Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 FOSHAN ELECTRICAL AND LIGHTING CO., LTD. ANNUAL REPORT 2018
March 2019
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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.
He Yong, theCompany’s legal representative, Liu Xingming, theCompany’s General Manager, and Tang Qionglan, theCompany’s Chief Financial Officer (CFO) hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete.
All directors have attended in person the board session for reviewing this report except the following:
|||||
|-|-|-|-|
|||Reason for not attending||
|Name|Position||Name of the proxy|
|||the session in person||
|Huang Zhiyong|Director|On business|He Yong|

The future plans and other forward-looking statements, as well as the cautionary statements mentioned in this Report shall NOT be considered as virtual promises of the Company to investors. And investors are kindly reminded to be well aware of possible risks.
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.
The Company has described in detail in this Report the risk of market competition, the risk of rising labor costs, the risk of rising raw material prices, the risk of falling prices of inventories, the risk of exchange rate fluctuations and the risk of doubtful receivable accounts. Please refer to “Outlook of theCompany’s Future Development” in “Part IV Operating Performance Discussion and Analysis” of this Report.
The Board has approved a final dividend plan for the Reporting Period: Based on theCompany’s total shares of 1,399,346,154, a cash dividend of RMB1.56 (tax inclusive) per 10 shares is to be distributed to all the shareholders, with a bonus issue of 0 additional shares (tax inclusive) for every 10 existing shares from profit, and no bonus issue from capital reserves.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2 Part II Corporate Information and Key Financial Information ................................................... 5 Part III Business Summary ............................................................................................................... 9 Part IV Operating Performance Discussion and Analysis ........................................................... 13 Part V Significant Events ................................................................................................................ 39 Part VI Share Changes and Shareholder Information ................................................................. 64 Part VII Preferred Shares ............................................................................................................... 75 Part VIII Directors, Supervisors, Senior Management and Staff ............................................... 76 Part IX Corporate Governance ...................................................................................................... 87 Part X Corporate Bonds .................................................................................................................. 97 Part XI Financial Statements .......................................................................................................... 98 Part XII Documents Available for Reference .............................................................................. 225
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Definitions
|||
|-|-|
|Term|Definition|
||Foshan Electrical and Lighting Co., Ltd. and its consolidated subsidiaries,|
|The “Company”, “FSL” or “we”||
||except where the context otherwise requires|
|GRAM|Guangdong Rising Assets Management Co., Ltd.|
|Electronics Group|Guangdong Electronics Information Industry Group Ltd.|
|GD Rising Finance|Guangdong Rising Finance Holding Co., Ltd.|
|Shenzhen Rising Investment|Shenzhen Rising Investment Development Co., Ltd.|
|Hong Kong Rising Investment|Hong Kong Rising Investment Development Limited|
|CSRC|China Securities Regulatory Commission|
|SZSE|Shenzhen Stock Exchange|
|General meeting|General meeting of Foshan Electrical and Lighting Co., Ltd.|
|Board of Directors|The board of directors of Foshan Electrical and Lighting Co., Ltd.|
|Supervisory Committee|The supervisory committee of Foshan Electrical and Lighting Co., Ltd.|
|Annual report auditor|Beijing Zhongzhengtiantong Certified Public Accountants LLP|
||Expressed in the Chinese currency of Renminbi, expressed in tens of thousands|
|RMB, RMB’0,000||
||of Renminbi|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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.|佛山照明|||
|Company name in English (if||||
||FOSHAN ELECTRICAL AND LIGHTING CO.,LTD|||
|any)||||
|Abbr. (if any)|FSL|||
|Legal representative|He Yong|||
|Registered address|No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China|||
|Zip code|528000|||
|Office address|No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, P.R.China|||
|Zip code|528000|||
|Company website|www.chinafsl.com|||
|Email address|gzfsligh@pub.foshan.gd.cn|||

II Contact Information
||||
|-|-|-|
||Board Secretary|Securities Representative|
|Name|Lin Yihui|Huang Yufen|
||No. 64, Fenjiang North Road, Chancheng|No. 64, Fenjiang North Road, Chancheng|
|Address|District, Foshan City, Guangdong|District, Foshan City, Guangdong|
||Province, P.R.China|Province, P.R.China|
|Tel.|（0757）82810239|（0757）82966028|
|Fax|（0757）82816276|（0757）82816276|
|Email address|fsl-yh@126.com|fslhyf@163.com|

III Media for Information Disclosure and Place where this Report Is Lodged
|||
|-|-|
|Newspapers designated by the Company for|China Securities Journal, Securities Times, Securities Daily, Ta Kung Pao|
|information disclosure|(HK)|
|Website designated by CSRC for publication of this|http://www.cninfo.com.cn|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
|Report||
||Board Secretary’s Office, FSL Office Building, No. 64, Fenjiang North|
|Place where this Report is lodged||
||Road, Chancheng District, Foshan City, Guangdong Province, P.R.China|

 IV Change to Company Registered Information
|||
|-|-|
|Unified social credit code|91440000190352575W|
|Change to principal activity of the||
||No change|
|Company since going public (if any)||
|Every change of controlling shareholder||
||No change|
|since incorporation (if any)||

V Other Information
The independent audit firm hired by the Company:
|||
|-|-|
|Name|Beijing Zhongzhengtiantong Certified Public Accountants LLP|
|Office address|13/F, Tower B, Jinyun Building, A43 Xizhimen Avenue North, Haidian District, Beijing|
|Accountants writing signatures|Tong Quanyong, Luo Dongri|

The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable√ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable√ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes√ No
||||||
|-|-|-|-|-|
||||2018-over-2017||
||2018|2017||2016|
||||change (%)||
|Operating revenue (RMB)|3,801,955,946.76|3,800,188,261.54|0.05%|3,366,454,968.60|
|Net profit attributable to the listed|377,615,133.62|740,308,725.30|||
||||-48.99%|1,072,342,050.13|
|company’s shareholders (RMB)|||||
|Net profit attributable to the listed|||||
|company’s shareholders before|354,513,585.67|353,549,021.39|0.27%|351,237,317.17|
|exceptional items (RMB)|||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
|Net cash generated from/used in|617,987,487.05|215,821,192.79|||
||||186.34%|289,978,768.48|
|operating activities (RMB)|||||
|Basic earnings per share|0.2699|0.5290|||
||||-48.98%|0.7663|
|(RMB/share)|||||
|Diluted earnings per share|0.2699|0.5290|||
||||-48.98%|0.7663|
|(RMB/share)|||||
|Weighted average return on equity|||||
||8.36%|15.14%|-6.78%|21.40%|
|(%)|||||
||||Change of 31||
||||December 2018 over||
||31 December 2018|31 December 2017||31 December 2016|
||||31 December 2017||
||||(%)||
|Total assets (RMB)|5,588,166,699.30|5,675,811,824.29|-1.54%|6,100,169,400.30|
|Equity attributable to the listed|4,319,259,418.46|4,779,115,459.39|||
||||-9.62%|4,990,466,577.12|
|company’s shareholders (RMB)|||||

VII Accounting Data Differences underChina’s Accounting Standards for Business Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable√ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable√ Not applicable
No difference for the Reporting Period.
VIII Key Financial Information by Quarter
Unit: RMB
||||||
|-|-|-|-|-|
||Q1|Q2|Q3|Q4|
|Operating revenue|1,123,376,512.26|941,402,777.73|820,735,540.10|916,441,116.67|
|Net profit attributable to the listed|||||
||96,552,712.99|132,724,742.83|94,389,387.69|53,948,290.11|
|company’s shareholders|||||
|Net profit attributable to the listed|||||
|company’s shareholders before|96,033,861.87|131,994,374.84|94,550,677.32|31,934,671.64|
|exceptional items|||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
|Net cash generated from/used in|||||
||124,450,627.91|20,273,150.47|365,717,317.90|107,546,390.77|
|operating activities|||||

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what have been disclosed in theCompany’s quarterly or interim reports.
□ Yes√ No
IX Exceptional Gains and Losses
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|2018|2017|2016|Note|
|Gain or loss on disposal of non-current assets|-1,671,154.30||||
|||176,540,060.61|-5,776,457.37||
|(inclusive of impairment allowance write-offs)|||||
|Government subsidies charged to current profit or|30,005,231.23||||
|loss (exclusive of government subsidies given in|||||
|the Company’s ordinary course of business at||1,185,148.00|1,669,377.53||
|fixed quotas or amounts as per the government’s|||||
|uniform standards)|||||
|Gain or loss on fair-value changes in trading|-477,200.00||||
|financial assets and liabilities & investment|||||
|income from disposal of trading financial assets|||||
|and liabilities and available-for-sale financial||269,362,165.95|853,216,065.17||
|assets (exclusive of effective portion of hedges|||||
|that arise in the Company’s ordinary course of|||||
|business)|||||
|Reversed portion of impairment allowance for|||||
|accounts receivable which are tested individually|||3,535,749.69||
|for impairment|||||
|Non-operating income and expense other than|-594,356.14||||
|||1,640,395.69|-4,774,788.19||
|above|||||
|Less: Income tax effects|4,222,066.76|61,971,050.60|127,331,306.57||
|Non-controlling interests effects (net of tax)|-61,093.92|-2,984.26|-566,092.70||
|Total|23,101,547.95|386,759,703.91|721,104,732.96|--|

 Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Gain/Loss Items:
□ Applicable√ Not applicable
No such cases for the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part III Business Summary
I Principal Activity of the Company in the Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
1. TheCompany’s Principal Activities or Products
We design, manufacture and market high-quality, green and energy-efficient lighting products and electrical products, as well as provide comprehensive lighting and electrical solutions. Our products mainly include electrical products such as LED light sources and luminaries, automotive LED luminaries, traditional light sources switches and socket. Currently, we have three major operating divisions, namely, lighting, electrical products and vehicle lighting. Upon years of development, we have won quite many honors, and our “FSL” and “Fenjiang” brands have been certified as “Famous China Brands”.
2. Main business models
(1) Procurement model
We mainly procure raw materials such as lamp beads, lamp holders, electronic components, aluminum substrate, plastic parts, metal materials, quartz tubes and fuel by way of bids invitation. A bids invitation supervisory committee consisting of personnel from several departments will be set up in the future. For every kind of our main raw materials, we usually have a few suppliers to choose from in procurement so that the procurement prices would be fair, the supply of raw materials in time and the good quality of the raw materials ensured.
(2) Production models
① Production of the conventional products
Concerning the conventional products, we analyze sales of every month and predict future market demand so as to formulate a production plan for the coming month. And our workshops produce according to the plan to avoid extra stock and at the same time ensure that there is enough for sale.
② Production according to orders
Different from the conventional lighting products which are of little variation in specifications, LED lighting products are at a fast pace of renewal and different customers often have different requirements regarding theproducts’ appearances and performance indexes. Therefore, we have to organize individualized production for
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 some orders for LED lighting products, export orders in particular. For this kind of orders, we formulate our production plans based on them and then make procurement plans according to the production plans, which will help effectively control the stock and the procurement prices of raw materials, reduce capital occupation and improve our operating efficiency to the maximum.
③ Combination of independent production and outsourcing
With a high production capacity, we produce most of our products and parts on our own. Only a small portion of parts and low-tech products is outsourced to sub-manufacturers, who will produce in strict accordance with our requirements. We will also tag along their production processes and examine carefully the quality of the products finished. In this way, our supply of products is guaranteed.
(3) Sales model
Domestically, we mainly adopt a commercial agent model. In terms of channels, we have wholesale, franchised store, illumination engineering& commercial lighting, industrial and mining outdoor channels, e-commerce& retail sales and automotive lighting channels.
For overseas markets, we primarily adopt OEM/ODM models and also sell under our own brands (through agents).
3. Main driving forces for growth
The Reporting Period saw unfavorable factors such as the slowing down domestic economy, the China-U.S. trade war and fierce competition. However, relying on its advantages in technology, brand, channel, and scale, the Company consistently pushed forward the technology upgrade of main products through continualR&D investment and technological innovation so as to improve the quality of its products. It also strengthened marketing and optimized the structure of its products to be sold. Additionally, it effectively controlled procurement cost and improved production efficiency by way of a higher level of automation in manufacturing. As a result, theCompany’s comprehensive competitiveness has increased further, and its operating revenue and net profit both recorded year-on-year growth.
4. Development stage and periodicity of the lighting industry as well as our position in the market
The recent years have witnessed the rapid rise of the LED lighting technology. Due to the sharp drop in their cost and their remarkable performance in energy saving& emission reduction, LED lighting products have been generally accepted by consumers, resulting in a higher and higher penetration rate as well as a fast-shrinking market for conventional lighting products. However, after years of fast development and renewal, growth in LED lighting has slowed down. Particularly the LED downstream with a low requirement for market access is suffering
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 from an obvious problem of structural overcapacity, leading to the disordered, cutthroat competition on the market. Under the double hits by a macro economic downturn and fierce competition, large enterprises will expand through mergers and acquisitions for stronger competitiveness, while some small and medium ones can only face the fate of being washed out of the market due to lack of competitiveness, which is bringing the entire industry into an integration phase. As a necessity for daily life, lighting products are mainly under the influence of the macro economy and the real estate sector but are little affected by seasons and regions.
Generally speaking,China’s lighting industry is insufficiently centralized with no overwhelmingly superior enterprises despite an enlarging market share of competitive brands. Upon years of development, we have become a leading and quite competitive lighting enterprise with strong competitiveness in brand, production scale, channel,R&D, etc.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
|||
|-|-|
|Major assets|Main reason for significant changes|
|Equity assets|No significant change during the Reporting Period|
|Fixed assets|No significant change during the Reporting Period|
|Intangible assets|No significant change during the Reporting Period|
||The ending amount was up 37.96% from the beginning amount, primarily driven by|
|Construction in progress||
||more investments in plant construction in the expansion of the plants in Gaoming .|
||The ending amount was down 35.44% from the beginning amount, primarily driven by|
|Available-for-sale financial assets||
||fair value of share decreases in the Current Period.|

2. Major Assets Overseas
□ Applicable√ Not applicable
III Core Competitiveness Analysis
Is the Company subject to any disclosure requirements for special industries?
No.
Channel advantage
The Company has been sticking to the marketing strategy of deeply focusing and refining channels. Through years
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 of development and experience accumulation, the Company currently has five major sales channels for the domestic market, which contains the circulation and wholesales channel, the exclusive shop channel, the E-business retail channel, and the engineering commercial lighting channel, industrial and mining outdoor channels , forming a marketing network covering the whole country. And the Company primarily serves as an OEM partner for internationally famous lighting companies, and sells its own FSL-branded products on the overseas market. Replying on strong and perfect sales channels, products of the Company can rapidly enter the market, which has significantly improved theCompany’s market development capability and competitiveness.
Brand advantage
The Company keeps focusing on the positioning, core value, and features of FSL brand, and continually improved the brand recognition and reputation of FSL brand by product design, end sales, advertisement, special lighting exhibition, and so on. At present, FSL and Fen Jiang among the three brands of the Company are both famous trademarks in China. The FSL brand has become one of the most influential and popular brands in China, and the powerful brand influence has become the main driver for continuous sales growth of the Company.
Technology advantage
The Company has always been attaching importance toR&D of new products and technologies, increasing the input on independent innovation on technologies and products, and perfecting the improvement process forR&D and technique of all products. The Company absorbs and trains technical talents, set up innovative incentive mechanism and performance mechanism, and fully provides with supports in fund, talents, and mechanisms.
Scale advantage
As one of the enterprises to first step into the industry of producing and selling lighting products, the Company possesses the manufacture culture of refining production and the large-scale manufacturing capability by years of experience accumulation. The Company has production bases in Foshan, Nanjing and Xinxiang. The large-scale and centralized production brings obvious economic benefits to the Company, which not only shows in manufacture cost of products, but also shows in aspects such as raw material procurement and product pricing.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part IV Operating Performance Discussion and Analysis
I Overview
(I) Summary
2018 saw changes inChina’s economy with mounting pressure on foreign trade. Domestically, economic growth was under great pressure with a growth slowdown in consumption demand. Internationally, pressure built up on export as a result of the tightening monetary policies of developed economies, decreasing liquidity across the globe and rising China-U.S. trade frictions. In face of these economic changes and the fierce competition industrywide, theCompany’s management continued to focus on the strategic objectives of “Cutting-Edge Technologies, Internationally-Famous Brands and Large-Scale Production” the Board had put forward, strengthening innovation, optimizing the product mix and improving manufacturing and management. As a result, the Company delivered a good operating performance for the Reporting Period. For this period, the Company recorded operating revenue of RMB3.802 billion, up0.05% compared to last year, and a net profit attributable to the listedcompany’s shareholders of RMB378 million, representing a year-on-year drop of48.99%. The drop in net profit was primarily attributable to a considerable decrease in investment income in 2018.
(II) Major Work in 2018
1. Strengthened market expansion and enhanced market competitiveness
(1) In respect of domestic sale, promote reforms in the sale channel mode and enhance channel competitiveness In terms of circulation channel, the Company promoted reforms in the channel business mode, drove the switch of distributors from merchants to service providers, flattened channel management, helped distributors in the change from an operation center to a service center, with the service center performing the functions such as the optimization of partial market environment, customer development and refinement of after-sales service, got closer to theconsumers’ terminal and strengthened the terminal control abilities over channels.
In respect of engineering lighting, the Company grasped the opportunity of the rapid increase in the demand of concentrated purchase by real estate companies and of concentrated invitation to tenders and procurement by big groups, proactively built the new product layout in household lighting and commercial lighting for civil purposes, had it operated by a professional team, and further strengthened its cooperation with real estate companies, property management companies and brand chain groups, with great achievements made. As at the end of 2018,
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 the Company had successfully entered contracts with 20 real estate companies including Evergrande Real Estate, Zhongliang Real Estate, Times Property, Aoyuan Group, Heineng Group, PKU Resources, KWG, Guangwu Real Estate and China South City, and was successfully listed into the brand bank of Country Garden. In addition, the Company had successfully entered contracts with a number of property management companies including Evergrande Property, Country Garden Property, Sunac Property, Great Wall Property, Gemdale Property, Hailiang Property and Zhongnan Property, and had won the bidding for the projects of Ping An Group, Sinopec, Aima Technology Group, etc.. The successful cooperation with so many real estate companies, property management companies and corporate groups reflects theCompany’s capacity and competence in household and commercial lighting solutions as well as represents thecustomers’ recognition of its products, brand and services. In respect of franchised stores, the Company accelerated the pace of expanding blank markets and upgraded stores to further enhance its terminal image. It encouraged scenario-based sales, improved theconsumers’ shopping experience in franchised stores, and enhanced its terminal marketing level and brand recognition by carrying out various forms of terminal promotion activities.
In respect of e-commerce, the Company kept increasing product categories on e-commerce and promoted the integration of online and offline channels through the synergy of product and price policies. With the platform promotion activities, it highlighted product differentiation, optimized the product sale structure, focused on the promotion of intelligent products, and became one of the official cooperative brands of Tmall Genie, laying a foundation for the subsequent development of theCompany’s products on the e-commerce platform.
(2) In terms of export sales, first, the Company adjusted the product structure. Through sustained guidance and efforts, theCompany’s main export products changed gradually from such light source products as bulbs and tubes to such lamps as downlights, ceiling lamps and flood lights, with breakthroughs made in intelligent products. Thus, the Company achieved “soft landing” in the transformation of its product structure. Second, the Company developed the potential of key customers to a great depth and worked well on the management and maintenance of key customers at multiple levels and from multiple perspectives, resulting in a big increase in the order amount from key customers. Third, the Company proactively developed new customers and kept increasing the flexible sources for export. During the Reporting Period, there were 148 new customers for export, who contributed an operating revenue of over RMB44 million.
2. IncreasedR&D investment and accelerated the layout in the new field of intelligent products
Facing the upgrading ofconsumers’ demands and the reform in industrial development, the Company increased
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018R&D investment and accelerated theR&D layout in the new fields of intelligent lighting, intelligent electrical products and intelligent vehicle lights. In 2018, the Company diversified and upgraded the intelligent product lines, refined product categories, developed intelligent products supporting the mainstream protocols including wifi/Bluetooth/Zigbee for different channels and different application scenarios, proactively carried out cooperation with domestic and foreign mainstream platforms, connected with the intelligent speakers and apps of foreign platforms such as Amazon, Echo, Google Assistant and Homekit and domestic platforms such as Alibaba, Tencent, Evergrande Real Estate and Lenovo Siot, completed the development of the intelligent control system “FSL e-Home” and realized the transformation from intelligent single products to intelligent solutions. In 2018, the Company achieved sales revenue of RMB14.18 million from intelligent products. The Company successfully secured the 110 Command Center of Foshan, the Outdoor Intelligent Project of China-Latin America Economic and Trade Cooperation Park, the Intelligent Firefighting Project of Shanwei Special Cooperation Zone, the Outdoor Intelligent Project of Rising Wanbo City and the E-Era Kindergarten Intelligent Classrooms of Nanshan, Shenzhen.
3. Upgraded manufacturing capacity and increased production efficiency
With the deep implementation of “Made in China 2025”, the Company keeps investing substantially on the upgrading of technical and production lines and enhance the level of automatic and informationized manufacturing. While the intelligent production lines for the main products such as bulbs, tubes, downlights, ceiling lamps, panel lights, vehicle lights and switches have been put into operation, the Company is promoting the project of integrating production, warehousing and logistics. In 2017, the Company won the title of “Foshan Pilot Demonstration Enterprise for Made in China 2025”; in 2018, theCompany’s “Pilot Demonstration Project of Intelligent Manufacturing Production Line of LED Lighting Products” was named as “2018 Guangdong Province Intelligent Manufacturing Pilot Demonstration Project”; in addition, the Company won the honor of the second-batch “China Green Factory” granted by the Ministry of Industry and Information Technology. The application of the intelligent production line has substantially enhanced theCompany’s manufacturing capacity, reduced labor costs, improved product quality and reduced the risk of product quality.
4. Made breakthroughs in the development of electrical product business and opened the market of new channel business
2018 is the second complete operation year of FSL Zhida, a holding subsidiary of the Company. With a sustained focus on combing products, FSL Zhida extended to sockets and integrated series and increased the sales outlets to
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 enhance the coverage of its sales network. In terms of conventional channels, FSL Zhida owned 7,626 terminal outlets. In terms of engineering and KA channels, over nearly twoyears’ market development, in 2018, FSL Zhida successfully signed contracts with the real estate companies including Vanke Kezhu, Huasheng Real Estate, Power China Real Estate, China Railway Real Estate, China South City Real Estate and Huayao Real Estate and entered into the contracts for the projects includingBeijing’s Sub-Center, Shougang, Beijing Sweet City andXi’an Xianyang Culture and Sports Functional Areas. In 2018, FSL Zhida made important breakthroughs in the business of engineering concentrated purchase, laying a solid foundation for it to release power in the engineering and KA channels and expand the sales scale.
5. The rapid development of LED vehicle lighting injected new power for theCompany’s subsequent development
During the Reporting Period, the Company kept increasing the investment in respect of LED vehicle lighting, recruited high-calibre technical professionals, introduced two new automatic production lines, diversified the product series and enhanced the production capacity. In the Reporting Period, the Company developed 11 specifications of headlamps, undertook 18 new LED module projects, and managed to enter the procurement system of SAIC, JMC Ford and Geely while maintaining the previous customer base. The new customers and new projects have enhanced the brand recognition of theCompany’s LED vehicle lighting in the market, laying a solid foundation for theCompany’s subsequent development. In 2018, theCompany’s sales revenue from LED vehicle lighting increased by more than100% from the previous year, injecting new power for its subsequent development.
6. Strengthened brand promotion for brand upgrading
In 2018, the Company carried out comprehensive upgrading on its brand strategies, created a new “Professional, Healthy, Fashionable and Intelligent” brand image, and promoted the transition of “Foshan Lighting” from an industrial brand to a popular brand. TheCompany’s upgrading of brand strategies was based on communication characteristics, orientation of development and integration of communication, with an all-round and multiple-channel communication of a professional, healthy, fashionable and intelligent lifestyle to users. In respect of conventional media, the Company placed a mass of advertisements on CCTV-2, CCTV-7, CCTV-10, Guangzhou Baiyun International Airport and the trains on Beijing-Guangzhou High-Speed Railway in 2018, which marked theCompany’s full entrance into an era of high-speed brand development. In terms of the internet and mobile internet, by cooperating with such new media as WeChat, Toutiao, Weibo and mobile apps, the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Company enhanced brand recognition and reputation among young people through the big data flow, formed comprehensive and diverse promotion positions, substantially increased the brand recognition and influence of “Foshan Lighting” and established a high-end popular brand image. In terms of the demonstration of terminal image, the Company upgraded the image of franchised stores, increasedusers’ favorability of experience and accommodated youngerconsumers’ interactive experience in the stores. Through the measures with concerted efforts, the Company has further enhanced its brand influence and gradually established its middle- and high-end brand image.
7. Refined the talent development mechanism and the performance appraisal system and reinforced the establishment of corporate culture
During the Reporting Period, the Company focused on promoting the building of a talent echelon, reinforced the introduction and development of high-calibre technical and management talents and carried out customized and professional training through the integration of internal and external trainers to establish a professional and efficient talent team. The Company launched the “Elite Lightening Program”, refined the performance appraisal mechanism oriented by performance, promoted the refinement of KPI performance management and endeavored to build the remuneration incentive system “centering around customers and based on players”. The Company nurtured a positive and vigorous corporate culture and enhanced corporate cohesion and centripetal force; enrichedstaff’s leisure life and created staff-caring channels; carried out the Party-mass related work centering around production and operation and strengthened the organization building of the Party to create a favorable environment for the sound development of the Company.
II Core Business Analysis
1. Overview
See “I Overview” above.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
||||||
|-|-|-|-|-|
|2018||2017|||
|||||Change (%)|
|Operating revenue|As % of total|Operating revenue|As % of total||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
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|-|-|-|-|-|-|
|||operating revenue||operating revenue||
|||(%)||(%)||
|Total|3,801,955,946.76|100%|3,800,188,261.54|100%|0.05%|
|By operating division||||||
|Lighting products||||||
||3,801,955,946.76|100.00%|3,800,188,261.54|100.00%|0.05%|
|and luminaries||||||
|By product category||||||
|LED lighting||||||
||2,776,060,566.71|73.02%|2,629,174,231.52|69.19%|5.59%|
|products||||||
|Traditional lighting||||||
||905,695,616.42|23.82%|1,015,201,248.68|26.71%|-10.79%|
|products||||||
|Electrical products|96,493,768.09|2.54%|128,591,276.67|3.38%|-24.96%|
|Other|23,705,995.54|0.62%|27,221,504.67|0.72%|-12.91%|
|By operating segment||||||
|Domestic|2,158,770,050.28|56.78%|2,311,103,467.42|60.82%|-6.59%|
|Overseas|1,643,185,896.48|43.22%|1,489,084,794.12|39.18%|10.35%|

