include the
remaining amount in the current profit or loss.
30. Intangible Assets
(1) Pricing Method, Useful Life and Impairment Test
1. Recognition Criteria of Intangible Assets
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Intangible assets are identifiable non-monetary assets that are owned or controlled by the Company without
physical form. The intangible assets are recognized when all the following conditions are met: (1) Conform to the
definition of intangible assets; (2) Expected future economic benefits related to the assets are likely to flow into
the Company; (3) The costs of the assets can be measured reliably.
2. Initial Measurement of Intangible Assets
Intangible assets are initially measured at cost. Actual costs are determined by the following principles:
(1) The cost of the acquisition of intangible assets, including the purchase price, relevant taxes and other expenses
directly attributable to the intended use of the asset. The payment of purchase price of intangible assets exceeding
normal credit terms is deferred, and the cost of intangible assets having financing nature in essence shall be
recognized based on the present value of the purchase price. The difference between the actual payment price and
the present value of the purchase price shall be recorded into the current profits and losses in the credit period
except that can be capitalized in accordance with the Accounting Standard for Business Enterprises No. 17 -
Borrowing Cost.
(2) The cost of investing in intangible assets shall be recognized according to the value agreed upon in the
investment contract or agreement, except that the value of the contract or agreement is unfair.
3. Subsequent Measurement of Intangible Assets
The Company shall determine the useful life when it obtains intangible assets. The useful life of intangible assets
is limited, and the years of the useful life or output that constitutes the useful life or similar measurement units
shall be estimated. The intangible assets are regarded as intangible assets with uncertain useful life if the term that
brings economic benefits to the Company is unforeseeable
Intangible assets with limited useful life shall be amortized by straight line method from the time when the
intangible assets are available until can’t be recognized as intangible assets; intangible assets with uncertain useful
life shall not be amortized. The Company reviews the estimated useful life and amortization method of intangible
assets with limited useful life at the end of each year, and reviews the estimated useful life of intangible assets
with uncertain useful life in each accounting period. For intangible assets that evidence shows the useful life is
limited, the useful life shall be estimated and the intangible assets shall be amortized in the estimated useful life.
4. Recognition Criteria and Withdrawal Method of Intangible Asset Impairment Provision
The impairment test method and withdrawal method for impairment provision of intangible assets are detailed in
Note 31: Long-term asset impairment under Note V.
(2) Accounting Policy for Internal Research and Development Expenditures
The expenditures in internal research and development projects of the Company are classified into expenditures in
research stage and expenditures in development stage. The expenditures in research stage are included in the
current profits and losses when incurred. The expenditures in development stage are recognized as intangible
assets when meeting the following conditions:
(1) The completion of the intangible assets makes it technically feasible for using or selling;
(2) Having the intention to complete and use or sell the intangible assets;
(3) The way in which an intangible asset generates economic benefits, including the proof that the products
produced with the intangible asset have market or the proof of its usefulness if the intangible asset has market and
will be used internally;
(4) Having sufficient technical, financial resources and other resources to support the development of the
intangible assets and the ability to use or sell the intangible assets;
(5) Expenditure attributable to the development stage of intangible assets can be measured reliably.
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The cost of self-developed intangible assets includes the total expenditure incurred since meeting intangible assets
recognition criterion until reaching intended use. Expenditures that have been expensed in previous periods are no
longer adjusted.
Non-monetary assets exchange, debt restructuring, government subsidies and the cost of intangible assets acquired
by business combination are recognized according to relevant provisions of Accounting Standard for Business
Enterprises No. 7 - Non-monetary assets exchange, Accounting Standard for Business Enterprises No. 12 - Debt
restructuring, Accounting Standards for Business Enterprises No. 16 - Government subsidies, Accounting
Standard for Business Enterprises No. 20 - Business combination respectively.
31. Impairment of Long-term Assets
For non-current non-financial assets such as fixed assets, construction in progress, intangible assets with limited
useful life, investment real estate measured in cost mode and long-term equity investments in subsidiaries, joint
ventures and associates, the Company determines whether there is indication of impairment at balance sheet date.
If there is indication of impairment, then estimate the amount of its recoverable value and test the impairment.
Goodwill, intangible assets with uncertain useful life and intangible assets that have not yet reached useable state
shall be tested for impairment every year, whether or not there is any indication of impairment.
If the impairment test results indicate that the recoverable amount of the asset is lower than its book value, the
impairment provision shall be made at the difference and included in the impairment loss. The recoverable
amount is the higher of the fair value of the asset minus the disposal cost and the present value of the expected
future cash flow of the asset. The fair value of the asset is recognized according to the price of the sales agreement
in the fair trade; if there is no sales agreement but there is an active market, the fair value is recognized according
to the buyer’s bid of the asset; if there is no sales agreement or active market, the fair value of asset shall be
estimated based on the best information that can be obtained. Disposal costs include legal costs related to disposal
of assets, related taxes, handling charges, and direct costs incurred to enable the asset reaching sellable status. The
present value of the expected future cash flows of the assets is recognized by the amount discounted at appropriate
discount rate according to the expected future cash flows arising from the continuing use of the asset and the final
disposal. The provision for impairment of assets is calculated and recognized on the basis of individual assets. If it
is difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group shall
be recognized by the asset group to which the asset belongs. The asset group is the smallest portfolio of assets that
can generate cash inflows independently.
The book value of the goodwill presented separately in the financial statements shall be apportioned to the asset
group or portfolio of asset groups that is expected to benefit from the synergies of the business combination when
the impairment test is conducted. The corresponding impairment loss is recognized if the test results indicate that
the recoverable amount of the asset group or portfolio of asset groups containing the apportioned goodwill is
lower than its book value. The amount of the impairment loss shall offset the book value of the goodwill
apportioned to the asset group or portfolio of asset groups, and offset the book value of other assets in proportion
according to the proportion of the book value of other assets except the goodwill in the asset group or portfolio of
asset groups.
Once the impairment loss of the above asset is recognized, the portion that the value is restored will not be written
back in subsequent periods.
32. Long-term Prepaid Expense
Long-term prepaid expense refers to general expenses with the apportioned period over one year (one year
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excluded) that have occurred but attributable to the current and future periods. Long-term deferred expense shall
be amortized averagely within benefit period. In case of no benefit in the future accounting period, the amortized
value of such project that fails to be amortized shall be transferred into the profits and losses of the current period.
The amortization period of various expenses is as follows:
Item Amortization Period
Expenditure on improvement of rented fixed
3-5 years
assets
Fixed repair expenditure 5 years
Mould 3 years
Wrap-around boxes 2 years
33. Contract Liabilities
The Company’s obligation of transferring commodities to customers due to consideration received or receivable
from clients. If the client has paid the contract consideration or the Company has obtained the unconditional right
of collection before the Company transfers commodities to the customer, the Company shall present the accounts
received or receivable as contract liabilities at the earlier time between the time when the client actually conducts
payment and the deadline of payment. Contract assets and contract liabilities under the same contract shall be
presented based on the net amount, while those not under the same contract shall not be offset.
34. Payroll
(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and
benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing
fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term
compensation actually happened during the accounting period when the active staff offering the service for the
Group should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Of
which the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
Welfare after demission mainly includes defined contribution plans and defined benefit plans. Of which defined
contribution plans mainly include basic endowment insurance, unemployment insurance, annuity funds, etc., and
the corresponding payable and deposit amount should be included into the relevant assets cost or the current gains
and losses when happen.
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(3) Accounting Treatment of the Demission Welfare
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor
contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a
layoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier date
between the time when the Group could not one-sided withdraw the demission welfare which offered by the plan
or layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to the
reorganization of the payment of the demission welfare and at the same time includes which into the current gains
and losses. But if the demission welfare is estimated that could not totally pay after the end of the annual report
within 12 months, should be disposed according to other long-term payroll payment.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare.
The group would recorded the salary and the social security insurance fees paid and so on from the employee’s
service terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under the
condition that they meet the recognition conditions of estimated liabilities.
The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should be
accounting disposed according to the setting drawing plan, while the rest should be disposed according to the
setting revenue plan.
35. Lease Liabilities
On the start date of the lease term, the Company recognizes the PV of the unpaid lease payment as a lease
obligation, except for the short-term and low-value asset leases. It will regard the interest rate implicit in lease as
the rate of discount, when calculating the PV of the lease payment. The incremental lending rate of the lessee will
be deemed as the rate of discount, if the interest rate implicit in lease cannot be confirmed. The Company
calculates the interest charge of the lease obligation in each period in the lease term at a fixed periodic interest rate
and includes it in the current profit or loss, unless such interest charge is stipulated to be included in the
underlying asset cost. Variable lease payments that are not included in the measurement of the lease obligation
should be included in the current profit or loss when they are actually incurred, unless such payments are
stipulated to be included in the underlying asset cost.
The Company will re-calculate the lease obligation using the PV of the changed lease payment, if the actual fixed
payment, the estimated payable of the residual value of the guarantee, the index or rate used to confirm the lease
payment, or the assessment result of the call option, the renewal option, or the termination option, or the actual
exercise changes, after the start date of the lease term.
36. Provisions
1. Recognition of Provisions
The obligation such as external guaranty, pending litigation or arbitration, product quality assurance, layoff plan,
loss contract, restructuring and disposal of fixed assets, pertinent to a contingencies shall be recognized as an
provisions when the following conditions are satisfied simultaneously: ① That obligation is a current obligation
of the enterprise; ② It is likely to cause any economic benefit to flow out of the enterprise as a result of
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
performance of the obligation; and ③ The amount of the obligation can be measured in a reliable way
2. Measurement of Provisions
The provisions shall be initially measured in accordance with the best estimate of the necessary expenses for the
performance of the current obligation. If there is a sequent range for the necessary expenses and if all the
outcomes within this range are equally likely to occur, the best estimate shall be determined in accordance with
the middle estimate within the range. In other cases, the best estimate shall be conducted in accordance with the
following situations, respectively: ① If the Contingencies concern a single item, it shall be determined in the
light of the most likely outcome. ② If the Contingencies concern two or more items, the best estimate should be
calculated and determined in accordance with all possible outcomes and the relevant probabilities. ③ When all
or some of the expenses necessary for the liquidation of an provisions of an enterprise is expected to be
compensated by a third party, the compensation should be separately recognized as an asset only when it is
virtually certain that the reimbursement will be obtained. The Company shall check the book value of the
provisions on the balance sheet date. The amount of compensation is not exceeding the book value of the
recognized provisions.
37. Share-based Payment
Not applicable
38. Other Financial Instruments such as Preferred Shares and Perpetual Bonds
Not applicable
39. Revenue
The Accounting Policy Adopted for Recognition and Measurement of Revenue
1. Accounting policies adopted in revenue recognition and measurement
The Company recognizes revenue when it has satisfied its performance obligations under the contract, i.e., when the
customer has obtained control of relevant goods or services. Obtaining control of relevant goods or services means
being able to direct the use of them and obtain substantially all of the benefits from them.
Where the contract contains two or more performance obligations, the Company, at the inception date of the contract,
allocates the transaction price to each performance obligation in accordance with the relative proportion of the
stand-alone selling price of the goods or services promised by each performance obligation. The Company measures
revenue on the basis of the transaction price allocated to each performance obligation.
Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for
transferring goods or services to a customer, excluding amounts collected on behalf of third parties and amounts
expected to be returned to the customer. The Company determines the transaction price in accordance with the terms
of the contract, with past business practices taken into account. When determining the transaction price, it considers
the impact of variable consideration, the existence of a significant financing component in the contract, non-cash
consideration, consideration payable to a customer and other factors. The transaction price is recognized only to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not
occur when the relevant uncertainty is resolved. Where a contract contains a significant financing component, the
Company determines the transaction price on the basis of the amount presumably payable in cash when the
customer obtains control of the goods or services, and uses the actual interest method to amortize the difference
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between the transaction price and the contract consideration during the contract period.
A performance obligation is satisfied over time if one of the following conditions is met; otherwise, it is treated as
satisfied at a point in time:
(1) The customer simultaneously receives and consumes the benefits provided by the Company's performance as the
Company performs.
(2) The customer can control the goods as they are created during the Company's performance.
(3) The goods produced by the Company's performance have no alternative use, and the Company has the right to
collect payment for performance completed to date during the entire contract period.
Where a performance obligation is to be satisfied over time, the Company recognizes revenue in accordance with
the progress of performance during that period, except when the progress cannot be reasonably determined. In
determining the progress of performance, the Company takes into account the nature of the goods or services and
adopts the output methods or the input methods.
Where the performance progress cannot be reasonably determined, and the costs incurred are expected to be
recovered, the Company recognizes revenue according to the amount of the costs incurred until the progress can be
reasonably determined.
Where the performance obligation is to be satisfied at a certain point in time, the Company recognizes revenue at the
point when the customer obtains control of the relevant goods or services. When judging whether the customer has
obtained control of goods or services, the Company considers the following indicators:
(1) The Company has a present right to receive payment for the goods or services, i.e., the customer has a present
obligation to pay for the goods or services.
(2) The Company has transferred the legal ownership of the goods to the customer, i.e., the customer has obtained
the legal ownership of the goods.
(3) The Company has transferred physical possession of the goods to the customer, i.e., the customer has taken
physical possession of the goods.
(4) The Company has transferred significant risks and rewards of ownership of the goods to the customer, i.e., the
customer has obtained significant risks and rewards of ownership of the goods.
(5) The customer has accepted the goods or services.
2. Specific methods
(1) Recognition of domestic sales revenue: Under the conventional settlement mode, the Company has delivered
goods that have passed inspection to the purchaser as required by the purchaser; the amount of revenue has been
determined, a sales invoice has been issued and the payment has been received or is expected to be recovered. Under
the consignment sales settlement mode, the Company recognizes sales revenue when the product is issued and the
settlement notice is issued after the customer inspection is qualified.
(2) Recognition of export sales revenue: The Company has produced goods according to the requirements stipulated
in the sales contract, and completed the export declaration procedures after the goods have passed inspection; the
freight company has shipped the goods, the amount of revenue has been determined, an export sales invoice has
been issued, and the payment has been received or is expected to be recovered.
Differences in accounting policies for the recognition of revenue caused by different business models for the same
type of business
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40. Government Subsidies
1. Category of Government Subsidies
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Company from the
government, which mainly include government subsidies related to assets and government subsidies related to
income.
2. Distinction Standard of Government Subsidies Related to Assets with Government Subsidies Related to Income
The government subsidies related to assets refer to the government subsidies obtained for acquisition, construction
or otherwise formation of long-term assets. The government subsidies related to income refer to the government
subsidies except the government subsidies related to assets.
The specific standard of classifying the government subsidies as subsidies related to assets: government subsidies
for acquisition, construction or otherwise formation of long-term assets.
The specific criteria that the Company classifies government subsidies as income related is: other government
subsidies other than asset-related government subsidies.
If the government documents do not specify the subsidy object, the bases that the Company classified the
government subsidies as assets-related subsidies or income-related subsidies were as follows: (1) If the specific
items for which the subsidy is targeted are stipulated in government documents, divide according to the relative
proportion of the amount of expenditure that forms assets and the amount of expenditure included in the cost in
the budget for that particular project, and the proportion shall be reviewed at each balance sheet date and changed
as necessary; (2) if the government documents only have a general statement of the purpose and do not specify a
specific project, the subsidy is recognized as government subsidy related to income.
3. Measurement of Government Subsidies
If a government subsidy is a monetary asset, it shall be measured according to the amount received or receivable.
If a government subsidy is a non-monetary asset, it shall be measured at its fair value, and shall be measured at a
nominal amount (RMB1) when the fair value cannot be obtained reliably.
For confirmed government subsidies that need to be returned, if there is relevant deferred income, the book
balance of related deferred income shall be written off and the excess shall be charged to profit or loss for the
Current Period; for other circumstances, it shall be directly charged to profit or loss for the Current.
4. Accounting Treatment for Government Subsidies
The Company adopts the gross method to confirm government subsidies.
The government subsidies related to assets are recognized as deferred income, and are charged to the current
profit or loss in a reasonable and systematic manner within the useful lives of the relevant assets (subsidies related
to the daily activities of the Company are included in other income; while subsidies unrelated to the daily
activities of the Company are included in non-operating income). Government subsidies measured at nominal
amounts are directly charged to profit or loss for the Current Period. Where the relevant assets are sold, transferred,
scrapped or damaged before the end of their useful lives, the balance of related undistributed deferred income
shall be transferred to the profit or loss of the asset disposal in the Current Period.
Government subsidies related to income shall be treated as follows:
(1) government subsidies used to compensate the relevant costs, expenses or losses of the Company in the
subsequent period shall be recognized as deferred income, and shall be included in the current profit and loss
during the period of confirming the relevant costs, expenses or losses (subsidies related to the daily activities of
the Company are included in other income; while subsidies unrelated to the daily activities of the Company are
included in non-operating income);
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(2) government subsidies used to compensate the relevant costs, expenses or losses incurred by the Company
shall be directly included in the current profits and losses (subsidies related to the daily activities of the Company
are included in other income; while subsidies unrelated to the daily activities of the Company are included in
non-operating income).
For government subsidies that include both assets-related and income-related parts, they should be distinguished
separately for accounting treatment; for government subsidies that are difficult to be distinguished, they should be
classified as income-related.
41. Deferred Income Tax Assets/Deferred Income Tax Liabilities
The income tax of the Company includes the current income tax and deferred income tax. Both are recorded into
the current gains and losses as income tax expenses or revenue, except in the following circumstances:
(1) The income tax generated from the business combination shall be adjusted into goodwill;
(2) The income tax related to the transaction or event directly included in shareholders’ equity shall be recorded
into shareholders’ equity.
At the balance sheet date, the Company recognizes the deferred income tax assets or deferred income tax
liabilities in accordance with the balance sheet liability method for the temporary difference between the book
value of assets or liabilities and its tax base.
The Company recognizes all taxable temporary differences as deferred income tax liabilities unless taxable
temporary differences arise in the following transactions:
(1) The initial recognition of goodwill or the initial recognition of the assets or liabilities arising from a transaction
with the following characteristics: the transaction is not a business combination and neither the accounting profit
nor the taxable income is incurred at the time of the transaction;
(2) The time of write-back of taxable temporary differences related to the investments in subsidiaries, associates
and joint ventures can be controlled and the temporary differences are likely to not be written back in the
foreseeable future.
The Company recognizes the deferred income tax assets arising from deductible temporary differences, subject to
the amount of taxable income obtained to offset the deductible temporary differences, unless the deductible
temporary differences arise in the following transactions:
(1) The transaction is not a business combination, and the transaction does not affect the accounting profit or the
amount of taxable income;
(2) The deductible temporary differences related to the investments in subsidiaries, associates and joint ventures
are not met simultaneously: Temporary differences are likely to be written back in the foreseeable future and are
likely to be used to offset the taxable income of deductible temporary differences in the future.
At the balance sheet date, the Company measures the deferred income tax assets and deferred income tax
liabilities at the applicable tax rate of the period expected to recover the asset or pay off the liabilities according to
tax law, and reflects the income tax effect of expected assets recovery or liabilities payoff method at the balance
sheet date.
At the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likely
that sufficient taxable income will not be available to offset the benefit of the deferred income tax assets in the
future period, the book value of the deferred income tax assets will be written down. If it is probable that
sufficient taxable income will be available, the amount of write-down will be written back.
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42. Lease
(1) Accounting Treatment of Operating Lease
As the lessee:
On the start date of the lease term, the Company deems the right-of-use assets and lease obligations of all the
operating leases, except for the simplified short-term lease and low-value leases. See Note 29. Right-of-use Assets
and 35. Lease Liabilities for the general accounting treatment of the Company as the lessee.
Lease change
A lease change refers to a change in the scope, consideration, and term of lease outside the original contract
clauses, including the addition or termination of the one or several rights to use lease assets, and the extension or
reduction of the lease term specified in the contract.
When the lease changes and the following conditions are met, the Company will regard the lease charge as a
separate lease for accounting treatment:
(1) The lease change expands the scope of lease through the increase of one or several rights to use the lease
assets;
(2) The increased consideration and the separate price of the expanded part of the scope of lease are the same,
upon adjustment, according to the contract.
If the lease change is not deemed as a separate lease for accounting treatment, the Company will re-amortize the
consideration of the changed contract, re-confirm the lease term, and re-calculate the PV of the lease obligation
using the changed lease payment and the revised rate of discount, on the date when the lease change takes effect.
The Company will correspondingly reduce the book value of the right-of-use assets and include the profit or loss
of the lease terminated in part or whole in the current profit or loss, if the lease change narrows the scope of lease
or shortens the lease term. The Company will correspondingly adjust the book value of the right-of-use assets, if
other lease changes result in the re-calculation of the lease obligation.
Short-term and low-value asset leases
The Company chooses not to confirm the right-of-use assets and lease obligations of the short-term and low-value
asset leases, and include the relevant lease payment in each period in the lease term in the current profit or loss or
the underlying asset cost on a straight-line basis. A short-term lease refers to the lease whose lease term does not
exceed 12 months and that does not include the call option on the start date of the lease term. A low-value asset
lease refers to the lease where the value will be low when the single lease asset is the new asset. For the leasehold
property that is underleased or expected to be underleased, the original lease does not belong to low-value asset
lease.
As the lessor:
The Company classifies lease into finance and operating leases on the start date of the lease term. A finance lease
refers to the lease where almost all the risks and remuneration, related to the ownership of the leasehold property,
is transferred, no matter whether the ownership is finally transferred or not. An operating lease refers to all leases
other than finance leases.
The lease receivable of the operating lease in each period in the lease term is deemed as a rental on a straight-line
basis. The Company capitalizes the initial direct cost related to the operating finance, amortize and include it in
the current profit or loss on the basis same as the recognition of rentals in the lease term. Variable lease payments
that are not included in the lease receivable are included in the current profit or loss when they are actually
incurred. If an operating lease changes, the Company will regard it as a new lease for accounting treatment from
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
the effective date of the change. The advance receipt or the lease receivable related to the lease prior to the change
is recognized as the payment receivable of the new lease.
(2) Accounting Treatments of Financial Lease
As the lessee:
For financing leased assets, on the beginning date of the lease term, the lower of the fair value of the leased asset and
the present value of the minimum lease payment amount on the lease commencement date is taken as the recorded
value of the leased asset, the minimum lease payment amount is regarded as the recorded value of long-term
payables, and the difference is regarded as unrecognized financing expense, which is apportioned by the effective
interest rate method in each period of the lease term. The contingent rentals are included in the profit or loss for the
current period upon actual incurrence thereof.
As the lessor:
The Company confirms the finance lease receivable of the finance lease and finally confirms the finance leasehold
property on the start date of the lease term. It recognizes the net investment in the lease as the entry value of the
finance lease, when initially calculating the finance lease receivable. The net investment in the lease is the sum of
the net value of the unguaranteed residual value and the lease receivable not received on the start date of the lease
term at the interest rate implicit in lease. The Company calculates and confirms the interest income at a fixed
periodic interest rate in each period in the lease term.
43. Other Significant Accounting Policies and Estimates
Naught
44. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Contents of and reasons for the changes to
Approval procedure Remarks
accounting policies
On December 7, 2018, the Ministry of Finance
(MOF) issued the Notice on Revision and Issuance
of the Accounting Standard for Business Enterprises
No. 21: Lease (C.K. [2018] No. 45). According to
See 44. Changes in important
the requirements of the Ministry of Finance, those
accounting policy and accounting
enterprises that are listed both at home and abroad Deliberated and approved by the 16th
estimates (3) for details about the
and those enterprises that are listed overseas and meeting of the Nine Board of
influence of implementing the new
adopt the International Financial Reporting Directors of the company
lease standards on items of financial
Standards or the Accounting Standards for Business
statements at period-beginning..
Enterprises for preparation of financial statements
should implement it from 1 January 2019; the other
enterprises that adopt the Accounting Standards for
Business Enterprises should implement it from 1
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
January 2021. The Company started to implement
the new lease standards from 1 January 2021 and
followed the relevant transitional requirements.
