Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

FOSHAN ELECTRICAL AND LIGHTING CO. LTD.INTERIM REPORT 2022

August 2022

1Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part I Important Notes Table of Contents and Definitions

The Board of Directors (or the “Board”) the Supervisory Committee as well as the directors

supervisors and senior management of Foshan Electrical and Lighting Co. Ltd. (hereinafter

referred to as the “Company”) hereby guarantee the factuality accuracy and completeness of

the contents of this Report and its summary and shall be jointly and severally liable for any

misrepresentations misleading statements or 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.Any plans for the future and other forward-looking statements mentioned in this Report and

its summary shall NOT be considered as absolute promises of the Company to investors.Therefore investors are reminded to exercise caution when making investment decisions.The Company has described in detail in this Report the risk of macro-economic fluctuations

and intensified market competition the risk of rising raw material prices the risk of exchange

rate fluctuations and the risk of the recoverability of accounts receivable. Please refer to the

section headed “Risks Facing the Company and Countermeasures” in Item X of Part III of

this Report.The Company has no interim dividend plan either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should there

be any discrepancies or misunderstandings between the two versions the Chinese versions

shall prevail.

2Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Table of Contents

Part I Important Notes Table of Contents and Defin... 2

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

Part III Management Discussion and Analysis ......... 9

Part IV Corporate Governance ....................... 34

Part V Environmental and Social Responsibility ..... 35

Part VI Significant Events ......................... 45

Part VII Share Changes and Shareholder Information.. 76

Part VIII Preferred Shares ......................... 83

Part IX Bonds ...................................... 84

Part X Financial Statements ........................ 85

3Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Documents Available for Reference

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 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.

4Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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.Hong Kong Rising Investment Rising Investment Development Limited

Hongkong Wah Shing Hongkong Wah Shing Holding Company Limited

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.NationStar Optoelectronics Foshan NationStar Optoelectronics Co. Ltd. (stock code: 002449)

NationStar Semiconducto Foshan NationStar Semiconductor Technology 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’0000 RMB’00000000

of Renminbi expressed in hundreds of millions of Renminbi

5Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name FSL FSL-B Stock code 000541 200541

Stock exchange for stock

Shenzhen Stock Exchange

listing

Company name in Chinese 佛山电器照明股份有限公司

Abbr. (if any) 佛山照明

Company name in English (if

FOSHAN ELECTRICAL AND LIGHTING GO.LTD

any)

Abbr. (if any) FSL

Legal representative Wu Shenghui

II Contact Information

Board Secretary Securities Representative

Name Huang Zhenhuan Huang Yufen

No. 64 Fenjiang North Road No. 64 Fenjiang North Road

Address Chancheng District Foshan City Chancheng District Foshan City

Guangdong Province P.R.China Guangdong Province P.R.China

Tel. （0757）82810239 （0757）82966028

Fax （0757）82816276 （0757）82816276

Email address fsldsh@chinafsl.com fslhyf@163.com

III Other Information

1. Contact Information of the Company

Indicate by tick mark whether any change occurred to the registered address office address and their zip codes

website address and email address of the Company in the Reporting Period.□ Applicable □ Not applicable

No change occurred to the said information in the Reporting Period which can be found in the 2021 Annual

Report.

2. Media for Information Disclosure and Place where this Report is Kept

Indicate by tick mark whether any change occurred to the information disclosure media and the place for

keeping the Company’s periodic reports in the Reporting Period.□ Applicable □ Not applicable

The newspapers designated by the Company for information disclosure the website designated by the CSRC

for disclosing the Company’s periodic reports and the place for keeping such reports did not change in the

Reporting Period. The said information can be found in the 2021 Annual Report.

6Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

3. Other Information

Indicate by tick mark whether any change occurred to other information in the Reporting Period.□ Applicable □ Not applicable

IV Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes □ No

Reason for retrospective restatement:

Business combination involving entities under common control.H1 2021 Change (%)

H1 2022

Before Restated Restated

Operating revenue

4348268999.311955342116.203626200260.1719.91%

(RMB)

Net profit attributable

to the listed company’s 160664433.28 110555542.93 122377552.60 31.29%

shareholders (RMB)

Net profit attributable

to the listed company’s

shareholders before 160862524.18 98950507.51 91188366.07 76.41%

exceptional gains and

losses (RMB)

Net cash generated

from/used in operating 150034906.39 45779640.52 446213006.20 -66.38%

activities (RMB)

Basic earnings per

0.11910.08200.090731.31%

share (RMB/share)

Diluted earnings per

0.11800.08120.089931.26%

share (RMB/share)

Weighted average

2.68%1.82%1.69%0.99%

return on equity (%)

31 December 2021 Change (%)

30 June 2022

Before Restated Restated

Total assets (RMB) 14393387239.50 9699592528.61 16317843693.47 -11.79%

Equity attributable to

the listed company’s 5373874037.57 5800558588.34 6986502976.72 -23.08%

shareholders (RMB)

V 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 Differences under CAS and IFRS

□ Applicable □ Not applicable

No such differences for the Reporting Period.

7Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards

□ Applicable □ Not applicable

No such differences for the Reporting Period.XI Exceptional Gains and Losses

□ Applicable □ Not applicable

Unit: RMB

Item Amount Note

Gain or loss on disposal of non-current

assets (inclusive of impairment -5723365.37

allowance write-offs)

Government subsidies charged to current

profit or loss (exclusive of government

subsidies consistently given in the

31578978.53

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 213042.31

in profit or loss

Current profit or loss on subsidiaries

obtained in business combinations

involving entities under common control 9568639.83

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

-8997858.09

liabilities and available-for-sale financial

assets (exclusive of the effective portion

of hedges that arise in the Company’s

ordinary course of business)

Non-operating income and expense other

6044307.77

than the above

Less: Income tax effects 4010901.27

Non-controlling interests effects (net of

28870934.61

tax)

Total -198090.90

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

□ Applicable □ Not applicable

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.

8Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part III Management Discussion and Analysis

I Principal Activity of the Company in the Reporting Period

(I) Principal business

The Company has been committed to the R&D production and sale of high-quality and energy-efficient

lighting products in order to provide integrated lighting solutions for customers. It has become the controlling

shareholder of Nanning Liaowang Auto Lamp Co. Ltd. ("Nanning Liaowang") and Foshan NationStar

Optoelectronics Co. Ltd. ("NationStar Optoelectronics") through M&A since 2021. At present the principal

business of the Company mainly includes the R&D production and sale of general lighting products electrical

products automotive lighting products and LED packaging products.The general lighting business of the Company mainly covers LED light sources LED luminaries traditional

lighting products and comprehensive lighting solutions for home lighting commercial lighting industrial

lighting municipal road lighting and landscape lighting. Over recent years the Company has been exploring

new fields including smart lighting healthy lighting marine lighting and animal and plant lighting.Electrical products mainly include switches sockets smart control panels and smart door locks.Based on its own automotive light sources and modules the Company relying on its majority-owned subsidiary

Nanning Liaowang has expanded the automotive lighting business into the automotive light assembly sector

involving basically all the lights that an automobile requires such as headlights rear light combos fog lights

backup lights interior lights and license plate lights. The main clients of Nanning Liaowang include SAIC-

GM-Wuling Automobile Chongqing Changan Automobile Bestune SAIC Maxus Automotive Dongfeng

Liuzhou Motor Dongfeng Sokon and other whole-automobile manufacturers. Additionally Nanning Liaowang

is an original equipment manufacturer ("OEM") of HASCO Vision.The Company conducts LED packaging business mainly by relying on its majority-owned subsidiary

NationStar Optoelectronics (stock code: 002449). The LED packaging business mainly involves components

(including components for display lighting indicating and non-visual lighting) modules (including display and

backlight modules as well as mini backlight modules) and LED epitaxial wafers and chips (including epitaxial

wafers and LED chips with various power ratings and specifications) that are widely used for consumer

electronics home appliances computers communications display and lighting products general lighting

automotive lights sterilization and purification plant lighting and other fields.(II) Industry development

The increasingly stable lighting market coupled with the impacts of the recurring COVID-19 and high raw

material prices has shrunk the profits of enterprises to some extent. Moreover the industry reshuffle is still in

progress. Enterprises with advantages in technology fund and brand are gradually expanding their market

shares and high-quality resources are being channeled to leading enterprises. Meanwhile the guidance of

national policies such as the "carbon emission peak and carbon neutrality" goals new infrastructure

9Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

construction new urbanization and major project construction and the constantly expanding lighting

application market have also brought new development opportunities for the lighting industry.As automotive lights are core parts of an automobile the automotive light industry development is closely

linked to the development of the automotive industry. According to the statistics of the China Association of

Automobile Manufacturers ("CAAM") hit by the sporadic COVID-19 cases the automobile output and sales in

China for H1 2022 reached 12117000 and 12057000 respectively representing a certain decline year on year.Nevertheless supported by the 50% reduction in the vehicle purchase tax and policies unveiled by local

governments to boost automobile consumption the growth of automobile output and sales recovered

significantly. For instance the output and sales of alternative fuel vehicles hit a record high with a market

penetration of 21.6% and increasing the prosperity index. With the development of automotive industry

technologies the increasingly electronic and smart automotive light-related technologies enable automotive

lights to carry more functions in addition to traditional lighting to facilitate driving and transmit signals thereby

improving driving safety and making driving more comfortable. As the penetration of smart automotive lights

with a higher value per automobile increases the automotive light industry will witness another round of

expedited growth.The development of information technologies such as 5G commercialization Internet of Things ("IoT") and

smart cities has increased consumers' attention to and demand for visual experience and set the trend towards

large-size display terminals with ultra-high definition ("UHD"). With the emergence of a constant stream of

new application sub-industries the small spacing industry will usher in rapid growth. Meanwhile the

industrialized application of Mini/Micro LED a new generation of core display technology has entered a

critical stage. With the constant increase in the number of investor enterprises the industry chain participation

scope is being continuously expanded. Additionally the joint support of governments enterprises and funds

will take the Mini/Micro LED industry onto the "fast track" and give the LED packaging industry a fresh

impetus for development.(III) Business models

1. Procurement model

The Company's procurement department should ensure that the procured materials and products meet the

prescribed requirements and that procurement activities are under control. Besides it should consider the needs

of each department and the reasonable stock quantity before carrying out any procurement determine suppliers

by means of bidding price negotiation and price comparison and follow up on the procurement orders. There

should be several backup suppliers of each principal raw material to ensure fair procurement price timely

material supply and high quality.

2. Production model

For routine products the production plan for the next month is prepared based on the analysis of the sales of

each month and changes in the future market demand and the safe stock benchmark. Each production

department produces products as planned so as to control the stock and meet the sales demand. For customized

products the make-to-order strategy is implemented to effectively control the stock quantity of raw materials

reduce the funds that are tied up and improve the Company's operational efficiency.

10Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

3. Sales model

In terms of general lighting for domestic sales the Company adopts the model of agency distribution and direct

supply to engineering projects. For channels the Company boasts hardware distribution home engineering

industrial lighting commercial distribution and e-commerce & retail sale channels. For foreign sales the

Company adopts the models of OEM and independent brands. The sale of products of independent brands

abroad is carried out mainly via agencies. In terms of automotive lighting in the factory-installed market the

model of supplying automotive light products directly to OEMs is mainly adopted; in the aftermarket products

are mainly sold by agencies. In terms of LED packaging the direct sale model is mainly adopted in which

products are sold through direct communication with clients.(IV) Main driving forces for growth

Closely following the development trends in the industry the Company upholds the overall idea of "stabilizing

the fundamentals and expanding new businesses" continuously strengthens the innovation driver and refines

the business portfolio. Additionally it promotes the change of the marketing model intensifies management

improvement and vigorously explores market segments. Since 2021 the Company has acquired Nanning

Liaowang and NationStar which has 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 as well as to strengthen

integration upstream and downstream of the industrial chain of LED. 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.II Core Competitiveness Analysis

During the Reporting Period through continued accumulation the Company’s core competitiveness has been

further enhanced which is mainly reflected in the following 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 six major sales channels in domestic

market (hardware distribution home engineering industrial lighting commercial distribution and e-commerce

& retail sales 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 comprehensive sales channels the Company has enabled

its products to enter market rapidly substantially enhancing its market development abilities and

competitiveness. Nanning Liaowang is one of the leading enterprises in the Chinese automotive light industry.

11Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

It has accumulated stable whole-automobile manufacturing clients of domestically-owned brands and has been

developing such clients of joint-venture brands. Its client entities are increasingly diverse and the market share

of its micro automotive lights ranks first in China. NationStar Optoelectronics has an excellent client structure.It has established a long-term cooperative relationship with industry-leading display manufacturers and

internationally famous home appliance enterprises and is widely recognized by end clients and the market.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 17 consecutive years the Company has

been included in the list of "China's 500 Most Valuable Brands". In 2022 the value of FSL brand reached

RMB26.529 billion. 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. Nanning Liaowang strictly abides by the national industry standards

when producing automotive lights of the "Liaowang" brand. It has been hailed as a high-quality supplier of

related OEMs several times. NationStar Optoelectronics has been awarded honors such as "National High-tech

Enterprise Certification" "Brand Power" "Top 10 LED Packaging Brands" "2020 Invisible Champion

Enterprise in the Manufacturing Industry in Foshan" and "Award for Annual Innovative Products in LED

Display Supply Chain" which constantly enhances its image of professionalism and brand advantages.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. The Company and its majority-owned subsidiaries have been cumulatively granted

1845 valid patents. Also they have led or participated in the formulation or revision of 113 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

12Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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. Nanning Liaowang boasts provincial-level enterprise technology centers provincial-level R&D

centers Guangxi Engineering Technology Research Center for Automotive Lighting Parts and the Shanghai

R&D center. In recent years Nanning Liaowang has increased R&D investment especially in the R&D

investment and marketing of the ultra-thin and ultra-compact LED module multi-pixel ADB module close shot

projection module ultra HD module laser headlight module and interactive headlight and control system.Besides the R&D of smart interactive rear lights OLED rear lights and the RGB interior ambient light and

control system is strengthened. These efforts enable the R&D capacity of Nanning Liaowang to be constantly

enhanced. NationStar Optoelectronics has successfully created 14 R&D platforms including the National- and

local-joint Engineering Laboratory for Semiconductor Lighting Materials and Components. Besides it has won

honors such as "National Intellectual Property Demonstration Enterprise" "China Award for Excellent Patents"

"Guangdong Science and Technology Progress Award (first/second prize)" and "2021 Advanced Technology

Golden Globe Award for Innovative Technologies". Moreover it has constantly made breakthroughs and

surmounted technological challenges in emerging areas such as Mini/Micro LED the third generation of

semiconductor smart wear non-visual light source automotive components and new optoelectronic

components.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 price negotiation. With

manufacturing bases in Nanning Liuzhou Chongqing Qingdao and Indonesia Nanning Liaowang has an

annual production capacity of more than five million sets of automotive lights. It is the largest automotive light

manufacturer in southwestern China. NationStar Optoelectronics began engaging in LED packaging in 1976. It

is included in the first batch of enterprises that have produced LED products and the first Chinese enterprise to

go public with LED packaging as its principal business. Besides it is one of the largest LED manufacturers in

China.Advantage of a vertical and integrated LED industrial chain

By controlling NationStar Optoelectronics whose business covers the entire LED industry chain including

upstream LED chip manufacturing midstream LED packaging and downstream LED application products the

Company has optimized the industry chain and enhanced its competitiveness and visibility in the industry.III Analysis of Principal Operations

(I) Overview

During the Reporting Period the Company acted on the general principle of seeking progress while maintaining

stability and conscientiously implemented various key tasks and measures relating to production and operation.

13Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Through management enhancement inside and market expansion outside the Company achieved a steady high

quality year-on-year increase in operating revenue and profit. During the Reporting Period the Company

recorded operating revenue of RMB4348.269 million up 19.91% year on year and a net profit attributable to

its shareholders of RMB160.6644 million increasing by 31.29% year on year.During the Reporting Period the Company mainly focused on the following tasks:

1. The Company focused on operational improvement as well as cost reduction and efficiency improvement.

First the Company made efforts to reduce costs. In H1 2022 based on the forecast of the price trend the

Company reduced the procurement cost of raw materials through negotiation the introduction of new suppliers

large-quantity procurement for lower prices and replacement with new materials. Additionally measures such

as robot assembling line automated production setting quotas for material consumption and process and

procedure optimization were employed to reduce manufacturing costs. Second the Company made efforts to

improve efficiency. Aside from striving to improve product quality the Company also raised the sales prices of

products pari passu which effectively increased the gross profit margin on product sales. Third the Company

made efforts to reduce stocks. A stock control mechanism was established to supervise the stock reduction

monthly in strict compliance with the baseline cordon and top prohibitions and to push ahead with the

clearance of the backlog of products. Fourth the Company made efforts to strengthen management. Based on

the arrangements for benchmarking management improvement and "three refinements in management" as well

as the realities the Company formulated the "three refinements in management" plan with "five optimizations

six decreases and seven reductions" at the core clarified the task list and division of duties defined the

promotion junctures and quantified the short- and medium-term goals.

2. The Company enhanced its competitive awareness and expanded the incremental market.

First the Company made all-around efforts to pave the way for its development in sub-fields. In terms of

marine lighting attention was paid to deep-sea lighting fish-collecting lighting and aquaculture lighting. In H1

2022 the Company built sales outlets and experiencing zones (halls) in coastal provinces in China and

Southeast Asian markets. Besides the Company sped up its cooperation with large enterprises and aquaculture

demonstration bases and the marine lighting market was gradually laid out. In terms of smart lighting the

"Scan to Connect" light smart product line microwave sensor light and other smart products and solutions were

rolled out. In terms of healthy lighting the Company launched the third generation of high-quality products in

an iterative manner from the perspectives of eyesight protection rhythm health disinfection and sterilization.Besides the Company was the first enterprise to roll out the visible light "photocatalysis" disinfection product

line and combine the functions of "eyesight protection and disinfection". Second the Company vigorously

expanded project sources. Concentrating on the fore-end planning and design of projects and technological

innovation and application the Company strengthened its cooperation with design institutes by signing

framework agreements on strategic cooperation with them which expanded project sources. Third the

Company expanded and strengthened the automotive light business. Nanning Liaowang proactively progressed

towards the middle- and high-end markets by strengthening product R&D and optimizing product structure.Besides it secured multiple new automobile OEM clients. During the Reporting Period Nanning Liaowang had

19 new projects to develop automotive lights for new automotive models five of which have entered the mass

production stage. The new projects laid a solid foundation for the future development of Nanning Liaowang.

14Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

3. The Company stuck to the innovation-driven development strategy and constantly improved its technological

strength.First a constant stream of new products was developed and launched. Based on the market demand the

Company formulated more than 300 plans for the R&D and upgrading of new products. Additionally it rolled

out over 100 differentiated functional new products three of which were awarded the Guangdong Certificate

for Famous and High-quality High-tech Products. Second the industry-university-research cooperation was

intensified. Four external R&D teams were engaged by the Company to facilitate its R&D and innovation. The

Company also cooperated with multiple well-known research institutes and universities to research 12 core

technologies in the fields such as new materials new technologies and smart control. Third the development

and application of new automotive light technologies were strengthened. Nanning Liaowang strengthened the

development and application of technologies such as the 24-pixel ADB module the laser headlight module

static projector light microlens array-based ("MLA-based") projector light and LED high and low beam lens

modules of different specifications thereby accelerating the creation of middle- and high-end products. Fourth

the development of NationStar Optoelectronics in the fields of the third generation of semiconductors

automotive components and new optoelectronic components and applications was expedited. Additionally the

Company constantly strengthened the creation and reserves of independent intellectual property rights in core

fields such as "Mini LED backlight" thereby promoting the transformation of technological achievements.Five of the Company's products were named the "2021 Guangdong Famous and High-quality High-tech

Products" and the "Core Technologies and Application of LED Epitaxial Chips for Lighting Communications"

project the Company participated in was awarded the "2021 Guangdong Science and Technology Progress

Award (second prize)".(II)Year-on-year changes in key financial data:

Unit: RMB

H1 2021/31 December

H1 2022/30 June 2022 Change (%) Main reason for change

2021

Operating revenue 4348268999.31 3626200260.17 19.91%

Cost of sales 3588065798.35 3009499337.22 19.22%

Selling expense 109839926.73 96772619.15 13.50%

Administrative expense 177742698.77 139620767.72 27.30%

Exchange rate

Finance costs -24000645.39 -3652008.27 -557.19% fluctuations in the

current period

Income tax expense 41141912.01 43339378.75 -5.07%

R&D expense 220198594.10 175562285.94 25.42%

Affected by the market

environment collection

Net cash generated

of customer payments

from/used in operating 150034906.39 446213006.20 -66.38%

activities did not keep pace with

payment to suppliers in

the current period.Increase in cash

generated from

investing activities in

Net cash generated

the same period of last

from/used in investing 121925617.82 533469077.41 -77.14%

activities year as a result of the

sale of the Gotion

High-tech shares as

well as higher cash

15Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

payments for the

construction and

acquisition of fixed

assets in the current

period

Payment for the

acquisition of equity

interests in subsidiary

NationStar

Net cash generated

Optoelectronics under

from/used in financing -790808665.96 -338996739.08 -133.28%

common control and

activities

increased cash used in

other financing

activities in the current

period

Decreased net cash

Net increase in cash generated from

-498894554.15631920871.55-178.95%

and cash equivalents financing activities in

the current period

Redemption of wealth

Held-for-trading management products

64068462.40348248125.61-81.60%

financial assets upon maturity in the

current period

Decrease in input VAT

withheld for

Other current assets 54343517.04 125675148.17 -56.76% authentication and

offsetting output VAT

in the current period

The combination of

NationStar

Optoelectronics which

was under common

control with the

Other non-current Company was

49992676.97499349770.41-89.99%

assets completed in the

current period and the

prepayment for equity

transfer made in the

prior period was

carried forward.Repayment of some

Short-term borrowings 65115000.00 226779997.01 -71.29% short-term borrowings

in the current period

Changes in the fair

value of forward forex

Held-for-trading

6544500.00 9367.37 69764.86% settlement contracts as

financial liabilities a result of exchange

rate fluctuations

Advances from Decrease in advances

4959545.568106923.79-38.82%

customers of rentals

New long-term

Long-term borrowings 556590467.75 / N/A borrowings in the

current period

Decreased liabilities of

Other non-current subsidiary to be

11334.1922653.46-49.97%

liabilities liquidated and de-

registered

New long-term

Total non-current

943420783.03 422440916.99 123.33% borrowings in the

liabilities current period

Combination of

Capital reserves 7245971.54 994114567.16 -99.27%

NationStar

16Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Optoelectronics under

common control in the

current period

Retirement of

Treasury stock 82165144.15 250600874.54 -67.21% inventory shares in the

current period

Acquisition of

subsidiary NationStar

Optoelectronics under

common control and

Surplus reserves 86780516.19 741353347.96 -88.29% retirement of inventory

shares in the current

period resulting in a

charge to surplus

reserves

Total equity Combination of

NationStar

attributable to owners

5373874037.57 6986502976.72 -23.08% Optoelectronics under

of the Company as the common control in the

parent current period

Acquisition of

subsidiary Nanning

Liaowang not under

common control in Q3

2021 and increased

R&D expense 208176593.76 144120095.18 44.45%

R&D investments in

the current period with

the expanded R&D

team and more R&D

projects

Increased interest on

Interest expense 6688232.76 2871203.53 132.94% borrowings in the

current period

Increased dividend

income from

investments in other

Return on investment 19613744.86 5493482.75 257.04% equity instruments and

gains on forward forex

settlement contracts in

the current period

Increased net profits of

Share of profit or loss associates attributable

of joint ventures and 650457.40 75266.51 764.21% to owners of the

associates Company as the parent

in the current period

Changes in the fair

value of forward forex

Gain on changes in fair

-10766595.97 1929788.30 -657.92% settlement contracts as

value a result of exchange

rate fluctuations

Increased allowance

Credit impairment loss

-17052498.84 1681781.89 -1113.95% for expected credit loss

(“-” for loss)

in the current period

More assets were

Asset disposal income disposed of and

82362.191782280.34-95.38%

(“-” for loss) liquidized in the same

period of last year

Carryforwards of

payables of subsidiary

NationStar

Non-operating income 8961693.96 3948332.41 126.97%

Optoelectronics that it

does not need to pay in

the current period

Increase in losses on

Non-operating expense 7844063.02 3694645.11 112.31%

the disposal of fixed

17Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

assets in the current

period

Net profit attributable Increased net profit in

to owners of the 160664433.28 122377552.60 31.29% the current period

Company as the parent

Decreased amount of

changes in the fair

Other comprehensive value of investments in

-128025149.83-243003831.0147.32%

income net of tax other equity

instruments in the

current period

Other comprehensive Decreased amount of

income net of tax changes in the fair

value of investments in

attributable to owners -128036703.73 -243003831.01 47.31%

other equity

of the Company as the instruments in the

parent current period

Changes in the fair YoY decrease in

value of investments in changes in the fair

-128132332.34-242940301.2747.26%

other equity value of shares of listed

instruments companies’ stocks held

Differences arising

from the translation of Fluctuations of the

foreign currency- 95628.61 -63529.74 250.53% RMB against foreign

denominated financial currencies

statements

Other comprehensive Acquisition of

subsidiary Nanning

income net of tax

11553.90 / N/A Liaowang not under

attributable to non- common control in Q3

controlling interests 2021

Decreased amount of

changes in the fair

Total comprehensive value of investments in

102285521.93-48001351.54313.09%

income other equity

instruments in the

current period

Decreased amount of

Total comprehensive changes in the fair

income attributable to value of investments in

32627729.55-120626278.41127.05%

owners of the other equity

Company as the parent instruments in the

current period

Material changes to the profit structure or sources of the Company in the Reporting Period:

□Applicable□Not applicable

No such changes in the Reporting Period.Breakdown of operating revenue:

Unit: RMB

H1 2022 H1 2021

As % of total As % of total

Change (%)

Operating revenue operating revenue Operating revenue operating revenue

(%)(%)

4348268999.33626200260.1

Total 100% 100% 19.91%

17

By operating division

Lighting products 2582524778.7 1896058034.8

59.39%52.29%36.20%

and luminaries 9 4

Electronic 1351047633.4 31.07% 1448541391.3 39.95% -6.73%

18Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

component 5 6

manufacturing

Export trade and

414696587.079.54%281600833.977.77%47.26%

other

By product category

General lighting 1794373850.4 1755458345.6

41.27%48.41%2.22%

products 8 0

LED packaging 1285748494.9 1383007531.6

29.57%38.14%-7.03%

and components 5 3

Auto lamps 788150928.31 18.13% 140599689.24 3.88% 460.56%

Epitaxial and chip

57483341.921.32%53378576.231.47%7.69%

products

Trade and other 422512383.65 9.72% 293756117.47 8.10% 43.83%

By operating segment

3277500277.82690507780.3

Domestic 75.37% 74.20% 21.82%

18

1070768721.5

Overseas 24.63% 935692479.79 25.80% 14.44%

0

Operating Division Product Category or Operating Segment Contributing over 10% of Operating Revenue or

Operating Profit:

□ Applicable □ Not applicable

Unit: RMB

YoY change in YoY change in YoY change in

Operating Gross profit

Cost of sales operating cost of sales gross profit

revenue margin

revenue (%) (%) margin (%)

By operating division

Lighting

258252477208716569

products and 19.18% 36.20% 35.25% 0.57%

luminaries 8.79 5.22

Electronic

135104763112849311

component 16.47% -6.73% -5.73% -0.89%

3.452.05

manufacturing

Export trade 414696587. 372406991.

10.20%47.26%38.35%5.79%

and other 07 08

By product category

General

179437385143272905

lighting 20.15% 2.22% 0.54% 1.33%

products 0.48 4.18

LED packaging

128574849105957882

and 17.59% -7.03% -5.18% -1.61%

components 4.95 3.49

788150928.654436641.

Auto lamps 16.97% 460.56% 453.78% 1.02%

3104

Epitaxial and 57483341.9 61414693.3

-6.84%7.69%-9.52%20.32%

chip products 2 0

422512383.379906586.

Trade and other 10.08% 43.83% 35.23% 5.71%

6534

By operating segment

327750027264467604

Domestic 19.31% 21.82% 22.68% -0.57%

7.815.09

107076872943389753.

Overseas 11.90% 14.44% 10.49% 3.15%

1.5026

Data of principal operations of the latest period adjusted according to the changed statistical caliber in the

Reporting Period:

19Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

□ Applicable □ Not applicable

IV Analysis of Non-Principal Operations

□ Applicable □ Not applicable

Unit: RMB

As % of profit before

Amount Source/Reason Recurrent or not

tax

Dividend income from

other equity investments

Return on investment 19613744.86 7.23% held during the period Not

and gains on forward

forex settlement contracts

Gain/loss on changes in

Gain/loss on changes

-10766595.97 -3.97% fair value of financial Not

in fair value

instruments

Inventory valuation

Asset impairments -23388143.98 -8.62% Not

allowances

Carryforward of

subsidiary NationStar’s

Non-operating income 8961693.96 3.30% payables that it no longer Not

needs to make payment

for

Loss on retirement of

Non-operating expense 7844063.02 2.89% Not

non-current assets

Receipt of continuing

Other income 37771447.80 13.91% Not

government grants

Allowances for doubtful

Credit impairment loss -17052498.84 -6.28% Not

accounts

Gains or losses on the

Asset disposal income 82362.19 0.03% disposal of non-current Not

assets

V Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Unit: RMB

30 June 2022 31 December 2021 Reason for

Change in

As % of total As % of total significant

Amount Amount percentage (%)

assets assets change

Monetary 183943963 238191165

12.78%14.60%-1.82%

assets 6.83 5.35

Accounts 218617854 198153884

15.19%12.14%3.05%

receivable 3.84 4.26

Contract assets 8089556.63 0.06% 8561303.10 0.05% 0.01%

181966943196999898

Inventory 12.64% 12.07% 0.57%

0.668.39

Investment 42165255.3 43347824.3

0.29%0.27%0.02%

property 7 4

Long-term

180115189.181545123.

equity 1.25% 1.11% 0.14%

investments 99 09

333754619336033991

Fixed assets 23.19% 20.59% 2.60%

7.410.95

Construction in 109436224 7.60% 108726105 6.66% 0.94%

20Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

progress 6.23 2.63

Right-of-use 11363508.0 14126206.0

0.08%0.09%-0.01%

assets 5 8

Short-term 65115000.0 226779997.

0.45%1.39%-0.94%

borrowings 0 01

Contract 161528315. 140228127.

1.12%0.86%0.26%

liabilities 35 84

New long-term

Long-term 556590467. borrowing in

3.87%0.000.00%3.87%

borrowings 75 the current

period

Lease liabilities 7287442.67 0.05% 8065560.58 0.05% 0.00%

2. Major Assets Overseas

□ Applicable □ Not applicable

3. Assets and Liabilities at Fair Value

□ Applicable □ Not applicable

Unit: RMB

Gain/loss

on fair- Cumulative Impairment

Purchased

value fair-value allowance Sold in the

Beginning in the Other Ending

Item changes in changes for the Reporting

amount Reporting changes amount

the charged to Reporting Period

Period

Reporting equity Period

Period

Financial

assets

1. Held-

for-trading

financial

assets

2000000196602.730000005019660

(exclusive

0.0040.002.74

of

derivative

financial

assets)

2.-

Derivative 5825678 1397612

4428066

financial .18 .10

assets .08

4.

Investment -

1504980887185519003171164717

s in other 1502308

equity 024.07 27.04 40.66 479.92 03.49

instruments

Subtotal of -

15308058871855300000019003171216311

financial 1544622

assets 702.25 27.04 0.00 40.66 694.76 66.83

-

Total of the 1530805 88718552 3000000 1900317 1216311

1544622

above 702.25 7.04 0.00 40.66 694.76

66.83

Financial - 8821116 2794502 6544500

9367.37

liabilities 6535132 .35 5.71 .00

21Foshan Electrical and Lighting Co. Ltd. Interim Report 2022.63

Details about other changes:

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

4. Restricted Asset Rights as at the Period-End

Unit: RMB

Item Ending carrying Reason for restriction

value

Monetary assets 448713603.58 Security deposits for notes and performance bonds

Notes receivable 821993782.57 In pledge for notes pool

Fixed assets 265763688.91

Intangible assets 11119256.27

As mortgage and guarantee for related party see XIV (III) “Guarantees” in Part X

Long-term

1081877.32

prepaid expense

Total 1548672208.65 — —

VI Investments Made

1. Total Investment Amount

□ Applicable □ Not applicable

Investment amount in the Reporting Investment amount in the same period of

Change (%)

Period (RMB) last year (RMB)

1174459163.98278111603.14322.30%

2. Major Equity Investments Made in the Reporting Period

□ Applicable □ Not applicable

Unit: RMB

Statu Inves Whet

s as tment her

Nam Date

Share on retur invol Discl

e of Inves Inves Fundi Inves Predi of

Main holdi Prod the n in ved osure

inves tment ted ng Partn tment cted discl

busin ng uct date the in index

tee meth amou Reso ers Durat retur osure

esses perce type of the curre any (if

enter ods nt urces ion n (if

ntage balan nt legal any)

prise any)

ce perio actio

sheet d ns

Fosh Deve 1517 Majo Own 26 Anno

Self- 1364 1364

an lopm Acqu 098 21.48 Long rity- ershi Febru unce

funde None 3659 3659 No

Natio ent ired 116.6 % -term owne p d .24 .24 ary ment

nStar produ 2 d transf 2022 No.

22Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Opto ction subsi erred 2022-

electr and diary toget 014

her

onics mark on

with

Co. eting relate Com

Ltd. of d pletio

LED credit n of

and or’s Trans

comp rights fers

and

onent of

liabili

s Asset

ties

s in

Majo

r

Asset

Acqu

isitio

ns

discl

osed

on

http:/

/ww

w.cni

nfo.c

om.c

n

Anno

unce

ment

No.

2022-

014

on

Proje

Com

ct

Own pletio

inves ershi n of

tment

Fosh p Trans

and transf

an fers

relate erred

Sigm Whol toget of d

a ly- her 26 Assetplann Self-

Vent Acqu 100.0 Long owne with Febru s in

ing funde None No

ure ired 0% -term d relate ary Majo

consu d

Capit subsi d 2022 r

lting diary credit

al Asset

and or’s

Co.mana rights

Acqu

Ltd. isitio

geme and

liabili ns

nt

ties discl

servi

osed

ces

on

http:/

/ww

w.cni

nfo.c

om.c

n

151713641364

Total - - - - - - - - - - -

09836593659

23Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

116.6.24.24

2

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

□ Applicable □ Not applicable

4. Financial Investments

(1) Securities Investments

□ Applicable □ Not applicable

Unit: RMB

Gain/ Accu

Loss mulat

on ed Purch

Meas Begin Sold Gain/l Endin

Initial fair- fair- ased

Securi Securi Securi ureme ning in oss in g Accou Fundi

invest value value in

ty ty ty nt carryi Repor Repor carryi nting ng

ment chang chang Repor

type code name metho ng ting ting ng title source

cost es in es ting

d value Period Period value

Repor charg Period

ting ed to

Period equity

Invest

Dome

ments

sticall Gotio -8301 Fair 8874 6982 9344 1715 7813 in Self-

y/Ove 00207 n value 9681

4485. 6421 8638 286.9 644.1 0086 other funde

rseas 4 High- metho 9062.listed tech 13 d 8.75 4.47 4 8 9.60

equity d

21 instru

stock

ments

Invest

Dome

ments

sticall Fair -

Xiam 1529 5759 1888 1806 1433 3418 in Self-

y/Ove 60118 value 5341

en 5760 5594 9914 8745 9628. 5674 other funde

rseas 7 metho

Bank 1741.6.83 4.40 2.57 3.72 75 9.40 equity d listed d 28 instru

stock

ments

Fosha

n

Invest

Dome branc

ments

sticall h of Fair

in Self-

y/Ove Guan 5000 value 5000 5000

N/A other funde

rseas gdong 00.00 metho 00.00 00.00 equity d

listed Devel d

instru

stock opme

ments

nt

Bank

Held-

Dome

for-

sticall 1176 Fair Lifan 1558 - 1397 tradin

y/Ove 60177 value

Techn 008.7 778.1 1611 612.1 g Other

rseas 7 metho

ology 4 8 66.08 0 financlisted d

ial

stock

assets

-

237614658871190016051125

1503

Total 4810 -- 4789 8552 0.00 3174 5272. 0552 -- --

9196

0.7041.337.040.669331.10

9.57

24Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

(2) Investments in Derivative Financial Instruments

□ Applicable □ Not applicable

Unit: USD’0000

Endin

g

invest Actua

Relati Relate Purch Impai

Initial Sold ment l

onshi d- Type Begin ased rment Endin

Opera invest Begin in as % gain/l

p with party of Endin ning in allow g

ting ment ning Repor of the oss in

the transa deriva g date invest Repor ance invest

party amou date ting Comp Repor

Comp ction tive ment ting (if ment

nt Period any’s ting

any or not Period any)

endin Period

g net

assets

Fosha

n

branc

h of Gener 16

Not 22

the al 180.0 Septe 180.0 180.0

relate Not March 7.10

Agric forwa

d 0 mber 0 0

ultural rd 2022 2021

Bank

of

China

Fosha

n

branc

h of Gener 22

Not 24

the al 280.0 Septe 280.0 280.0

relate Not March 12.09

Agric forwa

d 0 mber 0 0

ultural rd 2022 2021

Bank

of

China

Fosha

n

branc

h of

the

Indust Gener 28

Not 1

rial al 350.0 Septe 350.0 350.0

relate Not April 11.28

and forwa

d 0 mber 0 0

Com rd 2022 2021

merci

al

Bank

of

China

Fosha

n

branc

h of Gener 12

Not 14

the al 360.0 Octob 360.0 360.0

relate Not April 11.54

Agric forwa

d 0 er 0 0

ultural rd 2022 2021

Bank

of

China

Fosha

Gener 20

n Not

al 700.0 Octob 1 June 700.0 700.0

branc relate Not -16.18

forwa

h of d 0 er 2022 0 0

rd

the 2021

25Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Indust

rial

and

Com

merci

al

Bank

of

China

Fosha

n

branc

h of

the

Indust Gener 3

Not

rial al 260.0 Nove 7 June 260.0 260.0

relate Not -6.02

and forwa

d 0 mber 2022 0 0

Com rd 2021

merci

al

Bank

of

China

Fosha

n

branc

h of

the

Indust Gener 29

Not

rial al 1000. Dece 5 July 1000. 1000.relate Not

and forwa

d 00 mber 2022 00 00

Com rd 2021

merci

al

Bank

of

China

Fosha

n

Forwa

branc Not 28 27

rd 1000. 1000. 1000.h of relate Not March April 8.78

d option 00 00 00 Minsh 2022 2022

s

eng

Bank

Fosha

n

branc

h of Gener

Not 27 31

the al 1000. 1000. 1000.relate Not April Augus

Agric forwa

d 00 00 00

ultural rd 2022 t 2022

Bank

of

China

Fosha

n

branc

h of

the Gener 30

Not 27

Indust al 1000. Septe 1000. 1000.relate Not April

rial forwa

d 00 mber 00 00

and rd 2022 2022

Com

merci

al

Bank

26Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

of

China

Fosha

n

branc Gener 21

Not 27

h of al 1000. Octob 1000. 1000.relate Not April

the forwad 00 er 00 00 2022

Bank rd 2022

of

China

Fosha

n

branc

h of Gener 30

Not 27

the al 1000. Nove 1000. 1000.relate Not April

Agric forwa

d 00 mber 00 00

ultural rd 2022 2022

Bank

of

China

Fosha

n

branc Gener

Not 29 30

h of al

relate Not 0.05 April May 0.05 0.05

China forwad 2022 2022

Merch rd

ants

Bank

Fosha

n

branc

h of Gener

Not 11 15

the al 500.0 500.0 500.0

relate Not May Augus

Agric forwa

d 0 0 0

ultural rd 2022 t 2022

Bank

of

China

Fosha

n

branc Gener

Not 12 16

h of al 400.0 400.0 400.0

relate Not May Augus

the forwad 0 0 0

rd 2022 t 2022 Bank

of

China

Fosha

n

branc Gener 29 24

Not

h of al Dece Januar

relate Not 98.83 98.83 98.83 0.00

China forwad mber y

Merch rd 2021 2022

ants

Bank

Fosha

n

2924

branc GenerNot

al 130.8 Dece Januar 130.8 130.8

h of relate Not 0.75

forwa

d 4 mber y 4 4 China rd 2021 2022

Merch

ants

27Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Bank

Fosha

n

branc Gener 29

Not 24

h of al Dece

relate Not 69.50 March 69.50 69.50 1.16

China forwad mber

rd 2022 Merch 2021

ants

Bank

Fosha

n

branc

h of GenerNot 16 16

al 129.8 129.8 129.8

Bank relate Not May June 2.47

forwa

d 8 8 8 of rd 2022 2022

Com

munic

ations

9459.3429.6029.3559.5900.

Total -- -- 0.00% 32.97

1017931000

Funding source All self-funded

Legal matters involved (if

N/A

applicable)

Disclosure date of announcement

on board’s approving derivative 27 August 2021

investment (if any)

Risk analysis of the forward foreign exchange settlement: 1. Market risk: Given the

unpredictability of economic changes at home and abroad the foreign exchange hedging

business faces market risk to some extent. 2. Foreign currency risk: When the foreign

currency trend greatly deviates from the Company's judgment of such trend the expenses

after locking the exchange rate might exceed that before doing so resulting in losses to the

Company. 3. Internal control risk: Imperfect internal control policies probably triggers risks

to the foreign exchange hedging business as it is highly professional and complex. 4.Trading default risk: If the counterparty of foreign exchange hedging defaults by failing to

pay hedging earnings to the Company as agreed the actual exchange loss of the Company

will not be offset. 5. Collection forecast risk: Marketing departments forecast collection

based on the actual and expected orders of customers. In practice customers may adjust

such orders. As a result the Company's collection forecast will not be accurate leading to

delivery risks.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

Analysis of risks and control strategy in a timely manner to stabilize the export business and avoid exchange losses to the

measures associated with utmost. 2. The Management System for Forward Settlement and Sales of Foreign

derivative investments held in Exchanges approved by the Board of Directors of the Company stipulates that all forward

Reporting Period (including but foreign exchange settlement businesses of the Company shall be based on the normal

not limited to market risk liquidity production and operation and relied on specific business operations to avoid and prevent

risk credit risk operational risk various exchange rate risks. However speculative transaction and interest arbitrage are not

legal risk etc.) 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 business and manage all risks that the Company may

face within a controllable range. 5. The internal audit department of the Company shall

check the actual signing and execution situation of all trading contracts on a regular or

irregular basis.

28Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

Instruments the Accounting Standard for Business Enterprises No. 24—Hedges the

value of derivative investments in

Accounting Standard for Business Enterprises No. 37—Presentation of Financial Instrument

Reporting Period (fair value

and other applicable regulations. Fair value is arrived at based on the price provided by

analysis should include

pricing service providers such as banks or the price obtained. Fair value measurement and

measurement method and related

recognition are carried out on a monthly basis. Changes in the fair value of forward

assumptions and parameters)

exchange settlement contracts entered into by the Company are mainly attributable to

difference arising from exchange rate fluctuations.Major changes in accounting

policies and specific accounting

principles adopted for derivative N/A

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

Opinion of independent directors

with the needs of the Company's operation and development. The Company has established

on derivative investments and risk

relevant 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

VII Sale of Major Assets and Equity Investments

1. Sale of Major Assets

□ Applicable □ Not applicable

Relat

ionsh

Net ip

Ratio

profit betw

of the Exec

contri een

net Credi uted

buted the Own

profit tor’s as

to the trans ershi

contri rights sched

Com actio p of

Effec buted and uled

Trans pany Relat n the Index

t on by liabili or

actio from ed- party asset to

Trans the the Prici ties not;

Date n the party and invol Discl discl

actio Asset Com sale ng invol if

of price perio trans the ved osure osed

n sold pany of the princi ved not

sale (RM d- actio Com has date infor

party (see asset ple have give

B’00 begin n or pany been matio

note to the been reaso

00) to the not (appli all n

3) Com all ns

date cable transf

pany’ transf and

of for erred

s erred meas

sale relate or not

total or not ures

(RM d-

profit taken

B’00 party

(%)

00) trans

actio

ns)

Centr Part The Mark 27 Anno

H1 1900 1605 0.00

alize of the sale et Not N/A Yes Yes N/A Augu unce

%

d Com 2022 3.17 .53 woul price st ment

29Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

biddi pany’ d not s of 2021 No.ng on s affect the 2021-

the share the stock 056

secon holdi Com s on

dary ngs pany’ when Boar

mark in s reduc d

et Gotio busin ing Resol

n ess the ution

High- conti share s

tech nuity holdi Rega

Co. or ngs rding

Ltd. mana the

and geme Interi

Xiam nt m

en stabil Repo

Bank ity. rt

discl

osed

on

http:/

/ww

w.cni

nfo.c

om.c

n

2. Sale of Major Equity Investments

□ Applicable □ Not applicable

VIII 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

Relationshi

Principal Registered Operating Operating

Name p with the Total assets Net assets Net profit

activity capital revenue profit

Company

Foshan

NationStar

Manufactur 6184771 6101325 3786714 1664781 8126291 7288651

Optoelectro Subsidiary

ing 69.00 692.05 929.67 497.45 0.87 7.52

nics Co.Ltd.Nanning

Liaowang Manufactur 3505570 2210764 9335629 7008181 2163199 1818708

Subsidiary

Auto Lamp ing 0.00 023.92 26.07 99.55 7.34 7.80

Co. Ltd.FSL Zhida

Electric Manufactur 5000000 1712203 6829687 1050860 6761930 5704490

Subsidiary

Technology ing 0.00 96.28 0.08 95.87 .94 .75

Co. Ltd.FSL

Chanchang

Manufactur 7278294 2655525 1810164 1713149 1731400 1373378

Optoelectro Subsidiary

ing

nics Co. 4.00 03.77 43.99 04.10 4.49 9.66

Ltd.

30Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Subsidiaries obtained or disposed in the Reporting Period:

□Applicable □ Not applicable

How the subsidiary was obtained or

Name Impact on overall operations and performance

disposed of in the Reporting Period

Foshan NationStar Optoelectronics These two subsidiaries combined increased

Acquired

Co. Ltd. the Company’s operating revenue and net

profit attributable to the Company as the

Foshan Sigma Venture Capital Co.Acquired parent by RMB1630 million and

Ltd.RMB13.6437 million respectively.Information about major majority- and minority-owned subsidiaries:

—In a major asset restructuring in February 2022 the Company acquired a 21.32% interest in Foshan NationStar

Optoelectronics Co. Ltd. (NationStar) from Rising Group and its acting-in-concert party. Upon the conclusion of

the transaction the Company eventually holds a 21.48% interest in NationStar and NationStar has become a

majority-owned subsidiary of the Company. The Company has included NationStar in its consolidated financial

statements since Q1 2022.—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. Upon the

conclusion of the transaction the Company eventually holds a 53.79% interest in Nanning Liaowang and

Nanning Liaowang has become a majority-owned subsidiary of the Company. The Company has included

Nanning Liaowang in its consolidated financial statements from the date when the Company obtained actual

control of it.—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 Chanchang Optoelectronics Co. Ltd. (renamed on 19 June 2018 from “Foshan Chanchang ElectricAppliances (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.

31Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

held by Prosperity Lamps and Components Ltd. After the purchasing the Company held 100% equity of FSL

Chanchang Optoelectronics Co. Ltd.IX Structured Bodies Controlled by the Company

□ Applicable □ Not applicable

X Risks Facing the Company and Countermeasures

1. Risks of macro economic fluctuations and fiercer market competition

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

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

the lighting industry is a fully competitive industry. And as market demand slows down in growth the Company

could be facing fiercer competition.Countermeasures: The Company will continue to increase R&D investments in a bid to develop new products and

enter new segment markets. It will also accelerate the introduction of new manufacturing processes technologies

and products to the market for more market share and higher added value on its products. At the same time by

optimizing marketing network and strengthening the business focus and expansion on domestic and foreign major

customers the Company will improve service quality increase core competitive capacity of the Company

constantly.

2. Risk of raw material price fluctuations

The main raw materials of the Company and its subsidiaries include chips 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.Countermeasures: The Company will pay attention to market dynamics collect information analyze and pre-

judge supply of main raw materials and price trends so as to make excellent sourcing plans. By enhancing

negotiation increasing quantity of qualified suppliers perfecting supply chain management and promoting

alternative materials the Company is able to decrease procurement costs.

3. Risk of exchange rate fluctuations

Overseas sales account for around 25% of the Company’s total sales which are mainly settled in USD. If RMB

experiences significant appreciation the price competitiveness of overseas sales could be undermined and

32Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

exchange losses may increase which will produce adverse impacts on the Company’s net profit.Countermeasures: By knowing and analyzing exchange rate policies and fluctuation trend of settlement currencies

in time intensifying settlement currency management and carrying out foreign exchange hedging business when

the timing is right the Company can relatively lock in exchange rates and minimize the risks brought by exchange

rate fluctuations.

4. Risk associated with the recoverability of accounts receivable

Receivables grow along with the Company's business. Customers who fail to repay loans timely or become

insolvent due to changes in macroeconomic trends market environments and their business will place the

Company at the risk of non-performing receivables.Countermeasures: In order to reduce the receivable collection risk the Company can constantly optimize the

receivable risk management system regularly assess customers' credit profiles and enhance customer risk

assessment. Meanwhile it can reinforce contract approval and management double its effort to collect receivables

and incorporate the collection of receivables into the performance assessment system for business departments.

33Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part IV Corporate Governance

I Annual and Extraordinary General Meeting Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period

Investor

Convened Disclosure

Meeting Type participati Resolutions of the meeting

date date

on ratio

18 Resolutions of the First

The First Extraordinary Extraordinary 19 January

43.49% January Extraordinary General Meeting of

General Meeting of 2022 General Meeting 2022

20222022

The 2021 Annual General Annual General 26 April 27 April Resolutions of the 2021 Annual

43.20%

Meeting Meeting 2022 2022 General Meeting

Resolutions of the Second

The Second Extraordinary Extraordinary 30 June

42.99% 1 July 2022 Extraordinary General Meeting of

General Meeting of 2022 General Meeting 2022

2022

2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed

Voting Rights

□ Applicable □ Not applicable

II Change of Directors Supervisors and Senior Management

□ Applicable □ Not applicable

Name Office title Type of change Date of change Reason for change

Mr. Xu Xiaoping has

Deputy General resigned as Deputy

Xu Xiaoping Resigned 13 May 2022

Manager General Manager for

job adjustment.Mr. Cheng Ke has

Cheng Ke Director Resigned 7 June 2022 resigned as Director for

job adjustment.Elected by a general

Hu Fengcai Director Elected 30 June 2022

meeting as Director

III Interim Dividend Plan

□ Applicable □ Not applicable

The Company has no interim dividend plan either in the form of cash or stock.IV Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures

for Employees

□ Applicable □ Not applicable

No such cases in the Reporting Period.

34Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part V Environmental and Social Responsibility

I Major Environmental 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: 39.937 Lighting SO2 1 In the plant organized mg/m3

/ None

in Glass t/y

Co. Ltd.manner Industry

Gaoming

(DB44/215

Branch

9-2019)

Emission

Foshan

Standards

Electrical

Discharged for Air

and

in an Oxynitride: Pollutants Oxynitride:

Lighting Oxynitride 1 In the plant / None

organized 550mg/m3 in Glass 83.549 t/y

Co. Ltd.manner Industry

Gaoming

(DB44/215

Branch

9-2019)

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

Integrated

Liuzhou Discharged Emission

Discharged

Guige Volatile upon Standards

in an un-

Lighting organic 2 In the plant reaching of Air No limit No limit None

organized

Technology compounds applicable Pollutants

manner

Co. Ltd. standards (GB16297-

1996)

Discharge

Limits of

Wastewater: Water

Chemical Pollutants

Foshan Discharged COD: 16

oxygen (DB44/26-

NationStar by mg/L;

demand 2001) of

Optoelectro standards 1 In the plant Ammonia / / None

("COD") Guangdong

nics Co. after nitrogen:

and Province:

Ltd. treatment 0.124 mg/L

ammonia Standard

nitrogen Class II for

Time Period

II.Exhaust Total Emission

Foshan gases: Total Discharged VOCs: 1.04 Standard of

NationStar volatile by mg/m3 Volatile

Optoelectro organic standards 8 In the plant Benzene: Organic / / None

nics Co. compounds after 0.134 Compounds

Ltd. ("VOCs") treatment mg/m3 for

benzene Toluene and Furniture

35Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

toluene xylene: Manufacturi

xylene and 0.382 ng

particulate mg/m3 (DB44/814-

matters Particulate 2010) of

matters: Guangdong

0.175 Province:

mg/m3 Discharge

limits for

VOCs

through

exhaust

funnels for

Time Period

II.PH: Six to

nine Discharge

Wastewater:

COD: 90 Limits of

PH

mg/L Water

suspended

Foshan BOD5: 20 Pollutants COD: 3.129

solids Discharged COD: 0.506

NationStar mg/L (DB44/26- t/a

COD five- by t/a

Semiconduc Suspended 2001) of Ammonia

day standards 1 In the plant Ammonia None

tor solids: 60 Guangdong nitrogen:

biochemical after nitrogen:

Technology mg/L Province: 0.201

oxygen treatment 0.0012 t/a

Co. Ltd Ammonia Standard t/a

demand

nitrogen: 10 Class I for

("BOD5")

mg/L Time Period

and fluoride

Fluoride: 10 II.mg/L

Sulfur Emission

dioxide: Limits of

500 mg/m3; Air

nitrogen Pollutants

Exhaust

oxide: 120 (DB44/247-

gases:

mg/m3 2001) of

Particulate

particulate Guangdong

matters

matters: 120 Province:

sulfur

mg/m3; Standard

dioxide

ammonia Class II for

nitrogen

gas: 20 Time Period

oxide

mg/m3; II. Emission SO2:0.25

benzene

Foshan odor Standard of t/a;

toluene Discharged

NationStar concentratio Volatile NOX:11.9

xylene total by

Semiconduc n: 6000 Organic 6

VOCs odor standards 6 In the plant / None

tor mg/m3; Compounds t/a

concentratio after

Technology hydrogen for 总

n ammonia treatment

Co. Ltd. chloride: Furniture VOCs：

gas sulfuric

100 mg/m3; Manufacturi 2.45t/a

acid mist

fluoride: 9 ng

hydrogen

mg/m3; (DB44/814-

chloride

chlorine: 65 2010) of

fluoride

mg/m3; Guangdong

chlorine

sulfuric acid Province:

and

mist: 35 Discharge

hydrogen

mg/m3; limits for

sulfide

benzene: 1 VOCs

mg/m3; through

toluene and exhaust

xylene: 20 funnels for

36Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

mg/m3; Time Period

total VOCs: II.

30 mg/m3

Emission

Standard for

Foshan Noise of

Daytime:

NationStar Industrial

Discharged 60;

Semiconduc Enterprises

Noise by / / nighttime: / / None

tor at Boundary

standards 50 Unit: dB

Technology (GB12348-

(A)

Co. Ltd. 2008):

Standard

Class II

Construction and operation of pollution control facilities:

Date of Date of Designed Actual Operation

Total investment

No. Facility construction operation Operator Processes capacity capacity hours

(RMB’0000)

(MM/YYYY) (MM/YYYY) (m3/h) (m3/h) (h/d)

Semi-dry flue

gas

Desulfurization

desulphurization

denitration and November December Independent

1 500 (SDFGD) + 60000 60000 24

dust removal 2015 2015 operations

electric

system

precipitation +

SCR denitration

Dry filter+RTO

RTO oxidation November March 2017 Independent

2 360 catalytic 10000 10000 24

furnace 2016 operations

combustion

Filter cotton+

Activated

activated carbon

carbon November Independent

3 60 March 2019 adsorption 60712 60712 24

adsorption 2019 operations

device+22.5m

device

vent

Method for

Edwards

treating September November Independent

4 419.28 combustion 44000 26008 24

MOCVD 2012 2012 operations

treatment

exhaust gas

Method for Water spraying

treating acid and September November Independent and activated

5696.81850003359524

alkali exhaust 2012 2012 operations carbon

gases absorption

Method for UV photolysis

treating organic September November Independent and activated

6696.81600002446624

exhaust gas 2012 2012 operations carbon

absorption

Wastewater Physiochemical

September December Independent

7 treatment 356.7 and biochemical 1080t/d 245.6t/d 24

2012 2012 operations

station processing

Wastewater

Independent Coagulation and

8 treatment 39.5 April 2017 May 2017 600t/d 200t/d 24

operations sedimentation

station

Method for

treating the

Independent Plasma

9 exhaust gases of 28 May 2016 June 2016 90000 90000 24

operations purification

the plant in the

west

Method for

treating the UV photolysis

Independent

10 exhaust gases of 50 July 2018 August 2018 and plasma 70500 70500 24

operations

the plant in the purification

east

37Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Assessment of the environmental impact of construction projects and other administrative licenses of

environmental protection:

Document name of administrative

No. Approver Date of approval Approval No.license of environmental protection

Approval for Environmental Environmental

Impact Report on New Project of Protection Bureau of

1 3 November 2004 /

Foshan Electrical and Lighting Co. Gaoming District

Ltd. Gaoming Branch Foshan City

Environmental Protection Environmental

Acceptance Opinions on Phase I of Protection Bureau of

2 28 August 2008 MHY [2008] No. 26

Foshan Electrical and Lighting Co. Gaoming District

Ltd. Gaoming Branch Foshan City

Acceptance Opinions on Flue Gas

Environmental

Emission Continuous Monitoring

Protection Bureau of

3 System of Foshan Electrical and 22 February 2010 MHY [2010] No. 8

Gaoming District

Lighting Co. Ltd. Gaoming

Foshan City

Branch

Approval for Environmental

Environmental

Impact Report on Energy-saving

Protection Bureau of

4 Lamp Expansion Project of Foshan 30 August 2013 MHGYB [2013] No. 030

Gaoming District

Electrical and Lighting Co. Ltd.Foshan City

Gaoming Branch

Letter of Environmental Protection Environmental Transport

Acceptance Opinions on Energy- and Urban Management

MGY

5 saving Lamp Expansion Project of Bureau of Gaoming 19 February 2014

[2014] No. 2

Foshan Electrical and Lighting Co. District (Environmental

Ltd. Gaoming Branch Protection)

Approval from Environmental

Protection Bureau of Gaoming

Environmental

District Foshan City of

Protection Bureau of

6 Environmental Impact Report on 13 February 2015 MHS [2015] No. 14

Gaoming District

Expansion Project of Foshan

Foshan City

Electrical and Lighting Co. Ltd.Gaoming Branch

Approval from Environmental

Protection Bureau of Gaoming

Environmental

District Foshan City of Kiln

Protection Bureau of

7 Expansion and Flue Gas Control 26 November 2015 MHS [2015] No. 157

Gaoming District

and Remediation Project of Foshan

Foshan City

Electrical and Lighting Co. Ltd.Gaoming Branch

Letter from Environmental

Protection Bureau of Gaoming

District Foshan City of

Environmental

Environmental Protection

Protection Bureau of

8 Acceptance Opinions on Kiln 24 December 2015 MHY [2015] No. 83

Gaoming District

Expansion and Flue Gas Control

Foshan City

and Remediation Project of Foshan

Electrical and Lighting Co. Ltd.Gaoming Branch

Approval from Environmental

Protection Bureau of Gaoming

District Foshan City of

Environmental

Environmental Impact Report on

Protection Bureau of

9 New LED Luminaries R&D 30 September 2017 MHS [2017] No. 138

Gaoming District

Production Base Construction

Foshan City

Project of Foshan Electrical and

Lighting Co. Ltd. Gaoming

Branch

Approval from Environmental

Environmental

Protection Bureau of Gaoming

Protection Bureau of

10 District Foshan City of 14 January 2019 MHS [2019] No. 11

Gaoming District

Environmental Impact Report on

Foshan City

Glass Kiln (Change) Construction

38Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Project of Foshan Electrical and

Lighting Co. Ltd. Gaoming

Branch

Letter from Foshan Municipal

Ecology and Environment Bureau

of Environmental Protection

Acceptance Opinions on Solid

Ecology and

Waste Pollution Prevention and

11 Environment Bureau of 12 September 2019 FMHY [2019] No. 126

Control Facility for New LED

Foshan City

Luminaries R&D Production Base

Construction Project (Phase I) of

Foshan Electrical and Lighting Co.Ltd.Ecology and

12 Sewage Discharge License Environment Bureau of 1 June 2020 91440600784850061B001U

Foshan City

Reply on the Environmental

Impact Report of Liuzhou Guige

Lighting Technology Co. Ltd. with Liuzhou Environmental

13 25 September 2015 LHS Zi [2015] No. 134

an Annual Output of 1.35 Million Protection Bureau

Sets of Auto Parts (Motor Vehicle

Lamps)

Reply on Completion Acceptance

of Environmental Protection

Liuzhou Liudong New

Facilities of Liuzhou Guige

Area Administrative

14 Lighting Technology Co. Ltd. with 28 October 2019 LDSPHB Zi [2019] No. 70

Examination and

an Annual Output of 1.35 Million

Approval Bureau

Sets of Auto Parts (Motor Vehicle

Lamps) (Solid Waste)

Liuzhou Liudong New

Area Administrative

15 Sewage Discharge License 18 July 2020 914502000836092085001V

Examination and

Approval Bureau

Approval from Foshan

Environmental Protection Bureau

to the Report on the Influence of

Foshan Environmental

16 Environment Change of the 14 July 2016 F.H. [2016] No. 746

Protection Bureau

Epitaxial Chip Project (Phase I) of

Foshan NationStar Semiconductor

Technology Co. Ltd.Letter of Opinions from Foshan

Environmental Protection Bureau

on the Acceptance Inspection of

the Changed Completion Foshan Environmental

17 3 May 2017 F.H.H. [2017] No. 426

Environment of the Epitaxial Chip Protection Bureau

Project (Phase I) of Foshan

NationStar Semiconductor

Technology Co. Ltd.Foshan Municipal

18 Sewage Discharge License Ecology and 2 January 2020 91440600570160743B001Q

Environment Bureau

Approval to the Report on the Environmental

Influence of Changing the Protection and Urban

19 Environment for the Expanded Management Bureau of 5 September 2014 CB [2014] 0036

Project of Foshan NationStar Chancheng District

Optoelectronics Co. Ltd. Foshan City

Application for the Acceptance

Environmental

Inspection of the Changed

Protection and Urban

Completion Environment of the

20 Management Bureau of 29 December 2014 C.H.Y.B [2014] No. 46

Expanded Project of Foshan

Chancheng District

NationStar Optoelectronics Co.Foshan City

Ltd.Approval to the Report on the Environmental

21 Environmental Influence of the Protection and Urban 19 December 2014 CB [2014] 0073

Project of Production Expansion of Management Bureau of

39Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Small Spacing and Outdoor SMD Chancheng District

LED Display Components Foshan City

Opinions on the Acceptance

Inspection of the Completion Environmental

Environment for the Project of Protection Bureau of

22 20 May 2016 C.H.Y.B. 2016-4-032

Production Expansion of Small Chancheng District

Spacing and Outdoor SMD LED Foshan City

Display Components

Approval to the Report on the

Environmental Influence of the

Project of the Innovation in Environmental

Packaging Technology and Protection Bureau of

23 1 November 2016 CB 2016-4-205

Technological Transformation of Chancheng District

Key Packaging Equipment of Foshan City

LEDs with High Color Rendering

Index for Illumination

Approval to the Report on the

Environmental Influence of the

Project of the Innovation in Environmental

Packaging Technology and Protection Bureau of

24 1 November 2016 CB 2016-4-206

Technological Transformation of Chancheng District

Key Packaging Equipment of Foshan City

LEDs with Small Spacing for

Display

Opinions on the Acceptance

Inspection of the Completion

Environment of the Project of the

Environmental

Innovation in Packaging

Protection Bureau of

25 Technology and Technological 11 April 2017 C.H.Y.B. 2017-4-110

Chancheng District

Transformation of Key Packaging

Foshan City

Equipment of LEDs with High

Color Rendering Index for

Illumination

Opinions on the Acceptance

Inspection of the Completion

Environment of the Project of the Environmental

Innovation in Packaging Protection Bureau of

26 11 April 2017 C.H.Y.B. 2017-4-111

Technology and Technological Chancheng District

Transformation of Key Packaging Foshan City

Equipment of LEDs with Small

Spacing for Display

Approval to the Report on the

Environmental Influence of the

Project (Phase II) of the Innovation Environmental

in Packaging Technology and Protection Bureau of

27 8 December 2017 CB 2017-4-065

Technological Transformation of Chancheng District

Key Packaging Equipment of Foshan City

LEDs with High Color Rendering

Index for Illumination

Approval to the Report on the

Environmental Influence of the

Project (Phase II) of the Innovation Environmental

in Packaging Technology and Protection Bureau of

28 8 December 2017 CB 2017-4-064

Technological Transformation of Chancheng District

Key Packaging Equipment of Foshan City

LEDs with Small Spacing for

Display

Foshan Municipal

Sewage discharge registration

29 Ecology and 19 January 2020 914406001935264036001X

receipt of fixed pollution source

Environment Bureau

Opinions on the Acceptance

Inspection of the Completion

Independent acceptance

30 Environment of the Project (Phase / /

inspection

II) of the Innovation in Packaging

Technology and Technological

40Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Transformation of Key Packaging

Equipment of LEDs with High

Color Rendering Index for

Illumination

Opinions on the Acceptance

Inspection of the Completion

Environment of the Project (Phase

II) of the Innovation in Packaging Independent acceptance

31//

Technology and Technological inspection

Transformation of Key Packaging

Equipment of LEDs with Small

Spacing for Display

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

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).NationStar formulated the Contingency Plan for Environmental Emergencies of NationStar (Including Risk

Assessment Report and Material Survey of Environmental Emergencies) in May 2019 and had it filed with the

Foshan Municipal Ecology and Environment Bureau Chancheng Sub-bureau (Filing No.: 440604-2020-032-L) on

2 April 2020.

41Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

NationStar Optoelectronics formulated the Contingency Plan for Environmental Emergencies of Foshan

NationStar Semiconductor Technology Co. Ltd. (including Risk Assessment Report and Material Survey of

Environmental Emergencies) in May 2020 had it reviewed by experts on 1 July 2020 and had it filed with the

Foshan Municipal Ecology and Environment Bureau Gaoming Sub-bureau (Filing No.: 440600-2020-047-M) on

12 August 2020.

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.NationStar Optoelectronics following the self-monitoring plan entrusted a third-party environmental testing

agency GD Veizhong Testing Technique Co. Ltd. (Veizhong Testing) to perform the annual inspection of the

wastewater and exhaust outlets. 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.Foshan NationStar Semiconductor Technology Co. Ltd. prepared an environmental self-monitoring plan at the

beginning of the year. It entrusted a third-party environmental testing agency Guangdong Zhonghui Mobile

Laboratory Testing Technology Co. Ltd. to perform the quarterly 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.

42Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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 energy consumption under the same output value by selecting

high-efficiency and energy-saving equipment equipment renovation energy control etc. The Company insists on

constantly publicizing environmental protection knowledge to employees improving their awareness of

environmental protection and 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 ResponsibilityWe have always attached importance to the accomplishment of our social value. With “provide returns forshareholders provide a platform for employees create value for customers and create prosperity for the society”

as our mission we take on the social responsibilities to protect the interests of our creditors employees customers

suppliers and community. We have been utilizing resources in a scientific rational way effectively protecting the

natural environment and safeguarding social safety so as to promote common harmonious and sustainable

development of the Company and the society.

1. Protection of the rights and interests of our shareholders and creditors

We continuously improve our corporate governance structure regulate our operation and enhance our

management on information disclosure and investor relations. We treat all our investors fairly and justly ensure

their rights to know about participate in and vote on the significant events of the Company and safeguard the

legal rights and interests of all our shareholders especially our minority shareholders.

2. Protection of the rights and interests of our employees

Considering employees the most valuable resource for our survival and development we constantly improve our

43Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

employment system improve the compensation packages for our employees and attach importance to talent

cultivation so as to provide opportunities and space for the sustainable development of our employees as well as

realize the common development of the employees and the Company. We also pay attention to the health of our

employees attach importance to production safety and labor protection and improve the working and living

conditions for our employees so as to formulate harmonious and stable labor relations.

3. Protection of the rights and interests of our customers and consumers

We have been upholding the “Customer First” principle in our provision of quality products and services to

customers. We operate honestly and disallow any unfair trade practice against commercial ethics market rules

and the fair competition principle. We also improve our product quality and after-sales services and try to build a

win-win relationship with our customers.

4. Protection of the rights and interests of our suppliers

We respect and protect the legal rights and interests of our suppliers carefully protect their secret and proprietary

information encourage and push them to continuously improve the quality of their products and services through

creating an environment for open and fair competition among them so as to realize mutual benefits and mutual

development of the suppliers and the Company.

5. Production Safety Environmental Protection and Sustainable Development

The Company sees production safety environmental protection and energy conservation as an important part of

its strategy of sustainable development. It implements accountability systems in relation environmental protection

and production safety in strict accordance with the applicable laws and regulations. In addition it is ISO9001-(a

quality management system) IATF16949-(a quality management system) ISO14001-(an environment

management system) ISO45001-(a management system for occupational health and safety) and ISO50001-(an

energy management system) certified. In 2018 upon the review and publication by 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 commitment

that we should take on trying to boost the local economy through our own development. We have been granted

by the local government the title of “Foshan Over-100-Million Tax Payer” for many years due to our

contributions in boosting the harmonious development of the Company and the community.

44Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part VI Significant Events

I Commitments of the Company’s De Facto Controller Shareholders Related Parties and

Acquirers as well as the Company Itself and Other Entities Fulfilled in the Reporting

Period or Ongoing at the Period-End

□ Applicable □ Not applicable

Date of

Type of commit Term of

Commitment Promisor Details of commitment Fulfillment

commitment ment commitment

making

1. FSL does 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) FSL

has not been placed on file for

From the time

investigation or criminal

when the

investigation due to suspected

Company

insider trading related to this

Commitments plans the About trading and has not been subject

27 major asset

made during absence of to administrative punishment by

FSL October restructuring Expired

asset insider the CSRC or criminal 2021 to the date

restructuring trading responsibility investigated by when the

judicial organs according to law

major asset

for insider trading related to any

restructuring

major asset restructuring and has

is completed.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 Restructuring of

Listed Companies in the last 36

months.

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

About non-

reduce its FSL shares (if any) in

Commitments reduction of Directors any other way. 2. If FSL

FSL shares 28 Until this

made during and senior implements ex-rights behaviors

during Septemb trading is Expired

asset management such as share conversion share major asset er 2021 completed

restructuring of FSL offering and share allotment from restructurin

the date of issuance of this Letter

g

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

45Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

reducing share holdings. 3. Where

FSL or any other investor suffers

a loss as a result of my violation

of the aforesaid 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

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

to this trading and have not been

From the time

subject to administrative

when the

punishment by the CSRC or

Company

criminal responsibility

Commitments plans the Directors About investigated by judicial organs

27 major asset

made during and senior absence of according to law for insider

October restructuring Expired

asset management insider trading related to major asset 2021 to the date

restructuring of FSL trading restructuring and has not been when the

prohibited from engaging in any

major asset

major asset restructuring of listed

restructuring

companies according to Article 13

is completed.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.

1. They promise that there will be

no share reduction plan from the

Rising

date of issuance of this Letter of

Group

Commitments to the completion

Rising

of this trading and they will not

Capital

reduce its FSL shares in any other

Electronics About non-

way (except the transfer or

Commitments Group reduction of transfer between Rising Group

Hongkong FSL shares 28 Until the

made during and its wholly-owned

Wah Shing during Septemb completion of Expired

asset subsidiaries). 2. If FSL Hong Kong major asset er 2021 this trading

restructuring implements ex-rights behaviors Rising restructurin

such as share conversion share

Investment g

offering and share allotment from

and

the date of issuance of this Letter

Shenzhen

of Commitments to the

Rising

completion of this trading the

Investment

newly added shares obtained by

them will also be subject to the

46Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

above 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. 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 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

About

confidentiality clauses with the

explanation

above intermediaries clearly

Rising of

Commitments stipulating the scope of Group confidentiali

confidential information and the 27 Until the

made during Electronics ty measures

confidentiality responsibilities of October completion of Expired

asset Group and and each intermediary. 2021 this trading

restructuring Rising confidentiali 2. In communicating with the

Capital ty system

transaction counterparties the

adopted for

listed company made clear to

this trading

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 transaction

counterparties strictly abided by

the confidentiality obligation and

did not conduct any insider

trading using the information.About They are not subject to any

Commitments compliance securities and futures crimes as Rising

of this stipulated in Article 6 of Several 27 Until the

made during Group and

major asset Provisions on the Reduction of October completion of Expired

asset Rising restructurin Shares by Shareholders Directors 2021 this trading

restructuring Capital g with and Supervisors of Listed

Several Companies. During the period

47Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Provisions when the CSRC or the judicial

on the organ filed a case for

Reduction of investigation and less than six

Shares by months after the administrative

Shareholder penalty decision and criminal

s Directors judgment were made there was

and no situation that the shares of

Supervisors NATIONSTAR could not be

of Listed reduced due to violation of the

Companies 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. 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.: 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

Commitments About the Letter of Commitment all the

27 Until the

made during Electronics release of loans involved in the Maximum

October completion of Expired

asset Group credit Guarantee Contract and the 2021 this trading

restructuring guarantee Maximum Pledge Contract for

Stocks of Listed Companies have

been repaid there is no debt

based on the guarantee under the

above contracts and 39876500

shares of NATIONSTAR 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

48Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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) they have not

been placed on file for

investigation or criminal

investigation due to suspected

Key

insider trading related to this From the date

management

trading and have not been subject of the

Commitments personnel of About to administrative punishment by issuance of

Rising 27

made during absence of the CSRC or criminal the letter of

Group October Expired

asset insider responsibility investigated by commitment Electronics 2021

restructuring trading judicial organs according to law until the Group and

for insider trading related to any completion of

Rising

major asset restructuring and this trading

Capital

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 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.Whether the

commitments

Yes

were timely

performed

Specific

reasons for

failing to fulfill

commitments N/A

on time and

plans for next

step

II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its

Related Parties for Non-Operating Purposes

□ Applicable □ Not applicable

No such cases in the Reporting Period.

49Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

III Irregularities in the Provision of Guarantees

□ Applicable □ Not applicable

No such cases in the Reporting Period.IV Engagement and Disengagement of Independent Auditor

Are the interim financial statements audited?

□Yes □ No

These interim financial statements are unaudited.V Explanations Given by the Board of Directors and the Supervisory Committee Regarding

the Independent Auditor's “Modified Opinion” on the Financial Statements of the

Reporting Period

□ Applicable □ Not applicable

VI Explanations Given by the Board of Directors Regarding the Independent Auditor's

“Modified Opinion” on the Financial Statements of Last Year

□ Applicable □ Not applicable

VII Insolvency and Reorganization

□ Applicable □ Not applicable

No such cases in the Reporting Period.VIII Legal Matters

Significant lawsuits and arbitrations

□ Applicable □ Not applicable

No such cases in the Reporting Period.Other legal matters

□ Applicable □ Not applicable

Basic Amount Whether Lawsuit Execution of

information on involved there are (arbitratio Lawsuit (arbitration) lawsuit Date of Disclosure

lawsuit (RMB’00 accrued n) results and influences (arbitration) disclosure index

(arbitration) 00) liabilities progress judgment

Foshan An The second instance

Electrical and applicatio judgment reads the

Lighting Co. n for defendant should pay

No payment

Ltd. sued Jiang compulsor RMB11220800 and

1325.57 No has been

Zhenghao of y liquidated damages to

executed yet.Beijing enforceme the company. Jiang

Zhong'ao nt has Zhenghao should be

Zhengshi been jointly and severally

50Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Lighting made. liable for the debt.Electric

Appliance Co.Ltd. for a

dispute over a

purchase and

sales contract.Foshan

Electrical and An The first instance

Lighting Co. applicatio judgment reads that the

Ltd. sued n for defendant should pay

Chongqing Yufo compulsor RMB1745100 and No payment

Lighting and 174.51 No y interest to plaintiff FSL. has been

Electrical Co. enforceme The second instance executed yet.Ltd. for a nt has determined that the

dispute over a been defendant withdrew its

purchase and made. appeal.sales contract.The first instance

judgment: The first

Huang Weijian

instance confirmed that

and the other 11

the employment

persons sued Procedure

relationship between the

Foshan Lighting s for the

plaintiff (12 persons)

Lamps & second

41.21 No and the defendant had N/A

Components instance

terminated in June 2021

Co. Ltd. for a are in

and rejected other suits

dispute over process.of the plaintiff. The

economic

plaintiff refused to

compensation.accept the judgment and

instituted an appeal.The first instance

judgments: 1. The first

instance confirmed the

termination of the house

purchase and sales

contract between the

defendant and the

plaintiff. 2. The

defendant should return

Ye Jinxiu sued RMB436000 and the

Foshan Kelian interest to the plaintiff

Procedure

New Energy and Shenzhen

s for the

Technology Co. Chuanglian Real Estate

second

Ltd. for a 72.43 No Agency Co. Ltd. N/A

instance

dispute over a should be jointly and

are in

house purchase severally liable for the

process.and sales RMB152900 that the

contract. judgments required to

return. 3. The defendant

should pay off the loan

principal and interest of

RMB214700 to Bank

of China Foshan

Fenjiang Sub-branch.Both parties refused to

accept the judgments

and instituted an appeal.

51Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

The first instance

judgments: 1. The first

instance confirmed the

termination of the house

purchase and sales

contract between the

defendant and the

plaintiff. 2. The

defendant should return

Yu Qiuhong

RMB428700 and the

sued Foshan

interest to the plaintiff

Kelian New Procedure

and Shenzhen

Energy s for the

Chuanglian Real Estate

Technology Co. second

72.47 No Agency Co. Ltd. N/A

Ltd. for a instance

should be jointly and

dispute over a are in

severally liable for the

house purchase process.RMB149800 that the

and sales

judgments required to

contract.return. 3. The defendant

should pay off the loan

principal and interest of

RMB222000 to Bank

of China Foshan

Fenjiang Sub-branch.Both parties refused to

accept the judgments

and instituted an appeal.The first instance

judgments: 1. The first

instance confirmed the

termination of the house

purchase and sales

contract between the

defendant and the

plaintiff. 2. The

defendant should return

Zhong Junying

RMB483500 and the

sued Foshan

interest to the plaintiff

Kelian New Procedure

and Shenzhen

Energy s for the

Chuanglian Real Estate

Technology Co. second

77.08 No Agency Co. Ltd. N/A

Ltd. for a instance

should be jointly and

dispute over a are in

severally liable for the

house purchase process.RMB206700 that the

and sales

judgments require to

contract.return. 3. The defendant

should pay off the loan

principal and interest of

RMB214700 to Bank

of China Foshan

Fenjiang Sub-branch.Both parties refused to

accept the judgments

and instituted an appeal.Mudanjiang Procedure The first instance

Huaguang s for the judgments: 1. The

82.51 No N/A

Lighting Co. second Company should pay an

Ltd. sued instance indemnity of

52Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Foshan are in RMB533500 and the

Electrical and process. interest to the plaintiff.Lighting Co. 2. The Company should

Ltd. for a pay RMB80000 to the

dispute over the plaintiff as the

liability for tort. authentication fee. 3.The plaintiff should

return to the Company

the authenticated

product that was

removed from the shelf

in 2019. The Company

refused to accept the

judgments and

instituted an appeal.Tianjin

Zhongtong New

Technology

Development

Co. Ltd. sued

Procedure

Foshan

s for the

Electrical and

first

Lighting Co. 33.95 No No suit results. N/A

instance

Ltd. and Tianjin

are in

Jinsheng Bida

process.Hardware Co.Ltd. for a

dispute over a

purchase and

sales contract.In accordance with the

Yu Fangjun

arbitration award

made an

Foshan Lighting Lamps

arbitration

& Components Co.request for Procedure

Ltd. should pay Yu

economic s for the

Fangjun RMB29400 as

compensation first

2.94 No economic N/A

from Foshan instance

compensation. Foshan

Lighting Lamps are in

Lighting Lamps &

& Components process.Components Co. Ltd.Co. Ltd. for an

refused to accept the

employment

judgment and brought a

dispute.lawsuit to court.Cai Haiming

made an

arbitration

request for

The

economic

arbitration

compensation

5.99 No procedure No arbitration results. N/A

from Foshan

s are in

Electrical and

process.Lighting Co.Ltd. for an

employment

dispute.FSL Zhida Procedure

Electric 3.6 No s for the No suit results. N/A

Technology Co. first

53Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Ltd. sued instance

Qianxinan are in

Wanshunda process.Trading Co.Ltd. for a

dispute over a

purchase and

sales contract.Shenzhen

Chuanglian

Real Estate

Agency Co.Ltd. sued

Foshan Kelian Procedure

New Energy s for the

Technology Co. first

572 No No suit results. N/A

Ltd. for a instance

dispute over the are in

contract for the process.sales of

commercial

properties

through the

agency.Liang Guohao

sued Foshan

Kelian New Procedure

Energy s for the

Technology Co. first

62.3 No No suit results. N/A

Ltd. for a instance

dispute over a are in

house purchase process.and sales

contract.Shenzhen

Secket

Electrician

Technology Co.Ltd. sued FSL

Zhida Electric

Technology Co.Ltd. (FSL

Zhida)

Chengdu Procedure

ArGangle s for the

Insulated first

600 No No suit results. N/A

Electrical instance

Manufacturing are in

Co. Ltd. process.Chengdu

ArGangle

Yuanhu

Technology Co.Ltd. and

Zhejiang Tmall

Network Co.Ltd. for a

dispute over

54Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

patent

infringement.Guangzhou Cm

Punk

Optoelectronics

Co. Ltd. sued

Foshan

Procedure

NationStar

s for the

Optoelectronics

first

Co. Ltd. for a 436.13 No No suit results. N/A

instance

dispute over a

are in

purchase and

process.sales contract

(NationStar

Optoelectronics

filed a counter-

claim.)

Foshan

NationStar

Optoelectronics Procedure

Co. Ltd. sued s for the

Guangdong first

8.74 No No suit results. N/A

VEELK instance

Optoelectronic are in

Technology Co. process.Ltd. for a

contract dispute.Foshan

NationStar

Optoelectronics

Procedure

Co. Ltd. sued

s for the

Deng Jun of

first

Shenzhen 18.8 No No suit results. N/A

instance

HOXLED

are in

Optoelectronic

process.Technology Co.Ltd. for a

contract dispute.Foshan

NationStar

Optoelectronics Procedure

Co. Ltd. filed s for the

for bankruptcy first

44 No No suit results. N/A

of Shenzhen instance

Ledtek Opto are in

Electronics process.Technology Co.Ltd.Shaanxi The first instance

Electronic judgments: In

Information Procedure accordance with the

Group s for the judicial discretion of the

Optoelectronics second court each party should

168 No N/A

Technology Co. instance be liable for 50% of the

Ltd. sued are in damages. Foshan

Foshan process. NationStar

NationStar Semiconductor

Semiconductor Technology Co. Ltd.

55Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Technology Co. should pay Shaanxi

Ltd. for a Electronic Information

dispute over a Group Optoelectronics

chip purchase Technology Co.and sales RMB54800 as

contract. compensation. The

plaintiff refused to

accept the judgment and

instituted an appeal.IX Punishments and Rectifications

□ Applicable □ Not applicable

X Credit Quality of the Company as well as its Controlling Shareholder and De Facto

Controller

□ Applicable □ Not applicable

In the Reporting Period the Company and its controlling shareholder and de facto controller were not involved in

any unsatisfied court judgments large-amount overdue liabilities or the like.XI Major Related-Party Transactions

1. Continuing Related-Party Transactions

□Applicable □ Not applicable

Obtai

nable

As %

Appro marke

of Index

Relati ved Over t price

Trans Total total to

onshi Type Specif Pricin transa the Metho for

Relate action value value Disclo disclo

p with of ic g ction appro d of same-

d price( (RMB of all sure sed

the transa transa princi line ved settle type

party RMB’ ’0000 same- date infor

Comp ction ction ple (RMB line or ment transa

0000) ) type matio

any ’0000 not ctions

transa n

) (RMB

ctions

’0000

)

Purch

asing

produ

Fosha

cts Bank

n

and

Natio Under transf

receiv Purch 30 www.nStar same ers or

ing ase of Marke 1785. 1050 Dece cninfo

Optoe actual 1785. 0.55% Not bank 1785.labor materi t price

lectro contro 99 0 mber .com.servic als 99 accept 99

nics ller 2021 cn

e ance

Co.from notes

Ltd.relate

d

party

Guan Under Purch

Purch Bank 30 www.gdong same asing

ase of Marke 275.7 transf 275.7 Dece cninfo

Fengh actual produ 275.7 0.08% 2610 Not

materi t price

ua contro cts 0 ers or 0 mber .com.als

Adva ller and bank 2021 cn

56Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

nced receiv accept

Techn ing ance

ology labor

notes

Holdi servic

ng e

Co. from

Ltd. relate

d

party

Purch

asing

Share produ

Prosp holder cts Bank

erity that and transf

Lamp holds receiv Purch 30 www.ers or

s & over ing ase of Marke Dece cninfo

77.35 77.35 0.02% 600 Not bank 77.35

Comp 5% labor materi t price mber .com.onents shares servic als accept 2021 cn

Limit of the e ance

ed Comp from notes

any relate

d

party

A Purch

comp asing

Hangz any produ

hou contro cts Bank

Times lled and transf

Lighti receiv Purch

by a ers or

ng ing ase of Marke

relate 22.23 22.23 0.01% bank 22.23 N/A

and labor materi t price

Electr d servic als accept

ical indivi e ance

Co. dual from notes

Ltd. of the relate

Comp d

party

any

Purch

asing

Guan produ

gdong cts Bank

Electr and

Under transf

onic receiv Purch 30 www.same ers or

Techn ing ase of Marke Dece cninfo

actual 85.46 85.46 0.83% 97 Not bank 85.46

ology labor equip t price

contro mber .com.Resea servic ment accept

ller 2021 cn

rch e ance

Institu from notes

te relate

d

party

Purch

asing

Jiang

produ

men

cts Bank

Dongj

and

iang Under Recei transf

receiv 30 www.Envir same ving ers or

ing Marke Dece cninfo

onme actual labor 50.24 50.24 0.86% 300 Not bank 50.24

labor t price

ntal contro servic mber .com.servic accept

Techn ller e 2021 cn

e ance

ology

from notes

Co

relate

Ltd.d

party

Fosha Under Purch Recei Marke 14.82 14.82 0.25% Bank 14.82 N/A

57Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

n same asing ving t price transf

Fulon actual produ labor ers or

g contro cts servic

bank

Envir ller and e

onme receiv accept

ntal ing ance

Techn labor notes

ology servic

Co. e

Ltd. from

relate

d

party

Sellin

g

Share

produ

Prosp holder Bank

cts

erity that

and transf

Lamp holds Sellin 30 www.provid ers or

s & over g Marke 1148. 1148. 1148. Dece cninfo

ing 0.26% 4000 Not bank

Comp 5% produ t price

labor 74 74 74 mber .com.onents shares cts accept

servic 2021 cn

Limit of the ance

e to

ed Comp notes

relate

any

d

party

Sellin

g

Natio produ

Bank

nStar cts

Optoe Under and transf

Sellin

lectro same provid ers or

g Marke 1146. 1146.nics actual ing 0.26% bank 1146. N/A

produ t price

(Germ contro labor 22 22

cts accept 22

any) ller servic ance

Co. e to

notes

Ltd. relate

d

party

Sellin

Guan

g

gdong

produ

New Bank

cts

Electr

Under and transf

onics Sellin 30 www.same provid ers or

Infor g Marke 815.9 815.9 Dece cninfo

actual ing 0.19% 5000 Not bank 815.9

matio produ t price

contro labor 6 6 mber .com.n cts accept 6

ller servic 2021 cn

Impor ance

e to

t& notes

relate

Expor

d

t Ltd.party

Sellin

g

Shenz

produ

hen Bank

cts

Zhong

Under and transf

jin Sellin 30 www.same provid ers or

Lingn g Marke Dece cninfo

actual ing 60.71 60.71 0.01% 1550 Not bank 60.71

an produ t price

contro labor mber .com.Nonfe cts accept

ller servic 2021 cn

met ance

e to

Co. notes

relate

Ltd.d

party

Under Sellin Sellin Marke

Guan 53.82 53.82 0.01% Bank 53.82 N/A

same g g t price

58Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

gzhou actual produ produ transf

Wans contro cts cts ers or

ller and

hun bank

provid

Invest ing accept

ment labor ance

Mana servic notes

geme e to

nt relate

d

Co.party

Ltd.Sellin

g

Guan produ

Bank

gdong cts

Yixin Under and transf

Sellin 30 www.Chang same provid ers or

g Marke Dece cninfo

cheng actual ing 44.12 44.12 0.01% 1000 Not bank 44.12

produ t price

Const contro labor mber .com.cts accept

ructio ller servic 2021 cn ance

n e to

notes

Group relate

d

party

Guan Sellin

g

gzhou

produ

Sheng Bank

cts

du Under and transf

Sellin

Invest same provid ers or

g Marke

ment actual ing 28.19 28.19 0.01% bank 28.19 N/A

produ t price

Devel contro labor cts accept

opme ller servic ance

e to

nt notes

relate

Co. d

Ltd. party

Guan

Sellin

gdong

g

Zhong

produ

jin Bank

cts

Lingn

Under and transf

an Sellin

same provid ers or

Junpe g Marke

actual ing 12.29 12.29 0.00% bank 12.29 N/A

ng produ t price

contro labor

Intelli cts accept

ller servic

gent ance

e to

Equip notes

relate

ment

d

Co.party

Ltd.Sellin

g

produ

Guan Bank

cts

gdong

Under and transf

Rising Sellin 30 www.same provid ers or

South g Marke Dece cninfo

actual ing 7.00 7 0.00% 600 Not bank 7.00

Const produ t price

contro labor mber .com.ructio cts accept

ller servic 2021 cn

n Co. ance

e to

Ltd. notes

relate

d

party

Guan Under Sellin Sellin Marke 1200 Bank 30 www.

4.44 4.44 0.00% Not 4.44

gdong same g g t price 0 transf Dece cninfo

59Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Zhong actual produ produ ers or mber .com.nan contro cts cts bank 2021 cn

Const ller and

accept

ructio provid

n Co. ing ance

Ltd. labor notes

servic

e to

relate

d

party

A Sellin

comp g

any produ

Prosp Bank

contro cts

erity

lled and transf

Electr Sellin

by a provid ers or

ical g Marke

relate ing 4.13 4.13 0.00% bank 4.13 N/A

(Chin produ t price

d labor

a) cts accept

indivi servic

Co. ance

dual e to

Ltd. notes

of the relate

Comp d

any party

Sellin

Guan g

gdong produ

Bank

Electr cts

onics Under and transf

Sellin

Infor same provid ers or

g Marke

matio actual ing 2.78 2.78 0.00% bank 2.78 N/A

produ t price

n contro labor

cts accept

Indust ller servic ance

ry e to

notes

Group relate

Ltd. d

party

Guan

Sellin

gdong

g

Zhong

produ

jin Bank

cts

Lingn

Under and transf

an Sellin

same provid ers or

Junpe g Marke

actual ing 0.59 0.59 0.00% bank 0.59 N/A

ng produ t price

contro labor

Intelli cts accept

ller servic

gent ance

e to

Equip notes

relate

ment

d

Co.party

Ltd.