 (2) Operating Division, Product Category or Operating Segment Contributing over10% of Operating Revenue or Operating Profit
√ Applicable□ Not applicable
Is the Company subject to any disclosure requirements for special industries?
No.
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||||YoY change in||YoY change in|
||Operating||Gross profit||YoY change in||
|||Cost of sales||operating revenue||gross profit|
||revenue||margin||cost of sales (%)||
|||||(%)||margin (%)|
|By operating division|||||||
|Lighting products|||||||
||3,801,955,946.76|2,922,833,510.40|23.12%|0.05%|-0.59%|0.49%|
|and luminaries|||||||
|By product category|||||||
|LED lighting|||||||
||2,776,060,566.71|2,171,839,325.91|21.77%|5.59%|3.99%|1.20%|
|products|||||||
|Traditional|||||||
||905,695,616.42|667,945,297.12|26.25%|-10.79%|-10.41%|-0.31%|
|lighting products|||||||
|Electrical|||||||
||96,493,768.09|64,298,149.13|33.37%|-24.96%|-28.12%|2.93%|
|products|||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|Other|23,705,995.54|18,750,738.24|20.90%|-12.91%|13.69%|-18.51%|
|By operating segment|||||||
|Domestic|2,158,770,050.28|1,579,012,868.21|26.86%|-6.59%|-6.98%|0.30%|
|Overseas|1,643,185,896.48|1,343,820,642.19|18.22%|10.35%|8.14%|1.67%|

 Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:□ Applicable√ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes□ No
|||||||
|-|-|-|-|-|-|
|Operating division|Item|Unit|2018|2017|Change (%)|
||Unit sales|Piece|767,969,866|868,749,877|-11.60%|
|Lighting products||||||
||Output|Piece|771,535,024|852,675,184|-9.52%|
|and luminaries||||||
||Inventory|Piece|121,276,383|117,711,225|3.03%|

 Note: In 2018, the Company purchased 30,419,100 pieces of finished goods from outside.
Any over30% YoY movements in the data above and why:
□ Applicable√ Not applicable
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable√ Not applicable
(5) Breakdown of Cost of Sales
By operating division and product category
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||2018||2017|||
|Operating|||||As % of total||
||Item||As % of total cost|||Change (%)|
|division||Cost of sales||Cost of sales|cost of sales||
||||of sales (%)||||
||||||(%)||
|Lighting products|||||||
|||2,922,833,510.40|100.00%|2,940,069,129.71|100.00%|-0.59%|
|and luminaries|||||||
|Lighting products|||||||
||Raw materials|2,199,097,763.69|75.24%|2,139,903,308.07|72.78%|2.77%|
|and luminaries|||||||
|Lighting products|||||||
||Labor cost|419,756,197.29|14.36%|500,797,273.73|17.03%|-16.18%|
|and luminaries|||||||
|Lighting products|Depreciation and|285,228,811.19|9.76%|282,876,388.57|9.62%|0.83%|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|and luminaries|other||||||
|Lighting products|||||||
||Other|18,750,738.24|0.64%|16,492,159.34|0.56%|13.69%|
|and luminaries|||||||

Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||2018||2017|||
|Product category|Item||As % of total cost||As % of total cost|Change (%)|
|||Cost of sales||Cost of sales|||
||||of sales (%)||of sales (%)||
|LED lighting|||||||
||Raw materials|1,754,239,718.12|60.02%|1,658,258,780.94|56.40%|5.79%|
|products|||||||
|LED lighting|||||||
||Labor cost|265,927,179.88|9.10%|320,338,525.94|10.90%|-16.99%|
|products|||||||
|LED lighting|Depreciation and||||||
|||151,672,427.91|5.19%|109,969,762.25|3.74%|37.92%|
|products|other||||||
|LED lighting|||||||
||Subtotal|2,171,839,325.91|74.31%|2,088,567,069.13|71.04%|3.99%|
|products|||||||
|Traditional|||||||
||Raw materials|388,968,905.47|13.31%|412,293,959.50|14.02%|-5.66%|
|lighting products|||||||
|Traditional|||||||
||Labor cost|149,172,301.24|5.10%|167,854,073.03|5.71%|-11.13%|
|lighting products|||||||
|Traditional|Depreciation and||||||
|||129,804,090.42|4.44%|165,405,251.49|5.63%|-21.52%|
|lighting products|other||||||
|Traditional|||||||
||Subtotal|667,945,297.12|22.85%|745,553,284.02|25.36%|-10.41%|
|lighting products|||||||
|Electrical|||||||
||Raw materials|55,889,140.10|1.91%|69,350,567.63|2.36%|-19.41%|
|products|||||||
|Electrical|||||||
||Labor cost|4,656,716.17|0.16%|12,604,674.76|0.43%|-63.06%|
|products|||||||
|Electrical|Depreciation and||||||
|||3,752,292.86|0.13%|7,501,374.83|0.26%|-49.98%|
|products|other||||||
|Electrical|||||||
||Subtotal|64,298,149.13|2.20%|89,456,617.22|3.04%|-28.12%|
|products|||||||
|Other products|||||||
||Other|18,750,738.24|0.64%|16,492,159.34|0.56%|13.69%|
|and services|||||||
|Total||2,922,833,510.40|100.00%|2,940,069,129.71|100.00%|-0.59%|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
□ Yes√ No
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable√ Not applicable
(8) Major Customers and Suppliers
Major customers:
|||
|-|-|
|Total sales to top five customers (RMB)|701,920,329.61|
|Total sales to top five customers as % of total sales of the||
||18.46%|
|Reporting Period (%)||
|Total sales to related parties among top five customers||
||0.00%|
|as % of total sales of the Reporting Period (%)||

Information about top five customers:
|||||
|-|-|-|-|
|||Sales revenue contributed for||
|No.|Customer||As % of total sales revenue (%)|
|||the Reporting Period (RMB)||
|1|Customer A|447,863,946.12|11.78%|
|2|Customer B|123,020,918.98|3.24%|
|3|Customer C|50,701,481.65|1.33%|
|4|Customer D|40,462,607.27|1.06%|
|5|Customer E|39,871,375.59|1.05%|
|Total|--|701,920,329.61|18.46%|

 Other information about major customers:
√ Applicable□ Not applicable
None of the top five customers is a related party of the Company.
Major suppliers:
|||
|-|-|
|Total purchases from top five suppliers (RMB)|315,842,520.23|
|Total purchases from top five suppliers as % of total||
||13.43%|
|purchases of the Reporting Period (%)||
|Total purchases from related parties among top five||
|suppliers as % of total purchases of the Reporting Period|4.05%|
|(%)||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Information about top five suppliers:
|||||
|-|-|-|-|
|||Purchase in the Reporting||
|No.|Supplier||As % of total purchases (%)|
|||Period (RMB)||
|1|Supplier A|95,223,746.49|4.05%|
|2|Supplier B|67,569,061.90|2.87%|
|3|Supplier C|52,200,323.08|2.22%|
|4|Supplier D|50,963,619.43|2.17%|
|5|Supplier E|49,885,769.33|2.12%|
|Total|--|315,842,520.23|13.43%|

 Other information about major suppliers:
√ Applicable□ Not applicable
Among the top five suppliers, the 1st supplier is a related party of the Company while the other 4 are not.
3. Expense
Unit: RMB
||||||
|-|-|-|-|-|
||2018|2017|Change (%)|Reason for any significant change|
|Selling expense|237,485,389.89|213,812,639.74|11.07%||
|Administrative expense|173,871,085.61|179,002,806.58|-2.87%||
||-26,115,179.16|10,972,282.52||The significant drop was mainly|
|||||attributable to higher exchange gains|
|Finance costs|||-338.01%||
|||||driven by the depreciation of RMB and|
|||||growth in exports|
||52,726,585.28|34,578,167.96||More investments in R&D in the|
|R&D expense|||52.49%|Current Period, including significantly|
|||||higher labor cost|