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Leases since 2021
√ Applicable □ Not applicable
Whether items of balance sheets at the beginning of the year need adjustment
√ Yes □ No
Consolidated Balance Sheet
Unit: RMB
Item 31 December 2020 1 January 2021 Adjusted
Current assets:
Monetary assets 981,249,699.49 981,249,699.49
Settlement reserve
Interbank loans granted
Held-for-trading financial
407,619,201.36 407,619,201.36
assets
Derivative financial assets
Notes receivable 140,972,143.00 140,972,143.00
Accounts receivable 1,134,233,235.70 1,134,233,235.70
Accounts receivable
financing
Prepayments 11,994,745.05 11,994,745.05
Premiums receivable
Reinsurance receivables
Receivable reinsurance
contract reserve
Other receivables 20,194,968.19 20,194,968.19
Including: Interest
receivable
Dividends
receivable
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Financial assets purchased
under resale agreements
Inventories 735,685,116.91 735,685,116.91
Contract assets
Assets held for sale
Current portion of
non-current assets
Other current assets 175,090,368.85 175,090,368.85
Total current assets 3,607,039,478.55 3,607,039,478.55
Non-current assets:
Loans and advances to
customers
Investments in debt
obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity
181,365,016.32 181,365,016.32
investments
Investments in other equity
3,305,501,030.06 3,305,501,030.06
instruments
Other non-current financial
assets
Investment property
Fixed assets 685,707,548.55 685,707,548.55
Construction in progress 503,941,120.31 503,941,120.31
Productive living assets
Oil and gas assets
Right-of-use assets 3,943,088.30 3,943,088.30
Intangible assets 170,693,873.30 170,693,873.30
Development costs
Goodwill
Long-term prepaid
13,411,226.23 13,411,226.23
expense
Deferred income tax assets 40,253,777.17 40,253,777.17
Other non-current assets 11,423,843.62 11,423,843.62
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Total non-current assets 4,912,297,435.56 4,916,240,523.86 3,943,088.30
Total assets 8,519,336,914.11 8,523,280,002.41 3,943,088.30
Current liabilities:
Short-term borrowings
Borrowings from the
central bank
Interbank loans obtained
Held-for-trading financial
liabilities
Derivative financial
liabilities
Notes payable 480,971,214.80 480,971,214.80
Accounts payable 1,059,674,020.99 1,059,674,020.99
Advances from customers 1,285,357.28 1,285,357.28
Contract liabilities 65,777,726.45 65,777,726.45
Financial assets sold under
repurchase agreements
Customer deposits and
interbank deposits
Payables for acting trading
of securities
Payables for underwriting
of securities
Employee benefits payable 82,485,090.47 82,485,090.47
Taxes payable 18,876,657.51 18,876,657.51
Other payables 76,668,330.66 76,668,330.66
Including: Interest
payable
Dividends
payable
Handling charges and
commissions payable
Reinsurance payables
Liabilities directly
associated with assets held
for sale
Current portion of 1,750,282.11 1,750,282.11
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
non-current liabilities
Other current liabilities 5,503,702.07 5,503,702.07
Total current liabilities 1,791,242,100.23 1,792,992,382.34 1,750,282.11
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred
shares
Perpetual
bonds
Lease liabilities 2,192,806.19 2,192,806.19
Long-term payables
Long-term employee
benefits payable
Provisions
Deferred income
Deferred income tax
414,670,609.97 414,670,609.97
liabilities
Other non-current
1,244,064.84 1,244,064.84
liabilities
Total non-current liabilities 415,914,674.81 418,107,481.00 2,192,806.19
Total liabilities 2,207,156,775.04 2,211,099,863.34 3,943,088.30
Owners’ equity:
Share capital 1,399,346,154.00 1,399,346,154.00
Other equity instruments
Including: Preferred
shares
Perpetual
bonds
Capital reserves 15,157,514.90 15,157,514.90
Less: Treasury stock
Other comprehensive
2,349,388,533.61 2,349,388,533.61
income
Specific reserve
Surplus reserves 741,567,039.55 741,567,039.55
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
General reserve
Retained earnings 1,758,462,062.48 1,758,462,062.48
Total equity attributable to
owners of the Company as 6,263,921,304.54 6,263,921,304.54
the parent
Non-controlling interests 48,258,834.53 48,258,834.53
Total owners’ equity 6,312,180,139.07 6,312,180,139.07
Total liabilities and owners’
8,519,336,914.11 8,523,280,002.41 3,943,088.30
equity
Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2020 1 January 2021 Adjusted
Current assets:
Monetary assets 896,261,882.77 896,261,882.77
Held-for-trading financial
407,619,201.36 407,619,201.36
assets
Derivative financial assets
Notes receivable 137,477,199.21 137,477,199.21
Accounts receivable 1,030,713,074.22 1,030,713,074.22
Accounts receivable
financing
Prepayments 9,581,302.45 9,581,302.45
Other receivables 462,284,585.09 462,284,585.09
Including: Interest
receivable
Dividends
receivable
Inventories 615,106,650.81 615,106,650.81
Contract assets
Assets held for sale
Current portion of
non-current assets
Other current assets 139,275,518.71 139,275,518.71
Total current assets 3,698,319,414.62 3,698,319,414.62
Non-current assets:
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Investments in debt
obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity
536,949,311.73 536,949,311.73
investments
Investments in other equity
3,305,501,030.06 3,305,501,030.06
instruments
Other non-current financial
assets
Investment property
Fixed assets 628,174,755.88 628,174,755.88
Construction in progress 54,652,119.14 54,652,119.14
Productive living assets
Oil and gas assets
Right-of-use assets 3,943,088.30 3,943,088.30
Intangible assets 122,391,701.60 122,391,701.60
Development costs
Goodwill
Long-term prepaid
11,651,100.48 11,651,100.48
expense
Deferred income tax assets 31,403,727.94 31,403,727.94
Other non-current assets 7,548,885.47 7,548,885.47
Total non-current assets 4,698,272,632.30 4,702,215,720.60 3,943,088.30
Total assets 8,396,592,046.92 8,400,535,135.22 3,943,088.30
Current liabilities:
Short-term borrowings
Held-for-trading financial
liabilities
Derivative financial
liabilities
Notes payable 484,230,566.21 484,230,566.21
Accounts payable 1,108,208,382.75 1,108,208,382.75
Advances from customers
Contract liabilities 53,572,800.70 53,572,800.70
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Employee benefits payable 62,075,512.08 62,075,512.08
Taxes payable 7,819,839.48 7,819,839.48
Other payables 171,916,835.73 171,916,835.73
Including: Interest
payable
Dividends
payable
Liabilities directly
associated with assets held
for sale
Current portion of
1,750,282.11 1,750,282.11
non-current liabilities
Other current liabilities 4,483,279.11 4,483,279.11
Total current liabilities 1,892,307,216.06 1,894,057,498.17 1,750,282.11
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred
shares
Perpetual
bonds
Lease liabilities 2,192,806.19 2,192,806.19
Long-term payables
Long-term employee
benefits payable
Provisions
Deferred income
Deferred income tax
414,670,609.97 414,670,609.97
liabilities
Other non-current
liabilities
Total non-current liabilities 414,670,609.97 416,863,416.16 2,192,806.19
Total liabilities 2,306,977,826.03 2,310,920,914.33 3,943,088.30
Owners’ equity:
Share capital 1,399,346,154.00 1,399,346,154.00
Other equity instruments
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Including: Preferred
shares
Perpetual
bonds
Capital reserves 7,426,635.62 7,426,635.62
Less: Treasury stock
Other comprehensive
2,349,389,658.23 2,349,389,658.23
income
Specific reserve
Surplus reserves 741,567,039.55 741,567,039.55
Retained earnings 1,591,884,733.49 1,591,884,733.49
Total owners’ equity 6,089,614,220.89 6,089,614,220.89
Total liabilities and owners’
8,396,592,046.92 8,400,535,135.22 3,943,088.30
equity
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any New
Standards Governing Leases since 2021
□ Applicable √ Not applicable
45. Other
Naught
46. Fair value measurement
1. Scope of assets and liabilities measured by fair value:
The assets and liabilities of the Company measured by fair value include: Tradable financial assets and investments
in other equity instruments.
2. The alternative valuation techniques include: Market approach, income approach and cost approach.
3. Initial measurement of fair value
Fair value refers to the price that market participants can receive from selling an asset or pay for transferring a
liability in an orderly trading on the measurement date, that is, the exit price.
According to the nature of the trading and the characteristics of related assets or liabilities, the Company shall judge
whether the fair value at the time of initial recognition is equal to the trading price. Generally, the fair value is equal
to the trading price except for the following circumstances:
(1) The trading takes place between related parties. However, the Company has evidence that the related party
trading was conducted under market conditions.
(2) Trading is forced.
(3) The unit of measurement represented by the trading price is different from the unit of measurement of related
assets or liabilities measured at fair value.
(4) The trading market is not the principal market (or the most advantageous market) for the related assets or
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
liabilities.
Unless otherwise specified, if the trading price is not equal to the fair value, the difference shall be included in the
profits and losses of the current period.
47. Other Comprehensive Income
Other comprehensive earnings refer to various gains and losses that are not recognized in the current profits and
losses according to the Accounting Standard for Business Enterprises. It is presented in the following two
categories:
1. Other comprehensive earnings that cannot be reclassified into profits and losses in future accounting periods
mainly include the changes caused by re-measuring the net liabilities or net assets of the set income plan, the share
of other comprehensive earnings that cannot be reclassified into profit and loss in the future accounting period of the
invested entity calculated by the equity method, the changes in the fair value of other equity instruments investment,
and the changes in the fair value of the enterprise's own credit risk.
2. Other comprehensive earnings that will be reclassified into profits and losses when the prescribed conditions are
met in future periods mainly include the share of other comprehensive earnings reclassified into profit and loss when
the prescribed conditions are met in the future accounting period of the investee calculated according to the equity
method, the changes in fair value of other creditor's rights investments, the reclassification of financial assets into
other comprehensive earnings, the provision for credit impairment of other creditor's rights investments, the gains or
losses arising from cash flow hedging instruments that belong to effective hedging, and the translation differences in
foreign currency financial statements, etc.
48. Profit Distribution Method
The profits of the Company are distributed in the following order according to the Articles of Association:
1. To make up for the losses of previous years;
2. To withdraw the statutory surplus reserve, which may not be withdrawn when the accumulated withdrawal
amount exceeds 50% of the registered capital;
3. To withdraw any provident fund after the resolution of the Shareholders’ General Meeting;
4. The remaining profits shall be distributed according to the resolutions of the Shareholders withdrawal amount
VI. Taxes
1. Main Taxes and Tax Rates
Category of taxes Tax basis Tax rate
Sales volume from goods selling or taxable
VAT 3%, 6%, 9% , 13%
service
Urban maintenance and construction tax Turnover tax payable 7%, 5%
Enterprise income tax Taxable income 10%, 15%, 25%
Educational surtax Turnover tax payable 3%
Local educational surtax Turnover tax payable 2%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
235
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Name Income tax rate
The Company, Zhida Company, Chanchang Company, Nanning
Liaowang, Chongqing Guinuo, Liuzhou Lighting, Liuzhou 15%
Foreshine
FSL Lighting GmbH 15%
Indonesia Liaowang 10%
Other subsidiaries 25%
2. Tax Preference
The Company passed the re-examination for High-tech Enterprises in 2020, as well as won the “Certificate of
High-tech Enterprise” after approval by Department of Science and Technology of Guangdong Province,
Department of Finance of Guangdong Province, Guangdong Provincial Bureau of State Taxation and Guangdong
Provincial Bureau of Local Taxation. In accordance with relevant provisions in Corporate Income Tax Law of the
People’s Republic of China and the Administration Measures for Identification of High-tech Enterprises
promulgated in 2007, the Company paid the corporate income tax based on a tax rate of 15% within three years
since 1 January 2020.
Zhida Company and Chanchang Company passed the examination for High-tech Enterprises respectively in
December 2019 and December 2021, and thus Zhida Company and Chanchang Company paid the corporate
income tax based on a tax rate of 15% within three years respectively since 1 January 2019 and 1 January 2021 in
accordance with relevant provisions in Corporate Income Tax Law of the People’s Republic of China and the
Administration Measures for Identification of High-tech Enterprises promulgated in 2007.
3. According to the Decision on Tax Matters approved by the Local Taxation Bureau of Nanning High-tech
Industrial Development Zone (NGDSSB [2015] No. 1), Nanning Liaowang will enjoy the preferential tax reduction
and exemption of enterprise income tax in the western development from 1 January 2015, and the enterprise income
tax will be levied at a reduced rate of 15%.
4. After being examined and filed by the competent tax authorities, Chongqing Guinuo will enjoy the preferential
tax reduction and exemption of enterprise income tax in the western development from 1 January 2019, and the
enterprise income tax will be levied at a reduced rate of 15%.
5. According to the letter (LFGH Zi [2020] No. 196) issued by Liuzhou Development and Reform Commission on
17 August 2020, Liuzhou Guige Photoelectric is determined to be in line with the encouraged industries in the
western region, and the enterprise income tax will be paid at a reduced rate of 15% from 1 January 2020.
6. According to the letter (GKGH [2021] No. 237) jointly issued by the Science and Technology Department of
Guangxi Zhuang Autonomous Region, Finance Department of Guangxi Zhuang Autonomous Region and Guangxi
Zhuang Autonomous Region Tax Service, State Taxation Administration on 30 November 2021, Liuzhou Guige
Fuxuan is recognized as a high-tech enterprise (the certificate has not been obtained yet), and the preferential tax
rate of income tax for high-tech enterprises is 15%.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3. Other
Pay in accordance with the relevant provisions of the tax law
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Assets
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 16,733.10 14,800.25
Bank deposits 1,053,051,643.16 883,112,636.02
Other monetary assets(Note 1) 330,829,702.26 96,541,013.22
Unexpired interest(Note 2) 320,465.75 1,581,250.00
Total 1,384,218,544.27 981,249,699.49
Of which: Total amount deposited
26,786,097.33 1,127,886.79
overseas
Other notes
Note 1: Other monetary assets were security deposits for notes and performance bonds, as well as investments
placed with security firm and the balance with e-commerce platforms, of which the security deposits for notes and
performance bonds were restricted assets (see “81. Assets with Restricted Ownership or Right of Use” in Note
“VII Notes to Consolidated Financial Statements”).
Note 2: Unexpired interest did not belong to cash and cash equivalents.
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value through profit
328,248,125.61 407,619,201.36
or loss
Including:
Debt instrument investments
Equity instrument investments 1,558,778.18
Wealth management products 322,422,447.43 401,286,301.36
Others 4,266,900.00 6,332,900.00
Including:
Total 328,248,125.61 407,619,201.36
237
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3. Derivative Financial Assets
Naught
4. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 594,208,093.58 140,972,143.00
Total 594,208,093.58 140,972,143.00
Note: The ending balance of notes receivable increased by 321.51% to RMB453,235,950.58 compared with the beginning of the
period, which was mainly due to the combination of Nanning Liaowang not under the same control of RMB517,137,558.88 in the
current period.
Note:
Please refer to the relevant information of disclosure of bad debt provision of other receivables if adopting the general mode of
expected credit loss to withdraw bad debt provision of notes receivable.
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting Period
Naught
(3) Notes Receivable Pledged at the Period-end
Unit: RMB
Item Amount pledged at the period-end
Bank acceptance bill 275,626,604.28
Total 275,626,604.28
(4) Notes Receivable which Had Endorsed by the Company or Had Discounted and Had not Due on the
Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination at the Amount of not recognition termination at
Item
period-end the period-end
Bank acceptance bill 431,082,830.83
Total 431,082,830.83
238
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(5) Notes Transferred to Accounts Receivable because Drawer of the Notes Fails to Executed the Contract
or Agreement
Naught
(6) The Actual Write-off Notes Receivable
Naught
5. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra Withdraw
Carrying Carrying
Proportio wal Proportio al
Amount Amount value Amount Amount value
n proportio n proportio
n n
Accounts receivable
26,084,5 23,840,3 2,244,165 15,257,66 9,569,331 5,688,330.8
withdrawn bad debt 1.68% 91.40% 1.27% 62.72%
22.39 56.97 .42 2.85 .99 6
provision separately
Of which:
Accounts receivable
1,523,45 72,968,0 1,450,484 1,185,342 56,797,28 1,128,544,9
withdrawn bad debt 98.32% 4.79% 98.73% 4.79%
2,180.67 69.61 ,111.06 ,187.03 2.19 04.84
provision by group
Of which:
(1) General business 1,523,45 72,968,0 1,450,484 1,185,342 56,797,28 1,128,544,9
98.32% 4.79% 98.73% 4.79%
portfolio 2,180.67 69.61 ,111.06 ,187.03 2.19 04.84
(2) Internal business
portfolio
1,549,53 96,808,4 1,452,728 1,200,599 66,366,61 1,134,233,2
Total 100.00% 6.25% 100.00% 5.53%
6,703.06 26.58 ,276.48 ,849.88 4.18 35.70
Note: The ending balance of accounts receivable increased by 28.08% to RMB318,495,040.78 compared w ith the beginning of the
period, which was mainly due to the combination of Nanning Liaowang not under the same control in the current period. On the
purchase date, the book balance of accounts receivable of Nanning Liaowang was RMB261,213,859.26, and the expected credit loss
balance was RMB27,802,323.36.
Individual withdrawal of bad debt provision:
Unit: RMB
Name Ending balance
239
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Involved in the lawsuit,
the Company won the
Customer A 11,220,827.14 8,976,661.72 80.00% lawsuit in the second
instance, which had not
yet executed completely
Existing pending
Customer B 9,111,336.51 9,111,336.51 100.00%
litigation matters
Existing pending
Customer C 4,702,051.28 4,702,051.28 100.00%
litigation matters
Existing pending
Customer D 526,858.54 526,858.54 100.00%
litigation matters
The customer had
executed bankruptcy
Customer E 523,448.92 523,448.92 100.00% liquidation in December
2020, thus the accounts
were unrecoverable.
Total 26,084,522.39 23,840,356.97 -- --
Withdrawal of bad debt provision by group:
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Credit risk group 1,523,452,180.67 72,968,069.61 4.79%
Total 1,523,452,180.67 72,968,069.61 --
Please refer to the relevant information of disclosure of bad debt provision of other receivables if adopting the general mode of
expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 1,417,722,342.04
1 to 2 years 62,047,044.50
2 to 3 years 22,972,772.35
Over 3 years 46,794,544.17
3 to 4 years 24,800,747.87
4 to 5 years 12,031,839.07
Over 5 years 9,961,957.23
240
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Total 1,549,536,703.06
(2) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting Period
The amount of expected credit loss accrued in the current period is RMB4,202,667.10, and the amount of expected
credit loss recovered or reversed in the current period is RMB0.00, which is RMB98.71 different from the amount
of credit impairment loss accrued in the current period of RMB4,202,568.39, which is caused by the translation
difference of foreign currency statement of Indonesia Liaowang at the end of the period.
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
Item Amount
No. 1 1,036,835.71
No. 2 247,740.00
No. 3 117,554.16
No. 4 86,000.00
No. 5 40,908.20
No. 6 23,972.28
No. 7 10,000.00
Other retails accounts 167.71
Of which, verification of significant accounts receivable:
Unit: RMB
Whether occurred
because of
Name of the entity Nature Amount Reason Procedure
related-party
transactions
After litigation and The approval
compulsory procedure is carried
No. 1 Payment for goods 1,036,835.71 execution, the other out according to the Not
party has no Company’s rules for
enforceable property managing bad debt.
The approval
procedure is carried
No. 2 Payment for goods 247,740.00 Unrecoverable out according to the Not
Company’s rules for
managing bad debt.
The approval
No. 3 Payment for goods 117,554.16 Unrecoverable Yes
procedure is carried
241
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
out according to the
Company’s rules for
managing bad debt.
Total -- 1,402,129.87 -- -- --
Note:
The approval procedure for the verification of accounts receivable during the Reporting Period had been performed in accordance
with provisions of the bad debt management system of the Company.
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Ending balance of accounts Proportion to total ending balance Ending balance of bad debt
Name of units
receivable of accounts receivable (%) provision
No. 1 166,366,875.25 10.74% 4,991,006.26
No. 2 131,241,873.99 8.47% 3,937,256.22
No. 3 89,015,269.51 5.74% 2,670,458.09
No. 4 52,487,287.78 3.39% 1,574,618.63
No. 5 26,525,457.91 1.71% 795,763.74
Total 465,636,764.44 30.05%
(5) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable
Naught
(6) Derecognition of Accounts Receivable due to the Transfer of Financial Assets
Naught
6. Accounts Receivable Financing
Naught
7. Prepayment
(1) Listed by Aging
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 14,144,142.09 70.30% 9,193,885.82 76.65%
242
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
1 to 2 years 3,949,733.77 19.63% 355,870.31 2.97%
2 to 3 years 231,355.67 1.15% 1,081,261.45 9.01%
Over 3 years 1,794,725.49 8.92% 1,363,727.47 11.37%
Total 20,119,957.02 -- 11,994,745.05 --
Note: The ending balance of prepayments increased by 67.74% to RMB8,125,211.97 compared with the beginning of the period,
which was mainly due to the combination of Nanning Liaowang not under the same control in the current period.
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
Unit: RMB
Relationship with the Proportion to total
Name of units Ending balance Prepayment time
Company prepayments (%)
No. 1 Non-related party 2,456,719.58 12.21% 2020-2021
No. 2 Non-related party 1,482,752.68 7.37% 2021
No. 3 Non-related party 1,327,340.00 6.60% 2021
No. 4 Non-related party 1,281,260.12 6.37% 2021
No. 5 Non-related party 1,250,000.00 6.21% 2021
Total 7,798,072.38 38.76%
8. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 34,082,909.41 20,194,968.19
Total 34,082,909.41 20,194,968.19
(1) Interest Receivable
Naught
(2) Dividends Receivable
Naught
(3) Other Receivables
1) Other Receivables Classified by Account Nature
Unit: RMB
243
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Nature Ending carrying amount Beginning carrying amount
Staff borrow and petty cash 4,018,439.87 7,866,311.07
Performance bond 9,165,300.58 4,166,580.10
Rent, water & electricity fees 2,564,557.87 3,389,778.15
VAT export tax refunds 4,674,335.06 195,141.85
Other 22,642,922.70 7,020,439.45
Total 43,065,556.08 22,638,250.62
Note: The ending balance of other receivables increased by 68.77% to RMB13,887,941.22 compared with the beginning of the period,
which was mainly due to the combination of Nanning Liaowang not under the same control in the current period. the book balanc e of
other receivables of Nanning Liaowang was RMB28,872,830.21, and the expected credit loss balance was RMB6,349,173.76.
2) Information of Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
499,462.41 1,943,820.02 2,443,282.43
2021
Balance of 1 January
2021 in the Current —— —— —— ——
Period
Withdrawal of the
-1,297,178.88 1,487,369.36 190,190.48
Current Period
Other changes (note) 1,607,681.38 452,034.40 4,289,457.98 6,349,173.76
Balance of 31 December
809,964.91 3,883,223.78 4,289,457.98 8,982,646.67
2021
Note: It is the expected credit loss balance of other receivables of Nanning Liaowang on the purchase date, of which the thir d stage is
the current accounts involved in litigation, and Nanning Liaowang has fully accrued the expected credit loss.
Changes of carrying amount with significant amount changed of loss provision in the current period
□Applicable √Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 26,998,830.90
244
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
1 to 2 years 9,016,668.21
2 to 3 years 4,127,817.63
Over 3 years 2,922,239.34
3 to 4 years 1,004,374.23
4 to 5 years 1,239,473.81
Over 5 years 678,391.30
Total 43,065,556.08
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The amount of expected credit loss accrued in the current period is RMB190,190.49, and the amount of expected credit loss
recovered or reversed in the current period is RMB0.00, which is RMB325.92 different from the amount of credit impairment loss
accrued in the current period of RMB189,864.57, which is caused by the translation difference of foreign currency statement of
Indonesia Liaowang at the end of the period.
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Naught
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to total
ending balance of Ending balance of
Name of the entity Nature Ending balance Aging
other receivables bad debt provision
(%)
No. 1 Intercourse accounts 7,060,000.00 Within 1 year 16.39% 211,800.00
No. 2 VAT export tax
4,674,335.06 Within 1 year 10.85% 140,230.05
refunds
No. 3 Intercourse accounts 4,289,457.98 1-2 years 9.96% 4,289,457.98
No. 4 Social insurance 2,242,142.33 Within 1 year 5.21% 67,264.27
No. 5 Performance bond 1,946,000.00 2-3 years 4.52% 583,800.00
Total -- 20,211,935.37 -- 46.93% 5,292,552.30
6) Accounts Receivable Involving Government Grants
Naught
7) Derecognition of Other Receivables due to the Transfer of Financial Assets
Naught
245
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables
Naught
9. Inventory
Whether the Company needs to comply with disclosure requirements for real estate industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Falling price Falling price
reserves of reserves of
inventory or inventory or
Item
Carrying amount depreciation Carrying value Carrying amount depreciation Carrying value
reserves of reserves of
contract contract
performance cost performance cost
Raw materials 247,709,680.24 5,172,760.57 242,536,919.67 177,234,228.73 2,901,800.45 174,332,428.28
Goods in process 66,382,820.07 66,382,820.07 40,969,288.80 40,969,288.80
Inventory goods 597,575,545.42 41,900,565.60 555,674,979.82 387,194,563.02 13,992,901.12 373,201,661.90
Goods in transit 93,671,492.20 3,530,794.31 90,140,697.89
Semi-finished
100,723,505.66 377,760.65 100,345,745.01 145,960,270.11 1,013,387.91 144,946,882.20
goods
Low priced and
easily worn 3,231,115.87 3,231,115.87 2,234,855.73 2,234,855.73
articles
Others 5,177,062.67 5,177,062.67
Total 1,114,471,222.13 50,981,881.13 1,063,489,341.00 753,593,206.39 17,908,089.48 735,685,116.91
(2)Falling Price Reserves of Inventory and Depreciation Reserves of Contract Performance Cost
Unit: RMB
Increase Decrease
Beginning
Item Reversal or Ending balance
balance Withdrawal Other (note) Other
write-off
Raw materials 2,901,800.45 2,974,237.10 1,105,571.99 1,808,848.97 5,172,760.57
246
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Inventory goods 13,992,901.12 27,507,871.77 11,399,695.96 10,999,903.25 41,900,565.60
Semi-finished
1,013,387.91 409,446.80 1,045,074.06 377,760.65
goods
Goods in transit 191,990.59 3,491,750.59 152,946.87 3,530,794.31
Others 1,899,338.66 1,899,338.66
Total 17,908,089.48 31,083,546.26 17,896,357.20 15,906,111.81 50,981,881.13
Note: refer to the increase generated from the consolidation of Nanning Liaowang not under the same control in
the Reporting Period.
Item Basis for withdrawal of falling price Reasons for reversal or write-off of falling Note
reserves of inventory price reserves of inventory
The lower one between the inventory Sales or scrap of raw materials
Raw materials
cost and net realizable value
The lower one between the inventory Sales or scrap of products
Inventory goods
cost and net realizable value
Goods in transit The lower one between the inventory Sales or scrap of products
cost and net realizable value
Reasons for the provision for inventory depreciation: Provisions are set for the stagnancy of a few raw materials;
some inventory products become temporarily idle due to classification.
(3) Notes to the Ending Balance of Inventories Including Capitalized Borrowing Expense
Naught
(4) Amortization Amount of Contract Performance Cost during the Reporting Period
Naught
10. Contract Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Depreciation
Carrying value Carrying value
amount reserves amount reserves
Contract assets 8,826,085.67 264,782.57 8,561,303.10
Total 8,826,085.67 264,782.57 8,561,303.10
11. Held-for-Sale Assets
Unit: RMB
247
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Ending carrying Depreciation Ending carrying Estimated Estimated
Item Fair value
amount reserves value disposal expense disposal time
Houses, buildings
31 December
and land involved 23,831,992.10 23,831,992.10 183,855,895.00 55,718,333.95
2022
in expropriation
Total 23,831,992.10 23,831,992.10 183,855,895.00 55,718,333.95 --
Other notes:
Note: For details, see Note 20 "Demolition Matters of Nanjing Fozhao". The estimated disposal costs include employee resettle ment
fees, compensation for the termination of the original tenant's contract, and taxes related to the proceeds of de molition.
12. Current Portion of Non-current Assets
Naught
13. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
Large bank deposit certificate (note) 90,417,315.07
Input tax of VAT to be certified and
84,065,408.31 84,673,053.78
deducted
Advance payment of enterprise income tax 1,573,600.91
Others 54,979.52
Total 85,693,988.74 175,090,368.85
Other notes;
Bank deposit receipts of large amounts with a maturity of over three months which were transferable but not redeemable until
maturity.
14. Creditor’s Rights Investment
Naught
15. Other Creditor’s Rights Investment
Naught
16. Long-term Accounts Receivable
Naught
248
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
17. Long-term Equity Investment
Unit: RMB
Increase/decrease
Ending
Gains and Adjustme
Beginnin Cash Withdraw Ending balance
Additiona losses nt of
g balance Reduced Changes bonus or al of balance of
Investees l recognize other
(carrying investmen of other profits impairme Other (carrying depreciati
investmen d under comprehe
value) t equity announce nt value) on
t the equity nsive
d to issue provision reserves
method income
I. Joint ventures
II. Associated enterprises
Shenzhen
Primatron
ix 181,365,0 2,260,497 2,080,390 181,545,1
(Nanho) 16.32 .27 .50 23.09
Electronic
s Ltd.