5640.3825

Total -- -- -- -- -- -- -- --

787

Large-amount sales return in detail N/A

In December 2021 the Company estimated the total value of its continuing transactions

with related parties Guangdong Fenghua Advanced Technology Holding Co. Ltd.Prosperity Lamps & Components Limited and its majority-owned subsidiaries Guangdong

Give the actual situation in the Rising Investment Group and its majority-owned subsidiaries Guangdong Huajian

Reporting Period (if any) where an

Enterprise Group Co. Ltd. and its majority-owned subsidiaries Shenzhen Zhongjin

estimate had been made for the

Lingnan Nonfemet Co. Ltd. and its majority-owned subsidiaries Guangdong Construction

total value of continuing related-

party transactions by type to occur Engineering Group Co. Ltd. and its majority-owned subsidiaries Guangzhou Rising Non-

in the Reporting Period ferrous Metal Group Co. Ltd. and its majority-owned subsidiaries Guangdong Rising Real

Estate Group Co. Ltd. and its majority-owned subsidiaries Guangdong Electronic

Technology Research Institute Guangdong Rising Property Group Co. Ltd. and its

majority-owned subsidiaries Foshan NationStar Optoelectronics Co. Ltd. and its majority-

60Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

owned subsidiaries. In January 2022 the Company’s subsidiary NationStar estimated the

total value of its continuing transactions with related parties Guangdong Fenghua Advanced

Technology Holding Co. Ltd. Electronics Group and its majority-owned subsidiaries and

Dongjiang Environment and its majority-owned subsidiaries. Concerning the purchases

from related parties the actual amount in 2022 was RMB23.1179 million accounting for

14.26% of the estimate for 2022. As for the sales to related parties the actual amount in

2022 was RMB33.2899 million accounting for 11.42% of the estimate for 2022.

Reason for any significant

difference between the transaction

N/A

price and the market reference

price (if applicable)

2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests

□ Applicable □ Not applicable

Estimat

Book

ed Transac

Content value of

value of Transac tion

of the

Related Related the tion Settlem gains Date of Disclos

Related related Pricing transfer

relation party transfer price ent and disclos ure

party party policy red

ship name red (RMB’ method losses ure index

transact assets

assets 0000) (RMB’

ion (RMB’

(RMB’ 0000)

0000)

0000)

Refer to

the

valuatio

n in the

Valuati

on

Report

on the

Valuati Announ

on cement

Project

on

The in

Comple

Compa which

ny Foshan tion of

acquire Electric Transfe

Rising

Guangd d al and r of

Group

ong 46260 Lightin

is the Assets

Rising 021 g Co. 50099.actual Equity 25 in a

Holdin shares Ltd. 27824. 60- 53245. 1364.3

controll acquisit Cash Februar Major

gs of Plans to

er of ion 28 55974. 28 7

Group Nation Purchas y 2022 Asset

the 63

Co. Star e Acquisi

Compa

Ltd. Optoele 52051 tion

ny

ctronics 945 disclose

held by Shares d on

Rising of

http://w

Group Foshan

Nation ww.cni

Star nfo.co

Optoele m.cn/

ctronics

Co.Ltd.Held by

Guangd

ong

Rising

Holdin

61Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

gs

Group

Co.Ltd.and

Guangd

ong

Rising

Finance

Holdin

g Co.Ltd.issued

by

China

United

Internat

ional

Apprais

al

Consult

ing Co.Ltd.and

shall be

determi

ned by

both

parties

through

negotiat

ion

Refer to

the

valuatio

n in the

Valuati

on

Report

on the Announ

Valuati cement

on on

The

Project

Compa Comple

in

ny tion of

which

acquire Transfe

Rising Foshan

d r of

Guangd Capital Electric

57919

ong is a al and Assets

246272.6

Rising wholly- Equity Lightin 25 in a

shares 5-

Capital owned acquisit g Co. 3483.7 6666.5 Cash Februar Major

of

Investm subsidi ion Ltd. 7008.2

Nation y 2022 Asset

ent Co. ary of Plans to 3

Star Acquisi

Ltd. Rising Purchas

Optoele tion

Group e

ctronics

52051 disclose

held by

945 d on

Rising

Shares http://w

Capital

of ww.cni

Foshan nfo.co

Nation

m.cn/

Star

Optoele

ctronics

Co.Ltd.Held by

Guangd

62Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

ong

Rising

Holdin

gs

Group

Co.Ltd.and

Guangd

ong

Rising

Finance

Holdin

g Co.Ltd.issued

by

China

United

Internat

ional

Apprais

al

Consult

ing Co.Ltd.and

shall be

determi

ned by

both

parties

through

negotiat

ion

The

Compa Announ

ny cement

acquire

on

d 100%

of Comple

equity tion of

Guangd Electro of Value Transfe

ong nics Sigma of r of

Electro Group (holdin shares Assets

nics is a g of 86372.Equity 25 in a

Informa wholly- 79753 Nation 47969. 55- 91798.acquisit Cash Februar Major

tion owned 050 Star

ion 53 96501. 02

Industr subsidi shares Optoele y 2022 Asset 19

y ary of of ctronics Acquisi

Group Rising Nation held by tion

Ltd. Group Star Sigma disclose

Optoele d on

ctronics

http://w

) held

by ww.cni

Electro nfo.co

nics m.cn/

Group

Reasons for considerable differences

between the transaction price and the

None

book value or estimated value (if

applicable)

Upon the acquisition the Company and its wholly-owned subsidiary combined holds

Impact on the Company's operating a total of 132819895 shares in NationStar accounting for 21.48% of NationStar’s

63Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

results and financial conditions total share capital. As such the Company has become the controlling shareholder of

NationStar and Sigma which have been included in the Company’s consolidated

financial statements. During the Reporting Period NationStar and Sigma combined

increased the Company’s operating revenue net profit attributable to the Company as

the parent total assets and equity attributable to the Company as the parent by

RMB1630 million RMB13.6437 million RMB5237 million and RMB5.1575

million respectively.The actual performance during the

Reporting Period if the related-party

N/A

transaction is conditioned on the

performance.

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 Ending

maximum Interest rate Total Total

Related party Relationship balance balance

limits range deposited in withdrawn

(RMB’0000) (RMB’0000)

(RMB’0000) (RMB’0000) (RMB’0000)

Guangdong Controlled

Rising by the same 0.35%-

12000088648.74227604.43270726.3545526.82

Finance Co. controlling 3.30%

Ltd. shareholder

Loan business:

N/A

Credit or other financial business:

Total amount Actual amount

Related party Relationship Type of business

(RMB’0000) (RMB’0000)

Guangdong Rising Controlled by the same

Credit granting 100000 0

Finance Co. Ltd. controlling shareholder

64Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

6. Transactions with Related Parties by Finance Company Controlled by the Company

□ Applicable □ Not applicable

No finance company controlled by the Company was involved in making deposits borrowing credit granting or

any other financial business with any related party.

7. Other Major Related-Party Transactions

□ Applicable □ Not applicable

1. Other non-continuing related-party transactions

Transaction

Relationship Disclosu

Related Type of Specific Pricing amount Method of Disclosure

with the re

party transaction transaction principle (RMB’000 settlement date

Company website

0)

Purchasing Bank

Guangdong products and 9 July 2021

Under same transfers www.cni

Zhongnan receiving Receiving Market and 12

actual 4224.71 or bank nfo.com.Construction labor service labor service price March

controller cn

Co. Ltd. from related acceptance 2022

party notes

Purchasing

Guangdong Bank

products and

Yixin Under same transfers www.cni

receiving Receiving Market 6 May

Changcheng actual 1454.35 or bank nfo.com.labor service labor service price 2021

Construction controller cn

from related acceptance

Group

party notes

www.cni

nfo.com.Guangdong Purchasing Bank cn

products and (announ

Zhongren Under same transfers 1

receiving Receiving Market cement

Group actual 724.26 or bank December

labor service labor service price of

Construction controller 2020 from related acceptance subsidiar

Co. Ltd. party notes y

NationSt

ar)

Purchasing Bank

Shenzhen products and

Under same transfers

Yuepeng receiving Receiving Market

actual 47.08 or bank N/A

Construction labor service labor service price controller

from related acceptance Co. Ltd.party notes

2. The Company put out to tender the EPC project for the smart LED plants 1~3 at the Gaoming production

base in November 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 RMB129991380. Guangdong Yixin Changcheng Construction

Group Co. Ltd. is a tier-2 wholly owned subsidiary of Guangdong Rising Holdings Group Co. Ltd. which is

the controlling shareholder of the Company. The Company had a related-party transaction regarding the "EPC

65Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

project for the smart LED plants 1~3 at the Gaoming production base of Foshan Electrical and Lighting Co.Ltd." won by the consortium of Guangdong Yixin Changcheng Construction Group Co. Ltd. in accordance

with relevant regulations.

3. The Company put out to tender the EPC project for the plant and ancillary facilities at Mei’an High-tech

Zone Hainan Province of Fozhao (Hainan) Technology Co. Ltd. in January 2022. 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

RMB179051600. Guangdong Zhongnan Construction Co. Ltd. is a tier-2 wholly owned subsidiary of

Guangdong Rising Holdings Group Co. Ltd. which is the controlling shareholder of the Company. The

Company had a related-party transaction regarding the "EPC project for the plant and ancillary facilities at

Mei’an High-tech Zone Hainan Province of Fozhao (Hainan) Technology Co. Ltd." won by the consortium of

Guangdong Zhongnan Construction Co. Ltd. in accordance with relevant regulations.Index to the current announcement about the said related-party transaction disclosed:

Title of announcement Disclosure date Disclosure website

Announcement on a Related-Party

28 January 2022 www.cninfo.com.cn

Transaction Due to a Call for Public Bids

Announcement on a Related-Party

12 March 2022 www.cninfo.com.cn

Transaction Due to a Call for Public Bids

XII 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

Details of leases:

Lease

Purp

Lessor Lessee Leased asset amount Start date End date

ose

(RMB)

Foshan Hi-Tech 1846.81m2 (reserve land for road in planning Empl

NationS 121890.0

Industries zone) east to Foshan–Kaiping Expressway 2021-12-2 2023-12-1 oyee

tar 0/year

Development north to Jihua First Road and west to parki

66Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Company NationStar Phase II in Chancheng District ng

Foshan City space

Rooms 707 709 711 713 715 and 717

Guangdong Great New

(240m2 in total) on 7/F Great Wall Building 230400.0 Offic

Wall Building Electron 2021-12-16 2022-12-15

4-8 Siyouxinma Road Yuexiu District 0/year e

Co. Ltd. ics

Guangzhou City

Guangdong Great New Room 710 (38m2 in total) on 7/F Great Wall

36936.00/ Offic

Wall Building Electron Building 4-8 Siyouxinma Road Yuexiu 2022-5-16 2023-5-15

year e

Co. Ltd. ics District Guangzhou City

Exhibition Hall 2612 (111.35m2) on 26/F

193565.7 Offic

Wu Changqing FSL Tower C Building 2 Courtyard 58 Xinhua 2021-1-1 2022-12-31

6/year e

West Street Tongzhou District Beijing

Xiongxing

Village (Datang

and Hongnidun) 46.227 mu in Xiongxing Village (Datang and 369816.0 Offic

FSL 2007-8-1 2022-7-30

Wuzhuang Hongnidun) 0/year e

Village

Committee

Xiongxing

Village (Jintang

and Damiao) 10071.68/ Offic

FSL 2.162 mu in Xiongxing Village (Malutang) 2004-7-1 2022-7-30

Wuzhuang year e

Village

Committee

Zhuangbulin

Village

1365360/ Offic

Wuzhuang FSL 170.67 mu in Zhuangbulin Village 2008-07-01 2023-06-30

year e

Village

Committee

Zhuangbuliang

Village

524336.0 Offic

Wuzhuang FSL 65.542 mu in Zhuangbuliang Village 2008-07-01 2023-06-30

0/year e

Village

Committee

Rongxing Village

Wuzhuang 273744.0 Offic

FSL 34.218 mu in Rongxing Village 2008-07-01 2023-06-30

Village 0/year e

Committee

Shenzhen Zhongshan Flower Lamp Post-sales

Fenghua Warehouse (2/F Tower B 12 Fuqing Second 180000.0 Offic

FSL 2020-12-01 2023-11-30

Logistics Co. Road Yongxing Industrial Zone Henglan 0/year e

Ltd. Town Zhongshan City)

Shenzhen

Zhongshan Warehouse (Plant 6 Yongyi Sixth

Fenghua 1324800. Offic

FSL Road Yongxing Industrial Zone Henglan 2021-10-01 2027-09-30

Logistics Co. 00/year e

Town Zhongshan City)

Ltd.Guangxi Liuzhou

Empl

Dongcheng Liuzhou

600033.6 oyee

Investment Guige 5-19/F Tower 5 Anhe Huating 2021-11-09 2022-11-08

0 /year dormi

Development Lighting

tory

Group Co. Ltd.Guangxi Liuzhou

Empl

Dongcheng Liuzhou

80004.48 oyee

Investment Guige 20-21/F Tower 5 Anhe Huating 2021-11-01 2022-10-30

/year dormi

Development Lighting

tory

Group Co. Ltd.Guangxi Liuzhou Liuzhou 80004.48 Empl

22-23/F Tower 5 Anhe Huating 2022-04-22 2023-04-21

Dongcheng Guige /year oyee

67Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Investment Lighting dormi

Development tory

Group Co. Ltd.Guangxi Liuzhou

Empl

Dongcheng Liuzhou

40002.24 oyee

Investment Guige 24/F Tower 5 Anhe Huating 2021-09-01 2022-08-31

/year dormi

Development Lighting

tory

Group Co. Ltd.Guangxi Liuzhou

Empl

Dongcheng Liuzhou

5661.12 oyee

Investment Guige Room 1705 Tower 7 Anhe Huating 2022-05-23 2023-05-22

/year dormi

Development Lighting

tory

Group Co. Ltd.Guangxi Liuzhou

Empl

Dongcheng Liuzhou

4473.60 oyee

Investment Guige Room 803 Tower 10 Anhe Huating 2021-09-01 2022-08-31

/year dormi

Development Lighting

tory

Group Co. Ltd.Guilin CEKE 5/F Scientific Research Building

Liuzhou

Communication Information Industry Land Lot D-04 23657.16

Guige 2020-08-01 2022-07-31

Equipment Co. Chaoyang Village Qixing District Guilin /year Offic

Lighting

Ltd. City e

Stora

ge of

GAC Business Liuzhou

223496.1 finish

Logistics Co. Guige GAC Business Logistics Warehouse 2021-07-01 2022-06-30

6 /year ed

Ltd. Lighting

produ

cts

Used Car Export Headquarters Base south to

Qingdao Free

Guihua First Road east to Guihua Second Distri

Trade

Qingdao Road north to Guihua Third Road and west 947611.1 butio

International 2022-01-01 2022-12-31

Guige to Guihua Fourth Road Free Trade Town 0 /year n

Logistics Co.Prefecture Qianwan Bonded Port Zone center

Ltd.Qingdao City

Ware

Kunshan Yuanan 280m2 (E-1 Warehouse 3 Fengshu Bishan

Nanning housi

Logistics Co. Logistics Park) at 992 Biqing North Road 57120.00

Liaowan 2021-05-01 2024-04-30 ng of

Ltd. (Bishan Biquan Street Bishan District Chongqing /year

g mater

branch) City

ials

Changan Nanning Ware

Minsheng APLL Liaowan housi

100m2 at 5 Jiaodao East Avenue Doudian 54000.00

Logistics Co. g 2021-01-01 2022-12-31 ng of

Town Fangshan District Beijing /year

Ltd. (Beijing mater

branch) ials

Ware

Hebei Haiji Road Nanning housi

200m2 at 26 Jiaodao West Avenue Doudian 91584.00

Transport Service Liaowan 2022-08-01 2023-07-31 ng of

Town Fangshan District Beijing /year

Co. Ltd. g mater

ials

Changan Nanning Ware

Minsheng APLL Liaowan housi

100 m2 at 266 Changkong Road Shuangfeng 42000.00

Logistics Co. g 2022-01-01 2023-12-31 ng of

Street Yubei District Chongqing City /year

Ltd. (Yubei mater

branch) ials

Ware

Nanning 270 m2 at 200 meters south to the junction of

Hefei Shicheng 87480.00 housi

Liaowan Dabieshan Road and Huolong Road Shushan 2021-12-01 2022-12-01

Storage Co. Ltd. /year ng of

g District Hefei City

mater

68Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

ials

Changan Nanning Ware

Minsheng APLL Liaowan 700 m2 at 2 Xiangyuan Road Chang’an housi

193200.0

Logistics Co. g Industrial Park Dingqu Road Dingzhou City 2021-01-01 2022-12-31 ng of

0 /year

Ltd. (Hebei Hebei Province mater

branch) ials

Ware

Chongqing

Nanning housi

Sumisho Yunxin 200 m2 within Yudong Dajiang Factory 67920.00

Liaowan 2021-12-01 2022-11-30 ng of

Logistics Co. Banan District Chongqing City /year

g mater

Ltd.ials

Nanning Ware

Liuzhou 800m2 opposite the Nanshuangying Industrial

Liaowan housi

Yuanhong Car Park Guandong Road Guantang Industrial

g 2022-01-01 2022-12-31 ng of

Transport Co. Park Liudong New District Liuzhou City

211200.0 mater

Ltd. Guangxi Province

0 /year ials

Liaoning Anji- Ware

lianhe Nanning 139m2 at West Gate 3 of Dongfeng Liuqi 6 housi

37687.44

Automotive Liaowan Boyuan Avenue Yufeng District Liuzhou 2022-01-01 2022-12-31 ng of

/year

Logistics Co. g City Guangxi Province mater

Ltd. ials

Logis

Chongqing Chongqi 3709.86m2 workshop space on 1/F of the

tics

Jinshun Auto ng plant of Chongqing Jinshun Company 10 1001664.

2020-11-01 2023-10-31 wareh

Parts Technology Guinuo Baoyun Road Longxing Town Yubei 00/year

ousin

Co. Ltd. Lighting District Chongqing City

g

Logis

Chongqing Chongqi 817m2 workshop space on 2/F of the plant of

tics

Jinshun Auto ng Chongqing Jinshun Company 10 Baoyun 147060.0

2022-04-01 2023-10-30 wareh

Parts Technology Guinuo Road Longxing Town Yubei District 0/year

ousin

Co. Ltd. Lighting Chongqing City

g

Logis

Chongqing Chongqi 400m2 workshop space on 2/F of the plant of

tics

Jinshun Auto ng Chongqing Jinshun Company 10 Baoyun 72000.00/

2022-05-01 2023-10-30 wareh

Parts Technology Guinuo Road Longxing Town Yubei District year

ousin

Co. Ltd. Lighting Chongqing City

g

Lease items with a greater-than-10% impact on the Company’s gross profit during the Reporting Period:

□ Applicable □ Not applicable

No such cases in the Reporting Period.

2. Major guarantees

□ Applicable □ Not applicable

Unit: RMB'0000

Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)

Disclosure

Actual

date of the Type

Line of Actual guaran Collater Counter Term of Having Guarantee

guarantee of

Obligor guarante occurren tee al (if guarantee guarante expired for a related

line guaran

e ce date amoun any) (if any) e or not party or not announceme tee

t

nt

69Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Total actual

Total approved line for amount of such

such guarantees in the guarantees in

Reporting Period (A1) the Reporting

Period (A2)

Total actual

Total approved line for balance of such

such guarantees at the guarantees at

end of the Reporting the end of the

Period (A3) Reporting

Period (A4)

Guarantees provided by the Company as the parent for its subsidiaries

Disclosure

Actual

date of the Type

Line of Actual guaran Collater Counter Term of Having Guarantee

guarantee of

Obligor guarante occurren tee al (if guarantee guarante expired for a related

line guaran

e ce date amoun any) (if any) e or not party or not announceme tee

t

nt

Total actual

Total approved line for amount of such

such guarantees in the guarantees in

Reporting Period (B1) the Reporting

Period (B2)

Total actual

Total approved line for balance of such

such guarantees at the guarantees at

end of the Reporting the end of the

Period (B3) Reporting

Period (B4)

Guarantees provided between subsidiaries

Disclosure

Actual

date of the Type

Line of Actual guaran Collater Counter Term of Having Guarantee

guarantee of

Obligor guarante occurren tee al (if guarantee guarante expired for a related

line guaran

e ce date amoun e or not party or not

announceme tee any) (if any)

t

nt

Foshan

NationS

tar 12 June

20 Joint-

Semico 30000.0 12 June 1000 2018-27

September liabilit None None Yes No

nductor 0 2018 0.00 May

2017 y

Technol 2022

ogy Co.Ltd.Nanning 30

Liaowa Decemb

1 Joint-

ng Auto 24 June 20000.0 4770. er 2019-

February liabilit None None Yes No

Lamp 2021 0 00 1

2021 y

Co. Februar

Ltd. y 2022

Liuzhou 30

Guige Decemb

26 Joint-

Lighting 1000. er 2019-

January liabilit None None Yes No

Technol 00 26

2021 y

ogy Co. January

Ltd. 2022

Liuzhou 24 June 15000.0

30

Guige 2021 0

Joint- Decemb

Lighting 21 April 2000.liabilit None None er 2019- Yes No

Technol 2021 00

y 21 April

ogy Co.

2022

Ltd.Liuzhou 22 April 2000. Joint- 30

None None Yes No

Guige 2021 00 liabilit Decemb

70Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Lighting y er 2019-

Technol 22 April

ogy Co. 2022

Ltd.Nanning

Liaowa

ng Auto

Lamp

Co.Ltd.、

23 June

Liuzhou

Guige

24 June April

Foreshi 11

2021、19 4500. Secure 2022 25

ne 4500.00 February Yes None No No

January 00 d April

Technol 2022

20222022-31

ogy Co.Decemb

Ltd.、

er 2025

Liuzhou

Guige

Lighting

Technol

ogy Co.Ltd.Nanning

Liaowa 15 June

11

ng Auto 24 June 5000. Secure 2020-15

8100.00 February Yes None No No

Lamp 2021 00 d June

2022

Co. 2023

Ltd.Nanning

Liaowa

ng Auto

Lamp

Co.Ltd.、 30

Liuzhou Decemb

Guige er 2019-

Foreshi 23 April

7 May 1500. Secure

ne Yes None 2022 24 No No

2022 00 d

Technol April

ogy Co. 2022-31

Ltd.、 Decemb

Liuzhou er 2025

Guige

Lighting

Technol

24 June

ogy Co.

2021、19

Ltd. 9100.00

January

Nanning

2022

Liaowa

ng Auto

Lamp

Co.

30

Ltd.、

Decemb

Liuzhou

er 2019-

Guige

23 April

Foreshi 7 May 2000. Secure

Yes None 2022 24 No No

ne 2022 00 d

April

Technol

ogy Co.Decemb

Ltd.、

er 2025

Liuzhou

Guige

Lighting

Technol

ogy Co.

71Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Ltd.Total actual

Total approved line for amount of such

such guarantees in the 15000.00 guarantees in 32770.00

Reporting Period (C1) the Reporting

Period (C2)

Total actual

Total approved line for balance of such

such guarantees at the guarantees at

15000.0013000.00

end of the Reporting the end of the

Period (C3) Reporting

Period (C4)

Total guarantee amount (total of the three kinds of guarantees above)

Total actual

Total guarantee line guarantee

approved in the amount in the

15000.0032770.00

Reporting Period Reporting

(A1+B1+C1) Period

(A2+B2+C2)

Total actual

guarantee

Total approved

balance at the

guarantee line at the

15000.00 end of the 13000.00

end of the Reporting

Reporting

Period (A3+B3+C3)

Period

(A4+B4+C4)

Total actual guarantee amount (A4+B4+C4)

2.42%

as % 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. (referred to as “Chongqing Guinuo”) Qingdao Guige

Lighting Technology Co. Ltd. (referred to as “Qingdao Lighting”) Liuzhou Guige Foreshine Technology Co.Ltd. (referred to as “Liuzhou Foreshine”) and Liuzhou Guige Lighting Technology Co. Ltd. (referred to as

“Liuzhou Lighting”) are all wholly-owned subsidiaries of Nanning Liaowang Auto Lamp Co. Ltd. (referred to

as “Nanning Liaowang”). As of 30 June 2022 guarantees between Nanning Liaowang and its subsidiaries and

collaterals are set out in “3. Other” under “XIV Commitments and contingencies” in Part X of this Report.