4.R&D Expense
√ Applicable□ Not applicable
The Company always took science and technology as the first priority, paid attention to technologyR&D, constantly researched and developed new products and technologies meeting market demands, promoted the optimization and upgrade of product structure, improved the technology content of products, and improved the core competitiveness of the Company. Meanwhile, the Company strengthened the research on technique and
technology of products, so as to cut down product cost and improve quality. Where theR&D funds go to: One is
forward-looking technologies and products independently developed by the Company through separateR&D
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 projects as product and technology reserve for market expansion in the future. For this kind ofR&D projects, the Company usually launches the project and sets up a dedicated research team. The other is new products developed according tocustomers’ technological requirements. For this kind ofR&D projects, the Company formulates an initial design plan and starts trial productions after the plan has been approved by the customer, with the bench-scale and pilot-scale production expenses included into theR&D expense.
According to the Measures for the Administration of the Accreditation of High-Tech Enterprises,R&D expense includes theR&D expense recorded in cost of sales and theR&D expense capitalized as per the relevant accounting standards. In 2018, theCompany’sR&D expense amounted to RMB139.5949 million, accounting for3.67% of the operating revenue. The revenue generated from the sale of products through the bench-scale and pilot-scale production was recorded in the core business revenue, while RMB83.6775 million and RMB52.7266 million of the costs and expenses incurred were recorded in the cost of sales of core businesses and theR&D expense respectively.
Unit:RMB’0,000
||||||
|-|-|-|-|-|
|Year|Operatingrevenue|R&D expense|R&D expense as % ofoperating revenue|Costs recorded in cost ofsales|
|2018|380,195.59|13,959.49|3.67%|8,367.75|
|2017|380,018.83|12,798.29|3.37%|9,289.82|

 Details aboutR&D expense:
|||||
|-|-|-|-|
||2018|2017|Change (%)|
|Number of R&D personnel|673|540|24.63%|
|R&D personnel as % of total||||
||7.29%|5.86%|1.43%|
|employees||||
|R&D expense (RMB)|139,594,894.62|127,982,819.10|9.07%|
|R&D expense as % of operating||||
||3.67%|3.37%|0.30%|
|revenue||||
|Capitalized R&D expense||||
||0.00|0.00|0.00%|
|(RMB)||||
|Capitalized R&D expense as %||||
||0.00%|0.00%|0.00%|
|of total R&D expense||||

Reasons for any significant YoY change in the percentage ofR&D expense in operating revenue:
□ Applicable√ Not applicable
Reason for any sharp variation in the percentage of capitalizedR&D expense and rationale:
□ Applicable√ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 5. Cash Flows
Unit: RMB
|||||
|-|-|-|-|
|Item|2018|2017|Change (%)|
|Subtotal of cash generated from|3,844,002,001.24|3,792,544,040.88||
||||1.36%|
|operating activities||||
|Subtotal of cash used in|3,226,014,514.19|3,576,722,848.09||
||||-9.81%|
|operating activities||||
|Net cash generated from/used in|617,987,487.05|215,821,192.79||
||||186.34%|
|operating activities||||
|Subtotal of cash generated from|271,716,187.40|366,096,873.47||
||||-25.78%|
|investing activities||||
|Subtotal of cash used in|248,587,186.18|946,893,845.08||
||||-73.75%|
|investing activities||||
|Net cash generated from/used in|23,129,001.22|-580,796,971.61||
||||103.98%|
|investing activities||||
|Subtotal of cash used in|418,531,713.57|539,956,095.34||
||||-22.49%|
|financing activities||||
|Net cash generated from/used in|-418,531,713.57|-539,956,095.34||
||||22.49%|
|financing activities||||
|Net increase in cash and cash|225,101,547.42|-909,099,433.58||
||||124.76%|
|equivalents||||

Explanation of why any of the data above varies significantly:
√ Applicable□ Not applicable
1. Net cash generated from operating activities increased186.34% year-on-year, primarily because bank acceptance bills were adopted more often in the settlements with suppliers and some suppliers allowed longer payment days in the Current Period.
2. Net cash generated from investing activities increased103.98% year-on-year, primarily driven by a smaller margin between the purchase amount and the withdrawn amount ofbank’s low-risk principal-protected wealth management products and structured deposits.
3. Net cash used in financing activities increased22.49% year-on-year, primarily driven by a smaller amount of cash dividend payout.
4. Net increase in cash and cash equivalents increased124.76% year-on-year, primarily driven by more net cash generated from operating and investing activities.
Explanation of why net cash generated from/used in operating activities varies significantly from net profit for the
Reporting Period:
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018√ Applicable□ Not applicable
For the Reporting Period, net cash generated from operating activities stood at RMB617,987,487.05 while net profit stood at RMB379,150,336.15, representing a difference of RMB238,837,150.90, primarily because bank acceptance bills were adopted more often in the settlements with suppliers and some suppliers allowed longer payment days in the Current Period.
III Analysis of Non-Core Businesses
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
||Amount|As % of total profit|Main source/Reason|Exceptional or recurrent|
||||Gains on banks’ low-risk||
||||wealth management products||
|Investment income|53,329,524.74|11.82%|and dividends from holding|Exceptional|
||||available-for-sale financial||
||||assets||
|Gain/loss on|||Changes in the fair value of||
|changes in fair|-477,200.00|-0.11%|derivative financial|Exceptional|
|value|||instruments||
||||Allowances for doubtful||
|Asset impairments|37,673,120.95|8.35%|accounts and inventory|Exceptional|
||||valuation allowances||
|Non-operating|||Government subsidies and||
||3,808,610.50|0.84%||Exceptional|
|income|||other income received||
||||Losses on the disposal of||
|Non-operating|||||
||3,827,826.27|0.85%|non-current assets and|Exceptional|
|expense|||||
||||inventory||

IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||31 December 2018||31 December 2017||Change in||
|||||||Reason for any significant|
|||As % of total||As % of|percentage||
||Amount||Amount|||change|
|||assets||total assets|(%)||
||8 96,646,719.87||570,184,208.96|||Recovery of mature investments|
|Monetary capital||16.05%||10.05%|6.00%|in bank’s wealth management|
|||||||products at the period-end|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|Accounts|834,420,596.05||756,291,432.56||||
|||14.93%||13.32%|1.61%||
|receivable|||||||
|Inventory|767,319,599.00|13.73%|746,466,889.87|13.15%|0.58%||
|Long-term equity|182,458,559.69||179,414,105.14||||
|||3.27%||3.16%|0.11%||
|investments|||||||
|Fixed assets|512,106,912.39|9.16%|483,520,866.64|8.52%|0.64%||
||224,624,447.16||162,814,991.68|||More investments in plant|
|Construction in|||||||
|||4.02%||2.87%|1.15%|construction in the expansion of|
|progress|||||||
|||||||the plants in Gaoming|
|Available-for-sale||||||Decrease in the fair value of|
||897,716,590.20|16.06%|1,390,581,536.60|24.50%|-8.44%||
|financial assets||||||share in the Current Period|

 2. Assets and Liabilities at Fair Value
√ Applicable□ Not applicable
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Gain/loss on||||||
||||Cumulative|Impairment||||
|||fair-value|||Purchased in|Sold in the||
||Beginning||fair-value|allowance for||||
|Item||changes in the|||the Reporting|Reporting|Ending amount|
||amount||changes charged|the Reporting||||
|||Reporting|||Period|Period||
||||to equity|Period||||
|||Period||||||
|Financial assets||||||||
|1.||||||||
|Available-for-sa||||||||
||1,086,953,227.20||350,203,393.34||||594,088,280.80|
|le financial||||||||
|assets||||||||
|Subtotal of||||||||
||1,086,953,227.20||350,203,393.34||||594,088,280.80|
|financial assets||||||||
|Total of the||||||||
||1,086,953,227.20||350,203,393.34||||594,088,280.80|
|above||||||||
|Financial||||||||
|||-477,200.00|||||-477,200.00|
|liabilities||||||||

Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes√ No
3. Restricted Asset Rights as at the Period-End
||||
|-|-|-|
|Item|Ending carrying value|Reason for restriction|
|Monetary capital|101,360,963.49|Security deposits for notes and forward forex|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|||settlement|
|Notes receivable|44,969,669.60|In pledge for notes pool|
|Total|146,330,633.09||

V Investments Made
1. Total Investment Amount
√ Applicable□ Not applicable
||||
|-|-|-|
|Total investment amount of Reporting|Total investment amount of same period of||
|||Change (%)|
|Period (RMB)|last year (RMB)||
|0.00|143,604,335.25|-100.00%|

 2. Major Equity Investments Made in the Reporting Period
□ Applicable√ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable√ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable□ Not applicable
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||Gain/Lo||||||||
||||||||Accumu|||||||
|||||||ss on||||||||
||||||||lated|||||||
||||Initial|||fair-valu||Purchas||Gain/los||||
||||||Beginni||fair-valu||Sold in|||||
|Security|Security|Security||Measure||e||ed in||s in|Ending|Account|Funding|
||||investm|ment|ng|changes|e|Reporti|Reporti|Reporti|carrying|||
|type|code|name|||carrying||changes||ng|||ing title|source|
||||ent cost|method|value|in|charged|ng|Period|ng|value|||
|||||||Reporti||Period||Period||||
||||||||to|||||||
|||||||ng||||||||
||||||||equity|||||||
|||||||Period||||||||
|||||||||||||Availabl||
|Domestic||Guoxua|||||||||||The|
|||||Fair|1,011,83|||||||e-for-sal||
|ally/Overs||n|160,000||||305,230|||4,545,5|525,465||Compan|
||002074|||value|8,873.5|||||||e||
|eas listed||High-tec|,000.00||||,151.36|||47.50|,291.00||y’s own|
|||||method|0|||||||financia||
|stock||h|||||||||||money|
|||||||||||||l asset||
|Domestic||||||||||||Availabl|The|
|||China||Fair||||||||||
|ally/Overs|||30,828,||75,114,3||44,973,|||3,356,9|68,622,|e-for-sal|Compan|
||601818|Everbrig||value||||||||||
|eas listed|||816.00||53.70||241.98|||62.47|989.80|e|y’s own|
|||ht Bank||method||||||||||
|stock||||||||||||financia|money|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||l asset||
|||||||||||||Availabl||
|Domestic|||||||||||||The|
|||||||||||||e-for-sal||
|ally/Overs||Xiamen|292,574|Cost|292,574,133.00|||||10,971,|292,574||Compan|
||N/A|||||||||||e||
|eas listed||Bank|,133.00|method||||||417.60|,133.00||y’s own|
|||||||||||||financia||
|stock|||||||||||||money|
|||||||||||||l asset||
|||Foshan||||||||||||
|||branch||||||||||||
|||||||||||||Availabl||
|Domestic||of|||||||||||The|
|||||||||||||e-for-sal||
|ally/Overs||Guangd|500,000|Cost|500,000.00||||||500,000||Compan|
||N/A|||||||||||e||
|eas listed||ong|.00|method|||||||.00||y’s own|
|||||||||||||financia||
|stock||Develop|||||||||||money|
|||||||||||||l asset||
|||ment||||||||||||
|||Bank||||||||||||
||||||1,380,0|||||||||
||||483,902||||350,203|||18,873,|887,162|||
|Total||||--|27,360.|0.00||0.00|0.00|||--|--|
||||,949.00||||,393.34|||927.57|,413.80|||
||||||20|||||||||
|Disclosure date of||||||||||||||
|announcement on Board’s||||||||||||||
|consent for securities||||||||||||||
|investments||||||||||||||
|Disclosure date of||||||||||||||
|announcement on general||||||||||||||
|meeting’s consent for||||||||||||||
|securities investments (if||||||||||||||
|any)||||||||||||||