181,365,0 2,260,497 2,080,390 181,545,1
Subtotal
16.32 .27 .50 23.09
181,365,0 2,260,497 2,080,390 181,545,1
Total
16.32 .27 .50 23.09
18. Other Equity Instrument Investment
Unit: RMB
Item Ending balance Beginning balance
Non-listed equity investment 500,000.00 5,054,176.40
Listed equity investment 1,474,360,785.15 3,300,446,853.66
Total 1,474,860,785.15 3,305,501,030.06
Disclosure of non-trading equity instrument investment by items
Unit: RMB
Reason for
Amount of other Reason for other
assigning to
comprehensive comprehensive
Dividend income Accumulative Accumulative measure in fair
Item income income
recognized gains losses value and the
transferred to transferred to
changes included
retained earnings retained earnings
in other
249
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
comprehensive
income
Not satisfied with Sale of
Stock of Xiamen the condition of shareholdings
19,748,551.68 353,361,994.91 93,217,030.86
Bank trading equity
instrument
Not satisfied with Sale of
Stock of Gotion the condition of shareholdings
803,565,100.63 903,146,499.85
High-tech trading equity
instrument
Not satisfied with Sale of
Stock of the condition of shareholdings
3,894,818.34 33,804,550.70
Everbright Bank trading equity
instrument
Not satisfied with
Stock of
the condition of
Nationstar 1,538,511.32
trading equity
Optoelectronics
instrument
Foshan Fochen Not satisfied with Sale of
Highway the condition of shareholdings
10,875,167.71
Development Co., trading equity
Ltd. instrument
Other notes:
Note: The ending balance of other equity instrument investment was RMB-1,830,640,244.91, decreasing by 55.38%, which was
caused by sales of some stocks in the current period.
19. Other Non-current Financial Assets
Naught
20. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Land use right Construction in progress Total
I. Original carrying value
1. Beginning balance
2. Increased amount of
49,792,377.90 49,792,377.90
the period
250
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(1) Outsourcing
(2) Transfer from
inventories/fixed
49,792,377.90 49,792,377.90
assets/construction in
progress
(3) Enterprise
combination increase
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance 49,792,377.90 49,792,377.90
II. Accumulative
depreciation and
accumulative
amortization
1. Beginning balance
2. Increased amount of
6,444,553.56 6,444,553.56
the period
(1) Withdrawal or
591,284.49 591,284.49
amortization
(2) Transfer from
inventories/fixed
5,853,269.07 5,853,269.07
assets/construction in
progress (note)
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance 6,444,553.56 6,444,553.56
III. Depreciation reserves
1. Beginning balance
2. Increased amount of
the period
(1) Withdrawal
251
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1. Ending carrying value 43,347,824.34 43,347,824.34
2. Beginning carrying
value
(2) Investment Property Adopting the Fair Value Measurement Mode
□ Applicable √ Not applicable
(3) Investment Property Failed to Accomplish Certification of Property
Other notes
In October 2021, the Company held the 20th meeting of the ninth Board of Directors, where the Proposal on
Changing Some Self-used Real Estate into Investment Real Estate and Measuring by Cost Model was deliberated
and adopted, and the K2 and K3 buildings of Gaoming Fuwan Standard Workshop were changed from fixed assets
projects to investment real estate projects, measured by cost model, and depreciation was accrued by the same
method as fixed assets.
21. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 1,323,076,326.60 685,707,548.55
Disposal of fixed assets
Total 1,323,076,326.60 685,707,548.55
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Electronic
Item Total
buildings equipment equipment equipment
252
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
I. Original carrying
value
1. Beginning
949,016,860.88 758,424,898.71 21,812,402.45 31,973,759.69 1,761,227,921.73
balance
2. Increased
555,809,608.91 496,874,274.30 17,554,115.68 11,649,527.67 1,081,887,526.56
amount of the period
(1) Purchase 1,607,505.81 70,262,183.04 1,120,502.82 3,528,254.56 76,518,446.23
(2) Transfer
from construction in 1,241,854.38 28,794,297.61 20,088.49 30,056,240.48
progress
(3) Enterprise
552,954,860.11 397,812,688.27 16,433,247.05 8,101,171.12 975,301,966.55
combination increase
(4) Others
5,388.61 5,105.38 365.81 13.50 10,873.30
(note)
3. Decreased
189,692,181.66 17,760,021.13 2,924,011.24 486,326.24 210,862,540.27
amount of the period
(1) Disposal or
119,223,121.12 17,388,683.55 2,697,365.24 388,960.36 139,698,130.27
scrap
(2) Equipment
transformation
(3) Transfer
into investment 49,792,377.90 49,792,377.90
property
(4) Others
20,676,682.64 371,337.58 226,646.00 97,365.88 21,372,032.10
(note)
4. Ending balance 1,315,134,288.13 1,237,539,151.88 36,442,506.89 43,136,961.12 2,632,252,908.02
II. Accumulative
depreciation
1. Beginning
485,466,988.27 544,961,514.42 16,641,194.44 26,409,762.43 1,073,479,459.56
balance
2. Increased
149,848,278.22 213,102,232.90 12,237,551.66 6,403,908.90 381,591,971.68
amount of the period
(1) Withdrawal 38,269,817.31 61,555,839.99 2,296,408.80 2,038,449.30 104,160,515.40
(2) Enterprise
111,577,060.55 151,543,552.88 9,940,676.08 4,365,442.15 277,426,731.66
combination increase
(3) Others 1,400.36 2,840.03 466.78 17.45 4,724.62
3. Decreased
131,254,902.80 13,348,260.01 2,697,430.50 410,475.65 147,711,068.96
amount of the period
253
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(1) Disposal or
111,285,269.26 13,039,992.46 2,493,449.10 351,709.23 127,170,420.05
scrap
(2) Equipment
transformation
(3) Transfer
into investment 5,853,269.07 5,853,269.07
property
(4) Others
14,116,364.47 308,267.55 203,981.40 58,766.42 14,687,379.84
(note)
4. Ending balance 504,060,363.69 744,715,487.31 26,181,315.60 32,403,195.68 1,307,360,362.28
III. Depreciation
reserves
1. Beginning
2,040,485.59 428.03 2,040,913.62
balance
2. Increased
amount of the period
(1) Withdrawal
3. Decreased
224,694.48 224,694.48
amount of the period
(1) Disposal or
224,694.48 224,694.48
scrap
(2) Equipment
transformation
4. Ending balance 1,815,791.11 428.03 1,816,219.14
IV. Carrying value
1. Ending carrying
811,073,924.44 491,007,873.46 10,261,191.29 10,733,337.41 1,323,076,326.60
value
2. Beginning
463,549,872.61 211,422,898.70 5,171,208.01 5,563,569.23 685,707,548.55
carrying value
Note: Other assets such as houses and buildings involved in demolition of Nanjing Fozhao have been transferred to assets held for sale.
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Original carrying Accumulated Depreciation
Item Carrying value Note
value depreciation reserves
T5, T8, 7,270,900.82 5,675,051.55 1,536,308.44 59,540.83
254
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
energy-saving lamp
production line
Total 7,270,900.82 5,675,051.55 1,536,308.44 59,540.83
(3) Fixed Assets Leased out by Operation Lease
Naught
(4) Fixed Assets Failed to Accomplish Certification of Property
Other notes
The Company's Fuwan Standard Workshop J3, Fuwan Standard Workshop K1, Building 8 of Gaoming Family
Dormitory, Fuwan Staff Dormitory Building 7, Family Dormitory Building 3 to 6, Staff Village Dormitory Building
A, Staff Village Dormitory Building 2, 3, 5, 6, 10 to 13, Staff Dormitory Building 1 to 4, Fuwan Energy Saving
Lamp Workshop 2, Glass Workshop 8, Glass Workshop 9, Fluorescent Lamp Workshop, Standard Workshop A and
led Workshop have been completed and put into use and carried forward fixed assets. As of 31 December 2021, the
relevant real estate licenses are being processed. In addition, the ownership of four parking spaces of Nanning
Liaowang at No. 584 Zhenghe City, No. 155 Kerui Jiangyun, No. 160 Kerui Jiangyun and No. 588 Zhenghe City,
Liuzhou, are being processed. The management believed that there are no substantive legal barriers to the handling
of these title certificates, and it will not have a significant adverse impact on the normal operation of the Company.
(5) Disposal of Fixed Assets
Naught
22. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 730,595,319.42 503,941,120.31
Total 730,595,319.42 503,941,120.31
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
Construction in
731,914,119.42 1,318,800.00 730,595,319.42 503,941,120.31 503,941,120.31
progress
Total 731,914,119.42 1,318,800.00 730,595,319.42 503,941,120.31 503,941,120.31
255
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Of
Proporti
which:
on of Accumul Capitaliz
amount
accumul ative ation rate
Transferr of
Beginnin Other ative amount of
Increase ed in Ending Job capitaliz Capital
Item Budget g decrease investme of interests
d amount fixed balance schedule ed resources
balance d amount nt in interest for the
assets interests
construct capitaliz Reportin
for the
ions to ation g Period
Reportin
budget
g Period
Kelian 726,738, 448,595, 52,999,4 501,594, 36,640,9
Building 77.99% 76.73% Other
900.00 364.96 87.08 852.04 53.02
15th and
16th
floors 115,752, 106,195, 106,195,
office 100.00% 98.00% Other
buildings 763.00 222.94 222.94
of R&F
Center
Gaoming
R&D
Worksho 71,690,0 31,610,8 21,920,2 53,531,0
84.38% 87.00% Other
p 11, 12, 00.00 09.51 51.81 61.32
13, 14
and 18
FSL
intellige
nt 89,680,0 23,808,8 23,808,8
manufact 30.00% 30.00% Other
uring 00.00 49.57 49.57
factory
project
Gaoming 115,000, 5,236,80 16,972,6 22,209,4
office 21.82% 10.00% Other
building 000.00 1.98 49.43 51.41
Overhaul
of
Gaoming
No. 8
tank
furnace 10,890,0 6,242,79 6,242,79
Work 64.78% 70.00% Other
00.00 9.53 9.53
order:
20029
Gaoming
tank
furnace
Chongqi
ng
Guinuo 14,676,7 12,759,2 12,164,4 594,723.
98.24% 94.14% Other
machiner 05.40 09.37 86.22 15
y and
equipme
256
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
nt batch
Gaoming
LED T8
worksho 4,170,00 3,691,77 3,691,77
p 96.50% 100.00% Other
0.00 6.89 6.89
relocatio
n
Relocati
on and
reconstru
ction
project
of 6,542,60 5,903,25 5,903,25
general 98.35% 100.00% Other
light 0.00 4.16 4.16
bulb
worksho
p
(formerl
y T8 I)
48 t
electric
furnace 11,650,0 4,721,11 4,643,52 9,364,64
(18025) 90.83% 100.00% Other
Gaoming 00.00 9.09 7.44 6.53
tank
furnace
APS 2,990,00 877,679. 1,919,11 2,796,79
system 100.00% 100.00% Other
project 0.00 42 4.72 4.14
Upgradi
ng and
reconstru
ction
project
of 2,800,00 1,024,80 466,385. 1,491,19
60.18% 100.00% Other
Haolaite 0.00 9.18 92 5.10
producti
on
worksho
p and
office
Relocati
on and
reconstru
ction
project
of
medium 1,877,28 1,590,89 1,590,89
lamp 95.76% 100.00% Other
0.00 8.68 8.68
worksho
p
(original
paper
products
)
Self-mad
e 1 fifth
generatio
n 2,000,00 1,011,23 686,583. 1,697,82
95.93% 100.00% Other
LEDT8 0.00 9.59 35 2.94
lamp
automati
c
257
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
assembly
line
Work
order:
20030
Gaoming
LEDT8
1,176,45 493,077, 259,800, 24,718,1 13,982,7 714,176, 36,640,9
Total -- -- --
8,248.40 823.73 010.89 50.79 23.87 959.96 53.02
(3) List of the Withdrawal of the Depreciation Reserves for Construction in Progress
Unit: RMB
Item Amount withdrawn Reason for withdrawal
Oxidation line engineering 1,318,800.00 Idleness
Total 1,318,800.00 --
(4) Engineering Materials
Naught
23. Productive Living Assets
Naught
24. Oil and Gas Assets
□ Applicable √ Not applicable
25. Right-of-use Assets
Unit: RMB
Item Houses and buildings Land use right Total
I. Original carrying value
1. Beginning balance 851,453.04 28,139,965.65 28,991,418.69
2. Increased amount of the
17,081,728.89 17,081,728.89
period
(1) Leased in 10,378,526.12 10,378,526.12
(2) Business combination
6,703,202.77 6,703,202.77
increase
3. Decreased amount of the
725,181.47 2,451,601.62 3,176,783.09
period
4. Ending balance 17,208,000.46 25,688,364.03 42,896,364.49
258
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
II. Accumulated amortization
1. Beginning balance 14,234.11 25,034,096.28 25,048,330.39
2. Increased amount of the
6,020,215.21 1,291,150.56 7,311,365.77
period
(1) Withdrawal 2,689,218.04 1,291,150.56 3,980,368.60
(2) Business combination
3,330,997.17 3,330,997.17
increase
3. Decreased amount of the
684,511.68 2,275,958.99 2,960,470.67
period
4. Ending balance 5,349,937.64 24,049,287.85 29,399,225.49
IV. Carrying value
1. Ending carrying value 11,858,062.82 1,639,076.18 13,497,139.00
2. Beginning carrying value 837,218.93 3,105,869.37 3,943,088.30
26. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Non-patent
Item Land use right Patent Software Others (note 1) Total
technology
I. Original
carrying value
1. Beginning
232,199,092.68 4,597,419.45 7,622,600.00 244,419,112.13
balance
2. Increased
amount of the 126,333,626.70 19,051.89 14,141,452.07 61,387.26 140,555,517.92
period
(1) Purchase 26,596,784.43 5,774,506.85 12,277.36 32,383,568.64
(2) Internal
R&D
(3) Business
combination 99,736,842.27 19,051.89 8,366,945.22 49,109.90 108,171,949.28
increase
3. Decreased
amount of the 24,594,710.00 24,594,710.00
period
259
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(1) Disposal
(2) Others
24,594,710.00 24,594,710.00
(note 2)
4. Ending
333,938,009.38 19,051.89 18,738,871.52 7,683,987.26 360,379,920.05
balance
II. Accumulated
amortization
1. Beginning
71,255,724.77 2,215,427.39 254,086.67 73,725,238.83
balance
2. Increased
amount of the 17,810,980.47 1,428.93 3,414,683.43 812,392.88 22,039,485.71
period
(1)
5,720,423.15 793.85 1,261,650.26 767,375.56 7,750,242.82
Withdrawal
(2) Business
combination 12,090,557.32 635.08 2,153,033.17 45,017.32 14,289,242.89
increase
3. Decreased
amount of the 7,447,370.16 7,447,370.16
period
(1) Disposal
(2) Others
7,447,370.16 7,447,370.16
(note 2)
4. Ending
81,619,335.08 1,428.93 5,630,110.82 1,066,479.55 88,317,354.38
balance
III. Depreciation
reserves
1. Beginning
balance
2. Increased
amount of the 388,613.87 388,613.87
period
(1)
388,613.87 388,613.87
Withdrawal
3. Decreased
amount of the
period
(1) Disposal
260
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
4. Ending
388,613.87 388,613.87
balance
IV. Carrying
value
1. Ending
252,318,674.30 17,622.96 12,720,146.83 6,617,507.71 271,673,951.80
carrying value
2. Beginning
160,943,367.91 2,381,992.06 7,368,513.33 170,693,873.30
carrying value
The proportion of intangible assets formed from the internal R&D of the Company at the period-end to the ending balance of
intangible assets was 0.00%.
(2) Land Use Right with Certificate of Title Uncompleted
Other notes:
Note 1: Intangible assets-others mainly include the marketing channels and human resources invested by Foshan Nationstar
Optoelectronics Co., Ltd. (hereinafter referred to as "Nationstar") in Haolaite Company.
Note 2: Other reductions in intangible assets in the current period are the land involved in demolition in Nanjing Fozhao, which has
been transferred to assets held for sale.
27. Development Costs
Naught
28. Goodwill
(1) Original Carrying Value of Goodwill
Unit: RMB
Name of the Increase Decrease
invested units or Beginning Formed by
Ending balance
events generating balance business Disposal
goodwill combination
Nanning 16,211,469.82 16,211,469.82
Liaowang Auto
Lamp Co., Ltd.
Total 16,211,469.82 16,211,469.82
261
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Note: It is the difference between the combined consideration paid and the fair value of the identifiable net
assets purchased (including the recognized deferred income tax liabilities).
(2) Depreciation Reserves of Goodwill
None
29. Long-term Prepaid Expense
Unit: RMB
Amortization Other decreased
Item Beginning balance Increased amount Ending balance
amount of the period amount
Mould 879,096.86 123,131,220.31 36,882,355.13 87,127,962.04
Expense on
maintenance and 10,828,775.09 25,349,246.45 8,118,275.54 28,059,746.00
decoration
Boarding box 4,466,068.58 1,474,241.95 578.17 2,991,248.46
Other 1,703,354.28 9,119,292.30 3,762,663.03 7,059,983.55
Total 13,411,226.23 162,065,827.64 50,237,535.65 578.17 125,238,940.05
Other notes
Note: Due to the merger of Nanning Liaowang not under the same control in the current period, RMB94,182,937.64 of the increas e in
long-term deferred expenses in the current period is the amortized amount on the purchase day, mainly for automobile lamp
manufacturing molds.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Provision for impairment 160,147,646.18 24,951,655.41
88,758,899.69 14,118,876.93
of assets
Unrealized profit of
21,677,239.37 3,251,585.91 5,784,713.24 867,706.99
internal transactions
Undistributed deficit 36,016,962.39 7,312,677.73 20,735,316.21 5,183,829.06
Depreciation of fixed
63,273,361.51 9,491,004.25 71,106,985.78 10,810,152.06
assets
Payroll payable 51,262,888.11 7,689,433.22 61,821,414.20 9,273,212.13
262
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Accrued liabilities 7,671,948.69 1,150,792.30
Others 1,625,953.13 364,138.46
Total 341,675,999.38 54,211,287.28 248,207,329.12 40,253,777.17
Deferred income tax assets increased by 34.67% to RMB13,957,510.11 at the end of the period compared with the beginning of the
period, which was mainly due to the combination of Nanning Liaowang not under the same control in the current period.
(2) Deferred Income Tax Liabilities Had not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Assets assessment
appreciation from
business consolidation 93,485,366.87 14,022,805.03
not under the same
control
Changes in fair value of
financial assets recorded
1,152,615,606.86 172,892,341.03 2,758,137,833.20 413,720,674.97
into other comprehensive
income
Changes in fair value of
held-for-trading financial 4,912,265.32 776,194.13 6,332,900.00 949,935.00
assets
Total 1,251,013,239.05 187,691,340.19 2,764,470,733.20 414,670,609.97
Deferred income tax liabilities decreased by 54.74% at the end of the period to RMB-226,979,269.78 compared with the beginning of
the period, which was mainly due to the Company's sale of some stocks in the current period and the corresponding accumulated fair
value changes carried forward.
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
Mutual set-off amount of Amount of deferred Mutual set-off amount of Amount of deferred
deferred income tax income tax assets or deferred income tax income tax assets or
Item
assets and liabilities at liabilities after off-set at assets and liabilities at liabilities after off-set at
the period-end the period-end the period-begin the period-begin
Deferred income tax
54,211,287.28 40,253,777.17
assets
Deferred income tax 187,691,340.19 414,670,609.97
263
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
liabilities
(4) List of Unrecognized Deferred Income Tax Assets
Naught
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Naught
31. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserve value amount reserve value
455,129,434. 455,129,434.
Prepayments for equity acquisition (note)
98 98
Prepayments for construction and 14,219,171.6 14,219,171.6 10,401,758.4 10,401,758.4
equipment 5 5 7 7
Assets of subsidiaries to be cleared and
803,224.12 803,224.12 1,022,085.15 1,022,085.15
cancelled
470,151,830. 470,151,830. 11,423,843.6 11,423,843.6
Total
75 75 2 2
Other notes: Refer to the prepayments for purchasing 30% of equity to former shareholders of NationStar Optoelectronics in
accordance with the Share Transfer Agreement.
32. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Guarantee loans 97,700,000.00
Credit loans 128,914,000.00
Interest from short-term borrowings 165,997.01
Total 226,779,997.01
Notes of short-term borrowings category:
List of short-term borrowings as of 31 December 2021 was as follows:
264
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Unit: RMB
Borrowing contract number Loan balance Term of borrowing Conditions of Annual interest rate
loan
GJKFYHWHLDZJDK441020210110 63,757,000.00 2021-12-7 to 2022-12-7 Credit loans 1.2711%
0001595
GJKFYHWHLDZJDK441020210110 63,757,000.00 2021-12-20 to 2022-12-20 Credit loans 1.3115%
0001595
XYGDMYBLJZ (2021) No. 1001 47,700,000.00 2021-2-1 to 2022-2-1 Guarantee, 2.76%
pledge
XY WYZH2021012600174 10,000,000.00 2021-1-26 to 2022-1-26 Guarantee, 2.97%
pledge
XYMYZH2021042100146 20,000,000.00 2021-4-21 to 2022-4-21 Guarantee, 2.97%
pledge
XYMYZH2021042100164 20,000,000.00 2021-4-21 to 2022-4-21 Guarantee, 2.97%
pledge
LZYHKJZHJK210418069785 1,400,000.00 2021-4-18 to 2022-4-18 Credit loans 4.90%
Total 226,614,000.00 —— —— ——
Note: see Note XIV-(III) Others for details about guarantees of short-term borrowings.
(2) List of the Short-term Borrowings Overdue but not Returned
Naught
33. Held-for-trading Financial Liabilities
Naught
34. Derivative Financial Liabilities
Naught
35. Notes Payable
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 826,164,918.71 480,971,214.80
Total 826,164,918.71 480,971,214.80
The total amount of the due but not paid notes payable at the end of the period was of RMB0.00.
The ending balance of bills payable increased by 71.77% to RMB345,193,703.91 compared with the beginning of the period,
which was mainly due to RMB353,248,472.44 arising from the combination of Nanning Liaowang not under the same control in the
current period.
265
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
36. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Accounts payable 1,554,585,231.38 1,059,674,020.99
Total 1,554,585,231.38 1,059,674,020.99
The ending balance of accounts payable increased by 46.70% to RMB494,911,210.39 compared with the beginning of the period,
which was mainly due to the combination of Nanning Liaowang not under the same control in the current period.
(2) Significant Accounts Payable Aging over One Year
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Supplier A 50,857,480.81 Not reaching the settlement period
Supplier B 11,408,340.39 No settlement yet for quality dispute
Supplier C 5,937,450.99 No settlement yet for quality dispute
Supplier D 4,273,965.99 Not reaching the settlement period
Total 72,477,238.18 --
37. Advances from Customer
(1) List of Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Advances from customers 8,106,923.79 1,285,357.28
Total 8,106,923.79 1,285,357.28
(2) Significant Advances from Customers Aging over One Year
Naught
38. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Advances from customers 84,818,285.22 65,777,726.45
266
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Total 84,818,285.22 65,777,726.45
39. Employee Benefits Payable
(1) List of Employee Benefits Payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 82,485,090.47 781,021,939.02 775,031,452.39 88,475,577.10
II. Post-employment
benefit-defined 56,718,237.36 56,267,925.26 450,312.10
contribution plans
III. Termination benefits 231,106.93 231,106.93
Total 82,485,090.47 837,971,283.31 831,530,484.58 88,925,889.20
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus,
82,131,394.79 701,502,776.07 698,073,511.49 85,560,659.37
allowance, subsidy
2. Employee welfare 32,127,911.04 31,335,455.09 792,455.95
3. Social insurance 25,647,623.95 25,169,757.60 477,866.35
Of which: Medical
19,980,988.36 19,575,936.99 405,051.37
insurance premiums
Work-re
1,305,393.14 1,236,876.17 68,516.97
lated injury insurance
Materni
4,361,242.45 4,356,944.44 4,298.01
ty insurance
4. Housing fund 15,028,878.11 14,865,923.40 162,954.71
5. Labor union budget
and employee education 353,695.68 6,714,749.85 5,586,804.81 1,481,640.72
budget
Total 82,485,090.47 781,021,939.02 775,031,452.39 88,475,577.10
(3) List of Defined Contribution Plans
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
267
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
1. Basic pension benefits 55,513,044.63 55,077,515.01 435,529.62
2. Unemployment
1,137,309.73 1,122,527.25 14,782.48
insurance
3. Annuity 67,883.00 67,883.00
Total 56,718,237.36 56,267,925.26 450,312.10
Other notes:
The Company participates in the scheme of pension insurance and unemployment insurance established by government agencies as
required. According to the scheme, fees are paid to it on a monthly basis and at the rate of stipulated by government agencie s. In
addition to the above monthly deposit fees, the Company no longer assumes further payment obligations. Corresponding expenses
are recorded into the current profits or losses or the cost of related assets when incurred.
(4) Termination Benefits
Item Beginning balance Increase Decrease Ending balance
1. Compensation for termination of 231,106.93 231,106.93
labor relations
2. Estimated internal staff
expenditure
Total 231,106.93 231,106.93
40. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 12,999,526.19 7,470,456.34
Corporate income tax 54,088,937.37 6,753,904.80
Personal income tax 2,643,442.46 1,009,832.30
Urban maintenance and construction tax 2,060,219.96 1,174,681.01
VAT of land 6,392,510.40 414,132.63
Education surcharge 1,536,805.36 845,486.44
Property tax 821,836.12 315,798.24
Land use tax 545,215.31 187,752.00
Other 922,566.28 704,613.75
Total 82,011,059.45 18,876,657.51
41. Other Payables
Unit: RMB
Item Ending balance Beginning balance
268
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Dividends payable 15,646.07
Other payables 298,795,466.66 76,668,330.66
Total 298,811,112.73 76,668,330.66
(1) Interest Payable
Naught
(2) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 15,646.07
Total 15,646.07
(3) Other Payables
1) Other Payables Listed by Nature
Unit: RMB
Item Ending balance Beginning balance
Account current 165,250,657.72
Performance bond 51,177,605.86 42,365,111.53
Relevant expense of sales 5,853,486.17 3,143,336.62
Compensation for lawsuit 1,082,784.95
Payments for demolition 54,990,047.00
Other 21,523,669.91 30,077,097.56
Total 298,795,466.66 76,668,330.66
2) Significant Other Payables Aging over One Year
Unit: RMB
Item Ending balance Reason for not repayment or carry-over
Unit A 120,352,181.20 Unsettled
Unit B 5,327,583.26 Unsettled for involving in lawsuits
Total 125,679,764.46 --
Other notes
The ending balance of other payables increased by 289.75% to RMB222,142,782.07 compared with the beginning of the pe riod, which
was mainly caused by the merger of Nanning Liaowang not under the same control in the current period and the compensation for
269
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
demolition received by Nanjing Fozhao in the current period.