3. Cash Entrusted for Wealth Management

□ Applicable □ Not applicable

Unit: RMB’0000

Provision for

Unrecovered

Type Funding source Amount Undue amount impairment on

overdue amount

unrecovered

72Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

overdue amount

Bank financial

Self-owned funds 37191 6191 0 0

products

Total 37191 6191 0 0

High-risk wealth management transactions with a significant single amount or with low security low liquidity

or no principal protection:

□ Applicable □ Not applicable

Unit: RMB’0000

Inde

x to

trans

Typ Actu Pres actio

Ann Allo

e of al Rec crib Plan n

ualiz wan

weal Dete Exp gain eipt/ ed for sum

Sour ed ce

Typ th Begi Use rmin ecte /loss pay proc mor mar

ce Endi yiel for

Trus e of man Prin nnin of atio d in men edur e y

of ng d imp

tee trust age cipal g prin n of yiel Rep t of e trans and

prin date rate airm

ee men date cipal yiel d (if ortin such exec actio othe

cipal for ent

t d any) g gain uted n or r

refer (if

prod Peri /loss or not infor

ence any)

uct od not mati

on

(if

any)

Prin Subj

Fosh

cipal ect

an

- to

bran prot Self- 5 21 actu To

ch ecte own Febr

Ban 200 July Othe al 2.30 64.8 62.3 be

of d ed uary Yes Yes

k

Ping with

0 fund 202 r inve % 6 3 recei202

float s 2 stme ved An 1

ing nt

Ban

yiel peri

k d od

Subj

Fosh Prin

ect

an cipal

- to bran Self- 11

prot 12 actu To ch own Apri

Ban ecte 300 July Othe al 2.30 21.2 18.5 be

of ed l Yes Yes

k d 0 fund 202 r inve % 6 5 receiBan with 202

s 2 stme ved k of float 2

nt

Chin ing

peri

a yiel

d od

Not

prin

cipal 3 Cred Wit

Indu - Self- Sept 22 itors hdra To

stria prot own

Ban 119 emb July right wal 3.00 50.7 be

l ecte ed Yes Yes

k

d 1 fund er 202 s at % 8 receiBan

202 2 asset any ved

k with s

float 1 s time

ing

yiel

d

Total 619 -- -- -- -- -- -- 136. 80.8 -- 0 -- -- --

73Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

198

Situation where the principal is expectedly irrecoverable or an impairment may be incurred:

□ Applicable □ Not applicable

4. Other Significant Contracts

□ Applicable □ Not applicable

No such cases in the Reporting Period.XIII Other Significant Events

□ Applicable □ Not applicable

Retirement of shares:

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 deducting the 13 million A shares used for the equity incentive plan the remaining 18952995 repurchased

A shares and 18398512 repurchased B shares would be retired totalling 37351507 shares. On 8 February 2022

the above-mentioned shares were retired and the total share capital of the Company was changed from

1399346154 shares to 1361994647 shares.

XIV Significant Events of Subsidiaries

□ Applicable □ Not applicable

1. 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 RMB183855895 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 30 June 2022 Nanjing Fozhao

74Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

has received 30% of the compensation that is RMB55160000.00 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.

2. Cancellation of FSL LIGHTING GmbH

On 22 October 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.

3. Acquisition of NationStar and Sigma

The Company has completed in February 2022 the major asset restructuring involving the acquisition of a 21.32%

stake held by Rising Group and its acting-in-concert parties in NationStar Optoelectronics. Upon the acquisition

the Company eventually holds a 21.48% interest in NationStar. NationStar and Sigma have become majority-owned subsidiaries of the Company. For further information see “2. Business combinations involving entitiesunder common control” under Note VIII to the financial statements.

75Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

1.

1316919--1076586

Restricted 0.94% 0.79%

6240333224033324

shares

1.1

Shares

held by

the state

1.2

Shares

held by - -

24155390.17%10.00%

state-own 2415538 2415538

legal

person

1.3

Shares

held by

18260250.13%122061220618382310.13%

other

domestic

investors

Among

which:

shares

held by 1338434 0.10% 1338434 0.10%

domestic

legal

person

Shares

held by

domestic 487591 0.03% 12206 12206 499797 0.04%

natural

person

1.4

Oversea

89276320.64%89276320.66%

sharehold

ings

Among

76Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

which:

shares

held by

oversea

legal

person

Shares

held by

oversea 8927632 0.64% 8927632 0.66%

natural

person

2.--

13861761351228

Unrestrict 99.06% 3494817 3494817 99.21%

958783

ed shares 5 5

2.1 RMB - -

10730381056488

ordinary 76.68% 1654966 1654966 77.57%

507844

shares 3 3

2.2

Domestic - -

31313842947399

ally listed 22.38% 1839851 1839851 21.64%

5139

foreign 2 2

shares

2.3

Oversea

listed

foreign

shares

2.4 Other

--

3. Total 1399346 1361994

100.00%37351503735150100.00%

shares 154 647

77

Reasons for share changes:

□ Applicable □ Not applicable

1. During the Reporting Period the Company has deregistered a total of 37351507 shares including the

repurchased A shares of 18952995 and the repurchased B shares of 18398512 resulting in the decrease in

total share capital of the Company of 37351507 shares.

2. During the Reporting Period 12206 restricted shares were added given the locking as stipulated of the

shares held by some directors and senior management personnel who had left the post.

3. 2415538 shares restricted due to the reform of shareholder structure were lifted into non-restricted during

the Reporting Period.Approval of share changes:

□ Applicable □ Not applicable

77Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

1. The Company held the 26th Meeting of the 9th 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.Meanwhile the Board of Directors agreed to deregister a total of 37351507 shares including the repurchased

A shares of 18952995 and the repurchased B shares of 18398512. On 8 February 2022 the above-mentioned

shares for cancellation were canceled and the total share capital of the Company was changed from

1399346154 shares to 1361994647 shares.

2. During the Reporting Period the application for the addition of 12206 restricted shares given the locking as

stipulated of the shares held by some directors and senior management personnel who had left the post was

approved by Shenzhen Stock Exchange and China Securities Depository and Clearing Corporation Limited

(CSDC).

3. The lifting of 2415538 shares restricted due to the reform of shareholder structure into non-restricted

during the Reporting Period was approved by Shenzhen Stock Exchange and CSDC.Transfer of share ownership:

□Applicable □ Not applicable

Progress on any share repurchase:

□Applicable □ Not applicable

Progress on reducing the repurchased shares by means of centralized bidding:

□Applicable □ Not applicable

Effects of share changes on the basic and diluted earnings per share equity per share attributable to the

Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting

period respectively:

□Applicable □ Not applicable

Other information that the Company considers necessary or is required by the securities regulator to be

disclosed:

□Applicable □ Not applicable

2. Changes in Restricted Shares

□ Applicable □ Not applicable

Unit: share

Restricted Restricted Restricted

Restricted Restricted

Name of the shares amount shares shares amount Restricted

shares relieved shares relieved

shareholders at the period- increased of the at the period- reasons

of the period date

begin period end

Foshan Branch 2415538 2415538 0 0 Pre-IPO 26 April 2022

78Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

of ABC restricted

shares

Shares of the

Company held

by him cannot

be transferred

within six

Locked for months after

Cheng Ke 8662 0 2888 11550 resignation of resignation and

director relevant

provisions shall

be carried out

when the lock-

in period

expires

Shares of the

Company held

by him cannot

be transferred

within six

Locked for

months after

resignation of

Xu Xiaoping 27952 0 9318 37270 resignation and

senior

relevant

management

provisions shall

be carried out

when the lock-

in period

expires

Total 2452152 2415538 12206 48820 -- --

II. Issuance and Listing of Securities

□Applicable □ Not applicable

III. Total Number of Shareholders and Their Shareholdings

Unit: share

Total number of ordinary Total number of preference shareholders

shareholders at the period- 68196 with resumed voting rights at the period- 0

end end (if any) (see Note 8)

Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders

Total Increase/de Shares in pledge marked

Non-

Shareholdi ordinary crease in Restricted or frozen

Name of Nature of restricted

ng shares held the ordinary

shareholder shareholder ordinary Status of

percentage at the Reporting shares held Amount

shares held shares

period-end Period

Hongkong

Wah Shing Foreign

1884964318849643

Holding legal 13.84% In pledge 92363251

Company person 0 0

Limited

Prosperity

Foreign

Lamps & 14693485 14693485

legal 10.89%

Component

person 7 7

s Limited

Guangdong State- 9.01% 12269424 12269424 In pledge 32532815

79Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Electronics owned 6 6

Informatio legal

n Industry person

Group Ltd.Guangdong

State-

Rising

owned

Holdings 6.10% 83130898 83130898

legal

Group Co.person

Ltd.Essence

Internation

al Foreign

Securities legal 2.65% 36138459 552422 36138459

(Hong person

Kong) Co.Ltd.Central

State-

Huijin

owned

Asset 2.43% 33161800 33161800

legal

Manageme

person

nt Co. Ltd.Rising

Foreign

Investment

legal 1.87% 25482252 25482252

Developme

person

nt Limited

China

Merchants State-

Securities owned

1.06%1444830714448307

(Hong legal

Kong) Co. person

Ltd

Foreign

Zhuang

natural 0.87% 11903509 8927632 2975877

Jianyi

person

DBS

VICKERS

Foreign

(HONG

legal 0.72% 9744456 9744456

KONG)

person

LTD A/C

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

Related or acting-in-

Rising Investment Development Limited are acting-in-concert parties; and Prosperity Lamps &

concert parties among the

Components Limited and Zhuang Jianyi are acting-in-concert parties. Apart from that it is unknown

shareholders above

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 Naught

with voting rights and

giving up voting rights

Special account for share

repurchases (if any) As of the period-end the Company had 13000000 A-shares of it in its special account for share

among the top 10 repurchases accounting for 0.95% of the Company’s total share capital.shareholders (see note 11)

Top 10 unrestricted shareholders

Type of shares

Name of shareholder Unrestricted shares at the Period-end

Type Shares

80Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

RMB-

Hongkong Wah Shing

denominate 18849643

Holding Company 188496430

d ordinary

Limited 0

stock

RMB-

Prosperity Lamps & denominate 14693485

146934857

Components Limited d ordinary 7

stock

RMB-

Guangdong Electronics

denominate 12269424

Information Industry 122694246

d ordinary

Group Ltd. 6

stock

RMB-

Guangdong Rising denominate

8313089883130898

Holdings Group Co. Ltd. d ordinary

stock

Domestical

Essence International

ly listed

Securities (Hong Kong) 36138459 36138459

Co. Ltd. foreign

stock

RMB-

Central Huijin Asset denominate

3316180033161800

Management Co. Ltd. d ordinary

stock

Domestical

Rising Investment ly listed

2548225225482252

Development Limited foreign

stock

Domestical

China Merchants

ly listed

Securities (Hong Kong) 14448307 14448307

Co. Ltd foreign

stock

Domestical

DBS VICKERS (HONG

ly listed

KONG) LTD A/C 9744456 9744456

CLIENTS foreign

stock

RMB-

denominate

Zhang Shaowu 9600050 9600050

d ordinary

stock

Related or acting-in-

concert parties among the Among the top 10 unrestricted ordinary shareholders Hong Kong Wah Shing Holding Company

top 10 unrestricted Limited Guangdong Rising Holdings Group Co. Ltd. Guangdong Electronics Information Industry

ordinary shareholders as Group Ltd. and Rising Investment Development Limited are acting-in-concert parties; Apart from

well as between the top 10 that it is unknown whether there is among the top 10 shareholders any other related parties or

unrestricted ordinary acting-in-concert parties as defined in the Administrative Measures for the Acquisition of Listed

shareholders and the top Companies.

10 ordinary shareholders

Top 10 ordinary

shareholders involved in

None

securities margin trading

(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

No such cases in the Reporting Period.

81Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

IV Change in Shareholdings of Directors Supervisors and Senior Management

□Applicable □ Not applicable

No changes occurred to the shareholdings of the directors supervisors and senior management in the Reporting

Period. See the 2021 Annual Report for more details.V Change of the Controlling Shareholder or the Actual Controller

Change of the controlling shareholder in the Reporting Period

□Applicable □ Not applicable

No such cases in the Reporting Period.Change of the actual controller in the Reporting Period

□Applicable □ Not applicable

No such cases in the Reporting Period.

82Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part VIII Preference Shares

□Applicable □ Not applicable

No preference shares in the Reporting Period.

83Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part IX Bonds

□Applicable □ Not applicable

84Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Part X Financial Statements

I Auditor’s Report

Whether the interim report has been audited?

□Yes □ No

The interim report of the Company has not been audited.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.

30 June 2022

Unit: RMB

Item 30 June 2022 1 January 2022

Current assets:

Monetary assets 1839439636.83 2381911655.35

Settlement reserve

Interbank loans granted

Held-for-trading financial assets 64068462.40 348248125.61

Derivative financial assets

Notes receivable 1413792273.37 1690356491.64

Accounts receivable 2186178543.84 1981538844.26

Accounts receivable financing

Prepayments 38244161.07 33474104.32

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract reserve

Other receivables 31235165.53 37523072.02

Including: Interest receivable

Dividends receivable

Financial assets purchased under resale

agreements

Inventories 1819669430.66 1969998988.39

Contract assets 8089556.63 8561303.10

Assets held for sale 17147339.84 23831992.10

Current portion of non-current assets

Other current assets 54343517.04 125675148.17

Total current assets 7472208087.21 8601119724.96

Non-current assets:

Loans and advances to customers

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Long-term equity investments 180115189.99 181545123.09

Investments in other equity

1164717479.921504980024.07

instruments

Other non-current financial assets

85Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Investment property 42165255.37 43347824.34

Fixed assets 3337546197.41 3360339910.95

Construction in progress 1094362246.23 1087261052.63

Productive living assets

Oil and gas assets

Right-of-use assets 11363508.05 14126206.08

Intangible assets 364277890.38 368954162.34

Development costs

Goodwill 421831593.46 421831593.46

Long-term prepaid expense 174834483.73 152726512.56

Deferred income tax assets 79972630.78 82261788.58

Other non-current assets 49992676.97 499349770.41

Total non-current assets 6921179152.29 7716723968.51

Total assets 14393387239.50 16317843693.47

Current liabilities:

Short-term borrowings 65115000.00 226779997.01

Borrowings from the central bank

Interbank loans obtained

Held-for-trading financial liabilities 6544500.00 9367.37

Derivative financial liabilities

Notes payable 1607406305.48 2067111789.71

Accounts payable 2228681333.31 2429896658.92

Advances from customers 4959545.56 8106923.79

Contract liabilities 161528315.35 140228127.84

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 140988596.59 167784089.64

Taxes payable 77374922.57 90981474.60

Other payables 297828933.33 333128771.81

Including: Interest payable

Dividends payable 15646.07 15646.07

Handling charges and commissions

payable

Reinsurance payables

Liabilities directly associated with

assets held for sale

Current portion of non-current

30383518.7527600186.15

liabilities

Other current liabilities 9952101.27 10577082.29

Total current liabilities 4630763072.21 5502204469.13

Non-current liabilities:

Insurance contract reserve

Long-term borrowings 556590467.75

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities 7287442.67 8065560.58

Long-term payables

Long-term employee benefits payable

Provisions 18378155.88 17418343.01

Deferred income 108223263.15 116761570.35

Deferred income tax liabilities 252930119.39 280172789.59

Other non-current liabilities 11334.19 22653.46

Total non-current liabilities 943420783.03 422440916.99

86Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Total liabilities 5574183855.24 5924645386.12

Owners’ equity:

Share capital 1361994647.00 1399346154.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 7245971.54 994114567.16

Less: Treasury stock 82165144.15 250600874.54

Other comprehensive income 754018430.97 982972358.89

Specific reserve

Surplus reserves 86780516.19 741353347.96

General reserve

Retained earnings 3245999616.02 3119317423.25

Total equity attributable to owners of the

5373874037.576986502976.72

Company as the parent

Non-controlling interests 3445329346.69 3406695330.63

Total owners’ equity 8819203384.26 10393198307.35

Total liabilities and owners’ equity 14393387239.50 16317843693.47

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 30 June 2022 1 January 2022

Current assets:

Monetary assets 424568145.97 1017365290.91

Held-for-trading financial assets 304385804.11

Derivative financial assets

Notes receivable 66011888.67 72114026.44

Accounts receivable 1187803897.82 1058935664.33

Accounts receivable financing

Prepayments 10173470.35 9292256.82

Other receivables 447027739.63 511056231.24

Including: Interest receivable

Dividends receivable

Inventories 451972910.39 617905747.50

Contract assets 8089556.63 8561303.10

Assets held for sale

Current portion of non-current assets

Other current assets 3364413.79 36097001.14

Total current assets 2599012023.25 3635713325.59

Non-current assets:

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Long-term equity investments 2476746428.40 1243081889.11

Investments in other equity

1123657619.001474860785.15

instruments

Other non-current financial assets

Investment property 42165255.37 43347824.34

Fixed assets 556849101.34 576386630.08

Construction in progress 159339701.41 120514314.18

Productive living assets

Oil and gas assets

87Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Right-of-use assets 8374369.62 9827757.94

Intangible assets 121933831.47 123089721.51

Development costs

Goodwill

Long-term prepaid expense 30088478.45 31897595.21

Deferred income tax assets 30707247.51 31373123.07

Other non-current assets 12476726.67 460618564.04

Total non-current assets 4562338759.24 4114998204.63

Total assets 7161350782.49 7750711530.22

Current liabilities:

Short-term borrowings 127596999.82

Held-for-trading financial liabilities 6544500.00

Derivative financial liabilities

Notes payable 302876558.69 445480718.92

Accounts payable 895575614.41 949520447.82

Advances from customers 4571428.58 6857142.86

Contract liabilities 60532518.14 64120388.15

Employee benefits payable 36712883.94 51520068.31

Taxes payable 17175805.06 57207865.54

Other payables 190933919.17 223535108.76

Including: Interest payable

Dividends payable

Liabilities directly associated with

assets held for sale

Current portion of non-current

2561186.342800876.97

liabilities

Other current liabilities 6598016.36 5920593.62

Total current liabilities 1524082430.69 1934560210.77

Non-current liabilities:

Long-term borrowings 336484109.53

Bonds payable

Including: Preferred shares

Perpetual bonds

Lease liabilities 5813183.28 7026880.97

Long-term payables

Long-term employee benefits payable

Provisions

Deferred income

Deferred income tax liabilities 132200329.05 173532376.03

Other non-current liabilities

Total non-current liabilities 474497621.86 180559257.00

Total liabilities 1998580052.55 2115119467.77

Owners’ equity:

Share capital 1361994647.00 1399346154.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 17742717.33 22568665.93

Less: Treasury stock 82165144.15 250600874.54

Other comprehensive income 754235498.30 984695765.83

Specific reserve

Surplus reserves 300561517.94 741353347.96

Retained earnings 2810401493.52 2738229003.27

Total owners’ equity 5162770729.94 5635592062.45

Total liabilities and owners’ equity 7161350782.49 7750711530.22

Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan

88Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Person-in-charge of the Company’s accounting organ: Liang Yuefei

3. Consolidated Income Statement

Unit: RMB

Item H1 2022 H1 2021

1. Revenue 4348268999.31 3626200260.17

Including: Operating revenue 4348268999.31 3626200260.17

Interest income

Insurance premium income

Handling charge and

commission income

2. Costs and expenses 4084194362.54 3409104001.88

Including: Cost of sales 3588065798.35 3009499337.22

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 24369990.32 22743190.88

Selling expense 109839926.73 96772619.15

Administrative expense 177742698.77 139620767.72

R&D expense 208176593.76 144120095.18

Finance costs -24000645.39 -3652008.27

Including: Interest expense 6688232.76 2871203.53

Interest income 12905461.82 14130946.82

Add: Other income 37771447.80 33569233.15

Return on investment (“-” for loss) 19613744.86 5493482.75

Including: Share of profit or loss

650457.4037460.99

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 (“-”

-10766595.971929788.30

for loss)

Credit impairment loss (“-” for

-17052498.841681781.89

loss)

Asset impairment loss (“-” for

-23388143.98-23464653.80

loss)

Asset disposal income (“-” for

82362.191782280.34

loss)

3. Operating profit (“-” for loss) 270334952.83 238088170.92

Add: Non-operating income 8961693.96 3948332.41

Less: Non-operating expense 7844063.02 3694645.11

4. Profit before tax (“-” for loss) 271452583.77 238341858.22

Less: Income tax expense 41141912.01 43339378.75

5. Net profit (“-” for net loss) 230310671.76 195002479.47

5.1 By operating continuity

5.1.1 Net profit from continuing

230310671.76195002479.47

operations (“-” for net loss)

5.1.2 Net profit from discontinued

89Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

operations (“-” for net loss)

5.2 By ownership

5.2.1 Net profit attributable to

160664433.28122377552.60

owners of the Company as the parent

5.2.1 Net profit attributable to non-

69646238.4872624926.87

controlling interests

6. Other comprehensive income net of

-128025149.83-243003831.01

tax

Attributable to owners of the

-128036703.73-243003831.01

Company as the parent

6.1 Items that will not be

-128132332.34-242940301.27

reclassified to profit or loss

6.1.1 Changes caused by

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

-128132332.34-242940301.27

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

95628.61-63529.74

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 currency- 95628.61 -63529.74

denominated financial statements

6.2.7 Other

Attributable to non-controlling

11553.90

interests

7. Total comprehensive income 102285521.93 -48001351.54

Attributable to owners of the

32627729.55-120626278.41

Company as the parent

Attributable to non-controlling

69657792.3872624926.87

interests

8. Earnings per share

8.1 Basic earnings per share 0.1191 0.0907

8.2 Diluted earnings per share 0.1180 0.0899

Where business combinations under common control occurred in the current period the net profit achieved by the acquirees before

the combinations was RMB9568639.83 with the amount for the same period of last year being RMB89810090.36.Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan

Person-in-charge of the Company’s accounting organ: Liang Yuefei

4. Income Statement of the Company as the Parent

Unit: RMB

Item H1 2022 H1 2021

90Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

1. Operating revenue 1809179992.86 1797795292.73

Less: Cost of sales 1476364107.19 1485965900.74

Taxes and surcharges 10450725.11 11528913.49

Selling expense 60671112.08 58577327.98

Administrative expense 65659865.20 69674599.21

R&D expense 80982862.27 66804608.38

Finance costs -11830352.67 -3595436.39

Including: Interest expense 4427927.34

Interest income 3313721.07 7925093.81

Add: Other income 5635099.60 5739842.06

Return on investment (“-” for loss) 21542755.12 11964194.51

Including: Share of profit or loss

650457.4037460.99

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 (“-”

-10811400.001940000.00

for loss)

Credit impairment loss (“-” for

-9623686.252978976.42

loss)

Asset impairment loss (“-” for

-6552785.39-9907597.40

loss)

Asset disposal income (“-” for

1781700.24

loss)