(2) Investments in Derivative Financial Instruments
√ Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Beginni|||||Ending||
||||||||||||||Actua|
|||||||||||||investm||
||||||||||||||l|
||Relation|Related-||||||||Impairm||ent as %||
|||||Initialinvestmentamount||||Purchas|||||gain/l|
||ship|party|Type of||||||Sold in|ent|Ending|of the||
|Operating|||||Beginni|Ending|ng|ed in|||||oss in|
||with the|transacti|derivativ||||||Reportin|allowan|investm|Compan||
|party|||||ng date|date|investm|Reportin|||||Repor|
||Compan|on or|e||||||g Period|ce (if|ent|y’s||
||||||||ent|g Period|||||ting|
||y|not||||||||any)||ending||
||||||||||||||Perio|
|||||||||||||net||
||||||||||||||d|
|||||||||||||assets||
|Foshan|Not||Forward|US$12|19 May|30||US$12|||||-US|
|||Not|||||||||0|0.00||
|branch of|related||forex|million|2018|Novemb||million|||||$0.12|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Bank of|||settleme|||er 2018|||||||65mil|
|China|||nt||||||||||lion|
||||portfolio|||||||||||
|Foshan||||||||||||||
|branch of|||Forward|||||||||||
||||||||||||||-US$|
|Industrial|||forex|||21||||||||
||Not|||US$12|19 June|||US$12|||||0.082|
|and||Not|settleme|||Decemb|||||0|0.00||
||related|||million|2018|||million|||||millio|
|Commerci|||nt|||er 2018||||||||
||||||||||||||n|
|al Bank of|||portfolio|||||||||||
|China||||||||||||||
|Foshan|||Forward|||||||||||
||||||||||||||US$0.|
|branch of|||forex|||14||||||||
||Not|||US$12|12 July|||US$12|||US$2||0402|
|China||Not|settleme|||January||||||0.32%||
||related|||million|2018|||million|||million||millio|
|Constructi|||nt|||2019||||||||
||||||||||||||n|
|on Bank|||portfolio|||||||||||
|Foshan||||||||||||||
||||Forward|||||||||||
|branch of|||||||||||||US$0.|
||||forex||2|1||||||||
|the|Not|||US$12||||US$12|||US$4||0506|
|||Not|settleme||August|Februar||||||0.63%||
|Agricultur|related|||million||||million|||million||millio|
||||nt||2018|y 2019||||||||
|al Bank of|||||||||||||n|
||||portfolio|||||||||||
|China||||||||||||||
||||||||||||||-US|
|||||US$48||||US$48|||US$6||$0.11|
|Total|||||--|--|0||0|0||0.95%||
|||||million||||million|||million||77mil|
||||||||||||||lion|
|Funding source||||All from the Company’s own money||||||||||
|Legal matters involved (if applicable)||||N/A||||||||||
|Disclosure date of board announcement||||||||||||||
|approving derivative investment (if||||23 May 2018||||||||||
|any)||||||||||||||
|Disclosure date of general meeting||||||||||||||
|announcement approving derivative||||||||||||||
|investment (if any)||||||||||||||
|||||Risk Analysis of Forward Exchange Settlement Business: 1. Risk of exchange rate||||||||||
|||||fluctuations. In the case of large fluctuations in the exchange rate, the quoted price of the||||||||||
|Analysis of risks and control measures||||||||||||||
|||||bank’s forward exchange rate may be lower than the Company’s quoted exchange rate to the||||||||||
|associated with derivative investments||||||||||||||
|||||customer, which will make the Company unable to lock the quoted exchange rate to the||||||||||
|held in Reporting Period (including but||||||||||||||
|||||customer or the bank’s forward exchange rate may deviate from the exchange rate at the||||||||||
|not limited to market risk, liquidity risk,||||||||||||||
|||||time of the Company’s actual receipt and payment, and causes exchange losses. 2. Risk of||||||||||
|credit risk, operational risk, legal risk,||||||||||||||
|||||customer default. The customer’s accounts receivable may be overdue, and the payment for||||||||||
|etc.)||||||||||||||
|||||goods cannot be recovered within the predictable payback period, which will result in the||||||||||
|||||loss of the Company due to the delayed forward settlement. 3. Risk of payback prediction.||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
||The marketing department shall made corresponding payback prediction based on customer|
||orders and expected orders. However, during the actual implementation process, customers|
||may adjust their orders and predictions, which will result in the Company’s incorrect|
||payback prediction and cause the risk of delayed delivery of forward exchange settlement.|
||Adopted Risk Control Measures: 1. The Company will strengthen the research and analysis|
||of the exchange rate. When the exchange rate fluctuates greatly, it will adjust the business|
||strategy in a timely manner to stabilize the export business and avoid exchange losses to the|
||utmost. 2. The Management System for Forward Settlement and Sales of Foreign Exchanges|
||reviewed and approved by the board of directors of the Company stipulates that all forward|
||foreign exchange settlement businesses of the Company shall be based on the normal|
||production and operation, and relied on specific business operations to avoid and prevent|
||various exchange rate risks. However, speculative transaction and interest arbitrage are not|
||allowed. At the same time, the system clearly defines the operating principles, approval|
||authority, responsible department and responsible person, internal operation procedures,|
||information isolation measures, internal risk reporting system, risk management procedures,|
||and information disclosure related to the forward settlement business as well. In fact, the|
||system is conducive to strengthen the management of the Company’s forward foreign|
||exchange settlement business and prevent investment risks. 3. In order to prevent any delay|
||in the forward exchange settlement, the Company will strengthen the management of|
||accounts receivable, actively collect receivables, and avoid any overdue receivables. In the|
||meantime, the Company plans to increase the export purchases and purchase corresponding|
||credit insurance so as to reduce the risk of default and customer default. 4. The Company’s|
||forward foreign exchange settlement transactions must be based on the Company’s foreign|
||exchange earnings prediction. Besides, the Company shall strictly control the scale of 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.|
||At present, the Company has invested various derivatives including Forward Exchange|
||Settlement 3+3 Portfolio. This product portfolio is superior to other ordinary forward|
||settlement products during the same period. The first three sessions of vesting conditions of|
||this portfolio are: the spot exchange rate at maturity is lower than the agreed front-end|
||exchange rate, and the exchange settlement shall be carried out based on the agreed|
||front-end exchange rate; if the spot exchange rate at maturity is higher than the agreed|
|Changes in market prices or fair value||
||front-end exchange rate, the Company can choose not to settle the exchange or choose to|
|of derivative investments in Reporting||
||settle the exchange based on the spot exchange rate at maturity. The back-end three sessions|
|Period (fair value analysis should||
||of vesting conditions are: the spot exchange rate at maturity is lower than the agreed|
|include measurement method and||
||back-end exchange rate, and the Company can choose not to settle the exchange or choose|
|related assumptions and parameters)||
||to settle the exchange based on the spot exchange rate at maturity; if the spot exchange rate|
||at maturity is higher than the agreed back-end exchange rate, the exchange settlement shall|
||be carried out based on the agreed back-end exchange rate. At present, in terms of Forward|
||Exchange Settlement 3+3 Portfolio purchased by the Company, the spot exchange rates at|
||maturity are all higher than the agreed front-end exchange rates, and the Company chooses|
||not to exercise the right. Therefore, the product’s fair value has not changed.|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
|Major changes in accounting policies||
|and specific accounting principles||
|adopted for derivative investments in|N/A|
|Reporting Period compared to last||
|reporting period||
||The independent directors of the Company are of the opinion that during the Reporting|
||Period, the Company carried out forward forex settlement in strict compliance with the|
||Company Law, the Regulations of the People’s Bank of China on Foreign Exchange|
|Opinion of independent directors on|Settlement, Sale and Payment and the Company’s Management Rules for Forward Foreign|
|derivative investments and risk control|Exchange Settlement and Sale, among others, as well as within the Board’s authorization.|
||Such trading is primarily aimed to prevent exchange rate fluctuations from impacting the|
||Company’s export business and operating earnings, with no speculative trading involved. It|
||is a necessity, and the risk is well under control.|

5. Use of Funds Raised
□ Applicable√ Not applicable
No such cases in the Reporting Period
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable√ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable√ Not applicable
VII Major Subsidiaries
√ Applicable□ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over10% effect on theCompany’s net profit:
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Relationship||||||||
|||Principal|Registered|||Operating|Operating||
|Name||||Total assets|Net assets|||Net profit|
||with the||||||||
|||activity|||||||
||||capital|||revenue|profit||
||Company||||||||
|Foshan|||||||||
|||Manufacturin||48,923,226.5|45,298,982.8|102,187,989.|13,068,073.2||
|Chansheng|Subsidiary||1,000,000.00|||||9,744,036.00|
|||g||7|0|52|6||
|Electronic|||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||||
|-|-|-|-|-|-|-|-|-|
|Ballast Co.,|||||||||
|Ltd.|||||||||
|FSL|||||||||
|Chanchang||Manufacturin|72,782,944.0|141,982,328.|125,255,634.|95,280,365.6|19,164,730.9|14,364,562.1|
||Subsidiary||||||||
|Optoelectroni||g|0|30|70|2|2|4|
|cs Co., Ltd.|||||||||
|Foshan|||||||||
|Taimei Times||Manufacturin||54,912,585.2|27,026,882.6|138,186,413.|||
||Subsidiary||500,000.00||||7,515,116.79|5,050,703.26|
|Lamps Co.,||g||0|2|51|||
|Ltd.|||||||||
|FSL New|||||||||
|Light Source||Manufacturin|50,000,000.0|57,729,274.4|56,058,689.5|20,020,667.4|||
||Subsidiary||||||1,497,672.89|1,235,759.18|
|Technology||g|0|6|5|0|||
|Co., Ltd.|||||||||
|FSL|||||||||
|(Xinxiang)||Manufacturin|35,418,439.7|52,896,766.1|48,751,618.3|51,580,756.4|||
||Subsidiary||||||2,182,243.91|1,636,065.39|
|Lighting Co.,||g|6|7|1|1|||
|Ltd.|||||||||
|Guangdong|||||||||
|Fozhao|||||||||
||||200,000,000.||||||
|Financial|Subsidiary|Finance||330,297.12|330,297.12||3,908,283.77|2,930,212.85|
||||00||||||
|Leasing Co.,|||||||||
|Ltd.|||||||||
|FSL Lighting|||||||||
|Equipment||Manufacturin|15,000,000.0|65,051,460.2|55,487,198.2|75,811,490.5|||
||Subsidiary||||||5,812,537.61|4,472,322.74|
|Co., Ltd.||g|0|1|0|8|||
|Nanjing|||||||||
|Fozhao|||||||||
|Lighting||Manufacturin|41,683,200.0|60,013,457.7|55,147,783.9|40,918,403.0|10,579,629.4||
||Subsidiary|||||||5,625,270.23|
|Components||g|0|5|3|1|0||
|Manufacturin|||||||||
|g Co., Ltd.|||||||||
|FSL Zhida|||||||||
|Electric||Manufacturin|50,000,000.0|84,433,347.1|43,554,690.0|96,231,697.2|||
||Subsidiary||||||70,738.86|40,799.09|
|Technology||g|0|2|8|6|||
|Co., Ltd.|||||||||
|FSL Lighting||Manufacturin|||||||
||Subsidiary||195,812.50|739,617.83|-57,262.69|1,131,359.82|-251,764.94|-251,764.94|
|GmbH||g|||||||

Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable√ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Information about major majority- and minority-owned subsidiaries:
—Foshan Chansheng Electronic Ballast Co., Ltd. was invested and established by the Company and Mr. Ma Henglai and had set up and obtained license for business corporation on 26 August 2003. The Company holds75% equities of the said company; therefore the said subsidiary was included into the scope of the consolidated financial statements since the date of foundation.
On 24 December 2013, the Company and Mr. Ma Henglai signed the equity transfer agreement. The Company purchased25% equity of Foshan Chansheng Electronic Ballast Co., Ltd. held by Mr. Ma Henglai. After the purchasing, the Company held100% equity of Foshan Chansheng Electronic Ballast Co., Ltd.
—FSL Chanchang Optoelectronics Co., Ltd. (renamed on 19 June 2018 from “Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd.”), which is a Sino-foreign joint venture invested and established by the Company and Prosperity Lamps and Components Ltd, had obtained license for business corporation on 23 August 2005 through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District, Foshan with document “MWJMY Zi[2005] No. 79”. The Company holds70% 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 purchased30% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd. held by Prosperity Lamps and Components Ltd. After the purchasing, the Company held100% equity of Foshan Chanchang Electric Appliances (Gaoming) Co., Ltd.
—Foshan Taimei Times Lamps Co., Ltd., which is a Sino-foreign joint venture invested and established by the Company and Reback North America Investment Limited, had obtained license for Business Corporation on 5 December 2005 through approval by Foreign Trade and Economic Cooperation Bureau of Gaoming District, Foshan with document “MWJMY Zi[2005] No. 97”. The Company holds70% equities of the said company; therefore the said subsidiary was included into the scope of the consolidated financial statements since the date of foundation.
—FSL New Light Source Technology Co., Ltd. (its predecessor was “Foshan Lighting Lamps and Lanterns Co., Ltd.” and it changed its name to “FSL New Light Source Technology Co., Ltd.” on 17 December 2014), which is invested and established by the Company together with Foshan Haozhiyuan Trading Co., Ltd., Shanghai Liangqi Electric Co., Ltd, Changzhou Sanfeng Electrical& Lighting Co., Ltd., Henan Xingchen Electrical& Lighting Co., Ltd., Foshan Hongbang Electrical& Lighting Co., Ltd., Hebei Jinfen Trading Co., Ltd., obtaining its license for Business Corporation on 27 September 2009. The Company holds60% equities of this company. Therefore the said subsidiary was included into the scope of the consolidated financial statements since the date of foundation. On 25 September 2009 and 19 November 2010, the equity transfer agreement was signed between the Company and the minority shareholders, in which the minority shareholders respectively transferred their equities of Foshan Lighting Lamps and Lanterns Co., Ltd. to the Company. After transfer, the Company holds100% equities of Foshan Lighting Lamps and Lanterns Co., Ltd.
—FSL (Xinxiang) Lighting Co., Ltd. is a limited liability company which is invested and established by the Company, obtaining its license for Business Corporation on 17 April 2009. The Company holds100% equities of the said company, therefore the said subsidiary was included into the scope of the consolidated financial statements since date of foundation. On 27 August 2013, the 3rd Session of the 7th Board of Directors reviewed and approved to invest another RMB 2 million (land in an industrial park in Xinxiang, Henan Province and monetary funds) in FSL (Xinxiang) Lighting, increasing the registered capital of FSL (Xinxiang) Lighting to RMB 35,418,439.76.
—Guangdong Fozhao Financial Leasing Co., Ltd., a limited-liability company incorporated by the Company with a registered capital of RMB200 million, obtained the business license on 30 May 2011, which is100% owned by
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 the Company. It was included in the consolidated financial statements since the day of its incorporation. Later on, as approved at the 26th Meeting of the 8th Board of Directors on 7 September 2018, the Board has agreed to de-register the subsidiary. Up to the date of the independentauditor’s report, the de-registration formalities are still underway.
—FSL Lighting Equipment Co., Ltd. is a limited liability company invested and established by the Company with the registered capital of RMB 15 million, which had obtained its license for Business Corporation on 8 May 2013. And the Company holds100% equities of this company. Therefore the said subsidiary was included into the scope of the consolidated financial statements since the date of foundation.
—In accordance with the equity transfer agreement signed between the Company and Prosperity Lamps and Components Ltd. on 27 August 2008, Prosperity Lamps and Components Ltd. transferred100% equities of Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. (formerly known as “Prosperity (Nanjing) Lighting Components Co., Ltd.”, and changed name to “Nanjing Fozhao Lighting Components Manufacturing Co., Ltd.” on 15 November 2010.) to the Company. Therefore, Nanjing Fozhao Lighting Components Manufacturing Co., Ltd. became a wholly-owned subsidiary of the Company. The said subsidiary was included into the scope of the consolidated financial statements since the merger date.
—FSL Zhida Electric Technology Co., Ltd. (FSL Zhida) was incorporated by the Company, Foshan Zhibida Enterprise Management Co., Ltd. and Dongguan Baida Semiconductor Material Co., Ltd. on a joint investment basis. FSL Zhida obtained its business license on 21 October 2016. Holding a stake of51% in it, the Company has included FSL Zhida in its consolidated financial statements since the date of FSLZhida’s incorporation.
—FSL Lighting GmbH is a Limited Liability company invested and set up in German with registered capital Euro25,000. It got the business license on 30 November 2017 whose100% stock equity is held by the Company, and it is included into the scope of consolidated financial statement from the date of establishment.
VIII Structured Bodies Controlled by the Company
□ Applicable√ Not applicable
IX Prospects
(I) Development trends of the industry
1. Industry competition
In recent years, costs have kept decreasing and the effects of energy conservation and emission reduction have been prominent due to the rapid development of the LED lighting technology. In addition, LED has been applied in increasingly widespread scenarios with the continuous technical breakthroughs. As a result, LED lighting has maintained a fast and stable development trend in recent years. Overyears’ rapid development, although the overall sales of the LED industry is still increasing, the growth speed has slowed down substantially compared to the previous years. In the LED lower-stream application area, due to the relatively lower threshold, the problem of excess structured capacity is quite obvious in the LED lighting industry, which has resulted in chaotic and vicious competition in the market, mainly manifested as serious product homogenization, ambiguous product standards and fierce price competition at the finished product end. At present, market concentration of LED downstream applications is still not high, and the competition among brands and companies is still fierce. At the same time, the great pressure from continuous rise of raw material prices, transportation costs and manpower costs hinders the rapid development and profitability of enterprises. The industry is facing reshuffling. Enterprises lacking technology, brands and channelscan’t survive in the "LED winter" and quite from the market, while large
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 enterprises or companies with core competitiveness can seize the opportunity of deep adjustment and re-division of global industrial structure, and continue to extend the industrial chain to consolidate their leading positions by the use of funds, technology, brands, channels and other advantages. Superior resources are further concentrated in leading enterprises in the industry. The stronger becomes stronger. The market share of a strong brand with leading reputation will be effectively increased on the basis of maintaining stable consumption.
2. Development trend of the industry
(1) The increasingly enhanced industrial concentration will promote industrial integration and upgrading
The number of enterprises has been getting increasingly bigger compared with the conventional lighting era since LED entered the lower-stream application field of conventional lighting. At the same time, since it entered the LED era, such characteristics as diversified customer demands, product types and markets have been becoming more evident, resulting in a low degree of industrial concentration in the lower-stream application of LED. However, with the joint purchasing of large real estate developers for the refined decoration of residences, the group purchase of commercial chain brands and the unified invitation of tenders from urban administration departments in landscape lighting, the purchase of those big customers is getting concentrated. Under such a background, the lighting application end has shown a marked trend of industrial concentration. The operating revenue of large enterprises with technology, brand and channel advantages occupies an increasingly bigger proportion of the entire industry, whereas the SMEs among the low-end enterprises are gradually being marginalized until withdrawing from the LED industry. Meanwhile, as the automation of LED lighting products deepens, the market reshuffle will speed up. Amid the changes of the supply chain, a new framework of standardization, huge scale, brand concentration and product standards will be formed and the degree of industrial concentration will be enhanced, which will in turn enhance the industrial integration and upgrading and lead the industry towards healthy and sustainable development on a long-term basis.
(2) Intelligent lighting is growing better and intelligent lighting and healthy lighting are integrating with each other
While the lighting industry focused more on the form and function control technology in the discussion and research of intelligent lighting a few years ago, many enterprises have shifted their focus to the research of demands and applications of intelligent lighting in recent years. With the continuous development of intelligent technology, continuous launch of innovative functions and continuous popularization of the concept of intelligent household, the intelligent lighting market is growing rapidly. According to the statistics of GGII, in 2017,China’s intelligent lighting market entered a stage of high-speed development with a market scale reaching nearly RMB26.4 billion and a growth rate of80%. GGII predicts that in 2018,China’s LED intelligent lighting market scale will increase by46.6% from the previous year and reach RMB38.7 billion. In the next few years,China’s LED intelligent lighting market will maintain high-speed growth and in 2020, the market scale may reach RMB83 billion. With the development of lighting technology andpeople’s sustained pursuit of a healthy lifestyle, intelligent lighting will develop from functional and aesthetic designs to the orientation of arts and humanism. In the future, intelligent lighting will integrate with healthy lighting, which will lead to the development of efficient, comfort, healthy and intelligent products with more scientific content, better accommodating human behaviors, vision, physiology and psychology, and with the focus on humans.
(3) Intelligent lighting will change from single products to integrated solutions
Intelligent lighting is based on automatic control, IoT information technology, sensors and application technology and application of new efficient electric lighting source and aims to achieve energy conservation, easy operation, the enhancement of environmental comfort and efficient and reasonable lighting configuration. Intelligent lighting comprises diverse types and forms of lamps and lighting sources, which are coordinated and configured in such
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 synergistic effects as to accommodate the application scenarios, while it is difficult to achieve intelligent lighting configuration in the designs based on single products. To servecustomers’ demands for integrated solutions and develop products with higher added values, an increasing number of enterprises are changing from single intelligent products towards integrated solutions. In addition to emphasizing customized services and providing design concepts, integrated solutions highlight the awareness of service and enable consumers to experience a healthy and quality life brought by intelligence in a more convenient, easier and more comfortable manner. (II) The Future Development Strategies of the Company
The Company will continue to stick to the road of professional development, center around the three key businesses of “lighting, electrical products and vehicle lighting”, vigorously implement the strategic goal of “highly sophisticated technology, international brand and market and large-scale production”, and fully enhance its operation quality and sustainable development capabilities through the integration of inbound development and outbound expansion and of development speed and development quality.
(III) Work Plan for 2019
1. Vigorously expand the market and drive the sales growth
In terms of the lighting segment and domestic market, the Company will keep strengthening the channel building, increase the number of service providers and enhance its abilities of controlling terminals; it will accelerate the establishment of franchised stores, diversify the application scenarios of lighting products and extend the operation of household products; it will continue to speed up the channel development of engineering and commercial lighting, develop professional engineering customers and extend to the before market. In respect of the overseas market, the Company will create new growth points for household lamps and intelligent lighting and explore new marketing channels that are suitable for its development by virtue of its advantaged conventional projects.
In terms of the electrical products, the Company will continue to build a comprehensive sales network and drive the transformation of distributors towards service providers through the channels of circulation and franchised stores; it will promote the products such as intelligent switches and intelligent sockets through the channel of household product stores; it will energetically expand the channels of engineering and KA through a focus on products, personnel and services, thus laying a solid foundation for the development of emerging channels. In respect of vehicle lighting, the Company will optimize the product structure with a focus on LED vehicle lighting products, including LED headlamps, LED modules and LED auxiliary lamps. It will proactively promote LED project cooperation by deepening its relationship with the existing customers. It will vigorously develop new customers, actively explore the OEM channel and expedite the business layout.
2. Reinforce innovation through research and development and accelerate the adjustment in product structure In 2019, the Company will continue to increase investment on research and development, keep a close track on the application of industrial new technologies as well as the development trend of the industrial market area, continue to promote the switch of products from lighting source to lamps, shift its focus from functions towards both functions and aesthetics, and transform towards single products to system solutions; it will reinforce the development of new products, speed up the layout of the fields including intelligent lighting, healthy lighting and intelligent electrical products, upgrade the intelligent control technology and connect with more influential cloud platforms; it will standardize the management ofR&D process, achieve large-scale and standardized production to lay a good foundation for the automatic production, and shorten the development cycle of new products to equip itself with technology and product reserve advantages.
3. Upgrade manufacturing capacity, enhance product quality, refine after-sales services and achieve closed-loop management
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 The Company will continue to invest on the upgrading of technologies, and on the basis of the existing automation level, continue to develop the space for automatic and informationized manufacturing, optimize production procedures, promote the integration of its automatic production line and informationized system and further enhance its level of production intelligence and automation.
In respect of product quality, the Company will continue to refine the supply chain management, develop core suppliers with good quality; work well on product process design; enhance the management of product manufacturing, strengthen personnel training; strictly control product quality testing, further refine the inspection standards and methods and promote the product reliability project throughout the entire chain.
In terms of after-sales services, the technology department and the after-sales department will jointly form a team for prompt responses, follow-ups and processing ofcustomers’ complaints on non-performing products, which will carry out differentiated after-sales technical support for different channels.
4. Promote the adjustment in professional structure and support corporate growth
The further expansion of the corporate scale and the changes in market environment and industrial development have put higher demands on human resource management including recruitment, staff development and the incentive mechanism. The Company will strengthen its selection and recruitment of management professionals, technical professionals, marketing professionals and capital operation professionals, introduce a young team with vigorous thinking and boldness for innovation, promote the adjustment in professional structure, refine the human resource management system, including the human resource management policies of recruitment, training, remuneration management and performance management, and intensify the building of a comprehensive corporate professional mechanism for favorable competition to attract and retain professionals. It will strengthen the cultivation and development of young professionals with big potentials, include them into theCompany’s key back-up professional bank, initiate the building of a key professional echelon and support the corporate growth. (IV) Potential Risks
1. Risk of market competition
From the perspective of macro economy,China’s economy is facing great pressure of economic downturn. The persistent tight policies on the control of real estate, the sustained US-China trade wars and the turbulence in exchange rate and financial market contribute to the decreased market demands and the industry is facing the risk of inadequate growth impetus. From the perspective of industry, the lighting industry has been a market with global competition and thus, domestic lighting enterprises have to face the competition from some home appliance and electronic enterprises and LED upper- and middle-stream chip packaging enterprises which extend to the lighting application field, in addition to the competition from international famous branded lighting enterprises. If the Company cannot adapt to the future competition framework, it may be exposed to the risk of losses in market share.
2. The risk of rising labor costs and raw material price fluctuations
Due to the influence of domestic labor supply and demand as well as employment policies, labor costs keep increasing, especially in the Pearl River Delta region with more developed economy. In addition, raw materials of the Company account for a high proportion of operation costs. As some raw material prices are associated with uncontrollable factors such as global market conditions and national macroeconomic policies, there is a risk of price fluctuation of raw materials.
3. The risk of inventory loss from falling price
As of the end of the reporting period, the inventory amount is high, and the inventory mainly includes raw materials, semi-finished products and finished products. Due to the large number of product types and models, the inventory amount of the Company is relatively high. Moreover, as the sales revenue of the Company increases
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 year by year, the raw materials and inventories that are stored to meet production and sales will increase simultaneously. It will lead to a higher inventory maintained in the Company. In case that prices or demand changes occur in the raw material or product sales market in the future, the Company may experience a risk of inventory depreciation.
4. The risk of exchange rate fluctuations
The RMB exchange rate in China is based on market supply and demand, with reference to a basket of currencies for regulation and a managed floating exchange rate system. Exchange rate fluctuations will happen with the fluctuations of global economy, simmering tension of some regions and the monetary policies of various countries. Export business accounts for43.22% of the Company business, and the scale has been increasing year by year. If the exchange rate fluctuates significantly, business performance of the Company will be affected.
5. The risk of bad debts on accounts receivable
With the expansion of sales scale of the Company, the amount of accounts receivable has increased. The main debit customers of the Company are all long-term customers with good business reputations. Major adverse changes in the financial status of major debtors may result in the risk of bad debts on accounts receivable. X Communications with the Investment Community such as Researches, Inquiries and Interviews
1. During the Reporting Period
√ Applicable□ Not applicable
||||||
|-|-|-|-|-|
||||Type of communication|Index to main information|
|Date|Way of communication||||
||||party|communicated|
|||||Investor Relations-EasyIR-|
|4 January 2018|One-on-one meeting||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relations-EasyIR-|
|18 January 2018|One-on-one meeting||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relations-EasyIR-|
|14 May 2018|One-on-one meeting||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relations-EasyIR-|
|25 May 2018|One-on-one meeting||Institution||
|||||www.cninfo.com.cn|
|||||Investor Relations-EasyIR-|
|11 December 2018|One-on-one meeting||Institution||
|||||www.cninfo.com.cn|
|Times of visit||5|||
|Number of visiting institutions||10|||
|Number of visiting individuals||39|||
|Number of other visitors||0|||
|Tip-offs or leakages of substantial|||||
|supposedly-confidential information during||None|||
|communications|||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
How the profit distribution policy, especially the cash dividend policy, for ordinary shareholders was formulated, executed or revised in the Reporting Period:
√ Applicable□ Not applicable
According to the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of Listed Companies (Zheng-Jian-Fa[2012] No. 37) and the Guangdong CSRC Notice on Further Implementing Regulations Related to Dividend Distribution of Listed Companies (Guang-Dong-Zheng-Jian[2012] No. 91), in order to further standardize the dividend mechanism, promote a scientific, sustained and stable dividend mechanism and protect legal rights and interests of investors, in 2012, the Company convened a general meeting to revise the dividend-related contents in its Articles of Association and specify the dividend conditions, the lowest dividend ratio, the decision-making procedure, etc.. Meanwhile, it formulated the Management Rules for Profit Distribution and the Return for Shareholder Plan for the Coming Three Years (2018-2020), specifying the arrangements and forms of dividends, the cash dividend planning and the distribution intervals, which further improved the decision-making and supervision procedures for dividend distribution. According to theCompany’s Articles of Association, the profit distributed in cash shall not be less than30% of the distributable profit achieved in the year.
|||
|-|-|
|Special statement about the cash dividend policy||
|In compliance with the Company’s Articles of Association and||
||Yes|
|resolution of general meeting||
|Specific and clear dividend standard and ratio|Yes|
|Complete decision-making procedure and mechanism|Yes|
|Independent directors faithfully performed their duties and||
||Yes|
|played their due role||
|Non-controlling interests are able to fully express their opinion||
||Yes|
|and desire and their legal rights and interests are fully protected||
|In case of adjusting or changing the cash dividend policy, the||
|conditions and procedures involved are in compliance with|Yes|
|applicable regulations and transparent||