42. Liabilities Held for sale
Naught
43. Current Portion of Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Current portion of long-term borrowings
19,423,561.38
(note)
Current portion of lease liabilities 7,855,712.16 1,750,282.11
Total 27,279,273.54 1,750,282.11
Note: Refer to the current portion of financing lease payments.
44. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Pending changerover output VAT 8,038,471.15 5,503,702.07
Total 8,038,471.15 5,503,702.07
45. Long-term Borrowings
Naught
46. Bonds Payable
Naught
47. Lease Liabilities
Unit: RMB
Item Ending balance Beginning balance
Lease liabilities 15,718,515.38 3,943,088.30
Less: current portion of lease liabilities -7,855,712.16 -1,750,282.11
Total 7,862,803.22 2,192,806.19
Analysis on maturity date of lease liabilities
Item Ending balance Beginning balance
270
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
1 to 2 years 2,780,281.78 1,552,519.37
3 to 5 years 4,095,243.05 640,286.82
Over 5 years 987,278.39
Total 7,862,803.22 2,192,806.19
48. Long-term Payables
(1) Long-term Payables Listed by Nature
Unit: RMB
Item Ending balance Beginning balance
Principal and interest of financing lease
19,423,561.38
borrowings (note)
Less: Current portion of long-term
19,423,561.38
payables
Total 0.00
Other notes:
Note: The ending balance is generated from the financial leasing business of Nanning Liaowang.
(2) Specific Payables
Naught
49. Long-term Employee Benefits Payable
Naught
50. Provisions
Unit: RMB
Item Ending balance Beginning balance Reason for formation
Provisions of claim on using the
Product Quality Assurance 7,671,948.69
oil paint of Hipro by DFSK
Total 7,671,948.69 --
51. Deferred Income
Unit: RMB
Reason for
Item Beginning balance Increase Decrease Ending balance
formation
271
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
The first batch of
special funds for
industrial and
information
development for 2,333,333.50 166,666.65 2,166,666.85 Related to assets
autonomous regions
in 2017 (technical
transformation)
Special funds for
industry and
informatization in 2,225,000.00 125,000.00 2,100,000.00 Related to assets
Chongqing Liang
Jiang New Area
The Second batch of
support funds for the
"technological
transformation of
thousands of 2,000,000.00 33,333.34 1,966,666.66 Related to assets
enterprises" project
in the autonomous
region in 2021
Government fund
subsidy of Liuzhou
Treasury Payment 1,882,999.97 82,999.97 1,800,000.00 Related to assets
Bureau
Allocation of the
14th batch of
industrial support
funds by Finance
Bureau of 1,112,500.00 62,500.00 1,050,000.00 Related to assets
Chongqing Liang
Jiang New Area in
2019
Special funds for
automobile and parts 1,000,000.00 83,333.35 916,666.65 Related to assets
projects in 2020
Innovation funds for
enterprises in
962,500.00 62,500.00 900,000.00 Related to income
Liudong New Area
in 2017
Liuzhou Guige 2021
Liuzhou urban
construction
industrial Internet 790,000.00 52,666.68 737,333.32 Related to assets
demonstration city
financial support
project
The Third Batch of
Special Funds for
Innovation-Driven 752,000.00 40,000.00 712,000.00 Related to income
Development in
Guangxi in 2018
Funds for intelligent
transformation and
upgrading project of 651,666.65 28,333.35 623,333.30 Related to assets
automobile industry
enterprises in 2021
Project funds of
Liuzhou High-tech
Industrial 602,666.69 26,666.65 576,000.04 Related to assets
Development Zone
Management
272
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Committee
The first batch of
Liuzhou enterprise
support fund support 471,333.27 65,333.38 405,999.89 Related to assets
projects in 2018
Funding for
innovative projects 372,000.00 20,000.00 352,000.00 Related to assets
Special funds of
Guangxi Zhuang
Science and
Technology 113,000.00 5,000.00 108,000.00 Related to assets
Department for
innovation-driven
development in 2020
Research and
development of key
technologies and
industrialization of 550,376.08 550,376.08 Related to assets
intelligent LED
automobile lamps
Total 15,819,376.16 1,404,709.45 14,414,666.71 --
Other notes:
Note: Due to the merger of Nanning Liaowang not under the same control in the current period, RMB13,029,376.16 of the increase
in deferred income in the current period is the amortized amount on the purchase day.
52. Other Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Liabilities of subsidiaries to be cleared and
22,653.46 1,244,064.84
cancelled
Total 22,653.46 1,244,064.84
53. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning
New shares Bonus issue Ending balance
balance Bonus shares Other Subtotal
issued from profit
The sum of 1,399,346,154. 1,399,346,154.
shares 00 00
Other notes:
Unit: RMB
Item/Investor Beginning balance Ending balance
Increase Decrease
Invested amount Proportion Invested amount Proportion
273
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Restricted 13,169,196.00 0.94% 13,169,196.00 0.94%
shares
Unrestricted 1,386,176,958.00 99.06% 1,386,176,958.00 99.06%
shares
Total 1,399,346,154.00 100.00% 1,399,346,154.00 100.00%
54. Other Equity Instruments
Naught
55. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium 4,825,948.60
7,911,543.36 3,085,594.76
(premium on stock)
Other capital reserves 7,245,971.54 7,245,971.54
Total 15,157,514.90 3,085,594.76 12,071,920.14
56. Treasury Shares
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Treasury shares
201,955,572.33 201,955,572.33
(A-share)
Treasury shares (B-share) 48,645,302.21 48,645,302.21
Total 250,600,874.54 250,600,874.54
Other notes, including changes and reason of change:
Note: According to the Proposal on Repurchase of Some RMB Common Shares (A Shares) and Domestic Listed Foreign Shares (B
Shares) of the Company, which was deliberated and adopted at the sixth meeting of the ninth Board of Directors and the Third
Extraordinary General Meeting in 2020 in December 2020, during the period, the Company repurchased 31,952,995 A shares and
18,398,512 B shares by means of call auction trading with its own funds of RMB250,600,874.54 (excluding trading costs). As of the
end of the reporting period, the share repurchase has been completed. For details, please refer to Note XV-2 "Cancellation of
Repurchase Shares".
57. Other Comprehensive Income
Unit: RMB
Item Beginning Reporting Period Ending
274
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
balance Less: balance
Less: Recorded
Recorded in in other
other comprehe Attributabl
Income comprehensi nsive e to Attributabl
before ve income in income in Less: owners of e to
taxation in prior period prior Income the non-contro
the and period and tax Company lling
Current transferred to transferred expense as the interests
Period profit or loss to retained parent after tax
in the earnings in after tax
Current the
Period Current
Period
I. Other comprehensive income -380,765,4 1,041,043, -57,114,81
2,349,389,6 -1,364,693 984,695,
that may not subsequently be 62.68 249.12 9.40
58.23 ,892.40 765.83
reclassified to profit or loss
Changes in fair value of -380,765,4 1,041,043, -57,114,81
2,349,389,6 -1,364,693 984,695,
other equity instrument 62.68 249.12 9.40
58.23 ,892.40 765.83
investment
II. Other comprehensive income
-57,333.
that may subsequently be -1,124.62 -27,539.73 -56,209.20 28,669.47
82
reclassified to profit or loss
Differences arising from
translation of foreign -57,333.
-1,124.62 -27,539.73 -56,209.20 28,669.47
currency-denominated financial 82
statements
Total of other comprehensive 2,349,388,5 -380,793,0 1,041,043, -57,114,81 -1,364,750 984,638,
28,669.47
income 33.61 02.41 249.12 9.40 ,101.60 432.01
Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized amount:
The ending balance of other comprehensive income was RMB-1,364,750,101.60 decreasing 58.09% compared with that at the
beginning of the period, mainly due to the transfer of the accumulated fair value previously recorded into other comprehensive
income into retained earnings for sales of some stocks by the Company in the Reporting Period.
58. Specific Reserve
Naught
59. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
275
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Statutory surplus
699,673,077.00 699,673,077.00
reserves
Discretionary surplus
41,893,962.55 213,691.59 41,680,270.96
reserves
Total 741,567,039.55 213,691.59 741,353,347.96
Notes including changes and reasons thereof:
1. In line with the Company's Articles of Association, if the Company's accumulative statutory surplus reserve exceeds the
Company's registered capital by over 50%, withdrawal is not required any more.
2. During the reporting period, the trading fees related to repurchase of shares of the Company offset any surplus reserve by
RMB213,691.59.
60. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained earnings before
1,758,462,062.48 1,700,426,915.63
adjustments
Beginning balance of retained earnings after
1,758,462,062.48 1,700,426,915.63
adjustments
Add: Net profit attributable to owners of the
250,091,965.87 316,914,185.34
Company as the parent
Dividend of ordinary shares payable 135,847,668.70 258,879,038.49
Others (note) -1,041,043,249.12
Ending retained earnings 2,913,749,608.77 1,758,462,062.48
When selling stocks for the current period, the accumulated changes in fair value included in other comprehensive earnings in the
previous period are transferred to retained earnings.
List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to the Accounting Standards
for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from same control.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
61. Operating Revenue and Cost of Sales
Unit: RMB
Item Reporting Period Same period of last year
276
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 4,607,263,246.86 3,836,340,666.94 3,699,836,965.57 2,957,658,247.04
Other operations 165,427,222.28 125,871,366.53 45,077,487.15 38,615,663.76
Total 4,772,690,469.14 3,962,212,033.47 3,744,914,452.72 2,996,273,910.80
Whether the lower of the net profit before and after deduction of non-recurring gains and losses through audit is negative
□ Yes √ No
62. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and construction tax 14,486,804.19 12,797,350.61
Education surcharge 6,546,395.13 5,487,588.14
Property tax 10,858,526.89 8,136,199.68
Land use tax 5,641,160.53 5,170,804.93
Vehicle and vessel use tax 31,087.26 15,852.28
Stamp duty 3,996,416.04 2,847,363.44
Local education surcharge 3,900,946.03 3,660,351.56
VAT of land 414,132.63
Environmental protection tax 102,675.89 101,985.20
Others 393,432.00 212.76
Total 45,957,443.96 38,631,841.23
63. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 74,454,733.88 62,699,560.82
Business propagandize fees and
44,511,114.76 23,567,538.03
advertizing fees
Sales promotion fees 12,840,438.91 10,124,091.58
Business travel charges 11,418,043.43 9,248,697.83
Commercial insurance premium 4,751,270.10 5,257,100.62
Dealer meeting expense 806,507.86 974,212.62
Other 21,498,932.40 33,348,498.85
Total 170,281,041.34 145,219,700.35
277
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
64. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 119,834,123.62 89,335,431.10
Office expenses 19,943,898.38 14,548,829.21
Depreciation charge 18,638,776.21 16,796,115.88
Amortization of intangible assets 7,598,775.25 5,036,363.10
Engineering decoration cost 6,980,479.30 4,504,630.47
Rent of land and management charge 4,477,445.47 5,822,250.99
Utilities 4,270,695.13 4,811,554.12
Service charge 3,260,561.19
Disability security fund 2,955,901.37 1,466,128.42
Party construction funds 5,050,315.69
Others 18,375,455.89 7,993,754.77
Total 206,336,111.81 155,365,373.75
Other notes:
Compared with the previous period, the management expenses rose by 32.81% to RMB50,970,738.06 in the current period, which wa s
mainly caused by the merger of Nanning Liaowang in the current period and the reduction and exemption of social security due to the
pandemic in the previous period.
65. Development Costs
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 95,475,565.26 64,755,944.49
Material consumption 52,326,677.63 8,251,441.92
Depreciation and long-term prepaid
19,220,357.95 6,884,584.37
expense
Certification and testing fee 10,890,898.99 12,746,279.58
Expense on equipment debugging 8,662,071.21 7,866,127.63
Charges related to patents 1,287,039.72 1,970,723.98
Other 15,819,008.40 6,410,194.74
Total 203,681,619.16 108,885,296.71
Other notes:
1. In respect of R&D expense incurred by the Company, expense other than that on bench-scale and pilot-scale production is
included in R&D expense; and sales revenue of products from bench-scale and pilot-scale production is included in core business
278
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
revenue and the relevant costs are included in cost of sales of core business.
2. R&D expense stood at RMB94,796,322.45 in the current period, up 87.06% year-on-year, primarily driven by a considerable
increase of input in R&D, expansion of R&D teams and R&D projects, etc. as well as the combination of Nanning Liaowang in the
current period.
66. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 5,790,716.89
Less: Interest income 16,201,526.00 37,650,815.03
Foreign exchange gains or losses 12,012,555.38 30,819,758.83
Other 1,518,283.46 1,207,770.75
Total 3,120,029.73 -5,623,285.45
Other notes:
The financial expenses in the current period grew by RMB8,743,315.18 compared with the previous pe riod, which was mainly due to
the increase in interest expenses of new bank loans in the current period and the simultaneous decrease in interest income ca used by the
decrease in time deposit business.
67. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
Subsidies for position training of
2,968,000.00 5,541,000.00
employees
Special fund for promoting high-quality
2,004,092.60
economic development
Subsidies for high-tech enterprises 1,510,200.00
Support funds for industrial design
industry development in Chancheng 1,000,000.00
District, Foshan City
Subsidy for stabilizing posts 824,913.04 2,907,529.01
Industrial Internet project transformation
award 809,900.00
The third batch of special funds for
innovation-driven development in Guangxi
by the Guangxi Zhuang Science and 550,376.08
Technology Department (Intelligent LED
Lamp Project)
Rewards of “Competition among Hundreds
500,000.00 500,000.00
of Enterprises”
279
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Chongqing enterprise R&D reserve in
410,000.00
2021
Supporting fund for import and export 340,000.00 3,674,307.07
Foshan's funds for supporting
municipal-level development of industrial 300,000.00 1,000,000.00
design
Science and technology innovation
inclusive policy funds provided by the
300,000.00
Finance Bureau of Liang Jiang New Area
in 2021
Foshan's funds for promotion of robot
4,988,602.00
application and industrial development
Foshan's special funds for supporting
3,000,000.00
industrial Internet development
Chancheng District's funds for supporting
example setting and quality improvement
1,422,900.00
of high-tech enterprises (towns and streets)
in 2018
Chancheng District's government quality
1,000,000.00
award in 2019
Other 4,794,421.52 4,955,190.12
Total 16,311,903.24 28,989,528.20
Other income decreased by 43.73% to RMB-12, 677,624.96 in the current period compared with the previous period, mainly due to the
decrease of industrial development support funds received in the current period compared with the previous period.
68. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income
2,260,497.27 2,351,681.39
accounted by equity method
Investment income from disposal of long-term
3,085,594.76
equity investment
Investment income from holding of other
23,643,370.02 14,940,422.96
equity instrument investment
Income received from financial products and
1,118,141.63 23,451,129.06
structural deposits
Other 6,013,450.00 3,492,971.49
280
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Total 36,121,053.68 44,236,204.90
69. Net Gain on Exposure Hedges
Naught
70. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Held-for-trading financial assets 4,649,669.44 4,785,700.00
Total 4,649,669.44 4,785,700.00
71. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Expected credit loss of accounts receivable -4,202,568.39 -15,841,416.23
Expected credit loss of other receivables -189,864.56 -268,176.13
Expected credit loss of contract assets -264,782.57
Total -4,657,215.52 -16,109,592.36
72. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
II. Loss on inventory valuation and
-29,184,207.60 -7,581,307.74
contract performance cost
VII. Loss on construction in progress -1,318,800.00
X. Loss on intangible assets -388,613.87
Total -30,891,621.47 -7,581,307.74
Other notes:
The asset impairment loss increased by 307.47% to RMB23,310,313.73 in the current period compared with the previous period, which
was mainly caused by the increase of Nanning Liaowang's asset impairment loss of RMB14,681,409.95 in the current period compa red
with the previous period, and the Company's replenishment of inventory depreciation loss for newly added backlog products.
281
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
73. Assets Disposal Income
Unit: RMB
Sources Reporting Period Same period of last year
Disposal income of fixed assets 77,713,637.77 9,090,874.79
Compared with the previous period, the income from disposal of fixed assets increased by RMB68,622,762.98 in the current period,
mainly due to the disposal of some property assets by the Company in the current period, including No.59 Lecheng Second Road, Suite
24 of Middle and North Blocks of No.1 Lecheng First Road, Luocun District 3, No.2 Lecheng Third Road Fourth Street and No.4
Lecheng Third Street.
74. Non-operating Income
Unit: RMB
Amount recorded in the current
Item Reporting Period Same period of last year
non-recurring profit or loss
Government grants 57,720.00
Total income from scrap of
2,003,455.62 48,168.04 2,003,455.62
non-current assets
Of which: Income from scrap of
2,003,455.62 48,168.04 2,003,455.62
fixed assets
Income from default money 7,060,000.00 7,060,000.00
Other 4,123,500.76 2,058,806.15 4,123,500.76
Total 13,186,956.38 2,164,694.19 13,186,956.38
Government grants recorded in current profit or loss:
Unit: RMB
Whether
influence the Special Related to
Distribution Distribution Reporting Same period
Item Nature profits or subsidy or assets/related
entity reason Period of last year
losses of the not to income
year or not
Other
miscellaneou Related to
Subsidy No No 57,720.00
s government income
grants
75. Non-operating Expense
Unit: RMB
Item Reporting Period Same period of last year Amount recorded in the current
282
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
non-recurring profit or loss
Exchange loss on non-monetary
645,945.89 1,672,244.18 645,945.89
assets
Donations 104,364.08
Losses on inventories 311,858.32 291,692.80 311,858.32
Penalty 200.00 26,000.00 200.00
Delaying payment 190,078.72 556.29 190,078.72
Other 40,388.61 1,759,560.64 40,388.61
Total 1,188,471.54 3,854,417.99 1,188,471.54
76. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 23,309,089.13 46,120,717.25
Deferred income tax expense 1,741,577.22 -406,009.72
Total 25,050,666.35 45,714,707.53
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 292,348,101.65
Current income tax expense accounted at statutory/applicable tax
43,852,215.25
rate
Influence of applying different tax rates by subsidiaries 3,056,765.33
Influence of income tax before adjustment 1,031,206.00
Influence of non-deductable costs, expenses and losses 2,944,791.18
Influence of deduction -21,834,983.83
Regarded as sales 349,091.72
Investment income and final dividend -4,348,419.30
Income tax expense 25,050,666.35
77. Other Comprehensive Income
Refer to Note VII Main Items of Consolidated Financial Statements-57 for details.
283
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
78. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Taxes of equity transfer payments from
48,637,165.49
former shareholder of Nanning Liaowang
Margin income 40,666,019.15 12,240,049.79
Income from waste 27,393,454.55 18,500,712.83
Deposit interest 18,109,095.02 38,946,211.76
Government grants 17,435,679.47 29,323,585.92
Property and rental income 12,980,397.19 9,828,318.01
Income from insurance compensation 25,003.20 21,871.82
Other 5,778,972.29 10,805,467.01
Total 171,025,786.36 119,666,217.14
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Administrative and R&D expense paid in
67,305,563.82 51,683,094.67
cash
Selling expense paid in cash 61,331,324.84 139,896,500.31
Finance costs paid in cash 1,302,431.92 509,435.98
Returned cash deposit 42,863,242.64 8,933,825.48
Payment for taxes of equity transfer
accounts on behalf of former shareholder 48,637,165.49
of Nanning Liaowang
Other 9,057,860.33 6,746,686.92
Total 230,497,589.04 207,769,543.36
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Demolition compensation received 54,990,047.00
Total 54,990,047.00
284
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(4) Cash Used in Other Investing Activities
Naught
(5) Cash Generated from Other Financing Activities
Naught
(6) Cash Used in Other Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
Share repurchase 250,814,566.13
Finance lease rent 49,995,876.21
Total 300,810,442.34
79. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities:
Net profit 267,297,435.30 322,168,591.79
Add: Provision for impairment of assets 35,548,836.99 23,690,900.10
Depreciation of fixed assets, oil-gas
104,751,799.89 76,762,605.39
assets, and productive living assets
Depreciation of right-of-use assets 3,980,368.60
Amortization of intangible assets 7,750,242.82 5,036,363.10
Amortization of long-term prepaid
50,237,535.65 8,024,378.24
expenses
Loss from disposal of fixed assets,
intangible assets and other long-term assets -77,713,637.77 -9,090,874.79
(gains: negative)
Losses from scrapping of fixed assets
-1,357,509.73 1,624,076.14
(gains: negative)
Losses from changes in fair value
-4,649,669.44 -4,785,700.00
(gains: negative)
Finance costs (gains: negative) 5,790,716.89
285
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Investment loss (gains: negative) -36,121,053.68 -44,236,204.90
Decrease in deferred income tax assets
2,222,138.97 -246,364.71
(increase: negative)
Increase in deferred income tax
-480,561.75 717,855.00
liabilities (“-” for decrease)
Decrease in inventory (“-” for increase) -43,528,121.23 -105,929,840.59
Decrease in operating receivables (“-”
-201,444,146.36 86,704,874.15
for increase)
Increase in operating payables (“-” for
-389,309,460.41 34,387,672.98
decrease)
Others
Net cash generated from/used in
-277,025,085.26 394,828,331.90
operating activities
2. Significant investing and financing
activities without involvement of cash -- --
receipts and payments
Transfer of debts into capital
Current portion of convertible corporate
bonds
Fixed assets leased in for financing
Share purchase fund unpaid yet (note) 41,695,763.31
3.Net increase/decrease of cash and cash
-- --
equivalents:
Ending balance of cash 1,139,089,151.31 875,728,218.57
Less: Beginning balance of cash 875,728,218.57 1,051,079,042.41
Add: Ending balance of cash
equivalents
Less: Beginning balance of cash
equivalents
Net increase in cash and cash equivalents 263,360,932.74 -175,350,823.84
The unpaid equity purchase price refers to the unpaid price arising from the combination of Nanning Liaowang not under the same
control by the Company in the current period. According to the Share Transfer Agreement, the Company will pay the second shar e
transfer price within 15 days after the original shareholders of Nanning Liaowang complete the share transfer in 2022.
(2) Net Cash Paid For Acquisition of Subsidiaries
Unit: RMB
金额
286
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Cash or cash equivalents paid in the Reporting Period for business
252,184,400.45
combination occurring in the Reporting Period
Of which: --
Nanning Liaowang Auto Lamp Co., Ltd. 252,184,400.45
Less: Cash and cash equivalents held by subsidiaries on purchase
120,835,756.18
date
Of which: --
Nanning Liaowang Auto Lamp Co., Ltd. 120,835,756.18
Of which: --
Nanning Liaowang Auto Lamp Co., Ltd. 120,835,756.18
Net payments for acquisition of subsidiaries 131,348,644.27
Other notes:
Note: The difference between the cash and cash equivalents held by Nanning Liaowang on the purchase date and the monetary funds on
the purchase date was RMB55,190,042.63 for the limited use of bank acceptance bill margin and wealth management products.
(3) Net Cash Received from Disposal of the Subsidiaries
Naught
(4) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 1,139,089,151.31 875,728,218.57
Including: Cash on hand 16,733.10 14,800.25
Bank deposit on demand 1,039,748,114.76 870,224,197.60
Other monetary assets on demand 99,324,303.45 5,489,220.72
III. Ending balance of cash and cash
1,139,089,151.31 875,728,218.57
equivalents
(5) Subsidiaries and Other Business Units Acquired or Disposed in the Reporting Period
Naught
(6) Other Notes
Naught
80. Notes to Items of the Statements of Changes in Owners’ Equity
Notes to the name of “Other” of ending balance of the same period of last year adjusted and the amount adjusted:
Not applicable
287
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
81. Assets with Restricted Ownership or Right of Use
Unit: RMB
Item Ending carrying value Reason for restriction
Security deposit of notes, letter of
Monetary assets 245,575,069.72
guarantee, etc.
Notes receivable 275,626,604.28 Pledged for notes pool
Related-party mortgage guarantee, see
Fixed assets 277,849,723.49
Note XIV-(III) Others for details
Related-party mortgage guarantee, see
Intangible assets 11,274,770.33
Note XIV-(III) Others for details
Total 810,326,167.82 --
82. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance converted to
Item Exchange rate
balance RMB
Monetary assets -- -- 266,653,929.34
Of which: USD 31,760,973.86 6.3757 202,498,441.04
EUR 44,157.41 7.2197 318,803.25
HKD 45,316,276.57 0.8176 37,050,587.72
IDR 59,924,155,104.30 0.000447 26,786,097.33
Accounts receivable -- -- 376,000,761.23
Of which: USD 58,005,666.69 6.3757 369,826,729.12
EUR 212,143.56 7.2197 1,531,612.86
HKD
IDR 10,385,725,386.30 0.000447 4,642,419.25
Long-term borrowings -- --
Of which: USD
EUR
HKD
Other non-current assets 766,142.51
Of which: USD 59,710.71 6.3757 380,697.60
EUR 53,387.94 7.2197 385,444.91
288
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Short-term borrowings 127,514,000.00
Of which: USD 20,000,000.00 6.3757 127,514,000.00
Accounts payable 593,644.68
Of which: IDR 1,328,064,155.40 0.000447 593,644.68
Contract liabilities: 19,121,489.94
Of which: USD 2,965,980.32 6.3757 18,910,200.73
EUR 29,265.65 7.2197 211,289.21
Current portion of non-current
2,982,902.02
liabilities
Of which: IDR 6,673,158,881.43 0.000447 2,982,902.02
Lease liabilities 81,284.42
Of which: IDR 181,844,340.04 0.000447 81,284.42
Other non-current liabilities 11,004.46
Of which: USD 1,726.00 6.3757 11,004.46
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, Recording
Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant
Reasons Shall Be Disclosed.