2. Operating profit (“-” for loss) 127071656.76 123336495.15

Add: Non-operating income -667333.19 2012089.62

Less: Non-operating expense 4998457.51 226124.51

3. Profit before tax (“-” for loss) 121405866.06 125122460.26

Less: Income tax expense 15251135.30 18362006.98

4. Net profit (“-” for net loss) 106154730.76 106760453.28

4.1 Net profit from continuing

106154730.76106760453.28

operations (“-” for net loss)

4.2 Net profit from discontinued

operations (“-” for net loss)

5. Other comprehensive income net of

-129543043.34-242940301.27

tax

5.1 Items that will not be reclassified

-129543043.34-242940301.27

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

-129543043.34-242940301.27

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

91Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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 -23388312.58 -136179847.99

7. Earnings per share

7.1 Basic earnings per share

7.2 Diluted earnings per share

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 H1 2022 H1 2021

1. Cash flows from operating activities:

Proceeds from sale of commodities

4002503578.813946336085.43

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 145624893.13 93570819.45

Cash generated from other operating

119333795.3589817744.05

activities

Subtotal of cash generated from

4267462267.294129724648.93

operating activities

Payments for commodities and services 3065999967.63 2761223153.05

Net increase in loans and advances to

customers

Net increase in deposits in the central

bank and in interbank loans granted

Payments for claims on original

insurance contracts

Net increase in interbank loans granted

Interest handling charges and

commissions paid

Policy dividends paid

Cash paid to and for employees 702961459.58 622589181.75

Taxes paid 182912490.66 122117306.79

Cash used in other operating activities 165553443.03 177582001.14

Subtotal of cash used in operating

4117427360.903683511642.73

activities

Net cash generated from/used in 150034906.39 446213006.20

92Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

operating activities

2. Cash flows from investing activities:

Proceeds from disinvestment 502992240.66 315735017.52

Return on investment 21038833.14 454878942.50

Net proceeds from the disposal of fixed

assets intangible assets and other long- 232233.41 7762670.18

lived assets

Net proceeds from the disposal of

subsidiaries and other business units

Cash generated from other investing

activities

Subtotal of cash generated from

524263307.21778376630.20

investing activities

Payments for the acquisition of fixed

assets intangible assets and other long- 330641926.08 215505442.11

lived assets

Payments for investments 71695763.31 29402110.68

Net increase in pledged loans granted

Net payments for the acquisition of

subsidiaries and other business units

Cash used in other investing activities

Subtotal of cash used in investing

402337689.39244907552.79

activities

Net cash generated from/used in

121925617.82533469077.41

investing activities

3. Cash flows from financing activities:

Capital contributions received

Including: Capital contributions by

non-controlling interests to subsidiaries

Borrowings raised 687436000.00

Cash generated from other financing

53126214.001339606.80

activities

Subtotal of cash generated from

740562214.001339606.80

financing activities

Repayment of borrowings 309876000.00

Interest and dividends paid 159400451.54 36111859.97

Including: Dividends paid by

23912623.05

subsidiaries to non-controlling interests

Cash used in other financing activities 1062094428.42 304224485.91

Subtotal of cash used in financing

1531370879.96340336345.88

activities

Net cash generated from/used in

-790808665.96-338996739.08

financing activities

4. Effect of foreign exchange rates

19953587.60-8764472.98

changes on cash and cash equivalents

5. Net increase in cash and cash

-498894554.15631920871.55

equivalents

Add: Cash and cash equivalents

1886894463.371325464361.36

beginning of the period

6. Cash and cash equivalents end of the

1387999909.221957385232.91

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 H1 2022 H1 2021

1. Cash flows from operating activities:

Proceeds from sale of commodities

1647925557.331850655815.39

and rendering of services

93Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Tax rebates 66177691.70 63217537.03

Cash generated from other operating

49023640.1851058701.35

activities

Subtotal of cash generated from

1763126889.211964932053.77

operating activities

Payments for commodities and services 1182528555.48 1436749486.58

Cash paid to and for employees 279898010.00 314880615.57

Taxes paid 111471325.43 24295009.50

Cash used in other operating activities 63008054.83 110890242.14

Subtotal of cash used in operating

1636905945.741886815353.79

activities

Net cash generated from/used in

126220943.4778116699.98

operating activities

2. Cash flows from investing activities:

Proceeds from disinvestment 492992240.66 262773600.62

Return on investment 23125665.53 454663109.72

Net proceeds from the disposal of fixed

assets intangible assets and other long- 42771.45 1720784.40

lived assets

Net proceeds from the disposal of

subsidiaries and other business units

Cash generated from other investing

activities

Subtotal of cash generated from

516160677.64719157494.74

investing activities

Payments for the acquisition of fixed

assets intangible assets and other long- 59178832.68 53582153.85

lived assets

Payments for investments 1166664444.95 49402110.68

Net payments for the acquisition of

subsidiaries and other business units

Cash used in other investing activities

Subtotal of cash used in investing

1225843277.63102984264.53

activities

Net cash generated from/used in

-709682599.99616173230.21

investing activities

3. Cash flows from financing activities:

Capital contributions received

Borrowings raised 382336000.00

Cash generated from other financing

activities

Subtotal of cash generated from

382336000.00

financing activities

Repayment of borrowings 197016000.00

Interest and dividends paid 135641014.35

Cash used in other financing activities 220895890.55

Subtotal of cash used in financing

332657014.35220895890.55

activities

Net cash generated from/used in

49678985.65-220895890.55

financing activities

4. Effect of foreign exchange rates

15401360.65-7632408.62

changes on cash and cash equivalents

5. Net increase in cash and cash

-518381310.22465761631.02

equivalents

Add: Cash and cash equivalents

861826014.29803264792.72

beginning of the period

6. Cash and cash equivalents end of the

343444704.071269026423.74

period

Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan

Person-in-charge of the Company’s accounting organ: Liang Yuefei

94Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

7. Consolidated Statements of Changes in Owners’ Equity

H1 2022

Unit: RMB

H1 2022

Equity attributable to owners of the Company as the parent

Other equity Oth Non

Tota

instruments Less er -

l

Item Shar Capi : com Spe Surp Gen Reta

cont

Pref Perp own

e tal Trea preh cific lus eral ined Oth Subt rolli

erre etua ers’

capi Oth rese sury ensi rese rese rese earn er otal ng

d l equi

tal er rves stoc ve rve rves rve ings inter

shar bon ty

k inco ests

es ds

me

1331693410

994250982741

1. Balance as 99 19 86 06 39311 60 97 35

at the end of 346 317 502 695 19

45082333

the period of 15 42 97 33 83

prior year 67. 74. 58. 47.4.0 3.2 6.7 0.6 07.

16548996

052335

Add:

Adjustment

for change in

accounting

policy

Adjustment

for

correction of

previous

error

Adjustment

for business

combination

under

common

control

Other

adjustments

2. Balance as 13 31 69 34 10994 250 982 741

at the 99 19 86 06 39311 60 97 35

beginning of 346 317 502 695 19

45082333

the 15 42 97 33 83

Reporting 67. 74. 58. 47.4.0 3.2 6.7 0.6 07.Period 16 54 89 96

052335

--

-----

3. Increase/ 126 16 38 1537 986 168 228 654

decrease in 68 12 634 73

35186439557the period (“- 21 628 01 994” for 50 85 57 39 28 92. 93 6.0 92

decrease) 7.0 95. 30. 27. 31. 77 9.1 6 3.0

062399277

59

-

1603269102

128

3.1 Total 66 627 657 28

03

comprehensi 44 72 79 55

ve income 67 33. 9.5 2.3 21.

03.

285893

73

3.2 Capital - - - - - - -

increased 37 986 168 654 15 67 15

and reduced 351 86 43 57 10 40 17

95Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

by owners 50 85 57 28 357 912 098

7.095.30.31.20.6211

06239774.06.6

02

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

--

----

37986168654

106717

3.2.4351864357

35740098

Other 50 85 57 28

2091211

7.095.30.31.

4.0.626.6

0623977

02

----

13413424159

3.3 Profit 89 89 282 18

distribution 94 94 86 23

64.64.3.728.

7070040

3.3.1

Appropriatio

n to surplus

reserves

3.3.2

Appropriatio

n to general

reserve

----

3.3.313413424159

Appropriatio

898928218

n to owners

(or 94 94 86 23

shareholders) 64. 64. 3.7 28.

7070040

3.3.4

Other

-

3.4100100

Transfers 91

910.0

within 72

owners’ 72 0 24.equity 24. 19

19

3.4.1

Increase in

capital (or

share capital)

from capital

reserves

96Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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 100100

comprehensi 91

910.0

ve income 72

transferred to 72 0 24.retained 24. 19

earnings 19

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

1332533488

4. Balance as 82 754 8661 72 45 73 45 19

at the end of 165 01 780

99445999874329203

the 14 84 51

Reporting 64 971 61 03 34 384.1 30. 6.1

Period 7.0 .54 6.0 7.5 6.6 4.25 97 9

02796

H1 2021

Unit: RMB

H1 2021

Equity attributable to owners of the Company as the parent

Other equity Oth Non

Tota

instruments Less er -

l

Item Shar Capi : com Spe Surp Gen Reta

cont

Pref Perp own

e tal Trea preh cific lus eral ined Oth Subt rolli

erre etua ers’

capi Oth rese sury ensi rese rese rese earn er otal ng

d l equi

tal er rves stoc ve rve rves rve ings inter

shar bon ty

k inco ests

es ds

me

1. Balance as 139 151 234 741 175 626 482 631

at the end of

934575938567846392588218

the period of

prior year 615 14.9 853 039. 206 130 34.5 013

4.0003.61552.484.5439.07

Add:

Adjustment

for change in

97Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

accounting

policy

Adjustment

for

correction of

previous

error

Adjustment 991

for business 116 277 39344 - 169

combination 114 402 517

47121825

under 799 248 047

common 57. 812. 049. 4.67 2.92 7.59

control 70 33 30

Other

adjustments

2. Balance as

at the 102139 100 234 741 192 742 282

beginning of 473

934660926567828506228

the 506

Reporting 615 227 672 039. 711 929 131 16.6

Period 4.00 2.60 1.28 55 1.78 9.21 7.45

6

3. Increase/ - - -

decrease in - 220 - 470 441

598358314the period (“- 940 708 187 342 455” for - 873 828 682211 001. 889. 967. 30.3

decrease) 384. 417. 887.0.68 24 31 80 9

438647

---

3.1 Total 122 726

243120480

comprehensi 377 249

ve income 003 626 013552. 26.8

831.278.51.5

607

01414

3.2 Capital - - - 220 -

increased 230 725 229

940708187

and reduced - 298 095. 572

by owners 211 001. 889. 001. 44 905.

0.682431

2379

3.2.1--

Ordinary 220

220220

shares 708

increased by 708 708001.owners 001. 001.24

2424

3.2.2

Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’

equity

3.2.4---725-

Other 940 187 958 095. 886

211889.99944490

98Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

0.68319.994.55

--

--

3.3 Profit 292 371

790790

distribution 044 086

413413

91.930.1

8.228.22

24

3.3.1

Appropriatio

n to surplus

reserves

3.3.2

Appropriatio

n to general

reserve

3.3.3--

Appropriatio - -

292371

n to owners 790 790

(or 044 086413 413

shareholders) 91.9 30.18.22 8.22

24

3.3.4

Other

3.4-

Transfers 355

355

within 869

owners’ 869 553.equity 553. 42

42

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 -

comprehensi 355

355

ve income 869

transferred to 869 553.retained 553. 42

earnings 42

3.4.6

Other

3.5

Specific

99Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

reserve

3.5.1

Increase in

the period

3.5.2 Used

in the period

3.6 Other

4. Balance as

at the end of 139 997 220 175 741 239 706 286 993

the 934 200 708 039 379 863 624 642 266

Reporting 615 161. 001. 333 150. 007 088 684 772

Period 4.00 92 24 6.85 24 9.58 1.35 7.84 9.19

Legal representative: Wu Shenghui Chief Financial Officer: Tang Qionglan

Person-in-charge of the Company’s accounting organ: Liang Yuefei

8. Statements of Changes in Owners’ Equity of the Company as the Parent

H1 2022

Unit: RMB

H1 2022

Other equity instruments Other

Capita Less: compr Specif Surplu Retain Total

Item Share Prefer Perpet l Treasu ehensi ic s ed owner

Other

capital red ual Other reserv ry ve reserv reserv earnin s’

shares bonds es stock incom e es gs equity

e

1. Balance as 1399 2738 56352256 2506 9846 7413

at the end of 346 229 592

8665008795765334

the period of 154.0 003.2 062.4

prior year .93 4.54 5.83 7.96 0 7 5

Add:

Adjustment

for change in

accounting

policy

Adjustment

for

correction of

previous

error

Other

adjustments

2. Balance as

at the 1399 2738 56352256 2506 9846 7413

beginning of 346 229 592

8665008795765334

the 154.0 003.2 062.4

Reporting .93 4.54 5.83 7.96 0 7 5

Period

3. Increase/ - - - - - -

decrease in 7217

373548251684230444074728the period (“- 2490” for 1507 948. 3573 6026 9183 2133.25

decrease) .00 60 0.39 7.53 0.02 2.51

--

3.1 Total 1061

12952338

comprehensi 5473

ve income 4304 83120.76

3.34.58

3.2 Capital

-----

increased

100Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

and reduced 3735 4825 1684 4407 3145

by owners 1507 948. 3573 9183 3355.00600.390.025.23

3.2.1

Ordinary

shares

increased by

owners

3.2.2

Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’

equity

-----

3.2.437354825168444073145

Other 1507 948. 3573 9183 3355.00600.390.025.23

--

3.3 Profit 1348 1348

distribution 9946 9946

4.704.70

3.3.1

Appropriatio

n to surplus

reserves

3.3.2--

Appropriatio

13481348

n to owners

(or 9946 9946

shareholders) 4.70 4.70

3.3.3

Other

3.4-

Transfers 1009

1009

within 1722 0.00

owners’ 1722 4.19

equity 4.19

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

101Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

transferred to

retained

earnings

3.4.5

Other -

comprehensi 1009

1009

ve income 1722 0.00

transferred to 1722 4.19

retained 4.19

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 1361 2810 5162

at the end of 1774 8216 7542 3005

994401770

the 2717 5144 3549 6151

Reporting 647.0 493.5 729.9.33 .15 8.30 7.94

Period 0 2 4

H1 2021

Unit: RMB

H1 2021

Other equity instruments Other

Capita Less: compr Specif Surplu Retain Total

Item Share Prefer Perpet l Treasu ehensi ic s ed owner

Other

capital red ual Other reserv ry ve reserv reserv earnin s’

shares bonds es stock incom e es gs equity

e

1. Balance as 1399 7426 2349 7415 1591 6089

at the end of

346635.3896703884614

the period of

prior year 154.0 62 658.2 9.55 733.4 220.8

0399

Add:

Adjustment

for change in

accounting

policy

Adjustment

for

correction of

previous

error

Other

adjustments

2. Balance as

at the 1399 7426 2349 7415 1591 6089

beginning of 346 635. 389 6703 884 614

the

Reporting 154.0 62 658.2 9.55 733.4 220.8

Period 0 3 9 9

3. Increase/ - - -

decrease in 2207 5988 1878 4626 3570the period (“- 0800 0985 89.31 3000 7573” for

decrease) 1.24 4.69 6.70 8.54

102Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

--

3.1 Total 2429 1067 1361

comprehensi

ve income 4030 6045 7984

1.273.287.99

3.2 Capital - -

increased 2207 1878 2208

and reduced 0800 89.31 9589

by owners 1.24 0.55

3.2.1

Ordinary

shares

increased by

owners

3.2.2

Capital

increased by

holders of

other equity

instruments

3.2.3

Share-based

payments

included in

owners’

equity

--

3.2.4220718782208

Other 0800 89.31 9589

1.240.55

3.3 Profit

distribution

3.3.1

Appropriatio

n to surplus

reserves

3.3.2

Appropriatio

n to owners

(or

shareholders)

3.3.3

Other

3.4-

Transfers 3558 3558

within 6955 6955

owners’

equity 3.42 3.42

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

103Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

defined

benefit

schemes

transferred to

retained

earnings

3.4.5-

Other 3558 3558

comprehensi 6955 6955

ve income

transferred to 3.42 3.42

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 the end of 1399 7426 2207 1750 7413 2054 5732

the 346 635. 0800 579 7915 514 538

Reporting 154.0 62 1.24 803.5 0.24 740.1 482.3

Period 0 4 9 5

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 50000000 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 55000000 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

RMB1399346154.00. The Company held the 26th Meeting of the 9th 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. The repurchased 13 million A shares were used for the equity incentive plan. The

104Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

remaining 18952995 A shares and the repurchased 18398512 B shares totaling 37351507 shares were all

deregistered. On 8 February 2022 it was confirmed by Shenzhen Branch of CSDC that the number of

repurchased public shares canceled this time was 37351507 accounting for 2.67% of the total share capital of

the Company before the cancellation including 18952995 A shares and 18398512 B shares. Upon the

cancellation of the shares the total share capital of the Company was changed from 1399346154 shares to

1361994647 shares. The Company's registered capital was changed to RMB1361994647.00.

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 vehicle lamp products epitaxy and chip products LED packaging and component

products trade and application 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 August 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”) Nanning Liaowang Auto Lamp Co. Ltd. (referred to as “NanningLiaowang”) Foshan NationStar Optoelectronics Co. Ltd. (referred to as “NationStar Optoelectronics”) and

Foshan Sigma Venture Capital Co. Ltd. (referred to as “Sigma”) in total 14 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 Guinuo Lighting Technology Co. Ltd. (referred to as

“Chongqing Guinuo”) Qingdao Guige Lighting Technology Co. Ltd. (referred to as “Qingdao Lighting”)

Indonesia Liaowang Auto Lamp Co. Ltd. (referred to as “Indonesia Liaowang”) Foshan NationStar Electronic

Manufacturing Co. Ltd. (referred to as “NationStar Electronic Manufacturing”) Foshan NationStar

Semiconductor Technology Co. Ltd. (referred to as “NationStar Semiconductor”) Nanyang Baoli Vanadium

Industry Co. Ltd. (referred to as “Baoli Vanadium Industry”) Guangdong New Electronic Information Ltd.(referred to as “New Electronic”) and NationStar Optoelectronics (Germany) Co. Ltd. (referred to as “GermanyNationStar”) in total ten sub-subsidiary.Given that Nanyang Baoli Vanadium Industry Co. Ltd. (Baoli Vanadium) a subsidiary of NationStar

Optoelectronics is in a state of non-continuous operations the Interim Report 2022 of Baoli Vanadium for the

current period was formulated at fair value or costs whichever was lower.Compared with the previous period the consolidation scope of the current financial statements added two

subsidiaries of NationStar Optoelectronics and Sigma and five sub-subsidiaries of NationStar Electronic

Manufacturing NationStar Semiconductor Baoli Vanadium Industry New Electronic and Germany NationStar.For details please refer to Note VIII “Changes in the Scope of Consolidation" and Note IX "Interests in OtherSubjects".

105Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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.

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.

106Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

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

107Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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.

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;

108Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

(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

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.

109Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

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

110Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

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

111Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

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.

112Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

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.

113Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

The Company will always measure the provision for notes receivable whether including major financing

components or not based on the amount similar to that of expected credit losses for the whole existence period

and the amount increased or reversed of impairment for losses generated shall be recorded into the current profit

or loss as gains or losses of impairment. The bill risk portfolio determined by the Company and basis thereof are

as follows:

Item Basis

Group 1 Bank acceptance bills

Group 2 Commercial acceptance bills

For notes receivable classified into the Group 1 with low credit risks no bad debt provision will be withdrawn.For notes receivable classified into the Group 2 the bad debt provision shall be withdrawn based on aging with

reference to the Group 1 of accounts receivable.

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 For an account receivable with a significant single amount the impairment test

accounts receivable with a significant single shall be carried out on it separately. If there is any objective evidence of

amount 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%

4 to 5 years 80%

Over 5 years 100%

114Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

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.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.

115Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

The assets related to contract costs of the Company include contract acquisition costs and contract performance

costs. They are presented in inventories other current assets and other non-current assets respectively in

accordance with their liquidity.The incremental cost incurred by the acquisition of a contract would be recognized as an asset in the form of a

contract acquisition cost if it was expected to be recovered. Or if the amortization period of the asset does not

exceed a year the asset would be recognized as profit and loss of the current period when it occurred.Costs incurred for performing a contract which was not within the scope of other accounting standards for

enterprises and met the following conditions should be recognized as an asset in the form of a contract

performance cost:

(1) The costs were directly related to a current or expected contract including direct labor direct materials

manufacturing overhead (or similar) costs that are explicitly chargeable to the customer and other costs incurred

solely because of the contract;

(2) The costs increased the future resources of the Company to perform performance obligations;

(3) The costs were expected to be recovered.

Assets related to contract costs were amortized on the same basis as the revenue recognition related to the assets

and recognized as profit and loss of the current period.For assets related to contract costs if the book value was higher than the difference between the following two

items the Company would set aside impairment provisions for the extra portion and recognize the impairment

provisions as impairment losses on assets:

(1) The remaining consideration that the Company expected to obtain due to the transfer of commodities related to

the assets;

(2) Estimated costs to be incurred for the transfer of the related commodities.

If the result of (1) minus (2) was higher than the book value of the assets due to the subsequent changes in the

factors of impairment in previous periods the asset impairment provisions set aside should be reversed and

recognized as profit and loss of the current period. However the book value of the assets upon the reversal

should not exceed the book value of the assets on the reversal date supposing that impairment provisions were not

set aside.

116Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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: * 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; * 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

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: * The 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. * Due 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

117Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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:

* 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;

* 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

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

118Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

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

119Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

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

120Foshan Electrical and Lighting Co. Ltd. Interim Report 2022handle in accordance with the relevant accounting policies described in NotesⅥ. “Principles Procedures andMethods 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

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.

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

121Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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: * The economic benefits pertinent to the

fixed asset are likely to flow into the Company; and * 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

Category of fixed Expected net salvage

Method Useful life Annual deprecation

assets 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

(3) Recognition Basis Pricing and Depreciation Method of Fixed Assets by Finance Lease

A finance lease refers to a lease where all the risks and rewards related to the ownership of the leasehold

property are substantially transferred regardless of whether the ownership is eventually transferred or not. The

policy for the accrual of the depreciation of the leasehold property for the fixed assets acquired under the

finance lease was consistent with that adopted for the Company's self-owned fixed assets. Where it could be

reasonably certain that the Company would obtain the ownership of the leasehold property at the end of the

lease term the leasehold property would be depreciated within the service life. Where it could not be reasonably

122Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

certain that the Company could obtain ownership of the leased property at the end of the lease term the leased

property would be depreciated within the lease term or the service life of the leased property whichever was

shorter.

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 Progress

Please 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

123Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

eligible for capitalization to meet the intended useable or sellable status.The borrowing costs shall cease to be capitalized when the purchased or produced assets that meet the conditions

of capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligible

for capitalization meet the intended useable or sellable status can be included in the current profits and losses

when incurred.

3. Calculation method of capitalized amount of borrowing costs

During the period of capitalization the capitalization amount of interests (including amortization of discounts or

premiums) for each accounting period is determined in accordance with the following 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.

124Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

30. Intangible Assets

(1) Pricing Method Useful Life and Impairment Test

1. Recognition Criteria of Intangible Assets

Intangible assets are identifiable non-monetary assets that are owned or controlled by the Company without

physical form. The intangible assets are recognized when all the following conditions are met: (1) Conform to the

definition of intangible assets; (2) Expected future economic benefits related to the assets are likely to flow into

the Company; (3) The costs of the assets can be measured reliably.