The profit distributions to ordinary shareholders, either in the form of cash or stock, in the past three years
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (including the Reporting Period) are summarized as follows:
For 2016, based on the total 1,272,132,868 shares of the Company as at 31 December 2016, a cash dividend of RMB4.20 (tax included and dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed to the A-share and B-share holders for every 10 shares they hold, with the total distributed cash dividends reaching RMB534,295,804.56.
For 2017, based on the total 1,272,132,868 shares of the Company as at 31 December 2017, a cash dividend of RMB3.29 (tax included and dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed to the A-share and B-share holders for every 10 shares they hold, with the total distributed cash dividends reaching RMB 418,531,713.57. Meanwhile, converting capital reserve into 1 share to all shareholders for every 10 shares.
For 2018, based on the total 1,399,346,154 shares of the Company as at 31 December 2018, a cash dividend of RMB1.56 (tax included and dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed to the A-share and B-share holders for every 10 shares they hold, with the total distributed cash dividends reaching RMB 218,298,000.02.
Cash dividend for ordinary shareholders in the past three years (including the Reporting Period):
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Net profit||||||
|||attributable to||||||
|||ordinary||||Total cash||
||Cash|shareholders||Cash dividends||dividends||
||||A as % of B||C as % of B||D as % of B|
|Year|dividends (tax|of the listed||in other forms||(including||
||||(%)|(such as share|(%)||(%)|
||inclusive) (A)|company in||repurchase) (C)||those in other||
|||consolidated||||forms) (D)||
|||statements for||||||
|||the year (B)||||||
|2018|218,298,000.02|377,615,133.62|57.81%|0.00|0.00%|218,298,000.02|57.81%|
|2017|418,531,713.57|740,308,725.30|56.53%|0.00|0.00%|418,531,713.57|56.53%|
|||1,072,342,050.||||||
|2016|534,295,804.56||49.83%|0.00|0.00%|534,295,804.56|49.83%|
|||13||||||

Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for the ordinary shareholders despite the facts that the Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to the ordinary shareholders are positive.
□ Applicable√ Not applicable
II Final Dividend Plan for the Reporting Period
√Applicable□ Not applicable
|||
|-|-|
|Bonus shares for every 10 shares (share)|0|
|Dividend for every 10 shares (RMB) (tax inclusive)|1.56|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
|Additional shares to be converted from capital||
||0|
|reserve for every 10 shares (share)||
|Total shares as the basis for the profit distribution||
||1,399,346,154|
|proposal (share)||
|Cash dividends (RMB) (tax inclusive)|218,298,000.02|
|Cash dividends in other forms (such as share||
||0.00|
|repurchase) (RMB)||
|Total cash dividends (including those in other||
||218,298,000.02|
|forms) (RMB)||
|Distributable profit (RMB)|1,482,164,706.92|
|Total cash dividends (including those in other||
||100%|
|forms) as % of total profit distribution||
|Cash dividend policy||
|Where the Company is at a mature stage of development and has plans for considerable spending, in profit distribution, cash||
|dividends shall reach at least 40% in the total profit to be distributed.||
|Details about the proposal for profit distribution and converting capital reserve into share capital||
|As audited by Beijing Zhongzheng Tiantong Certified Public Accountants LLP, the after-tax net profits of RMB365,031,838.42 of||
|the Company as the parent for 2018, plus the beginning retained profits of RMB1,572,167,765.91, minus the distributed profits of||
|RMB418,531,713.57 for 2017 and the statutory surplus reserve of RMB 36,503,183.84 for 2018. The ending profits distributable to||
|shareholders of were RMB1,482,164,706.92 for 2018. The Board of Directors has proposed to allocate profits for 2018 as follows:||
|Based on the total 1,399,346,154 shares of the Company as at 31 December 2018, a cash dividend of RMB1.56 (tax included and||
|dividends for B-share holders to be paid in the Hong Kong dollars) will be distributed to the A-share and B-share holders for every||
|10 shares they hold, with the total cash dividends to be distributed reaching RMB 218,298,000.02. The retained profits of RMB||
|1,263,866,706.90 will be carried forward into the next year. The profit allocation preplan can be effective upon review and approval||
|of the Shareholders’ General Meeting of the Company.||