□ Applicable √ Not applicable
83. Arbitrage
Qualitative and quantitative information of relevant arbitrage instruments, hedged risk in line with the type of arbitrage to disclose:
Naught
84. Government Grants
Government grants
Unit: RMB
Amount recorded in
Sources Amount Listed items the current profit or
loss
Other
Grants for employees' on-the-job training 2,968,000.00 2,968,000.00
income
Special funds for promoting high-quality economic Other
2,004,092.60 2,004,092.60
development income
Other
Grants for high-tech enterprises 1,510,200.00 1,510,200.00
income
289
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Support funds for industrial design industry development in Other
1,000,000.00 1,000,000.00
Chancheng District, Foshan City income
Other
Subsidy for stabilizing employment 824,913.04 824,913.04
income
Other
Industrial Internet project transformation award 809,900.00 809,900.00
income
The third batch of special funds for innovation-driven
development in Guangxi by the Science and Technology Other
550,376.08 550,376.08
Department of Guangxi Zhuang Autonomous Region income
(Intelligent LED Lamp Project)
Other
"100 Enterprises Strive for the First Place" bonus 500,000.00 500,000.00
income
Other
Chongqing enterprise R&D reserve in 2021 410,000.00 410,000.00
income
Other
Import and export support funds 340,000.00 340,000.00
income
Other
Industrial design development support funds in Foshan 300,000.00 300,000.00
income
Science and technology innovation inclusive policy funds
Other
provided by the Finance Bureau of Liang Jiang New Area in 300,000.00 300,000.00
income
2021
Other
Others 4,794,421.52 4,794,421.52
income
Total 16,311,903.24 16,311,903.24
85. Other
Naught
VIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control in the Reporting Period
Unit: RMB
Income of Net profits of
Time and
Cost of Recognition acquiree from acquiree from
Name of place of Proportion of Way to gain
gaining the Purchase date basis of the purchase the purchase
acquiree gaining the equity the equity
equity purchase date date to date to
equity
period-end period-end
290
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Purchase of Reelect
former directors and
Nanning
shareholders’ complete
Liaowang 1 August 493,880,163. 1 August 707,022,757. 28,862,888.6
53.79% equity and changes of
Auto Lamp 2021 76 2021 31 3
capital industrial and
Co., Ltd.
increase in commercial
cash registration
(2) Combination Cost and Goodwill
Unit: RMB
Combination cost
--Cash 493,880,163.76
Total combination cost 493,880,163.76
Less: fair value of identifiable net assets acquired 477,668,693.94
The amount of goodwill/combined cost less than the fair value
16,211,469.82
share of identifiable net assets obtained
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
Unit: RMB
Nanning Liaowang lamp Co., Ltd
Fair value on purchase date Carrying value on purchase date
Monetary assets 176,025,798.81 176,025,798.81
Inventories 313,460,310.46 313,460,310.46
Fixed assets 697,875,234.89 629,478,819.32
Intangible assets 93,882,706.39 66,748,282.54
Held-for-trading financial assets 15,086,008.74 15,086,008.74
Notes receivable and accounts receivable 598,705,624.03 598,705,624.03
Other current assets 8,843,992.98 8,843,992.98
Construction in progress 3,901,388.20 3,901,388.20
Right-of-use assets 3,372,205.60 3,372,205.60
Long-term prepaid expense 94,182,937.64 94,182,937.64
Goodwill 14,329,625.91
Deferred income tax assets 16,179,649.08 16,179,649.08
Other non-current assets 21,659,286.52 21,659,286.52
Total assets 2,043,175,143.34 1,947,644,303.92
291
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Borrowings 198,258,013.62 198,258,013.62
Deferred income tax liabilities 14,329,625.91
Notes payable and accounts payable 1,015,328,033.63 1,015,328,033.63
Employee benefits payable 19,573,230.62 19,573,230.62
Taxes payable 9,284,798.88 9,284,798.88
Current portion of non-current liabilities 53,169,797.06 53,169,797.06
Lease liabilities 1,941,745.82 1,941,745.82
Long-term payables 22,247,027.59 22,247,027.59
Provisions 7,988,407.72 7,988,407.72
Deferred income 13,029,376.16 13,029,376.16
Total liabilities 1,355,150,057.01 1,340,820,431.10
Net assets 688,025,086.33 606,823,872.82
Less: Non-controlling interests 406,462,516.18 358,491,518.87
Net assets acquired (note) 281,562,570.15 248,332,353.95
The determination method of the fair value of identifiable assets and liabilities:
The Company adopts the asset-based method to determine the fair value of the assets and liabilities of Nanning Liaowang at the date of
purchase. The valuation methods of major assets and their key assumptions are listed as follows:
The evaluation method of fixed assets is replacement cost method, and the fair value is determined by the current market pric e plus
necessary transportation and miscellaneous expenses, installation and commissioning expenses, capital cost and newness rate.
The valuation method of intangible assets is market approach, and the fair value is mainly determined by the land price on the base date
of valuation.
The valuation method of inventory is the market price method, and the fair value is determined according to the book value and product
sales profit on the valuation base date.
Other notes:
After purchasing about 40.92% of the original shareholder's equity in Nanning Liaowang, the Company increased its capital by
RMB200,000,000.00 in cash, including an increase in paid-in capital of RMB7,635,930.00 and an increase in capital reserve-capital
premium of RMB192,364,070.00; the fair value after capital increase is RMB888,025,086.33, and the Company holds 53.79% shares
in Nanning Liaowang, and the owner's equity attributable to the Company is RMB477,668,693.94.
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair Value
Whether there is a transaction that through multiple transaction step by step to realize business combination and gaining the control
during the Reporting Period
□ Yes √ No
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquiree
that Cannot Be Determined on the Acquisition Date or during the Period-end of the Merger
Naught
292
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(6) Other Notes
Naught
2. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting Period
Naught
(2) Combination Cost
Naught
(3) The Carrying Value of Assets and Liabilities of the Combined Party on the Combination Date
Naught
3. Counter Purchase
Naught
4. Disposal of Subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
□ Yes √ No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□ Yes √ No
5. Changes in Combination Scope for Other Reasons
Note to changes in combination scope for other reasons (such as newly establishment or liquidation of subsidiaries, etc.) and relevant
information:
Hainan Technology was newly established in May of this period and has been included in the scope of consolidation since its
establishment. New Light Source and Hunan Keda have completed industrial and commercial cancellation in September and
November respectively, and will no longer be included in the scope of consolidation from the date of cancellation.
6. Other
Naught
293
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Main operating Nature of Holding percentage
Name Registration place Way of gaining
place business Directly Indirectly
Foshan Lighting
Lamps & Production and Newly
Foshan Foshan 100.00%
Components Co., sales established
Ltd.
FSL Chanchang
Production and Newly
Optoelectronics Foshan Foshan 100.00%
sales established
Co., Ltd.
Foshan Taimei
Production and Newly
Times Lamps and Foshan Foshan 70.00%
sales established
Lanterns Co., Ltd.
Foshan Electrical
& Lighting Production and Newly
Xinxiang Xinxiang 100.00%
(Xinxiang) Co., sales established
Ltd.
Nanjing Fozhao
Lighting
Production and
Components Nanjing Nanjing 100.00% Acquired
sales
Manufacturing
Co., Ltd.
FSL Zhida
Electric Production and Newly
Foshan Foshan 51.00%
Technology Co., sales established
Ltd.
FSL LIGHTING Production and Newly
Germany Germany 100.00%
GMBH sales established
Foshan Haolaite Production and Newly
Foshan Foshan 51.00%
Lighting Co., Ltd. sales established
Foshan Kelian
New Energy Property
Foshan Foshan 100.00% Acquired
Technology Co., development
Ltd.
Fozhao (Hainan) Haikou Haikou Production and Newly
100.00%
Technology Co., sales established
294
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Ltd.
Nanning
Liaowang Auto Manufacturing of
Nanning Nanning 53.79% Acquired
Lamp Co., Ltd. vehicle lamps
(note 2)
Liuzhou Guige
Lighting Manufacturing of
Liuzhou Liuzhou 53.79% Acquired
Technology Co., vehicle lamps
Ltd.
Liuzhou Guige Manufacturing of
Foreshine automotive
Liuzhou Liuzhou 53.79% Acquired
Technology Co., electronic
Ltd. products
Chongqing
Guinuo Lighting Manufacturing of
Chongqing Chongqing 53.79% Acquired
Technology Co., vehicle lamps
Ltd.
Qingdao Guige
Lighting Manufacturing of
Qingdao Qingdao 53.79% Acquired
Technology Co., vehicle lamps
Ltd.
Indonesia
Manufacturing of
Liaowang Auto Indonesia Indonesia 53.79% Acquired
vehicle lamps
Lamp Co., Ltd.
Other notes:
Note: Liuzhou Guige Lighting, Liuzhou Guige Foreshine, Chongqing Guinuo, Qingdao Lighting and Indonesia Liaowang are
wholly-owned subsidiaries (grandchildren) of Nanning Liaowang.
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Shareholding proportion The profit or loss Declaring dividends Balance of
Name of non-controlling attributable to the distributed to non-controlling interests
interests non-controlling interests non-controlling interests at the period-end
Foshan Taimei Times
Lamps and Lanterns Co., 30.00% 742,477.85 11,450,551.98
Ltd.
FSL Zhida Electric
49.00% 2,513,547.88 24,626,765.88
Technology Co., Ltd.
Foshan Haolaite Lighting
49.00% 1,415,333.79 16,852,876.19
Co., Ltd.
295
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Nanning Liaowang Auto
46.21% 12,562,779.38 422,919,171.77
Lamp Co., Ltd.
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Ending balance Beginning balance
Non-curr Non-curr Non-curr Non-curr
Name Current Total Current Total Current Total Current Total
ent ent ent ent
assets assets liabilities liabilities assets assets liabilities liabilities
assets liability assets liability
Foshan
Taimei
Times
135,829, 17,573,4 153,402, 115,233, 115,233, 71,270,5 15,316,4 86,586,9 50,893,3 50,893,3
Lamps
008.12 37.36 445.48 938.88 938.88 18.28 06.34 24.62 44.19 44.19
and
Lanterns
Co., Ltd.
FSL
Zhida
Electric 126,777, 12,494,2 139,272, 76,679,7 76,679,7 112,196, 8,962,67 121,158, 63,696,1 63,696,1
Technolo 943.85 11.78 155.63 76.30 76.30 198.34 6.26 874.60 84.82 84.82
gy Co.,
Ltd.
Foshan
Haolaite 60,890,6 12,887,9 73,778,5 39,384,2 39,384,2 51,192,0 12,249,9 63,442,0 31,936,1 31,936,1
Lighting 48.90 36.38 85.28 09.45 09.45 90.96 45.68 36.64 60.19 60.19
Co., Ltd.
Nanning
Liaowan
1,346,86 817,363, 2,164,22 1,305,42 23,058,6 1,328,47
g Auto
3,737.14 839.98 7,577.12 0,077.19 96.78 8,773.97
Lamp
Co., Ltd.
1,670,36 860,319, 2,530,68 1,536,71 23,058,6 1,559,77 234,658, 36,529,0 271,187, 146,525, 146,525,
Total
1,338.01 425.50 0,763.51 8,001.82 96.78 6,698.60 807.58 28.28 835.86 689.20 689.20
Unit: RMB
Reporting Period Same period of last year
Cash flows Cash flows
Total Total
Name Operating from Operating from
Net profit comprehensi Net profit comprehensi
revenue operating revenue operating
ve income ve income
activities activities
Foshan 147,525,074. 2,474,926.17 2,474,926.17 3,103,173.55 145,973,615. 4,983,862.50 4,983,862.50 -1,854,553.69
296
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Taimei Times 10 97
Lamps and
Lanterns Co.,
Ltd.
FSL Zhida
Electric 164,800,910. -10,852,478.6 123,690,820.
5,129,689.55 5,129,689.55 8,881,031.22 8,881,031.22 2,202,238.82
Technology 54 5 25
Co., Ltd.
Foshan
Haolaite 81,332,587.1 30,156,976.5
2,888,499.38 2,888,499.38 1,704,983.53 -1,209,123.55 -1,209,123.55 -5,636,610.73
Lighting Co., 8 8
Ltd.
Nanning
Liaowang 707,022,757. 28,862,888.6 28,924,930.3 13,797,867.2
Auto Lamp 31 3 3 1
Co., Ltd.
1,100,681,32 39,356,003.7 39,418,045.4 299,821,412. 12,655,770.1 12,655,770.1
Total 7,753,545.64 -5,288,925.60
9.13 3 3 80 7 7
(4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the Company
Naught
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope of
Consolidated Financial Statements
Naught
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling the
Subsidiary
Naught
3. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
Naught
(2) Main Financial Information of Significant Joint Ventures
Naught
297
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(3) Main Financial Information of Significant Associated Enterprises
Naught
(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises
Unit: RMB
Beginning balance/Same period of last
Ending balance/Reporting Period
year
Joint ventures: -- --
The total of following items according to the
-- --
shareholding proportions
Associated enterprises: -- --
Total carrying value of investment 181,545,123.09 181,365,016.32
The total of following items according to the
-- --
shareholding proportions
--Net profit 2,260,497.27 2,351,681.39
--Total comprehensive income 2,260,497.27 2,351,681.39
(5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises to
Transfer Funds to the Company
Naught
(6) The Excess Loss of Joint Ventures or Associated Enterprises
Naught
(7) The Unrecognized Commitment Related to Investment to Joint Ventures
Naught
(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated Enterprises
Naught
4. Significant Common Operation
Naught
298
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Naught
6. Other
Naught
X. The Risk Related to Financial Instrume nts
The financial instruments of the Company included: equity investment, notes receivable, accounts receivable,
accounts payable, etc. The details of each financial instrument see relevant items of Note V.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The
operating management of the Company was responsible for the risk management target and the recognition of the
policies.
(I) Credit risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the
other party. The credit risk the Company faced was selling on credit which leads to customer credit risk.
The Company will evaluate credit risk of new customer, and set credit limit, once the balance of account
receivable over credit limit, require the customer to pay or producing and delivering goods shall be approved by
the management of the Company.
The Company through monthly aging analysis of account receivable and monitoring the collection situation of the
customer ensured the overall credit risk of the Company was in control scope. Once appear abnormal situation,
the Company should conduct necessary measures to requesting the payment timely.
(II) Liquidity Risk
Liquidity risk is referred to their risk of incurring capital shortage when performing settlement obligation in the
way of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient
cash to pay the due liabilities. The liquidity risk is centralized controlled by the Financial Department of the
Company. The financial department through supervising the balance of the cash and securities can be convert to
cash at any time and the rolling prediction of cash flow in future 12 months to ensure the Company have sufficient
cash to pay the liabilities under the case of all reasonable prediction, Each financial liability of the Company was
estimated due within 1 year.
(III) Market risk
Market risk was referred to risk of the fair value or future cash flow of financial instrument changed due to the
change of market price, including: exchange rate risk, interest rate risk and other price risk.
1. Exchange rate risk
Exchange rate risk refers to the risk of loss due to exchange rate changes. The Company's exposure to foreign
exchange risk is mainly related to the US dollar and the euro. As of 31 December 2021, the Company's assets and
liabilities were in RMB, except for the balances of usd, euro, Hong Kong dollar and rupiah as set out in this Note
VII-82, Foreign Currency Monetary Items. Foreign exchange risk arising from the assets and liabilities of such
foreign currency balances may have a certain impact on the Company's operating results.The Company made
efforts to avoid exchange rate risk through forward exchange settlement, improving operation management and
promoting the international competitiveness of the Company, etc.
2. Interest rate risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due
299
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
to the change of market interest rates. The interest rate risk faced by the Company mainly comes from bank
borrowings. By establishing a good bank-enterprise relationship, the Company reasonably designed the credit line,
credit variety and credit period, ensured sufficient credit line of banks, and met various short-term financing needs
of the Company with preferential loan interest rates. As of 31 December 2021, the Company's fixed interest rate
loan balance was RMB226,614,000.00, accounting for 100% of the total loan balance, and the risks in this part
were controllable.
3. Other price risk
Naught
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Ending fair value
Item Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
-- -- -- --
measurement
(I) Held-for-trading
5,825,678.18 322,422,447.43 328,248,125.61
financial assets
1. Financial assets at fair
value through profit or 5,825,678.18 322,422,447.43 328,248,125.61
loss
(III) Other equity
1,474,360,785.15 500,000.00 1,474,860,785.15
instrument investment
II. Inconsistent fair value
-- -- -- --
measurement
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
In line with the market price of shares on the balance sheet date and forward foreign exchange option rate.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
Items measured at fair value level 2 are bank's wealth management products, which are measured at the
contractual expected yield rate as a reasonable estimate of the fair value.
300
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Because the business environment, operation conditions and financial conditions of the invested company,
China Guangfa Bank has not changed significantly, the Company takes investment costs as the reasonable
estimation of fair value to measure.
(2) Because the business environment, operation conditions and financial conditions of the invested company,
Shenzhen Zhonghao (Group) Co., Ltd. were deteriorated, the Company takes zero element as the reasonable
estimation of fair value to measure.
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning and
Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3
Naught
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if
Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
Naught
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
Naught
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
Financial assets and liabilities not measured at fair value include: monetary assets, accounts receivable and
accounts payable, etc. There is small difference between the carrying value of above financial assets and liabilities
and fair value.
9. Other
Naught
XII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
1. The parent company of the Company
Proportion of share Proportion of voting
held by the rights owned by the
Name Registration place Nature of business Registered capital Company as the Company as the
parent against the parent against the
Company (%) Company (%)
301
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Hongkong Wah Hong Kong Investment HKD110,000 13.47% 13.47%
Shing Holding
Company Limited
Guangdong Guangzhou Production and sales RMB462 million 8.77% 8.77%
Electronics
Information Industry
Group Ltd.
Guangdong Rising Guangzhou Investment 100 亿元 5.94% 5.94%
Holdings Group Co.,
Ltd.
Rising Investment Hong Kong Investment RMB200 million 1.82% 1.82%
Development and HKD1 million
Limited
Total 30.00% 30.00%
Notes: Information on parent company of the Company
Hongkong Wah Shing Holding Company Limited (hereinafter referred to as "Hongkong Wah Shing"), the largest shareholder of the
Company, is a wholly-owned subsidiary of Guangdong Electronics Information Industry Group Ltd. (hereinafter referred to as
"Electronics Group"), and Electronics Group, Shenzhen Rising Investment Development Co., Ltd. (hereinafter referred to as
"Shenzhen Rising"), Guangdong Rising Holdings Group Co., Ltd. (renamed Guangdong Rising Capital Investment Co., Ltd. on 13
December 2021, here inafter referred to as “Rising Capital”) and Rising Investment Development Limited (hereinafter referred to as
“Rising Investment”) are wholly-owned subsidiaries of Guangdong Rising Holdings Group Co., Ltd. (hereinafter referred to as
“Rising Holdings Group”). According to the relevant provisions of the Company Law and the Measures for the Administrative
Measures on Acquisition of Listed Companies, Electronics Group, Shenzhen Rising, Rising Capital and Rising Investment are
concerted actors, and Rising Holdings Group becomes the actual controller of the Company. On 15 December 2021, Shenzhen Rising
and Rising Capital transferred all their shares of the Company to Rising Holdings Group. After the transfer, Rising Holdings Group,
Electronics Group and Rising Investment acted in concert with each other. As of 31 December 2021, the above-mentioned persons
acting in concert held a total of 419,803,826.00 A and B shares of the Company, accounting for 30.00% of the total share capital of
the Company.
2. Subsidiaries of the Company
Refer to Note IX Equity in Other Entities-1. Equity in Subsidiaries for details.
3. Information on the Joint Ventures and Associated Enterprises of the Company
Refer to Note IX Equity in Other Entities-3. Equity in Joint Ventures or Associated Enterprises for details of significant joint ventures
or associated enterprises of the Company.
4. Information on Other Related Parties
Name Relationship with the Company
PROSPERITY LAMPS & COMPONENTS LTD Shareholder owning over 5% shares
Foshan NationStar Optoelectronics Co. Ltd. Under same actual controller
302
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Guangdong Fenghua Advanced Technology Holding Co., Ltd. Under same actual controller
Guangdong Rising Lighting Technology Co., Ltd. Under same actual controller
Guangdong Vollsun Data Solid-state Storage Co., Ltd Under same actual controller
Guangdong Rising Finance Limited Under same actual controller
MTM Semiconductor Equipment Co., Ltd. Under same actual controller
Guangdong Electronic Technology Research Institute Under same actual controller
Guangzhou Diansheng Property Management Co., Ltd. Under same actual controller
Shaoguan Green Resource Recycling Development Co., Ltd. Under same actual controller
Zhuhai Doumen District Yongxingsheng Environmental
Under same actual controller
Industrial Wastes Recycling Comprehensive Treatment Co., Ltd.
Jiangmen Dongjiang Environmental Protection Technology Co.,
Under same actual controller
Ltd.
Foshan Fulong Environmental Protection Technology Co., Ltd. Under same actual controller
Guangdong New Electronic Information Ltd. Under same actual controller
Guangdong Huajian Enterprise Group Co. Ltd. Under same actual controller
Guangdong Zhongnan Construction Co., Ltd. Under same actual controller
Guangzhou Huajian Engineering Construction Co., Ltd. Under same actual controller
Guangdong Yixin Changcheng Construction Group Under same actual controller
Guangdong Zhongjin Lingnan Equipment Technology Co., Ltd. Under same actual controller
Shenzhen Zhongjin Lingnan Nonfemet Company Limited Under same actual controller
Guangdong Guangsheng Communications Technology Co., Ltd. Under same actual controller
Guangdong Rising Capital Investment Co., Ltd. Under same actual controller
Guangdong Electronics Information Industry Group Ltd. Under same actual controller
Guangdong Heshun Property Management Co., Ltd. Under same actual controller
Rising International Building Branch of Guangdong Heshun
Under same actual controller
Property Management Co., Ltd.
Guangdong Zhongjin Lingnan Engineering Technology Co., Ltd. Under same actual controller
Guangdong Rising Rare Metals Photoelectric Materials Ltd. Under same actual controller
Shenzhen Yuepeng Construction Co., Ltd. Under same actual controller
NationStar Optoelectronics (Germany) Co., Ltd. Under same actual controller
Guangdong Zhongjin Lingnan Junpeng Intelligent Equipment Under same actual controller
Co., Ltd.
Guangdong Rising South Construction Co., Ltd. Under same actual controller
Primatronix Nanho Technology Ltd. Under same actual controller
Hangzhou Times Lighting and Electrical Co., Ltd. Enterprise controlled by related natural person
303
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. Enterprise controlled by related natural person
Prosperity Electrical (China) Co., Ltd. Enterprise controlled by related natural person
Siteco Prosperity Lighting (Langfang) Co., Ltd. Enterprise controlled by related natural person
OSRAM (China) Lighting Co., Ltd. Enterprise significantly affected by related natural person
Shanglin ChenWang Ecological Agriculture Professional
Enterprise significantly affected by related natural person
Cooperative
Nanning Qiuyuan Jingwang Industrial Investment Co., Ltd. Enterprise significantly affected by related natural person
Nanning Ruixiang Industrial Investment Co., Ltd. Enterprise significantly affected by related natural person
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RMB
The approval trade Whether exceed trade Same period of last
Related party Content Reporting Period
credit credit or not year
Foshan NationStar
Purchase of
Optoelectronics 42,644,701.72 120,000,000.00 否 54,268,443.27
materials
Co., Ltd.
Guangdong
Fenghua Advanced Purchase of
7,858,610.67 15,000,000.00 否 8,810,002.31
Technology Holding materials
Co., Ltd.
PROSPERITY
LAMPS & Purchase of
2,654,442.36 13,000,000.00 否 3,128,174.91
COMPONENTS materials
LTD
Prosperity Electrical Purchase of
1,394,588.50 118,407.08
(China) Co., Ltd. materials
Hangzhou Times
Purchase of
Lighting and 646,501.00 448,824.06
materials
Electrical Co., Ltd.
Guangdong
Electronic Purchase of
1,151,902.67 3,000,000.00 否 724,424.77
Technology equipment
Research Institute
Guangdong
Receiving labor
Zhongnan 60,430,362.16 139,734,113.59
service
Construction Co.,
304
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Ltd.
Guangdong Yixin
Receiving labor
Changcheng 16,489,569.63
service
Construction Group
Jiangmen
Dongjiang
Environmental Receiving labor
269,383.02 326,229.47
Protection service
Technology Co.,
Ltd.
Guangdong
Electronic Receiving labor
2,734.91 16,851.55
Technology service
Research Institute
Foshan Fulong
Environmental
Receiving labor
Protection 25,471.70 42,477.88
service
Technology Co.,
Ltd.
Zhuhai Doumen
District
Yongxingsheng
Environmental Receiving labor
5,660.38 13,274.34
Industrial Wastes service
Recycling
Comprehensive
Treatment Co., Ltd.
Shenzhen Yuepeng
Receipt of labor
Construction Co., 234,245.88
services
Ltd.
Shaoguan Green
Resource Recycling Receiving labor
35,150.44
Development Co., service
Ltd.
Total 133,808,174.60 151,000,000.00 207,666,373.67
Information of sales of goods and provision of labor service
Unit: RMB
Related party Content Reporting Period Same period of last year
Guangdong New Electronic
Sale of products 37,516,153.50 13,257,739.83
Information Ltd.
PROSPERITY LAMPS & Sale of products 25,442,505.36 23,581,892.27
305
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
COMPONENTS LTD
Guangdong Rising Rare Metals
Sale of products 8,100,954.40
Photoelectric Materials Ltd.
Shenzhen Zhongjin Lingnan
Sale of products 3,104,398.07 508,074.33
Nonfemet Company Limited
Guangdong Yixin Changcheng
Sale of products 3,089,642.46 2,001,082.10
Construction Group
NationStar Optoelectronics
Sale of products 1,642,983.52
(Germany) Co., Ltd.
Guangdong Zhongnan
Sale of products 1,863,057.74 2,478,832.12
Construction Co., Ltd.
Rising International Building
Branch of Guangdong Heshun Sale of products 619,220.36
Property Management Co., Ltd.
Guangdong Zhongjin Lingnan
Equipment Technology Co., Sale of products 225,710.62 367,903.54
Ltd.
Guangdong Zhongjin Lingnan
Engineering Technology Co., Sale of products 108,592.02
Ltd.
Guangdong Heshun Property
Sale of products 73,458.68
Management Co., Ltd.
Guangdong Zhongjin Lingnan
Junpeng Intelligent Equipment Sale of products 49,674.33
Co., Ltd.
Guangdong Rising Holdings
Sale of products 30,226.55 57,417.70
Group Co., Ltd.
Prosperity Electrical (China)
Sale of products 26,984.56 44,923.04
Co., Ltd.
Guangdong Rising South
Sale of products 14,356.46
Construction Co., Ltd.
Guangdong Electronics
Information Industry Group Sale of products 8,013.27 8,004.42
Ltd.
Guangzhou Huajian
Engineering Construction Co., Sale of products 6,145.47 678,572.88
Ltd.
Primatronix Nanho Technology
Sale of products 857.79
Co., Ltd.
306
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Guangdong Electronic
Sale of products 856,798.23
Technology Research Institute
Guangdong Rising
Communications Technology Sale of products 23,628.32
Co., Ltd.
Total 81,922,935.16 43,864,868.78
Information of sales/purchase of goods and provision/reception of labor service
1. The pricing policy for related-party transactions is as follows:
The pricing for related-party transactions observes the principle of market subject to the market price when the transaction happens
and relevant accounts shall be paid on time based on actual transaction.