2. Initial Measurement of Intangible Assets

Intangible assets are initially measured at cost. Actual costs are determined by the following principles:

(1) The cost of the acquisition of intangible assets including the purchase price relevant taxes and other expenses

directly attributable to the intended use of the asset. The payment of purchase price of intangible assets exceeding

normal credit terms is deferred and the cost of intangible assets having financing nature in essence shall be

recognized based on the present value of the purchase price. The difference between the actual payment 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

125Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

produced with the intangible asset have market or the proof of its usefulness if the intangible asset has market and

will be used internally;

(4) Having sufficient technical financial resources and other resources to support the development of the

intangible assets and the ability to use or sell the intangible assets;

(5) Expenditure attributable to the development stage of intangible assets can be measured reliably.

The cost of self-developed intangible assets includes the total expenditure incurred since meeting intangible assets

recognition criterion until reaching intended use. Expenditures that have been expensed in previous periods are no

longer adjusted.Non-monetary assets exchange debt restructuring government subsidies and the cost of intangible assets acquired

by business combination are recognized according to relevant provisions of Accounting Standard for Business

Enterprises No. 7 - Non-monetary assets exchange Accounting Standard for Business Enterprises No. 12 - Debt

restructuring Accounting Standards for Business Enterprises No. 16 - Government subsidies Accounting

Standard for Business Enterprises No. 20 - Business combination respectively.

31. Impairment of Long-term Assets

For non-current non-financial assets such as fixed assets construction in progress intangible assets with limited

useful life investment real estate measured in cost mode and long-term equity investments in subsidiaries joint

ventures and associates the Company determines whether there is indication of impairment at balance sheet date.If there is indication of impairment then estimate the amount of its recoverable value and test the impairment.Goodwill intangible assets with uncertain useful life and intangible assets that have not yet reached useable state

shall be tested for impairment every year whether or not there is any indication of impairment.If the impairment test results indicate that the recoverable amount of the asset is lower than its book value the

impairment provision shall be made at the difference and included in the impairment loss. The recoverable

amount is the higher of the fair value of the asset minus the disposal cost and the present value of the expected

future cash flow of the asset. The fair value of the asset is recognized according to the price of the sales agreement

in the fair trade; if there is no sales agreement but there is an active market the fair value is recognized according

to the buyer’s bid of the asset; if there is no sales agreement or active market the fair value of asset shall be

estimated based on the best information that can be obtained. Disposal costs include legal costs related to disposal

of assets related taxes handling charges and direct costs incurred to enable the asset reaching sellable status. The

present value of the expected future cash flows of the assets is recognized by the amount discounted at appropriate

discount rate according to the expected future cash flows arising from the continuing use of the asset and the final

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.

126Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Once the impairment loss of the above asset is recognized the portion that the value is restored will not be written

back in subsequent periods.

32. Long-term Prepaid Expense

Long-term prepaid expense refers to general expenses with the apportioned period over one year (one year

excluded) that have occurred but attributable to the current and future periods. Long-term deferred expense shall

be amortized averagely within benefit period. In case of no benefit in the future accounting period the amortized

value of such project that fails to be amortized shall be transferred into the profits and losses of the current period.The amortization period of various expenses is as follows:

Item Amortization Period

Expenditure on improvement of rented fixed assets 3-5 years

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

127Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

the corresponding payable and deposit amount should be included into the relevant assets cost or the current gains

and losses when happen.

(3) Accounting Treatment of the Demission Welfare

If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor

contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a

layoff and should recognize the payroll liabilities occurred from the demission welfare base on the earlier date

between the time when the Group could not one-sided withdraw the demission welfare which offered by the plan

or layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to the

reorganization of the payment of the demission welfare and at the same time includes which into the current gains

and losses. But if the demission welfare is estimated that could not totally pay after the end of the annual report

within 12 months should be disposed according to other long-term payroll payment.

(4) Accounting Treatment of the Welfare of Other Long-term Staffs

The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare.The group would recorded the salary and the social security insurance fees paid and so on from the employee’s

service terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under the

condition that they meet the recognition conditions of estimated liabilities.The other long-term welfare that the Group offers to the staffs if met with the setting drawing plan should be

accounting disposed according to the setting drawing plan while the rest should be disposed according to the

setting revenue plan.

35. Lease Liabilities

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

128Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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: * That obligation is a current obligation

of the enterprise; * It is likely to cause any economic benefit to flow out of the enterprise as a result of

performance of the obligation; and * 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: * If the Contingencies concern a single item it shall be determined in the light

of the most likely outcome. * 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. * 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

129Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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 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

130Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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);

131Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

(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.

132Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

the effective date of the change. The advance receipt or the lease receivable related to the lease prior to the change

133Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

(2) Changes in Accounting Estimates

□Applicable □ Not applicable

45. Other

Naught

VI. Taxes

1. Main Taxes and Tax Rates

Category of taxes Tax basis Tax rate

Sales volume from goods selling or taxable

VAT 3% 6% 9% 13%

service

Urban maintenance and construction tax Turnover tax payable 7% 5%

Enterprise income tax Taxable income 10% 15% 25%

134Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Educational surtax Turnover tax payable 3%

Local educational surtax Turnover tax payable 2%

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate

Name Income tax rate

The Company Zhida Company Chanchang Company Nanning

Liaowang Chongqing Guinuo Liuzhou Lighting Liuzhou

15%

Foreshine Headquarters of NationStar Optoelectronics

NationStar Semiconductor Germany NationStar

FSL Lighting GmbH 15%

Indonesia Liaowang 10%

Other subsidiaries 25%

2. Tax Preference

1. The Company passed the re-examination for High-tech Enterprises in 2020 as well as won the “Certificate ofHigh-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.

2. 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 Foreshine 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%.

7. NationStar Optoelectronics a subsidiary of the Company was recognized as a high-tech enterprise on 16

December 2008 and its certificate number was GR200844000097. It was re-recognized as a high-tech enterprise

in 2020 and its new certificate number is GR202044006337 dated 9 December 2020. Its corporate income tax

135Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

rate for 2020-2022 is 15%.

8. Foshan NationStar Semiconductor Technology Co. Ltd. a wholly owned subsidiary of NationStar

Optoelectronics was recognized as a high-tech enterprise on 10 October 2015 and its certificate number was

GR201544001238. It was re-recognized as a high-tech enterprise in 2021 and its new certificate number is

GR202144008779 dated 20 December 2021. Its corporate income tax rate for 2021-2023 is 15%.

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 68284.86 24635.14

Bank deposits 1399979420.13 1800849053.18

Other monetary assets (Note 1) 436039030.34 578254717.74

Unexpired interest (Note 2) 3352901.50 2783249.29

Total 1839439636.83 2381911655.35

Of which: Total amount deposited

38119429.2227310928.58

overseas

Total amount with

restrictions on use due to mortgage 448713603.58 247425015.48

pledge or freeze

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

64068462.40348248125.61

profit or loss

Including:

Equity instrument investments 1397612.10 1558778.18

Wealth management products 62670850.30 342422447.43

Others 4266900.00

Including:

Total 64068462.40 348248125.61

3. Derivative Financial Assets

Naught

136Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

4. Notes Receivable

(1) Notes Receivable Listed by Category

Unit: RMB

Item Ending balance Beginning balance

Bank acceptance bill 1372158706.47 1659553102.56

Commercial acceptance bill 41633566.90 30803389.08

Total 1413792273.37 1690356491.64

Unit: RMB

Ending balance Beginning balance

Carrying amount Bad debt provision Carrying amount Bad debt provision

Categor Withdra Withdra

Carrying Carrying

y Proporti wal Proporti wal

Amount Amount value Amount Amount value

on proporti on proporti

on on

Of

which:

notes

receivab

le

withdra 14150 14137 16909 16903

12876628640

wn bad 79909. 100.00% 100.00% 92273. 85132. 100.00% 100.00% 56491.

36.09.59

debt 46 37 23 64

provisio

n by

group

Of

which:

Bank 13721 13721 16595 16595

acceptan 58706. 96.97% 0.00 0.00% 58706. 53102. 98.14% 0.00 0.00% 53102.ce bill 47 47 56 56

Commer

cial 42921 12876 41633 31432 628640 30803

3.03%100.00%1.86%100.00%

acceptan 202.99 36.09 566.90 029.67 .59 389.08

ce bill

14150141371690916903

12876628640

Total 79909. 100.00% 100.00% 92273. 85132. 100.00% 100.00% 56491.

36.09.59

46372364

Withdrawal of bad debt provision by group:

Unit: RMB

Ending balance

Name

Carrying amount Bad debt provision Withdrawal proportion

Within 1 year 42921202.99 1287636.09 3.00%

Total 42921202.99 1287636.09

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

137Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

(2) Bad Debt Provision Withdrawn Reversed or Collected during the Reporting Period

Withdrawal of bad debt provision:

Unit: RMB

Increase/decrease

Beginning

Category

balance Reversed or

Ending balance

Withdrawn Verified Other

collected

Notes

receivable

withdrawn bad

debt provision

separately

Notes

receivable

withdrawn bad 628640.59 658995.50 1287636.09

debt provision

by group

Total 628640.59 658995.50 1287636.09

For commercial acceptance bills there is difference in withdrawal proportion of bad debts between the

Company as the Parent and the majority-owned subsidiary NationStar. The Company unified the accounting

estimates in the consolidated financial statements and complementally withdrew the bad debt provision of

RMB429212.03 for notes receivable.Of which bad debt provision collected or reversed with significant amount:

□Applicable □ Not applicable

(3) Notes Receivable Pledged by the Company at the Period-end

Unit: RMB

Item Amount pledged at the period-end

Bank acceptance bill 821993782.57

Total 821993782.57

(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 675292723.41

Total 675292723.41

(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

138Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

Categor Withdra Withdra

Carrying Carrying

y Proporti wal Proporti wal

Amount Amount value Amount Amount value

on proporti on proporti

on on

Account

s

receivab

le

withdra

3351233367144991335123112323891

wn bad 1.45% 99.57% 1.60% 92.87%

debt 866.15 874.59 .56 866.15 709.17 56.98

provisio

n

separatel

y

Of

which:

Account

s

receivab

le 22844 21860 20632 19791

withdra 98441 84056

74693.98.55%4.31%33552.05995.98.40%4.07%49687.

wn bad 141.68 307.99

debt 96 28 27 28

provisio

n by

group

Of

which:

(1)22844218602063219791

General 98441 84056

74693.98.55%4.31%33552.05995.98.40%4.07%49687.

business 141.68 307.99

portfolio 96 28 27 28

(2)

Internal

business

portfolio

23179218612096719815

131809115180

Total 87560. 100.00% 5.69% 78543. 18861. 100.00% 5.49% 38844.

016.27017.16

11844226

Individual withdrawal of bad debt provision:

Unit: RMB

Ending balance

Name

Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason

Involved in the lawsuit

the Company won the

lawsuit in the second

Customer A 11220827.14 11220827.14 100.00%

instance which had not

yet executed

completely

Existing pending

Customer B 9111336.51 9111336.51 100.00%

litigation matters

Customer C 6024216.41 6024216.41 100.00% Less likely to be

139Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

recovered

Existing pending

Customer D 4702051.28 4702051.28 100.00%

litigation matters

The compensation

amount of the customer

Customer E 815484.27 815484.27 100.00% lawsuit is large and

less likely to be

recovered

Existing pending

Customer F 526858.54 526858.54 100.00%

litigation matters

The customer had

executed bankruptcy

liquidation in

Customer G 523448.92 523448.92 100.00%

December 2020 thus

the accounts were

unrecoverable.Expected to be

Customer H 395321.00 395321.00 100.00%

unrecoverable

In the processing of

customer complaints

Customer I 193322.08 48330.52 25.00%

the possibility of bad

debts is greater

Total 33512866.15 33367874.59

Withdrawal of bad debt provision by group:

Unit: RMB

Ending balance

Name

Carrying amount Bad debt provision Withdrawal proportion

Credit risk group 2284474693.96 98441141.68 4.31%

Total 2284474693.96 98441141.68

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) 2141771714.41

1 to 2 years 97849610.15

2 to 3 years 12018016.13

Over 3 years 66348219.42

3 to 4 years 29532295.52

4 to 5 years 21599874.05

Over 5 years 15216049.85

Total 2317987560.11

(2) Bad Debt Provision Withdrawn Reversed or Collected during the Reporting Period

Bad debt provision withdrawn in the Reporting Period:

Unit: RMB

Beginning Increase/decrease

Category Ending balance

balance Withdrawn Reversed or Verified Other

140Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

collected

Bad debt

provision 31123709.1 33367874.5

2244165.42

separately 7 9

accrued

Bad debt

provision

84056307.914385162.798441141.6

withdrawn 329.04

according to 9 3 8

groups

115180017.16629328.1131809016.

Total 329.04

16527

For common business group there is difference in withdrawal proportion of expected credit losses between the

Company as the Parent and the majority-owned subsidiary NationStar. The Company unified the accounting

estimates in consolidated financial statements and complementally withdrew bad debt provision of

RMB6019862.42 for accounts receivable.The amount of expected credit loss accrued in the current period is RMB16527279.88 and the amount of

expected credit loss recovered or reversed in the current period is RMB0.00 which is RMB102048.27 different

from the amount of credit impairment loss accrued in the current period of RMB16629328.15 which is caused

by the translation difference of foreign currency statement of Indonesia Liaowang at the end of the period.

(3) Accounts Receivable with Actual Verification for the Reporting Period

Unit: RMB

Item Amount

Other retails accounts 329.04

Of which verification of significant accounts receivable:

Unit: RMB

Whether occurred

Name of the entity Nature Amount Reason Procedure because of related-

party transactions

The approval

procedure is

carried out

Other retails

Payment for goods 329.04 Unrecoverable according to the Not

accounts Company’s rules

for managing bad

debt.Total 329.04

(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 provision

receivable (%)

No. 1 152875068.03 6.60% 4586252.04

No. 2 89987854.53 3.88% 2699635.64

No. 3 79809077.83 3.44% 2394272.33

No. 4 71161243.67 3.07% 2134837.31

No. 5 55652405.43 2.40% 1669572.16

Total 449485649.49 19.39%

141Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

(5) Derecognition of Accounts Receivable due to the Transfer of Financial Assets

Naught

(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement

of Accounts Receivable

Naught

6. Accounts Receivable Financing

Naught

Increase or decrease of accounts receivable financing and changes in fair value thereof

□Applicable □ Not applicable

If the depreciation reserve for accounts receivable financing was withdrawn in accordance with the general

model of expected credit losses the information related to depreciation reserve shall be disclosed by reference

to the disclosure method of other receivables:

□Applicable □ Not applicable

7. Prepayment

(1) Listed by Aging

Unit: RMB

Ending balance Beginning balance

Aging

Amount Proportion Amount Proportion

Within 1 year 28409430.08 74.28% 26325276.67 78.64%

1 to 2 years 7056500.42 18.45% 4740160.27 14.16%

2 to 3 years 229005.90 0.60% 553744.18 1.65%

Over 3 years 2549224.67 6.67% 1854923.20 5.54%

Total 38244161.07 33474104.32

(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target

Unit: RMB

Name of Relationship with the Proportion to total prepayments

Ending balance Prepayment time

units Company (%)

No. 1 Non-related party 2731478.94 7.14% 1 to 2 years

No. 2 Non-related party 1436720.69 3.76% Within 1 year

No. 3 Non-related party 1407273.77 3.68% Within 1 year

142Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

No. 4 Non-related party 1327340.00 3.47% Within 1 year

No. 5 Non-related party 1083340.97 2.83% Within 1 year

Total — — 7986154.37 20.88% — —

8. Other Receivables

Unit: RMB

Item Ending balance Beginning balance

Other receivables 31235165.53 37523072.02

Total 31235165.53 37523072.02

(1) Interest Receivable

1) Category of Interest Receivable

Naught

2) Significant Overdue Interest

Naught

3) Withdrawal of Bad Debt Provision

□Applicable □ Not applicable

(2) Dividends Receivable

1) Category of Dividends Receivable

Naught

2) Significant Dividends Receivable Aged over 1 Year

Naught

3) Withdrawal of Bad Debt Provision

□Applicable □ Not applicable

(3) Other Receivables

1) Other Receivables Disclosed by Account Nature

Unit: RMB

Nature Ending carrying amount Beginning carrying amount

VAT export tax refunds 5260428.72 4674335.06

Performance bond 15114786.48 12056403.00

Staff borrow and petty cash 2342223.49 4018439.87

143Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Rent water & electricity fees 1458352.75 2564557.87

Other 38298697.53 45643798.95

Total 62474488.97 68957534.75

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 of duration (credit Total

duration (credit

the next 12 months impairment not

impairment occurred)

occurred)

Balance of 1 January

890724.806224279.9524319457.9831434462.73

2022

Balance of 1 January

2022 in the Current

Period

Withdrawal of the

-234354.72103008.43-131346.29

Current Period

Verification of the

6100.0027693.0030000.0063793.00

Current Period

Balance of 30 June

650270.086299595.3824289457.9831239323.44

2022

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) 22573384.78

1 to 2 years 8058085.07

2 to 3 years 5938709.25

Over 3 years 25904309.87

3 to 4 years 2907396.35

4 to 5 years 1049775.73

Over 5 years 21947137.79

Total 62474488.97

3) Bad Debt Provision Withdrawn Reversed or Recovered in the Reporting Period

Bad debt provision withdrawn in the Reporting Period:

Unit: RMB

Increase/decrease

Beginning

Category Reversed or Ending balance

balance Withdrawn Verified Other

collected

Other 31434462.7 31239323.4

-131346.2963793.00

receivables 3 4

31434462.731239323.4

Total -131346.29 63793.00

34

For common business group there is difference in withdrawal proportion of expected credit losses between the

Company as the Parent and the majority-owned subsidiary NationStar. The Company unified the accounting

144Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

estimates in consolidated financial statements and complementally withdrew bad debt provision of

RMB11531.29 for other receivables.The amount of expected credit loss accrued in the current period is RMB-133776.54 and the amount of

expected credit loss recovered or reversed in the current period is RMB0.00 which is RMB2430.55 different

from the amount of credit impairment loss accrued in the current period of RMB-131346.29 which is caused

by the translation difference of foreign currency statement of Indonesia Liaowang at the end of the period.Of which bad debt provision revered or recovered with significant amount:

Naught

4) Particulars of the Actual Verification of Other Receivables during the Reporting Period

Unit: RMB

Item Amount

Bid security and deposit 32743.00

Others 31050.00

Of which significant actual verification of other receivables:

Unit: RMB

Whether occurred

Name of the entity Nature Amount Reason Procedure because of related-

party transactions

The approval

procedure shall be

carried out

according to the

Litigation costs are Company’s rules

Other retails Bid security and

32743.00 high and there is a for managing bad Not

accounts deposit

risk of losing debts regarding to

verification

application before

accounts can be

verified

The approval

procedure shall be

carried out

according to the

Litigation costs are Company’s rules

Other retails

Other 31050.00 high and there is a for managing bad Not

accounts

risk of losing debts regarding to

verification

application before

accounts can be

verified

Total 63793.00

145Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

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

20000000.00 Over 5 years 32.01% 20000000.00

accounts

No. 2 VAT export tax

4496365.98 Within 1 year 7.20% 172842.34

refunds

No. 3 Intercourse

2673256.53 Within 2 years 4.28% 428945.80

accounts

No. 4 Performance bond 1946000.00 Within 1 year 3.11% 122223.17

No. 5 Intercourse

1712634.80 Within 3 years 2.74% 583800.00

accounts

Total 30828257.31 49.34% 21307811.31

6) Accounts Receivable Involving Government Grants

Naught

7) Derecognition of Other Receivables due to the Transfer of Financial Assets

Naught

8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement

of Other Receivables

Naught

9. Inventory

Whether the Company 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 depreciation Carrying depreciation

Carrying value Carrying value

amount reserves of amount reserves of

contract contract

performance performance

cost cost

358341044.352004114.381168885.14729292.6366439592.

Raw materials 6336930.47

722507443

Goods in 12237323.8 12237323.8 317007606. 317007606.process 2 2 13 13

Inventory 119238248 133644653. 105873782 122362051 135963343. 108765716

goods 0.34 16 7.18 1.60 21 8.39

146Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

Revolving

5434655.635434655.633231115.873231115.87

materials

69802063.266611234.893671492.290140697.8

Goods in transit 3190828.40 3530794.31

6609

Semi-finished 304323618. 303995116. 100723505. 100345745.

328502.08377760.65

goods 44 36 66 01

20649158.520649158.5

Others 5177062.67 5177062.67

66

196317034143500914.181966943212460017154601190.196999898

Total

4.77110.669.20818.39

(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 Other

write-off

14729292.6

Raw materials 592123.14 8984485.31 6336930.47

Inventory 135963343. 19075837.9 21394528.0 133644653.goods 21 9 4 16

Semi-finished

377760.6590386.67139645.24328502.08

goods

Goods in transit 3530794.31 -339965.91 3190828.40

154601190.19418381.830518658.5143500914.

Total

819911

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 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 value Carrying Depreciation Carrying value

147Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

amount reserves amount reserves

Contract assets 8794261.68 704705.05 8089556.63 8826085.67 264782.57 8561303.10

Total 8794261.68 704705.05 8089556.63 8826085.67 264782.57 8561303.10

If the bad debt provision for contract assets in accordance with the general model of expected credit losses the

information related to the bad debt provision shall be disclosed by reference to the disclosure method of other

receivables:

□Applicable □ Not applicable

11. Held-for-Sale Assets

Unit: RMB

Ending Estimated

Depreciation Ending Estimated

Item carrying Fair value disposal

reserves carrying value disposal time

amount expense

Houses

buildings and 17147339.8 17147339.8 183855895. 55718333.9 31 December

land involved 4 4 00 5 2022

in expropriation

17147339.817147339.8183855895.55718333.9

Total --

44005

Other notes:

Note: For details see Part X-XVI.Other Major Events-8.Other: "Demolition Matters of Nanjing Fozhao" of this

Report. The estimated disposal costs include employee resettlement fees compensation for the termination of

the original tenant's contract and taxes related to the proceeds of demolition.

12. Current Portion of Non-current Assets

Naught

13. Other Current Assets

Unit: RMB

Item Ending balance Beginning balance

Input tax of VAT to be certified and

40618746.09111605177.04

deducted

Advance payment of enterprise income

10323874.7610562615.78

tax

Others 3400896.19 3507355.35

Total 54343517.04 125675148.17

14. Investments in debt obligations

Naught

15. Other Investments in Debt Obligations

Naught

148Foshan Electrical and Lighting Co. Ltd. Interim Report 2022

16. Long-term Accounts Receivable

(1) List of Long-term Receivables

Naught

(2) Derecognition of Long-term Receivables due to the Transfer of Financial Assets

Naught

(3) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement

of Long-term Receivables

Naught

17. Long-term Equity Investment

Unit: RMB

Increase/decrease

Gains

Ending

and Cash

Beginni Adjust Withdra balance

losses bonus Ending

ng Additio Reduce ment of Change wal of of

Investe recogni or balance

balance nal d other s of depreci depreci

es zed profits Other (carryin

(carryin investm investm compre other ation ation

under announ g value)

g value) ent ent hensive equity reserve reserve