2. Related-party transactions between the Company and its subsidiaries, as well as those between the subsidiaries were offset when
preparing the consolidated financial statements.
(2) Information on Related-party Trusteeship/Contract
Naught
(3) Information on Related-party Lease
Naught
(4) Information on Related-party Guarantee
Other notes
See Note XIV-(III) Others.
(5) Information on Inter-bank Lending of Capital of Related Parties
Naught
(6) Information on Assets Transfer and Debt Restructuring by Related Party
Naught
(7) Information on Remuneration for Key Management Personnel
Unit: RMB
Item Reporting period Same period of last year
Chairman of the Board 1,503,487.93 553,233.53
General Manager 1,425,147.02 2,246,860.84
Chairman of the Supervisory Committee 1,328,797.52 1,011,360.58
Secretary of the Board 306,708.16
307
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Chief Financial Officer 1,302,654.16 992,873.82
Other 10,793,083.07 7,286,668.80
Total 16,659,877.86 12,090,997.57
(8) Other Related-party Transactions
(8.1) Acquisition of equity from related parties
In October 2021, Electronics Group signed the Equity Transfer Agreement with the Company on Foshan Sigma Venture Capital Co.,
Ltd., and transferred its 100% equity of Sigma (Sigma holds 79,753,050 shares of NationStar Optoelectronics) to the Company a t a
consideration of RMB917,980,229.67. In the same month, Rising Holdings Group and Rising Capital respectively signed the S hare
Transfer Agreement on Foshan NationStar Optoelectronics Co., Ltd. with the Company, and transferred their total 52,051,945 tradable
shares of NationStar Optoelectronics with unlimited selling conditions to the Company at a consideration of RMB599,117,886.95
(RMB11.51/share). As of 31 December 2021, the Company has paid 30% of the equity acquisition amount, that is,
RMB455,129,434.98, as the security deposit for this trading. For details of the equity acquisition progress, please refer to Note XV
Events after the Balance Sheet Date.
(8.2) Funds Interests of Related Parties
Related party Content Reporting Period Same period of last year
Guangdong Huajian Enterprise Group Borrowing interest 11,857,755.40
Co., Ltd. (Note) expense
Total 11,857,755.40
Note: It is the loan interest expense of Foshan Kelian, a subsidiary, from Guangdong Huajian Enterprise Group Co., Ltd.
(hereinafter referred to as "Huajian Enterprise Group"). The relevant loan principal and interest have been settled, and there is
no new loan interest in this period.
(8.3) Collect liquidated damages from related parties
In December 2020, the Company signed the Equity Transfer Agreement and Supplementary Agreement with Huajian
Enterprise Group, and the Company acquired 100% equity of Hunan Keda, thus holding Kelian Building. In this period, due
to the dispute between the two parties over the completion acceptance date agreed in the Equity Transfer Agreement, the
Company required Huajian Enterprise Group to bear the liquidated damages for delayed delivery of the building according to
the Agreement. After negotiation, Huajian Enterprise Group will pay liquidated damages of RMB7,060,000.00 to the
Company.
(8.4) Deposits and Loans of Related Parties
Related party Deposit nature Deposit term Ending balance
Guangdong Rising Finance Co., Ltd. Current, agreed can be withdrawn at any 294,777,469.27
(note) time
Note: According to the Financial Services Agreement signed by both parties in 2020 and 2021, the maximum daily deposit balance of
the company in Guangdong Rising Finance Co., Ltd. does not exceed RMB300,000,000.00, of which the annualized interest rate of
time deposit is 3.3%, the annualized interest rate of seven-day notice deposit is 2.45%, and the annualized interest rate of agreement
deposit is 1.75%; the interest income incurred and recognized in the current period is RMB6,873,960.08.
308
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
6. Accounts Receivable and Payable of Related Party
(1) Accounts Receivable
Unit: RMB
Ending balance Beginning balance
Item Related party
Carrying amount Bad debt provision Carrying amount Bad debt provision
Monetary
Guangdong Rising
capital-Interest 1,581,250.00
Finance Co., Ltd.
receivable
PROSPERITY
LAMPS &
Accounts receivable 7,536,111.98 226,083.36 3,953,777.97 118,613.34
COMPONENTS
LTD
OSRAM (China)
Accounts receivable 117,554.16 94,043.33
Lighting Co., Ltd.
Prosperity
(Hangzhou) Lighting
Accounts receivable 86,000.00 86,000.00
and Electrical Co.,
Ltd.
Guangdong Vollsun
Accounts receivable Data Solid-state 2,553,280.00 765,984.00
Storage Co., Ltd.
Guangdong
Zhongnan
Accounts receivable 1,095,727.04 32,871.81 2,642,688.00 79,280.64
Construction Co.,
Ltd.
Guangdong Yixin
Accounts receivable Changcheng 5,752,518.74 172,575.56 2,261,222.79 67,836.68
Construction Group
Shenzhen Zhongjin
Accounts receivable Lingnan Nonfemet 2,621,178.80 78,635.36 574,124.00 17,223.72
Company Limited
Guangdong
Zhongjin Lingnan
Accounts receivable 670,784.00 46,301.49 415,731.00 12,471.93
Equipment
Technology Co., Ltd.
Guangzhou Huajian
Engineering
Accounts receivable 44,823.00 4,445.48 289,857.54 8,695.73
Construction Co.,
Ltd.
309
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Guangdong New
Accounts receivable Electronic 10,627,013.80 318,810.41 14,131,264.06 423,937.92
Information Ltd.
Guangdong
Zhongjin Lingnan
Accounts receivable 10,118.00 303.54
Engineering
Technology Co., Ltd.
Guangdong Rising
Rare Metals
Accounts receivable 6,455,385.93 193,661.58
Photoelectric
Materials Ltd.
Guangdong Heshun
Property
Accounts receivable 2,303.60 69.11
Management Co.,
Ltd.
Rising International
Building Branch of
Guangdong Heshun
Accounts receivable 669,790.40 20,093.71
Property
Management Co.,
Ltd.
Guangdong Huajian
Other receivables Enterprise Group 7,060,000.00 211,800.00
Co. Ltd.
Guangdong New
Other receivables Electronic 8,865.50 265.97
Information Ltd.
Prosperity Electrical
Prepayments 39,428.00
(China) Co., Ltd.
Foshan NationStar
Prepayments Optoelectronics Co. 31,266.86
Ltd.
Guangdong Rising
Other non-current
Capital Investment 19,999,513.57
assets
Co., Ltd.
Guangdong
Other non-current Electronics
275,394,068.90
assets Information Industry
Group Ltd.
Other non-current Guangdong Rising
159,735,852.51
assets Holdings Group Co.,
310
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Ltd.
Total 497,684,055.77 1,305,917.38 28,677,444.38 1,674,087.29
(2) Accounts Payable
Unit: RMB
Item Related party Ending carrying amount Beginning carrying amount
Foshan NationStar
Notes payable 5,816,952.78
Optoelectronics Co., Ltd.
Guangdong Fenghua Advanced
Notes payable 798,496.60
Technology Holding Co., Ltd.
Foshan NationStar
Accounts payable 13,989,061.63 32,866,944.98
Optoelectronics Co., Ltd.
Guangdong Fenghua Advanced
Accounts payable 794,923.94 5,258,863.67
Technology Holding Co., Ltd.
Prosperity Electrical (China)
Accounts payable 567,218.00
Co., Ltd.
PROSPERITY LAMPS &
Accounts payable 1,350,955.58
COMPONENTS LTD
Hangzhou Times Lighting and
Accounts payable 178,185.14 289,282.42
Electrical Co., Ltd.
HONG KONG PROSPERITY
Accounts payable LAMPS & COMPONENTS 1,337,304.32
LTD
Guangdong Zhongnan
Accounts payable 12,370,475.74
Construction Co., Ltd.
Guangdong Yixin Changcheng
Accounts payable 3,825,018.07
Construction Group
Nanning Ruixiang Industrial
Other payables 120,352,181.20
Investment Co., Ltd.
Guangdong Huajian Enterprise
Other payables 1,726,264.40 9,358,999.63
Group Co., Ltd.
Guangdong Electronic
Other payables 391,025.00 260,860.00
Technology Research Institute
Guangdong Fenghua Advanced
Other payables 30,000.00 30,000.00
Technology Holding Co., Ltd.
Shenzhen Yuepeng
Other payables 298,300.64
Construction Co., Ltd.
Other payables Foshan NationStar 240,354.07 279,800.91
311
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Optoelectronics Co., Ltd.
Contract liabilities, other Prosperity Electrical (China)
59,428.00 39,764.94
current liabilities Co., Ltd.
Contract liabilities, other Guangdong Heshun Property
2,303.60
current liabilities Management Co., Ltd.
Contract liabilities, other Guangdong Rising South
3,233.00
current liabilities Construction Co., Ltd.
Contract liabilities, other NationStar Optoelectronics
7,219.71
current liabilities (Germany) Co., Ltd.
Total 162,787,945.84 49,735,472.13
7. Commitments of Related Party
1. Commitment on Avoidance of Horizontal Competition
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: Electronics Group and its acting-in-concert parties Hong Kong Rising Investment have
made more commitments as follows to avoid horizontal competition with the Company: 1. They shall conduct
supervision and restraint on the production and operation activities of themselves and their relevant enterprises so
that besides the enterprise above that is in horizontal competition with the Company for now, if the products or
business of them or their relevant enterprises become the same with or similar to those of the Company or its
subsidiaries in the future, they shall take the following measures: (1) If the Company thinks necessary, they and
their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If the
Company thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets and
business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid
horizontal competition with the Company are also applicable to their directly or indirectly controlled subsidiaries.
They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document
and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries
break the aforesaid commitments and thus cause a loss for the Company, they shall compensate the Company on a
rational basis.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(2) Commitment maker: Rising Group
Contents of Commitment: 1. The Promisor will take active measures to avoid any business or activity that
competes or may compete with the principal business of the Company and its auxiliary enterprises, and urge the
Promisor to control enterprises to avoid any business or activity that competes or may compete with the principal
business of the Company and its auxiliary enterprises. 2. If the Promisor and its controlled enterprises are given
the opportunity to engage in new business that constitutes or may constitute horizontal competition with the
principal businesses of the Company and its auxiliary enterprises, the Promisor will make every effort to make the
business opportunity first available to the Company or its auxiliary enterprises on reasonable and fair terms and
conditions on the premise that conditions permit and in the interest of the listed company.
Date of commitment making: 4 November 2021
Term of commitment: Long-standing
312
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Fulfillment: In execution
（3）Commitment maker: Rising Group, Rising Capital, and Hongkong Wah Shing
Contents of Commitment: 1. They shall conduct supervision and restraint on the production and operation
activities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontal
competition with FSL for now, if the products or business of them or their relevant enterprises become the same
with or similar to those of FSL or its subsidiaries in the future, they shall take the following measures: (1) If FSL
thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and
business; and (2) If FSL thinks necessary, it is given the priority to acquire first, by proper means, the relevant
assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or
avoid horizontal competition with FSL are also applicable to their directly or indirectly controlled subsidiaries.
They are obliged to urge and make sure that other subsidiaries execute what’s prescribed in the relevant document
and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries
break the aforesaid commitments and thus cause a loss for FSL, they shall compensate FSL on a rational basis.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
2. Commitment on Reduction and Regulation of Related-party Transactions
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: Electronics Group and its acting-in-concert parties Hongkong Wah Shing and Hong
Kong Rising Investment have made a commitment that during their direct or indirect holding of the Company’s
shares, they shall 1. Strictly abide by the regulatory documents of the CSRC and the SZSE, the Company’s
Articles of Association, etc. and not harm the interests of the Company or other shareholders of the Company in
their production and operation activities by taking advantage of their position as the controlling shareholder and
actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or
associated companies (the “Relevant Enterprises” for short) will try their best to avoid or reduce related-party
transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness,
fairness and equal value exchange for necessary and unavoidable related-party transactions between them and
their Relevant Enterprises and the Company, and withdraw from voting when a related-party transaction with
them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the
relevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations and
regulatory documents. Where the aforesaid commitments are broken and a loss is thus caused for the Company,
its subsidiaries or the Company’s other shareholders, they shall be obliged to compensate.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(2) Commitment maker: Rising Group
Contents of Commitment: 1. Strictly abide by the regulatory documents of the CSRC and the SZSE, the Company’s
Articles of Association, etc; and not harm the interests of the Company or other shareholders of the Company in
their production and operation activities by taking advantage of their position as the controlling shareholder and
actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or
associated companies (the "Relevant Enterprises" for short) will try their best to avoid or reduce related-party
transactions with the Company or the Company’s subsidiaries; 3. strictly follow the market principle of justness,
fairness and equal value exchange for necessary and unavoidable related-party transactions between them and their
Relevant Enterprises and the Company, and withdraw from voting when a related-party transaction with them or
313
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant
approval procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory
documents.
Date of commitment making: 4 November 2021
Term of commitment: Long-standing
Fulfillment: In execution
（3）Commitment maker: Rising Group, Rising Capital, and Hongkong Wah Shing
Contents of Commitment: They have made a commitment that during their direct or indirect holding of FSL
activities of themselvesstrictly abide by the regulatory documents of the CSRC and the SZSE,FSL’s Articles of
Association, etc. and not harm the interests of the Company or other shareholders of FSL in their production and
operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2.
make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the
"Relevant Enterprises" for short) will try their best to avoid or reduce related-party transactions with FSL or FSL’s
subsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessary and
unavoidable related-party transactions between them and their Relevant Enterprises and FSL, and withdraw from
voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a general
meeting or a board meeting, and execute the relevant approval procedure and information disclosure duties pursuant
to the applicable laws, regulations and regulatory documents. Where the aforesaid commitments are broken and a
loss is thus caused for FSL, its subsidiaries or FSL’s other shareholders, they shall be obliged to compensate.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
3. Commitment on Independence
(1) Commitment maker: Electronics Group and Hong Kong Rising Investment
Contents of Commitment: In order to ensure the independence of FSL in business, personnel, asset, organization
and finance, Electronics Group and Hong Kong Rising Investment have made the following commitments: 1. They
will ensure the independence of FSL in business: (1) They promise that FSL will have the assets, personnel,
qualifications and capabilities for it to operate independently as well as the ability of independent, sustainable
operation in the market. (2) They promise not to intervene in FSL’s business activities other than the execution of
their rights as FSL’s shareholders. (3) They promise that they and their related parties will not be engaged in
business that is substantially in competition with FSL’s business. And (4) They promise that they and their related
parties will try their best to reduce related-party transactions between them and FSL; for necessary and unavoidable
related-party transactions, they promise to operate fairly following the market-oriented principle and at fair prices,
and execute the transaction procedure and the duty of information disclosure pursuant to the applicable laws,
regulations and regulatory documents. 2.They will ensure the independence of FSL in personnel: (1) They promise
that FSL’s GM, deputy GMs, CFO, Company Secretary and other senior management personnel will work only for
and receive remuneration from FSL, not holding any positions in them or their other controlled subsidiaries other
than director and supervisor. (2) They promise FSL’s absolute independence from their related parties in labor,
human resource and salary management. And (3) They promise to follow the legal procedure in their
recommendation of directors, supervisors and senior management personnel to FSL and not to hire or dismiss
employees beyond FSL’s Board of Directors and General Meeting. 3. They will ensure the independence and
completeness of FSL in asset: (1) They promise that FSL will have a production system, an auxiliary production
system and supporting facilities for its operation; legally have the ownership or use rights of the land, plants,
machines, trademarks, patents and non-patented technology in relation to its production and operation; and have
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independent systems for the procurement of raw materials and the sale of its products. (2) They promise that FSL
will have independent and complete assets all under FSL’s control and independently owned and operated by FSL.
And (3) They promise that they and their other controlled subsidiaries will not illegally occupy FSL’s funds and
assets in any way, or use FSL’s assets to provide guarantees for the debts of themselves or their other controlled
subsidiaries with. 4. They will ensure the independence of FSL in organization: (1) They promise that FSL has a
sound corporate governance structure as a joint-stock company with an independent and complete organization
structure. (2) They promise that the operational and management organs within FSL will independently execute
their functions according to laws, regulations and FSL’s Articles of Association. 5. They will ensure the
independence of FSL in finance: (1) They promise that FSL will have an independent financial department and
financial accounting system with normative, independent financial accounting rules. (2) They promise that FSL will
have independent bank accounts and not share bank accounts with its related parties. (3) They promise that FSL’s
financial personnel do not hold concurrent positions in its related parties. (4) They promise that FSL will
independently pay its tax according to law. And (5) They promise that FSL can make financial decisions
independently and that they will not illegally intervene in FSL’s use of its funds.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(2) Commitment maker: Rising Group
Contents of Commitment: To maintain the independence of the Company, the Promisor has made the following
commitments: 1. It will ensure the personnel independence of the Company. It promises to ensure personnel
independence with the Company, and GM, deputy GMs, CFO, Secretary of the Board of Directors and other senior
management personnel of the Company will not hold positions other than directors and supervisors in the
enterprises wholly owned, controlled or actually controlled by it and its subsidiaries (hereinafter referred to as
"subsidiaries"), and will not receive salaries from it or its subsidiaries. the Company: To maintain the independence
of the Company, the Promisor has made the following commitments: 1. It will ensure the personnel independence of
the Company. It promises to ensure personnel independence with the Company, and GM, depnd (2) It promises that
it and its subsidiaries will not illegally occupy the Company’s funds and assets in any way. 3. It will ensure the
financial independence of the Company: (1) It promises that the Company will have an independent financial
department and financial accounting system. (2) It promises that the Company will have a standardized and
independent financial accounting system. (3) It promises that the Company will have independent bank accounts
and not share bank accounts with it. (4) It promises that the Company’s financial personnel do not hold concurrent
positions in it or its subsidiaries. And (5) It promises that the Company can make financial decisions independently
and that they will not illegally intervene in the Company’s use of its funds. 4. It will ensure the independence of the
Company in organization: (1) It promises that the Company can operate independently with an independent and
complete organization structure. (2) It promises that the office and production and business premises of the
Company are separated from those of Rising Holdings Group. And (3) It promises that the Board of Directors, the
Supervisory Committee and various functional departments of the Company operate independently, and there is no
subordinate relationship with the functional departments of Rising Holdings Group. And 5, It will ensure the
independence of the Company in business: (1) It promises that the Company will have independence in business.
And (2) It promises that the Company will have the assets, personnel, qualifications and capabilities for it to operate
independently as well as the ability of independent, sustainable operation in the market.
Date of commitment making: 4 November 2021
Term of commitment: Long-standing
Fulfillment: In execution
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4. Commitment on effective performance of measures to fill up returns
Commitment maker: Rising Group, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong Kong Rising
Investment and Shenzhen Rising Investment
Contents of Commitment: 1. They promise not to interfere in the operation and management activities of the listed
company beyond their authority and not to encroach on the interests of the listed company. 2. From the date of
issuance of these commitments to the completion of this trading of the listed company, if the CSRC makes new
regulatory requirements on measures to fill up returns and commitments of relevant personnel, and the above
commitments cannot meet these new regulatory requirements of the CSRC, they promise to issue supplementary
commitments according to the latest regulations of the CSRC at that time. 3. They promise to earnestly fulfill the
measures to fill up returns formulated by the listed company and any commitments made by them. If they violate
these commitments and causes losses to the listed company or investors, they are willing to bear the compensation
responsibility for the listed company or investors according to law. As one of the subjects responsible for the
measures to fill up returns, if they violate the above commitments or refuses to fulfill the above commitments, they
agree that the securities regulatory agencies such as the CSRC and the SZSE will punish them or take relevant
regulatory measures in accordance with the relevant regulations and rules they formulated or issued.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
5. Commitment on non-reduction of FSL shares during major asset restructuring
Commitment maker: Rising Group, Rising Capital, Electronics Group, Hongkong Wah Shing, Hong Kong Rising
Investment and Shenzhen Rising Investment
Contents of Commitment: 1. They promise that there will be no share reduction plan from the date of issuance of
this Letter of Commitments to the completion of this trading, and they will not reduce its FSL shares in any other
way (except the transfer or transfer between Rising Holdings Group and its wholly-owned subsidiaries). 2. If FSL
implements ex-rights behaviors such as share conversion, share offering and share allotment from the date of
issuance of this Letter of Commitments to the completion of this trading, the newly added shares obtained by them
will also be subject to the above commitments related to not reducing share holdings.
Date of commitment making: 28 September 2021.
Term of commitment: Until the completion of this trading.
Fulfillment: Complete
6. Commitment on explanation about not prohibited from participating in of any major asset restructuring
of listed companies as stipulated in Article 13 of the Interim Provisions on Strengthening the Supervision of
Abnormal Stock Trading Related to Major Asset Restructuring of Listed Companies
(1) Commitment maker: Shenzhen Rising Investment, Hong Kong Rising Investment, and Hongkong Wah Shing
Contents of Commitment: As of the issuance date of the Report on Major Asset Purchase and Related Party Trading
of Foshan Electrical and Lighting Co., Ltd. (Draft), they have not been placed on file for investigation or criminal
investigation due to suspected insider trading related to this trading, and has not been subject to administrative
punishment by the CSRC or criminal responsibility investigated by judicial organs according to law for insider
trading related to any major asset restructuring in the last 36 months. The relevant entities of this trading are not
prevented from participating in any major asset restructuring of listed companies according to Article 13 of the
Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset
Restructuring of Listed Companies.
Date of commitment making: 27 October 2021.
Term of commitment: Three years prior to the date of issue of commitment.
Fulfillment: Complete
(2) Commitment maker: Directors, supervisors and senior management of Shenzhen Rising Investment, Hong Kong
Rising Investment, and Hongkong Wah Shing
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Contents of Commitment: As of the issuance date of the Report on Major Asset Purchase and Related Party Trading
of Foshan Electrical and Lighting Co., Ltd. (Draft), they have not been placed on file for investigation or criminal
investigation due to suspected insider trading related to this trading, and has not been subject to administrative
punishment by the CSRC or criminal responsibility investigated by judicial organs according to law for insider
trading related to any major asset restructuring in the last 36 months. The relevant entities of this trading are not
prevented from participating in any major asset restructuring of listed companies according to Article 13 of the
Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset
Restructuring of Listed Companies.
Date of commitment making: 27 October 2021.
Term of commitment: Three years prior to the date of issue of commitment.
Fulfillment: Complete
(3) Commitment maker: Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: As of the issuance date of the Report on Major Asset Purchase and Related Party Trading
of Foshan Electrical and Lighting Co., Ltd. (Draft), the counterparties of this restructuring have not been placed on
file for investigation or criminal investigation due to suspected insider trading related to this trading, and has not
been subject to administrative punishment by the CSRC or criminal responsibility investigated by judicial organs
according to law for insider trading related to any major asset restructuring in the last 36 months. The relevant
entities of this trading do not disclose the insider information of this restructuring or use the insider information of
this restructuring to conduct trading. In case of any violations to the above commitments, the relevant subjects of
this trading will bear corresponding compensation liabilities.
Date of commitment making: 27 October 2021.
Term of commitment: Three years prior to the date of issue of commitment.
Fulfillment: Complete
7. Commitment on legal compliance
（1）Commitment maker: Shenzhen Rising Investment, Hong Kong Rising Investment, and Hongkong Wah Shing
Contents of Commitment: 1. They have not been investigated by the judicial organ for suspected crimes or by the
CSRC for suspected violations of laws and regulations, and there is no administrative punishment (except those
obviously unrelated to the securities market) or criminal punishment in the last three years; 2. They have not failed
to repay large debts on schedule, failed to fulfill their commitments, been taken administrative supervision measures
by the CSRC, or been disciplined by any stock exchange, have not been publicly condemned by any stock exchange,
have no other major acts of dishonesty and have no any other bad record in the last three years.
Date of commitment making: 27 October 2021.
Term of commitment: Three years prior to the date of issue of commitment.
Fulfillment: Complete
(2) Commitment maker: Rising Capital
Contents of Commitment: 1. Rising Capital has not been investigated by the judicial organ for suspected crimes or
by the CSRC for suspected violations of laws and regulations, and there is no administrative punishment (except
those obviously unrelated to the securities market) or criminal punishment in the last five years; 2. Rising Capital
has not failed to repay large debts on schedule, failed to fulfill its commitments, been taken administrative
supervision measures by the CSRC, or been disciplined by any stock exchange, has not been publicly condemned by
any stock exchange, has no other major acts of dishonesty and has no any other bad record in the last five years. 3.
The main management personnel of Rising Capital have not received administrative punishment or criminal
punishment related to the securities market, and have not involved in major civil litigation or arbitration related to
economic disputes in the last five years. 4. The main management personnel of Rising Capital have not failed to
repay large debts on schedule, failed to fulfill their commitments, been taken administrative supervision measures
by the CSRC or been disciplined by any stock exchange in the last five years.
Date of commitment making: 27 October 2021
Term of commitment: Five years prior to the date of issue of commitment.
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Fulfillment: Complete
(3) Commitment maker: Electronics Group
Contents of Commitment: 1. Electronics Group has not been investigated by the judicial organ for suspected crimes
or by the CSRC for suspected violations of laws and regulations, and there is no administrative punishment (except
those obviously unrelated to the securities market) or criminal punishment in the last five years; 2. Electronics
Group has not failed to repay large debts on schedule, failed to fulfill its commitments, been taken administrative
supervision measures by the CSRC, or been disciplined by any stock exchange, has not been publicly condemned by
any stock exchange, has no other major acts of dishonesty and has no any other bad record in the last five years. 3.
On 20 November , 2019, Guangdong Regulatory Bureau of the CSRC issued an administrative penalty decision
([2019] No. 13), giving Liu Ke, the director of Guang Dong Fenghua Advanced Technology (Holding) Co., Ltd.
(now chairman of Electronics Group), a warning and a fine of RMB30,000 over the case of illegal information
disclosure of Guang Dong Fenghua Advanced Technology (Holding) Co., Ltd. Except as aforesaid, the main
management personnel of Electronics Group have not received administrative punishment or criminal punishment
related to the securities market, and have not involved in major civil litigation or arbitration related to economic
disputes in the last five years; 4. Except as aforesaid, the main management personnel of Electronics Group have not
failed to repay large debts on schedule, failed to fulfill their commitments, been taken administrative supervision
measures by the CSRC or been disciplined by any stock exchange in the last five years.
Date of commitment making: 27 October 2021
Term of commitment: Five years prior to the date of issue of commitment.
Fulfillment: Complete
(4) Commitment maker: Rising Group
Contents of Commitment: 1. Rising Group has not been investigated by the judicial organ for suspected crimes or by
the CSRC for suspected violations of laws and regulations, and there is no administrative punishment (except those
obviously unrelated to the securities market) or criminal punishment in the last five years; 2. Rising Group has not
failed to repay large debts on schedule, failed to fulfill its commitments, been taken administrative supervision
measures by the CSRC, or been disciplined by any stock exchange, has not been publicly condemned by any stock
exchange, has no other major acts of dishonesty and has no any other bad record in the last five years. 3. According
to the announcement of Guangdong Discipline Inspection and Supervision Network on 18 October 2021, Yu Gang,
a member of the Party Committee and deputy general manager of Rising Group, is suspected of serious disciplinary
violations and is currently undergoing disciplinary review and supervision by the Supervision Committee of
Guangdong Provincial Commission for Discipline Inspection. As of the date of issuance of this Letter of
Commitments, there is no result of disciplinary review and supervision. Except as aforesaid, the main management
personnel of Rising Group have not received administrative punishment or criminal punishment related to the
securities market, and have not involved in major civil litigation or arbitration related to economic disputes in the
last five years. 4. The main management personnel of Rising Capital have not failed to repay large debts on schedule,
failed to fulfill their commitments, been taken administrative supervision measures by the CSRC or been disciplined
by any stock exchange in the last five years.
Date of commitment making: 27 October 2021
Term of commitment: Five years prior to the date of issue of commitment.
Fulfillment: Complete
(5) Commitment maker: NATIONSTAR and Sigma
Contents of Commitment: NATIONSTAR and Sigma have not been investigated by judicial organs for suspected
crimes or by the CSRC for suspected violations of laws and regulations, and have not been subject to major
administrative punishment or criminal punishment in the last five years.
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Date of commitment making: 27 October 2021.
Term of commitment: Five years prior to the date of issue of commitment.
Fulfillment: Complete
(6) Commitment maker: Directors, supervisors and senior management personnel of NationStar Optoelectronics
and Sigma
Contents of Commitment: NationStar Optoelectronics and Sigma have not been investigated by judicial organs for
suspected crimes or by the CSRC for suspected violations of laws and regulations, and have not been subject to
major administrative punishment or criminal punishment in the last five years.
Date of commitment making: 27 October 2021.
Term of commitment: Five years prior to the date of issue of commitment.
Fulfillment: Complete
8. Commitment on compensation for possible violations of laws and regulations by NationStar
Optoelectronics
Commitment maker: Rising Holdings Group, Electronics Group, and Rising Capital
Contents of Commitment: If NationStar Optoelectronics is subject to administrative penalties such as accountability
and fines by relevant competent departments after the completion of this trading due to the illegal acts of NationStar
Optoelectronics before the completion of this acquisition, they promise to fully bear the losses of NATIONSTAR or
FSL, as well as the expenses and fees under punishment or recourse, to ensure that NationStar Optoelectronics or
FSL will not suffer any economic losses.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
9. Commitment on explanation of confidentiality measures and confidentiality system adopted for this
trading
Commitment maker: Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: 1. During the preliminary negotiation between the listed company and the counterparty
on this trading, necessary and sufficient confidentiality measures were taken to limit the scope of knowledge of
relevant sensitive information. According to the requirements of the SZSE, the listed company have completed the
submission and online reporting of the memorandum of trading process, relevant materials of insider information
insiders. The listed company have hired independent financial advisers, legal advisers, audit institutions, valuation
institutions and other intermediaries, and signed confidentiality agreements or appointment agreements with
confidentiality clauses with the above intermediaries, clearly stipulating the scope of confidential information and
the confidentiality responsibilities of each intermediary.
Date of commitment making: 27 October 2021.
Term of commitment: Until the completion of this trading.
Fulfillment: In execution.
10. Commitment on the truthfulness, accuracy and completeness of the information provided during this
major asset restructuring
(1) Commitment maker: Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: 1. They promise that the information provided is true, accurate and complete, and there
are no false records, misleading statements or material omissions. 2. They have provided relevant information and
documents (including but not limited to original written materials, duplicate materials or oral testimony, etc.) related
to this trading to the intermediaries. They promise that the copies or photocopies of the documents and materials
provided are consistent with the originals, and that the signatures and seals of the documents and materials are
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
authentic, and the signatories of the documents have been legally authorized and effectively signed the documents;
that there are no false records, misleading statements or material omissions. 3. They promise that the explanations
and confirmations issued by them are true, accurate and complete, and there are no false records, misleading
statements or material omissions. 4. During this trading, they will disclose the information about this trading in a
timely manner in accordance with relevant laws and regulations, the CSRC and the SZSE, and ensure the
authenticity, accuracy and completeness of such information. 5. They shall bear legal responsibility for the
authenticity, accuracy and completeness of the information, documents, materials, explanations and confirmations
provided. In case of any violation or losses caused to the listed company, investors, parties to the trading and
intermediaries participating in this trading, they will be liable for compensation according to law. 6. Where the
information provided or disclosed by them in this trading is suspected of false records, misleading statements or
material omissions, and they are filed for investigation by the judicial organ or by the CSRC, the shares with
interests in the listed company will not be transferred until the investigation conclusion is formed.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
(2) Commitment maker: NationStar Optoelectronics
Contents of Commitment: NationStar Optoelectronics has provided the necessary, true, accurate, complete and
effective documents, materials or oral statements and explanations for this trading at this stage, and there is no
concealment, falsehood or material omission. The copies or photocopies of the documents provided are consistent
with the original materials or originals. The signatures and seals on the documents and materials provided are
authentic, and NationStar Optoelectronics has fulfilled the legal procedures required for such signatures and seals
and obtained legal authorization. All the facts stated and explained are consistent with the facts that happened.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
（3）Commitment maker: Sigma
Contents of Commitment: 1. Sigma has provided relevant information and documents (including but not limited to
original written materials, duplicate materials or oral testimony, etc.) related to this trading to the intermediaries
providing professional services of auditing, valuation, legal and financial consultancy for this trading. Sigma
promises that the copies or photocopies of the documents and materials provided are consistent with the originals,
and that the signatures and seals of the documents and materials are authentic, and the signatories of the documents
have been legally authorized and effectively signed the documents; that the provided information and documents are
authentic, accurate and complete and that there are no false records, misleadin g statements or material omissions.
FSL also promises to bear individual and joint and several liability. 2. Sigma promises that the information provided
is true, accurate and complete. In case of any losses caused to investors due to any false presentations, misleading
statements or material omissions in the information provided, Sigma will be liable for compensation according to
law.
Date of commitment making: 27 October 2021
Term of commitment: Long-standing..
Fulfillment: In execution.
11. Commitment on the clarity of the underlying assets of this major asset restructuring
(1) Commitment maker: Electronics Group
Contents of Commitment: Electronics Group promises that the 100% equity of Sigma it held is clear in ownership
and is not subject to any dispute or potential dispute, and there is no situation affecting its legal existence; and
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that may
lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the relevant
judicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction or
prohibition of transfer of the above-mentioned equity controlled by Electronics Group.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
(2) Commitment maker: Rising Group
Contents of Commitment: Rising Group promises that 46,260,021 shares of NationStar Optoelectronics it held is
clear in ownership and is not subject to any dispute or potential dispute, and there is no situation affecting its legal
existence; the above shares are not subject to any other pledges, guarantees or third-party interests or restrictions
and there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that
may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the
relevant judicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction or
prohibition of transfer of the above-mentioned equity controlled by Rising Group.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
(3) Commitment maker: Rising Capital
Contents of Commitment: Rising Capital promises that 5,791,924 shares of NationStar Optoelectronics it held is
clear in ownership and is not subject to any dispute or potential dispute, and there is no situation affecting its legal
existence; the above shares are not subject to any other pledges, guarantees or third-party interests or restrictions
and there is no pending or potential litigation, arbitration and any other administrative or judicial procedure that
may lead to the seizure, freezing, expropriation or restriction of transfer of the above-mentioned equity by the
relevant judicial or administrative organs. There is no entrusted shareholding or trust shareholding, restriction or
prohibition of transfer of the above-mentioned equity controlled by Rising Group.
Date of commitment making: 27 October 2021.
Term of commitment: Long-standing.
Fulfillment: In execution.
（4）Commitment maker: Sigma
Contents of Commitment: Among 79,753,050 shares of tradable shares with unlimited selling conditions of
NationStar Optoelectronics held by Sigma, 39,876, 500 shares were pledged for Guangdong Electronics
Information Industry Group Ltd. As of the date of issuance of this commitment, the pledge of the above shares has
been released. However, the Maximum Pledge Contract for Stocks of Listed Companies (No.: XYYZZ (BY)
No.201906280001-2) signed by Sigma and Guangzhou Branch of Industrial Bank Co., Ltd. has not been dissolved.
Guangdong Electronics Information Industry Group Ltd. has promised that it will not add any new loans to
Guangzhou Branch of Industrial Bank Co., Ltd. as a borrower during the validity period of the guarantee, and that it
will not substantially assume any guarantee responsibility due to the Maximum Pledge Contract for Stocks of Listed
Companies. Except as aforesaid, the asset ownership of Sigma is clear, there is no dispute or potential dispute, and
there is no situation affecting the legal existence. There is no entrusted shareholding or trust shareholding,
restriction or prohibition of transfer of the above-mentioned equity controlled by Rising Holdings Group.
Date of commitment making: 27 October 2021
Term of commitment: Long-standing.
Fulfillment: Complete
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12. Commitment on compliance of this major asset restructuring with Several Provisions on the Reduction of
Shares by Shareholders, Directors and Supervisors of Listed Companies
Commitment maker: Rising Group and Rising Capital
Contents of Commitment: 1. They are not subject to any securities and futures crimes as stipulated in Article 6 of
Several Provisions on the Reduction of Shares by Shareholders, Directors and Supervisors of Listed Companies.
During the period when the CSRC or the judicial organ filed a case for investigation, and less than six months
after the administrative penalty decision and criminal judgment were made, there was no situation that the shares
of NATIONSTAR could not be reduced due to violation of the rules of stock exchanges and public censure by
stock exchanges for less than three months. 2. In case of any violation or losses caused to NATIONSTAR,
investors, parties to the trading and intermediaries participating in this trading, they will be liable for
compensation according to law.
Date of commitment making: 27 October 2021.
Term of commitment: Until the completion of this trading.
Fulfillment: In execution.
13. Commitment on the release of credit guarantee
Commitment maker: Electronics Group
Contents of Commitment: 1. As of the date of issuance of the Letter of Commitments, Sigma has signed the
Maximum Guarantee Contract (Contract No.: XYYBZ (BY) No.201906280001-1) and the Maximum Pledge
Contract for Stocks of Listed Companies (Contract No.: XYYZZ (BY) No.201906280001-2) with Guangzhou
Branch of Industrial Bank Co., Ltd. Sigma will provide the maximum guarantee and pledge guarantee for the debt of
Electronics Group, with the guarantee amount of RMB400 million (in words: RMB Four Hundred Million), and the
guarantee will be valid from 28 June 2019 to 27 June 2022. Electronics Group promises that on the date of issuance
of this Letter of Commitment, all the loans involved in the Maximum Guarantee Contract and the Maximum Pledge
Contract for Stocks of Listed Companies have been repaid, there is no debt based on the guarantee under the above
contracts, and 39,876,500 shares of NationStar Optoelectronics held by Sigma have been released from pledge. At
the same time, Electronics Group further makes an irrevocable commitment that it will not add any new loans to
Guangzhou Branch of Industrial Bank Co., Ltd. as a borrower before the expiration date of the Maximum Guarantee
Contract and the Maximum Pledge Contract for Stocks of Listed Companies, so as to ensure that Sigma will not
actually assume any guarantee responsibilities due to the above guarantee contracts. 2. Electronics Group promises
that it will not arrange for Sigma to add any form of guarantee before the completion of the delivery of Sigma's
equity in this trading. 3. In case of any violations of the above commitments, Electronics Group shall solve and
eliminate the above situation within ten days, and bear corresponding legal responsibilities to Sigma and FSL.
Date of commitment making: 27 October 2021
Term of commitment: Until the completion of this trading.
Fulfillment: In execution.
14. Commitment on no ownership dispute in equity
Commitment maker: Sigma
Contents of Commitment: 1. Sigma promises that all its registered capital has been paid in. 2. Sigma promises that
all existing shareholders contribute their own funds to hold shares, there is no situation such as holding shares on
behalf of them, and there is no dispute or potential dispute between shareholders over their shares.
Date of commitment making: 27 October 2021
Term of commitment: Long-standing.
Fulfillment: In execution.
15. Commitment on explanation on litigation and administrative punishment
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Commitment maker: Sigma
Contents of Commitment: As of the date of issuance of this note, Sigma and its wholly-owned and controlled
subsidiaries have no outstanding or foreseeable major lawsuits, arbitrations and administrative penalties that have a
significant adverse impact on this trading. As of the date of issuance of this note, the directors, supervisors and
senior management personnel of Sigma have no pending or foreseeable major lawsuits, arbitrations and
administrative penalties that have a significant adverse impact on this trading.
Date of commitment making: 27 October 2021
Term of commitment: Before the date of issuance of the commitment.
Fulfillment: Complete
16．About absence of insider trading
Commitment maker: Key management personnel of Rising Group, Electronics Group, and Rising Capital
Contents of Commitment: They promise that they will not disclose the relevant insider information of this trading or make use of
the insider information for insider trading; 2. As of the issuance date of the Report on Major Asset Purchase and Related Party
Trading of Foshan Electrical and Lighting Co., Ltd. (Draft), they have not been placed on file for investigation or criminal
investigation due to suspected insider trading related to this trading, and have not been subject to administrative punishment by the
CSRC or criminal responsibility investigated by judicial organs according to law for insider trading related to any major asset
restructuring, and have not been prohibited from engaging in any major asset restructuring of listed companies according to A rticle
13 of the Interim Provisions on Strengthening the Supervision of Abnormal Stock Trading Related to Major Asset Restructuring of
Listed Companies in the last 36 months; 3. In case of violation of the above commitments, they will bear all losses caused to the
listed company and its shareholders.
Date of commitment making: 27 October 2021
Term of commitment: From the date of the issuance of the letter of commitment until the completion of this trading
Fulfillment: In execution.
8. Other
Naught
XIII. Stock Payment
1. The Overall Situation of Stock Payment
□Applicable √ Not applicable
2. The Stock Payment Settled in Equity
□Applicable √ Not applicable
3. The Stock Payment Settled in Cash
□Applicable √ Not applicable
4. Modification and Termination of the Stock Payment
Naught
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
5. Other
Naught
XIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on the balance sheet date
1. Commitment about cash dividends
Commitment maker: The Company
Contents: The annual profits distributed in cash by the Company shall be not less than 30% of the distributable
profits of the year.
Date of commitment making: 27 May 2009
Term of commitment: Long-standing
Fulfillment: In execution
2. Commitment on the development of Haikou plot
In November 2021, Hainan Technology, a wholly-owned subsidiary of the Company, acquired an industrial land
located in Mei'an Science and Technology New City, Haikou, with a land area of 34,931.13 square meters and a
land price of RMB26,596,784.43. In the same month, Hainan Technology signed the Agreement on Industrial
Project Development and Land Access with Haikou National High-tech Industrial Development Zone Management
Committee (hereinafter referred to as “Haikou Development Zone Management Committee”). The agreement
stipulates that the above-mentioned plots are used for the development of marine lighting R&D and manufacturing
base projects, and the investment in fixed assets is about RMB314 million (including plant, equipment and land,
equivalent to RMB6 million per mu). Hainan Technology promises to complete the planning scheme design within
two months from the date of signing the Confirmation of Listing and Transferring the Right to Use State-owned
Construction Land; complete the construction drawing design within three months after completing the planning
scheme design and obtain the Building Construction Permits and start construction at the same time (subject to the
foundation concrete pouring of the main buildings). The project will be put into production within 18 months from
the date of signing the Confirmation of Listing and Transferring the Right to Use State-owned Construction Land.
From the date of signing the contract to the first year after the project is put into production, the accumulated tax
payment is not less than RMB10 million, the accumulated tax payment in the first two years is not less than
RMB27.4 million, the accumulated tax payment in the first three years is not less than RMB67.1 million, the
accumulated tax payment in the first four years is not less than RMB117 million, and the accumulated tax payment
in the five years is not less than RMB203 million. The total industrial output value (or revenue) in the first year after
the project is put into production is not less than RMB218 million, the accumulated value in the first two years is not
less than RMB433 million, the accumulated value in the first three years is not less than RMB929 million, the
accumulated value in the first four years is not less than RMB1.548 billion, and the accumulated value in the five
years is not less than RMB2.62 billion. If the project fails to start construction within 12 months from the date of
signing the Confirmation of Listing and Transfering of State-owned Construction Land Use Rights due to Hainan
Technology reasons, the Haikou Development Zone Management Committee has the right to unilaterally terminate
the contract and the municipal government will recover the land use rights according to law; if the total amount of
tax paid in the year after putting into production does not reach the annual agreement, Hainan Technology shall pay
liquidated damages to Haikou Development Zone Management Committee according to the difference; if Hainan
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Technology has idle land due to government reasons and force majeure, the municipal government shall collect idle
land fees or recover the right to use state-owned construction land.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
1. The lawsuit with Beijing Zhengshi
As Beijing Zhongao Zhengshi Lighting Appliance Co., Ltd. and its subordinate dealers (hereinafter referred to as
“Beijing Zhengshi”) defaulted on the Company’s payment for goods, the Company filed a lawsuit with the Foshan
Chancheng District People’s Court in September 2017 (Case No.: (2017) Yue 0604 MC No. 13425), demanding
an immediately settlement of the payment and overdue liquidated damages of the loan interest rate at the same
period from 31 July 2017 from No. 1 defendant, Beijing Zhengshi, as well as jointly and severally liability for the
above debt from No. 2 defendant Jiang Zhenghao. On 10 May 2018, in People’s Court of Chancheng District,
Foshan City (2017) Yue 0604 MC No. 13425 Civil Ruling, Beijing Zhengshi was adjudged to pay the payment for
goods of RMB14,220,827.14 and liquidated damages for the Company and Jiang Zhenghao undertook the jointly
and severally liability. Beijing Zhengshi and Jiang Zhenghao were not satisfied with the judgment and applied to
the Foshan Intermediate People’s Court on 24 May 2018 and asked for the revocation of the first instance
judgment and rejection of all claims of the Company. On 28 October 2021, the Civil Judgment of Foshan
Intermediate People's Court ((2018) Y06MZ No.6382) ruled that the preserved goods should be deducted from the
payment of RMB3 million owed by Beijing Zhengshi, and Beijing Zhengshi should pay the balance of
RMB11,220,827.14 and liquidated damages to the Company, and Jiang Zhenghao should bear joint and several
liabilities. As of the date of this report, the above balance has not been implemented. On 16 December 2021, the
Company applied to the court for compulsory enforcement, and on 21 February 2022, it received the court's order
restricting the consumption of Beijing Zhengshi and Jiang Zhenghao.
2. Litigation between Foshan Kelian and some owners
Due to the late delivery of housing by Foshan Kelian, three owners (plaintiffs) of the housing filed a lawsuit against
Foshan Kelian and Shenzhen Chuanglian Real Estate Agency Co., Ltd. (hereinafter referred to as "Shenzhen
Chuanglian") with Chancheng District People's Court of Foshan City in October 2021 (case number: (2021)
Y0604MC No.41627, No.41628 and No.41629 respectively), requesting: 1. Terminate the Commodity House
Purchase and Sales Contract entered into between the plaintiffs and Foshan Kelian; 2. Order the two defendants to
jointly refund the house price and interest of RMB1,999,544.00 (based on the total house price, calculated at an
annual interest rate of 4.35% from 1 October 2020 to the actual refund date), compensate for losses of
RMB71,185.48 (including property management and maintenance fund and deed tax), and bear liquidated damages
of RMB 149,008.00 (calculated according to the total house price), totaling RMB2,219,737.48 3. The litigation
costs in this case shall be borne by the two defendants. The above case has been heard on 30 December 2021, and as
of the date of this report, the above case has not been concluded.
3. Litigation between Foshan Kelian and Shenzhen Chuanglian
In April 2021, Foshan Kelian and Shenzhen Chuanglian signed the Exclusive Sales Agreement of Property of
Foshan Kelian Center Project. Both parties confirm that the original contract was terminated, Shenzhen
Chuanglian's agency sales right was terminated, and it was unable to fulfill the exclusive purchase of the target
property. However, Shenzhen Chuanglian was responsible for handling the follow-up related matters such as the
decoration and repossession of 32 apartments that have been sold. On the premise that Shenzhen Chuanglian fulfills
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
the terms agreed in this agreement, Foshan Kelian will refund part of the deposit of the original contract in batches.
In December 2021, Shenzhen Chuanglian filed a lawsuit with Chancheng District People's Court of Foshan City
(Case No.: (2021) Y0604MC No.42183). On the grounds that Foshan Kelian failed to deliver the house to the owner
before July 31, 2021, which made it impossible to achieve the conditions agreed in the termination agreement, it
requested to order the Company to return the money of RMB5,572,000.00 and interest of RMB50,000.00
(provisional), pay the lawyer's fee of RMB98,000.00 to Shenzhen Chuanglian and bear all the litigation costs of this
case, totaling RMB5,720,000.00 (provisional). The case was heard on 11 February 2022, and as of the date of this
report, it has not yet been concluded. As of the date of this report, the case has not been concluded.
4. Sales contract disputes between Nanning Liaowang and Hubei Meiyang
Nanning Liaowang filed a lawsuit with Xiangyang High-tech Development Zone People's Court for a dispute over
the sales contract with Hubei Meiyang Automobile Industry Co., Ltd. (hereinafter referred to as "Hubei Meiyang"),
demanding that Hubei Meiyang pay RMB590,948.44 as payment for goods and RMB59,000 as liquidated damages.
After coordination by the court, both parties voluntarily reached the following mediation agreement: Hubei
Meiyang made the goods payment of RMB196,890.00 before June 30 and July 31 respectively and fully paid the
remaining payment of RMB197,168.44 before 31 August, 2021. If the defendant Hubei Meiyang failed to fulfill the
payment obligations as agreed in any of the above periods, Nanning Liaowang has the right to apply to the court for
compulsory execution of the actual outstanding payment. Up to now, Hubei Meiyang has not fulfilled its payment
obligations. Nanning Liaowang has applied for compulsory execution. The court has not found any enforceable
property, and has returned the litigation costs borne by Nanning Liaowang.
5. Technology entrusted development contract disputes between Nanning Liaowang and Chongqing Meiwan
Nanning Liaowang has a dispute with Chongqing Meiwan New Energy Automobile Technology Co., Ltd.
(hereinafter referred to as "Chongqing Meiwan") over the entrusted development contract of technology, and filed
an arbitration application with China Chongqing Arbitration Commission (Case No.: (2020) YZ Zi No.3414),
demanding that Chongqing Meiwan pay RMB4,702,100 for technology development, RMB707,300 for late
payment and RMB50,000 for attorney fees, totaling RMB5,459,400 (the above amount is provisional).
On 19 March 2021, China Chongqing Arbitration Commission ruled as follows: Chongqing Meiwan paid
RMB4,702,100 to Nanning Liaowang, paid liquidated damages for late payment (based on the payment, calculated
according to the judgment), paid attorney fees of RMB50,000, and the arbitration fee of RMB55,200 in this case
was borne by Chongqing Meiwan. This award is final. Because Chongqing Meiwan failed to fulfill its payment
obligations according to the arbitration award, Nanning Liaowang applied to Chongqing No.1 Intermediate People's
Court for compulsory execution, and was allowed to file a case for execution on 6 July, 2021 (Case No.: (2021)
Y01Z No.1419). On 23 September, 2021, Chongqing No.1 Intermediate People's Court made an execution ruling:
The execution procedure was terminated because no property available for execution was found yet.
On 6 December 2021, Chongqing No.5 Intermediate People's Court made a civil ruling ((2021) Y05PS No.504),
ruling to accept the bankruptcy liquidation case of Chongqing Meiwan. On 16 December 2021, Chongqing No.5
Intermediate People's Court made a decision ((2021) Y05P No.343), appointing Sichuan Finding (Chongqing) Law
Firm as the manager of Chongqing Meiwan. On 4 January 2022, Nanning Liaowang received the Notice of
Creditor's Rights Declaration under Bankruptcy Liquidation of Chongqing Meiwan. On 26 January 2022, Nanning
Liaowang collected the information according to the notice requirements and sent it to the administrator of this
bankruptcy liquidation case. On 17 February 2022, the administrator of Chongqing Meiwan held the first creditors'
meeting of the case. On 25 February 2022, the voting notice of the first creditors' meeting was received: The voting
results of the first creditors' meeting of Chongqing Meiwan are as follows: The Debtor's Property Management Plan,
Bankruptcy Estate Conversion Plan, Bankruptcy Estate Distribution Plan and Proposal for Off-site Voting
deliberated by this creditors' meeting were all voted and adopted and are binding on all creditors.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
6. Sales contract disputes between Nanning Liaowang and Hipro Polymer Materials
Nanning Liaowang has a dispute over the sales contract with Hipro Polymer Materials (Jiangsu) Co., Ltd.
(hereinafter referred to as "Hipro Polymer Materials"), and filed a lawsuit with Nanning Intermediate People's Court
of Guangxi Zhuang Autonomous Region (Case No.: (2021) G01MC No.1028), requesting Hipro Polymer Materials
to compensate Nanning Liaowang for the loss of quality claim amount of RMB21.304 million and the loss of
overdue interest on payment of goods of RMB2.876 million, totaling RMB24.1799 million. Nanning Liaowang
provided the Sales Contract of Car Lamp Parts and Materials, Quality Assurance Agreement and Claim Agreement
related to this case. Due to the quality problems of the surface hardening coating provided by Hipro Polymer
Materials, Nanning Liaowang began to receive three packages of returned parts from the host customer due to the
failure of the surface hardening coating in January 2018. As of 30 October 2020, Nanning Liaowang had 28 batches
of car lamp products returned and claimed by the host customer, with a total of 29,657 car lamp products, resulting
in a loss of RMB21.304 million. After many negotiations, both parties failed to reach a claim agreement.
Because of the emergence of new facts in this case, after comprehensive consideration, Nanning Liaowang decided
to withdraw the lawsuit and then file a new lawsuit and submit evidence to the court. After Nanning Liaowang
submitted the application for withdrawal, Nanning Intermediate People's Court made a ruling on 8 October 2021,
allowing the plaintiff (Nanning Liaowang) to withdraw the lawsuit, and the case acceptance fee was halved (the
application for withdrawal and refund of fees has been submitted to Nanning Intermediate People's Court for
processing). At present, the evidence has been sorted out and is being submitted. At present, the evidence has
basically been collected and sorted out and printed according to the requirements of the lawyer, the first batch of
electronic mail and other evidence applications are notarized, and the second batch of evidence (OEM has sent an
email, to be sorted and checked) are to be collected and notarized, and then submitted for prosecution after the
notarization is completed.
7. Sales contract disputes between Chongqing Guinuo and Hubei Meiyang
Chongqing Guinuo filed a lawsuit with the People's Court of Xiangyang High-tech Development Zone because of
the dispute over the sales contract with Hubei Meiyang, requesting the court to order Hubei Meiyang to pay
RMB8,493,100 for goods and the loss of capital occupation. After the case was filed with the court on 16 August
2019, the court heard the case according to the summary procedure. After mediation by the court, Hubei Meiyang
agreed to make the payment to Chongqing Guinuo in installments, but it actually failed to fulfill the payments.
Chongqing Guinuo has applied to the court for enforcement, which is currently under implementation.
Chongqing Guinuo has a dispute over the sales contract with Hubei Meiyang and filed a lawsuit with the People's
Court of Xiangyang High-tech Development Zone, requesting the court to order Hubei Meiyang to bear the loss of
goods of RMB3,694,800. On 3 May 2021, the People's Court of Xiangyang High-tech Development Zone ruled that
the parts purchase contract and price agreement between Chongqing Guinuo and Hubei Meiyang were dissolved,
and other claims of Chongqing Guinuo were rejected. On 11 January 2022, Chongqing Guinuo applied to the court
for compulsory enforcement, and the court took measures to restrict consumption in Hubei, and because there was
no enforceable property, the court terminated this enforcement.
8. Labor disputes
(1) In June, 2021, a lighting equipment company moved to Gaoming District, Foshan City, and at the same time, it
took compensatory measures such as providing shuttle bus or accommodation to all employees. However, 13
employees were still unwilling to resign with the relocation of the company, and asked the lighting equipment
company to pay economic compensation. On 20 August 2021, Foshan Nanhai District Labor and Personnel Dispute
Mediation and Arbitration Commission issued the Arbitration Order (FNLRZA Zi [2021] No.3423), rejecting the
arbitration request for economic compensation of the above 13 persons. As a result, 12 of them refused to accept the
above arbitration order, and filed a lawsuit with Nanhai District People's Court of Foshan City in September 2021,
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
requesting confirmation that the labor contract between them and the lighting equipment company was terminated
on 28 June 2021, and ordered the lighting equipment company to pay economic compensation totaling
RMB412,100.00 for terminating the labor contract and bear the litigation costs of this case. As of the date of this
report, the above cases have not been concluded. The case was heard on 13 December 2021 and has not been
concluded as of the date of this report.
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant Statements
There was no significant contingency in the Company.
3. Other
As of 31 December 2021, guarantees among Nanning Liaowang and its subsidiaries, Nanning Ruixiang Industrial
Investment Co., Ltd. (formerly named Nanning Guige Precision Industry Technology Co., Ltd., hereinafter
referred to as “Nanning Ruixiang”) were as follows (RMB’0,000):
Principal Principal Guarantee
Guarantor Type of guarantee Guarantee balance
debtor debtee amount
Nanning Nanning Kuang Linchang, Liang Xiaoling, Yang Joint-liability 20,000.00 4,770.00
Liaowang Branch of Shiyue, Gu Hanhua, Nanning Ruixiang, guarantee,
(note 1) Industrial Bank Qingdao Lighting, Liuzhou Lighting, mortgage
Chongqing Guinuo
Nanning Far Eastern Nanning Liaowang, Nanning Ruixiang, Joint-liability 2,600.00 724.13
Liaowang International Qingdao Lighting, Liuzhou Lighting, guarantee
(note 2) Financial Kuang Linchang, Liang Xiaoling, Yang
Leasing Co., Shiyue, Gu Hanhua
Ltd.
Liuzhou Nanning Nanning Liaowang, Liuzhou Lighting, Joint-liability 15,000.00 5,000.00
Lighting (note Branch of Kuang Linchang, Liang Xiaoling, Yang guarantee,
3) Industrial Bank Shiyue, Gu Hanhua mortgage
Chongqing Far Eastern Nanning Liaowang, Nanning Ruixiang, Joint-liability 3,990.00 1,218.23
Guinuo (note International Qingdao Lighting, Liuzhou Lighting, guarantee
4) Financial Kuang Linchang, Liang Xiaoling, Yang
Leasing Co., Shiyue, Gu Hanhua
Ltd.
Total —— —— —— 41,590.00 11,712.36
Note 1: Nanning Liaowang and Nanning Branch of Industrial Bank signed the Working Capital Loan Contract (XYGCBLJ Zi (2021)
No.1001), with a loan amount of RMB47.7 million (from 1 February 2021 to 1 February 2022). Among them, Nanning Liaowang
provides mortgage guarantee with the immovable property owned as collateral, and the balance of its creditor's rights does not exceed
the maximum mortgage principal of RMB72.3444 million. The mortgaged real estate is a) YG (2017) NNSBDCQZ No.0065501; b)
EG (2017) NNSBDCQZ No.0065499; c) SG (2017) NNSBDCQZ N o.0065498; d) SG (2017) NNSBDCQZ No.0065497; Nanning
Ruixiang provides mortgage guarantee with the immovable property owned as collateral, and the balance of its creditor's rights does not
exceed the maximum mortgage principal of RMB24.0445 million. The mortgaged real estate is: e) WG (2017) NNSBDCQZ
No.0064815; f) LG (2017) NNSBDCQZ No.0064833; g) QG (2017) NNSBDCQZ No.0064840. Kuang Linchang, Liang Xiaoling,
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Yang Shiyue, Gu Hanhua, Nanning Ruixiang, Qingdao Lighting, Liuzhou Guige Lighting and Chongqing Guinuo jointly assume joint
and several guarantee liabilities for all creditor's rights balances under the maximum principal limit of RMB200 million, and the
guarantee amount is valid from 30 December 2019 to 30 December 2024.
In addition to the above mortgages and guarantees, Chongqing Guinuo takes its immovable property as collateral for the maximum
balance of its main creditor's rights not exceeding RMB122,294,700, and the mortgage amount is valid from 15 June 2020 to 15 June
2023. The mortgaged real estate is a) YY (2020) LJXQBDCQ No.000436821, b) EY (2020) LJXQBDCQ No.000437330, c) SY (2020)
LJXQBDCQ No.000437429 and d) SY (2020) LJXQBDCQ No.000437448.
Note 2: On 18 May 2020, Nanning Liaowang and Far East International Financial Leasing Co., Ltd. (hereinafter referred to as "Far East
Leasing") signed the Sale Lease Contract (Contract No.: IFELC20DE24MZT-L-01), with a financing loan amount of RMB26 million,
and the actual loan amount obtained was RMB24 million (the difference with the financing loan amount was RMB2 million as a deposit,
which was withheld by Far East Leasing), and the loan term of finance lease is 30 months. Nanning Ruixiang, Liuzhou Guige Lig hting,
Qingdao Lighting, Yang Shiyue, Gu Hanhua, Kuang Linchang and Liang Xiaoling provide joint and several liability guarantee for this
financing loan. Nanning Liaowang signed the Ownership Transfer Agreement with Far East Leasing. According to the General Terms
and Conditions of the Sale and Return Lease Contract: Under the condition that Party B (Nanning Liaowang, the same below) enjoys all
the rights under this contract and does not affect Party B's normal use, Party A (Far East Leasing, the same below) may trans fer its
ownership of the leased items to any third party, or mortgage the leased items and other guarantees, and the validity of the contract will
not be affected. Party A undertakes not to adversely affect Party B's rights (especially the performance of this contract) due to the
transfer/mortgage. Party B shall perform this contract according to the contract, and Party A shall guarantee that Party B shall have the
right to use the leased items and the ownership after the expiration of the lease period according to the contract.
Note 3: Liuzhou Guige Lighting and Nanning Branch of Industrial Bank signed loan contracts numbered WYZH2021012600174,
WYZH2021042100164 and WYZH2021042100146, borrowing RMB10 million (from 26 January 2021 to 26 January 2022), RMB20
million (from 21 April 2021 to 21 April 2022), and RMB20 million (from 22 April 2021 to 22 April 2022) respectively. Among them,
Liuzhou Guige Lighting provides mortgage guarantee with the real estate owned by Liuzhou Guige Lighting as collateral for the
maximum balance of its main creditor's rights not exceeding RMB150 million, and the guarantee amount is valid from 30 December
2019 to 30 December 2024. The mortgaged real estate is: a) YG (2019) LZSBDCQ No.0191988, located at No.1 Factory Building,
No.12 Hengsi Road, Cheyuan; b) EG (2019) LZSBDCQ No.0191991, located in the mold center of No.12 Hengsi Road, Cheyuan; c)
SG (2019) LZSBDCQ No.0191994, located in the logistics gate guard room at No.12 Hengsi Road, Cheyuan; d) SG (2019) LZSBDCQ
No.0191995, located in the guard room of Gate 12, Hengsi Road, Cheyuan. Nanning Liaowang, Kuang Linchang, Liang Xiaoling,
Yang Shiyue and Gu Hanhua provide joint and several liability guarantee with the maximum balance of principal creditor's rights not
exceeding RMB150 million exposure, and the guarantee amount is valid from 30 December 2019 to 30 December 2024.
Note 4: On 21 June 2020, Chongqing Guinuo signed the Sale and Return Lease Contract with Far East Leasing (Contract No.:
IFELC20DE2XZXM-L-01), with a financing loan amount of RMB39.9 million and an actual loan amount of RMB35.99 million (the
difference with the financing loan amount is RMB4 million as a deposit, which is withheld by Far East Leasing), and the loan term of
finance lease is 30 months. This financial lease loan is mortgaged by Chongqing Guinuo with 28 fixed assets and 104 molds owned by
itself. Chongqing Guinuo signed the Ownership Transfer Agreement with Far East Leasing, and Nanning Liaowang, Nanning Ruixiang,
Liuzhou Guige Lighting, Qingdao Lighting, Liang Xiaoling, Yang Shiyue, Gu Hanhua and Kuang Linchang provided joint and severa l
liability guarantee for the lease loan. According to the General Terms and Conditions of the Sale and Return Lease Contract: Under the
condition that Party B (Chongqing Guinuo, the same below) enjoys all the rights under this contract and does not affect Party B's
normal use, Party A (Far East Leasing, the same below) may transfer its ownership of the leased items to any third party, or mortgage
the leased items and other guarantees, and the validity of the contract will not be affected. Party A undertakes not to adversely affect
Party B's rights (especially the performance of this contract) due to the transfer/mortgage. Party B shall perform this contract according
to the contract, and Party A shall guarantee that Party B shall have the right to use the leased items and the ownership after the
expiration of the lease period according to the contract.
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
XV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
Naught
2. Profit Distribution
The Company's profit distribution plan for 2021 is as follows: Based on the total share capital of 1,361,994,647
shares disclosed in the Company's 2021 annual report, deducting 13 million A shares of the remaining
repurchased shares in the Company's special repurchase account, that is, 1,348,994,647 shares, the Company
intends to distribute a cash dividend of RMB1 (tax included and dividends for B-share holders to be paid in the
Hong Kong dollars) for every 10 shares held by A-share and B-share holder.
3. Sales Return
N/A
4. Notes to Other Events after Balance Sheet Date
(I) Profit Distribution Plan
The Company's profit distribution plan for 2021 is as follows: Based on the total share capital of 1,361,994,647
shares disclosed in the Company's 2021 annual report, deducting 13 million A shares of the remaining repurchased
shares in the Company's special repurchase account, that is, 1,348,994,647 shares, the Company intends to
distribute a cash dividend of RMB1 (tax included) for every 10 shares held by A-share and B-share holder and 0
bonus shares (tax included and dividends for B-share holders to be paid in the Hong Kong dollars). Where the total
shares of the Company with profit distribution rights change due to the issuance of new shares, the grant of equity
incentives and other reasons during the implementation of this profit distribution plan, the Company will adjust the
total dividends accordingly according to the principle of unchanged distribution ratio per share.
The proposal is still to be submitted to the 2021 Annual General Meeting for review.
(II) Cancellation of repurchased shares
The Company held the 26th meeting of the ninth Board of Directors on 14 January 2022, where the Proposal on
Cancelling Some Shares of the Company's Repurchase Special Securities Account was deliberated and adopted,
and used the repurchased 13 million A shares for the equity incentive plan. The remaining 18,952,995 A shares
and 18,398,512 B shares were repurchased, totaling 37,351,507 shares. On 8 February 2022, it was confirmed by
Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. that the number of repurchased public
shares cancelled this time was 37,351,507, accounting for 2.67% of the total share capital of the Company before
cancellation, including 18,952,995 A shares and 18,398,512 B shares. Upon completion of this share cancellation,
the total share capital of the Company was changed from 1,399,346,154 shares to 1,361,994,647 shares. Industrial
and commercial change procedures are still in process.
(III) Progress in major asset restructuring
The Company held the 19th meeting of the ninth Board of Directors and the Third Extraordinary General Meeting in
2021 on 27 October 2021 and 31 December 2021 respectively, where the untport on Major Asset Purchase and
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Related Party Trading of Foshan Electrical and Lighting Co., Ltd. (Draft) and Its Summary" and other proposals
related to this trading was deliberated and adopted. It was agreed that the Company will purchase 100% equity of
Sigma held by Electronics Group (Sigma holds 79,753,050 shares of NationStar Optoelectronics) and 52,051,945
tradable shares of NationStar Optoelectronics held by Rising Group and Rising Capital in total by paying cash.
According to the resolution of the Shareholders' General Meeting, the Company organized and implemented the
work related to this major asset restructuring. As of 25 February 2022, the Company has completed the 100% equity
transfer and industrial and commercial change procedures of Sigma, and Sigma has become a wholly-owned
subsidiary of the Company. The 52,051,945 tradable shares of NationStar Optoelectronics held by Rising Group
and Rising Capital with unlimited selling conditions have been transferred and registered to the Company, and the
delivery of 52,051,945 shares of NationStar Optoelectronics has been completed. So far, the Company and its
wholly-owned subsidiary Sigma hold a total of 132,819,895 shares of NationStar Optoelectronics, accounting for
21.48% of the total share capital of NationStar Optoelectronics, and the Company has become the controlling
shareholder of NationStar Optoelectronics.
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
Naught
2. Debt Restructuring
Naught
3. Assets Replacement
Naught
4. Pension Plan
Naught
5. Discontinued Operations
Naught
6. Segment Information
Naught
7. Other Significant Transactions and Events with Influence on Investors’ Decision-making
Naught
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Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
8. Other
(I) Demolition Matters of Nanjing Fozhao
According to the Decision of Nanjing Lishui District People's Government on House Expropriation on
State-owned Land of Honglan Street Affordable Housing Project in Lishui District (NLFZ Zi [2020] No.18), The
house owned by Nanjing Fozhao, a wholly-owned subsidiary of the Company, located at 688 Jinniu North Road,
Honglan Street, Lishui District, Nanjing (the total construction area of the house is 44,558.09 square meters,
which is an industrial house; The land use right covers an area of 135,882.4 square meters, which is industrial land)
belongs to the expropriation scope, and the compensation, relocation fee, loss fee of production and business
suspension and other rewards of the expropriated assets total RMB183,855,895.00. As of 31 December 2021,
Nanjing Fozhao has received 30% of the compensation, that is, RMB55,160,000.00, and the land use right
certificate and house ownership certificate of the assets involved have been cancelled. As of the date of this report,
the site handover is still in progress. After the demolition work is completed, Nanjing Fozhao plans to carry out
liquidation and cancellation.
XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Category of Accounts Receivable
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Item Withdra Withdraw
Carrying Carrying
Proportio wal Proportio al
Amount Amount value Amount Amount value
n proportio n proportio
n n
Accounts receivable
for which bad debt 11,220,8 8,976,66 2,244,165 15,257,66 9,569,331 5,688,330.8
1.00% 80.00% 1.40% 62.72%
provision separately 27.14 1.72 .42 2.85 .99 6
accrued
Of which:
Accounts receivable
for which bad debt 1,108,64 51,950,3 1,056,691 1,073,149 48,124,87 1,025,024,7
99.00% 4.69% 98.60% 4.48%
provision accrued 1,819.86 20.95 ,498.91 ,615.48 2.12 43.36
by group
Of which:
(1) Common 1,022,00 51,950,3 970,055,3 1,012,031 48,124,87 963,906,50
91.26% 5.08% 92.98% 4.76%
business portfolio 5,643.56 20.95 22.61 ,374.59 2.12 2.47
(2) Internal business 86,636,1 86,636,17 61,118,24 61,118,240.
7.74% 5.62%
portfolio 76.30 6.30 0.89 89
332
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
1,119,86 60,926,9 1,058,935 1,088,407 57,694,20 1,030,713,0
Total 100.00% 5.44% 100.00% 5.30%
2,647.00 82.67 ,664.33 ,278.33 4.11 74.22
Individual withdrawal of bad debt provision by single item:
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Reason for withdrawal
Involved in the lawsuit;
the Company won in the
Customer A 11,220,827.14 8,976,661.72 80.00% first instance judgment
and not executed
completely
Total 11,220,827.14 8,976,661.72 -- --
Withdrawal of bad debt provision by group:
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Credit risk portfolio 1,108,641,819.86 51,950,320.95 4.69%
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general mode
of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 1,048,406,539.45
1 to 2 years 24,832,557.94
2 to 3 years 8,500,312.82
Over 3 years 38,123,236.79
3 to 4 years 17,208,975.28
4 to 5 years 11,978,176.23
Over 5 years 8,936,085.28
Total 1,119,862,647.00
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The amount of expected credit loss accrued in the current period is RMB4,387,268.74, and the amount of expected credit loss
recovered or reversed in the current period is RMB0.00.
333
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
Item Amount
No. 1 1,036,835.71
No. 2 117,554.16
Other driblet small amount 100.31
Total 1,154,490.18
Of which, verification of significant accounts receivable:
Unit: RMB
Whether occurred
because of
Name of the entity Nature Amount Reason Procedure
related-party
transactions
After litigation and The approval
compulsory procedure is carried
No. 1 Payment for goods 1,036,835.71 execution, the other out according to the Not
party has no Company’s rules for
enforceable property managing bad debt.
The approval
procedure is carried
No. 2 Payment for goods 117,554.16 Unrecoverable out according to the Yes
Company’s rules for
managing bad debt.
The approval
procedure is carried
Other retails accounts Payment for goods 100.31 Unrecoverable out according to the Not
Company’s rules for
managing bad debt.
Total -- 1,154,490.18 -- -- --
Note:
The approval procedure for the verification of accounts receivable during the Reporting Period had been performed in accordance
with provisions of the bad debt management system of the Company.
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Proportion to total ending
Ending balance of accounts Ending balance of bad debt
Name of units balance of accounts receivable
receivable provision
(%)
334
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
No. 1 166,366,875.25 14.86% 4,991,006.26
No. 2 89,015,269.51 7.95% 2,670,458.09
No. 3 72,464,493.55 6.47%
No. 4 26,525,457.91 2.37% 795,763.74
No. 5 25,411,814.39 2.27% 762,354.43
Total 379,783,910.61 33.92% --
(5) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable
Naught
(6) Derecognition of Accounts Receivable due to the Transfer of Financial Assets
Naught
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 511,056,231.24 462,284,585.09
Total 511,056,231.24 462,284,585.09
(1) Interest Receivable
Naught
2) Significant Overdue Interest
Naught
3) Information of Withdrawal of Bad Debt Provision
□ Applicable √ Not applicable
(2) Dividends Receivable
Naught
335
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(3) Other Receivables
1) Other Receivables Classified by Account Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Staff borrow and petty cash 3,486,778.81 7,403,907.26
Performance bond 5,597,832.99 4,025,073.30
Rent, water & electricity fees 2,564,557.87 2,989,445.13
VAT export tax refunds 4,674,335.06 195,141.85
Other intercourse 497,805,458.10 450,006,575.72
Total 514,128,962.83 464,620,143.26
2) Information of Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
454,821.73 1,880,736.44 2,335,558.17
2021
Balance of 1 January
2021 in the Current —— —— —— ——
Period
Withdrawal of the
308,426.99 428,746.43 737,173.42
Current Period
Balance of 31 December
763,248.72 2,309,482.87 3,072,731.59
2021
Changes of carrying amount with significant amount changed of loss provision in the current period
□Applicable √Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 488,303,376.34
1 to 2 years 19,335,851.40
2 to 3 years 2,598,983.38
Over 3 years 3,890,751.71
336
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
3 to 4 years 2,377,256.70
4 to 5 years 1,079,847.71
Over 5 years 433,647.30
Total 514,128,962.83
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The amount of expected credit loss accrued in the current period is RMB 737,173.42, and the amount of expected credit loss
recovered or reversed in the current period is RMB0.00
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Naught
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to total
Ending balance of
Name of the entity Nature Ending balance Aging ending balance of
bad debt provision
other receivables (%)
No. 1 Internal business
395,836,356.26 Within 1 year 76.99%
group
No. 2 Internal business
69,983,015.32 Within 2 years 13.61%
group
No. 3 Internal business
11,931,264.29 Within4 year 2.32%
group
No. 4 Intercourse accounts 7,060,000.00 Within 1 year 1.37% 211,800.00
No. 5 VAT export tax
4,674,335.06 Within 1 year 0.91% 140,230.05
refunds
Total -- 489,484,970.93 -- 95.20% 352,030.05
6) Accounts Receivable Involving Government Grants
Naught
7) Derecognition of Other Receivables due to the Transfer of Financial Assets
Naught
337
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables
Naught
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Investment to
1,061,536,766.02 1,061,536,766.02 355,584,295.41 355,584,295.41
subsidiaries
Investment to
joint ventures and
181,545,123.09 181,545,123.09 181,365,016.32 181,365,016.32
associated
enterprises
Total 1,243,081,889.11 1,243,081,889.11 536,949,311.73 536,949,311.73
(1) Investment to Subsidiaries
Unit: RMB
Beginning Increase/decrease
Ending balance
balance Depreciation Ending balance
Investee Additional Reduced of depreciation
(carrying reserves Other (carrying value)
investment investment reserve
value) withdrawn
FSL Chanchang
Optoelectronics 82,507,350.00 82,507,350.00
Co., Ltd.
Foshan Taimei
Times Lamps
350,000.00 350,000.00
and Lanterns
Co., Ltd.
Nanjing Fozhao
Lighting
Components 72,000,000.00 72,000,000.00
Manufacturing
Co., Ltd.
Foshan
Electrical & 35,418,439.76 35,418,439.76
Lighting
338
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(Xinxiang) Co.,
Ltd.
Guangdong
Fozhao New
Light Sources 50,077,000.00 50,077,000.00
Technology Co.,
Ltd.
Foshan Haolaite
Lighting Co., 16,685,000.00 16,685,000.00
Ltd.
Foshan Lighting
Lamps &
15,000,000.00 15,000,000.00
Components
Co., Ltd.
FSL Zhida
Electric
25,500,000.00 25,500,000.00
Technology Co.,
Ltd.
FSL Lighting
195,812.50 195,812.50
GMBH
Hunan Keda
New Energy
Investment and 57,850,693.15 40,000,000.00 -97,850,693.15
Development
Co., Ltd.
Foshan Kelian
New Energy
113,000,000.00 170,000,000.00
Technology Co., 57,000,000.00
Ltd.
Fozhao
(Hainan) 150,000,000.0
150,000,000.00
Technology Co., 0
Ltd.
Nanning
493,880,163.7
Liaowang Auto 493,880,163.76
6
Lamp Co., Ltd.
355,584,295.4 740,880,163.7 1,061,536,766.
Total 50,077,000.00 15,149,306.85
1 6 02
339
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
Note: For details, please refer to Section XVII Major Events of the Company's Subsidiaries, 2. Absorption and
Merger of Hunan Keda, of this report.
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease
Ending
Gains and Adjustme
Beginnin Cash Withdraw Ending balance
Additiona losses nt of
g balance Reduced Changes bonus or al of balance of
Investee l recognize other
(carrying investmen of other profits impairme Other (carrying depreciati
investmen d under comprehe
value) t equity announce nt value) on
t the equity nsive
d to issue provision reserve
method income
I. Joint ventures
II. Associated enterprises
Shenzhen
Primatron
ix 181,365,0 2,260,497 2,080,390 181,545,1
(Nanho) 16.32 .27 .50 23.09
Electronic
s Ltd.
181,365,0 2,260,497 2,080,390 181,545,1
Subtotal
16.32 .27 .50 23.09
181,365,0 2,260,497 2,080,390 181,545,1
Total
16.32 .27 .50 23.09
(3) Other Notes
Naught
4. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main business 3,548,713,016.46 3,011,542,500.00 3,341,450,360.57 2,726,640,272.12
Other business 169,595,356.00 142,496,679.53 148,816,741.96 134,309,284.64
Total 3,718,308,372.46 3,154,039,179.53 3,490,267,102.53 2,860,949,556.76
340
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income
38,645,385.25
accounted by cost method
Long-term equity investment income
2,260,497.27 2,351,681.39
accounted by equity method
Investment income from disposal of
7,349,443.02 43,551,565.30
long-term equity investment
Investment income from holding of other
23,643,370.02 14,940,422.96
equity instrument investment
Investment income from financial products
971,514.99 23,451,129.06
and structural deposits
Other 6,013,450.00 3,678,150.00
Total 78,883,660.55 87,972,948.71
Note: Refer to dividends of the subsidiary Lamps & Components Limited.
6. Other
Naught
XVIII. Supple mentary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gain/Loss arising from disposal of
82,233,742.26
non-current assets
Government grants recognized in the current
period, except for those acquired in the
ordinary course of business or granted at 15,971,903.24
certain quotas or amounts according to the
government’s unified standards
Capital occupation charges on non-financial
enterprises that are recorded into current 881,704.19
profit or loss
Gain/loss from change of fair value of 10,663,119.44
341
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
trading financial assets and liabilities, and
investment gains from disposal of trading
financial assets and liabilities, and
available-for-sale financial assets, other than
valid hedging related to the Company’s
common businesses
Other non-operating income and expenses
10,640,975.11
other than the above
Less: Income tax effects 17,224,178.81
Non-controlling interests effects 3,085,681.16
Total 100,081,584.27 --
Others that meets the definition of non-recurring gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains and Losses as a recurrent
gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
EPS (Yuan/share)
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to ordinary 4.23%
0.1854 0.1836
shareholders of the Company
Net profit attributable to ordinary 2.53% 0.1112 0.1101
shareholders of the Company after
deduction of non-recurring profit or
loss
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International
and Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and
Chinese Accounting Standards
□ Applicable √ Not applicable
342
Foshan Electrical and Lighting Co., Ltd. Annual Report 2021
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas
Accounting Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the
Foreign Auditing Agent, Such Foreign Auditing Agent’s Name Shall Be Clearly Stated
Naught
4. Other
Naught
Wu Shenghui, legal representative
Foshan Electrical and Lighting Co., Ltd.
30 March 2022
343