III Fulfillment of Commitments
1. Commitments of theCompany’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and other Entities Fulfilled in the Reporting Period or Ongoing at the Period-end√Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||||Date of|||
|||Type of|||Term of||
|Commitment|Promisor||Details of commitment|commitment||Fulfillment|
|||commitment|||commitment||
|||||making|||
|Commitments made in|||||||
|share reform|||||||
|Commitments made in||About avoidance|Electronics Group and its||||
||Controlling|||4 December|||
|acquisition documents||of horizontal|acting-in-concert parties||24 months|Ongoing|
||shareholder|||2017|||
|or shareholding||competition|Shenzhen Rising||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|alteration documents|||Investment and Hong||||
||||Kong Rising Investment||||
||||have made a commitment||||
||||that they shall eliminate||||
||||the horizontal competition||||
||||between Foshan||||
||||NationStar||||
||||Optoelectronics Co., Ltd.||||
||||and the Company through||||
||||business integration or||||
||||other ways or||||
||||arrangements before 4||||
||||December 2019.||||
||||Electronics Group and its||||
||||acting-in-concert parties||||
||||Shenzhen Rising||||
||||Investment and Hong||||
||||Kong Rising Investment||||
||||have made more||||
||||commitments as follows||||
||||to avoid horizontal||||
||||competition with the||||
||||Company: 1. They shall||||
||||conduct supervision and||||
||||restraint on the production||||
||||and operation activities of||||
||||themselves and their||||
|||About avoidance|relevant enterprises so that||||
||Controlling|||4 December|||
|||of horizontal|besides the enterprise||Long-standing|O ngoing|
||shareholder|||2015|||
|||competition|above that is in horizontal||||
||||competition with the||||
||||Company for now, if the||||
||||products or business of||||
||||them or their relevant||||
||||enterprises become the||||
||||same with or similar to||||
||||those of the Company or||||
||||its subsidiaries in the||||
||||future, they shall take the||||
||||following measures: (1) If||||
||||the Company thinks||||
||||necessary, they and their||||
||||relevant enterprises shall||||
||||reduce and wholly transfer||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
|||their relevant assets and||||
|||business; and (2) If the||||
|||Company thinks||||
|||necessary, it is given the||||
|||priority to acquire first, by||||
|||proper means, the relevant||||
|||assets and business of||||
|||them and their relevant||||
|||enterprises. 2. All the||||
|||commitments made by||||
|||them to eliminate or avoid||||
|||horizontal competition||||
|||with the Company are||||
|||also applicable to their||||
|||directly or indirectly||||
|||controlled subsidiaries.||||
|||They are obliged to urge||||
|||and make sure that other||||
|||subsidiaries execute||||
|||what’s prescribed in the||||
|||relevant document and||||
|||faithfully honor all the||||
|||relevant commitments. 3.||||
|||If they or their directly or||||
|||indirectly controlled||||
|||subsidiaries break the||||
|||aforesaid commitments||||
|||and thus cause a loss for||||
|||the Company, they shall||||
|||compensate the Company||||
|||on a rational basis.||||
|||Electronics Group and its||||
|||acting-in-concert parties||||
|||Shenzhen Rising||||
|||Investment and Hong||||
|||Kong Rising Investment||||
||About reduction|||||
|||have made a commitment||||
|Controlling|and regulation of||4 December|||
|||that during their direct or||Long-standing|O ngoing|
|shareholder|related-party||2015|||
|||indirect holding of the||||
||transactions|||||
|||Company’s shares, they||||
|||shall 1. strictly abide by||||
|||the regulatory documents||||
|||of the CSRC and the||||
|||SZSE, the Company’s||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|Articles of Association,|
|etc. and not harm the|
|interests of the Company|
|or other shareholders of|
|the Company in their|
|production and operation|
|activities by taking|
|advantage of their position|
|as the controlling|
|shareholder and actual|
|controller; 2. make sure|
|that they or their other|
|controlled subsidiaries,|
|branch offices, jointly-run|
|or associated companies|
|(the “Relevant|
|Enterprises” for short)|
|will try their best to avoid|
|or reduce related-party|
|transactions with the|
|Company or the|
|Company’s subsidiaries;|
|3. strictly follow the|
|market principle of|
|justness, fairness and|
|equal value exchange for|
|necessary and|
|unavoidable related-party|
|transactions between them|
|and their Relevant|
|Enterprises and the|
|Company, and withdraw|
|from voting when a|
|related-party transaction|
|with them or their|
|Relevant Enterprises is|
|being voted on at a|
|general meeting or a|
|board meeting, and|
|execute the relevant|
|approval procedure and|
|information disclosure|
|duties pursuant to the|
|applicable laws,|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
|||regulations and regulatory||||
|||documents. Where the||||
|||aforesaid commitments||||
|||are broken and a loss is||||
|||thus caused for the||||
|||Company, its subsidiaries||||
|||or the Company’s other||||
|||shareholders, they shall be||||
|||obliged to compensate.||||
|||In order to ensure the||||
|||independence of the||||
|||Company in business,||||
|||personnel, asset,||||
|||organization and finance,||||
|||Electronics Group and its||||
|||acting-in-concert parties||||
|||Shenzhen Rising||||
|||Investment and Hong||||
|||Kong Rising Investment||||
|||have made the following||||
|||commitments: 1. They||||
|||will ensure the||||
|||independence of the||||
|||Company in business: (1)||||
|||They promise that the||||
|||Company will have the||||
|Controlling|About||4 December|||
|||assets, personnel,||Long-standing|O ngoing|
|shareholder|independence||2015|||
|||qualifications and||||
|||capabilities for it to||||
|||operate independently as||||
|||well as the ability of||||
|||independent, sustainable||||
|||operation in the market.||||
|||(2) They promise not to||||
|||intervene in the||||
|||Company’s business||||
|||activities other than the||||
|||execution of their rights as||||
|||the Company’s||||
|||shareholders. (3) They||||
|||promise that they and||||
|||their related parties will||||
|||not be engaged in||||
|||business that is||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|substantially in|
|competition with the|
|Company’s business. And|
|(4) They promise that they|
|and their related parties|
|will try their best to|
|reduce related-party|
|transactions between them|
|and the Company; for|
|necessary and|
|unavoidable related-party|
|transactions, they promise|
|to operate fairly following|
|the market-oriented|
|principle and at fair|
|prices, and execute the|
|transaction procedure and|
|the duty of information|
|disclosure pursuant to the|
|applicable laws,|
|regulations and regulatory|
|documents. 2. They will|
|ensure the independence|
|of the Company in|
|personnel: (1) They|
|promise that the|
|Company’s GM, deputy|
|GMs, CFO, Company|
|Secretary and other senior|
|management personnel|
|will work only for and|
|receive remuneration from|
|the Company, not holding|
|any positions in them or|
|their other controlled|
|subsidiaries other than|
|director and supervisor.|
|(2) They promise the|
|Company’s absolute|
|independence from their|
|related parties in labor,|
|human resource and salary|
|management. And (3)|
|They promise to follow|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|the legal procedure in|
|their recommendation of|
|directors, supervisors and|
|senior management|
|personnel to the Company|
|and not to hire or dismiss|
|employees beyond the|
|Company’s Board of|
|Directors and General|
|Meeting. 3. They will|
|ensure the independence|
|and completeness of the|
|Company in asset: (1)|
|They promise that the|
|Company will have a|
|production system, a|
|auxiliary production|
|system and supporting|
|facilities for its operation;|
|legally have the|
|ownership or use rights of|
|the land, plants, machines,|
|trademarks, patents and|
|non-patented technology|
|in relation to its|
|production and operation;|
|and have independent|
|systems for the|
|procurement of raw|
|materials and the sale of|
|its products. (2) They|
|promise that the Company|
|will have independent and|
|complete assets all under|
|the Company’s control|
|and independently owned|
|and operated by the|
|Company. And (3) They|
|promise that they and|
|their other controlled|
|subsidiaries will not|
|illegally occupy the|
|Company’s funds and|
|assets in any way, or use|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|the Company’s assets to|
|provide guarantees for the|
|debts of themselves or|
|their other controlled|
|subsidiaries with. 4. They|
|will ensure the|
|independence of the|
|Company in organization:|
|(1) They promise that the|
|Company has a sound|
|corporate governance|
|structure as a joint-stock|
|company with an|
|independent and complete|
|organization structure.|
|And (2) They promise that|
|the operational and|
|management organs|
|within the Company will|
|independently execute|
|their functions according|
|to laws, regulations and|
|the Company’s Articles of|
|Association. And 5. They|
|will ensure the|
|independence of the|
|Company in finance: (1)|
|They promise that the|
|Company will have an|
|independent financial|
|department and financial|
|accounting system with|
|normative, independent|
|financial accounting rules.|
|(2) They promise that the|
|Company will have|
|independent bank|
|accounts and not share|
|bank accounts with its|
|related parties. (3) They|
|promise that the|
|Company’s financial|
|personnel do not hold|
|concurrent positions in its|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
||||related parties. (4) They||||
||||promise that the Company||||
||||will independently pay its||||
||||tax according to law. And||||
||||(5) They promise that the||||
||||Company can make||||
||||financial decisions||||
||||independently and that||||
||||they will not illegally||||
||||intervene in the||||
||||Company’s use of its||||
||||funds.||||
|Commitments made in|||||||
|time of asset|||||||
|restructuring|||||||
|Commitments made in|||||||
|time of IPO or|||||||
|refinancing|||||||
|Equity incentive|||||||
|commitments|||||||
||||The profits distributed by||||
||||the Company in cash||||
|Other commitments|||||||
|||About cash|every year shall not be||||
|made to minority|The Company|||27 May 2009|Long-standing|O ngoing|
|||dividends|less than 30% of the||||
|interests|||||||
||||distributable profits it has||||
||||achieved in the year.||||
|Executed on time or not|Yes||||||
|Specific reasons for|||||||
|failing to fulfill|||||||
||N/A||||||
|commitments on time|||||||
|and plans for next step|||||||

2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still within the forecast period, explain why the forecast has been reached for the Reporting Period.
□Applicable√ Not applicable
IV Occupation of theCompany’s Capital by the Controlling Shareholder or Its Related Parties for Non-Operating Purposes
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 V Explanations Given by the Board of Directors, the Supervisory Board and the Independent Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting Period
□ Applicable√ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Methods
√Applicable□ Not applicable
In order to execute the following notice regarding accounting policy changes, the Proposal on Accounting Policy Changes was approved at the
29th
Meeting of theCompany’s
8th
Board of Directors.
On 15 June 2018, the Ministry of Finance issued the Notice on Revising and Issuing the Format of the 2018 Annual Financial Statements for General Enterprises(CK〔2018〕No.15).
Therefore, the Company changed its accounting policies accordingly, which had no significant influence on its financial position, operating results and cash flows of 2018.
The accounting policy changes are detailed as follows:
||||
|-|-|-|
|Changes in accounting policy|Approval procedure|Remark|
|(1) “Notes receivable” and “accounts|||
|||Notes and accounts receivable:|
|receivable” in the balance sheet are presented|||
|||Ending: RMB941,927,209.55|
|together as “notes and accounts receivable”;|||
|||Beginning: RMB824,659,624.97|
|“notes payable” and “accounts payable” as|||
|“notes and accounts payable”; “interest|||
|receivable” and “dividends receivable” in||Notes and accounts payable:|
|“other receivables”; “interest payable” and||Ending: RMB985,280,820.92|
|“dividends payable” in “other payables”;||Beginning: RMB539,303,554.54|
|“disposal of fixed assets” in “fixed assets”;|||
|“engineering materials” in “construction in|||
||Approved at the 29th Meeting of the|Other receivables:|
|progress”; and “specific payables” in|||
||Company’s 8th Board of Directors|Ending: RMB5,152,364.04|
|“long-term payables”. Comparative data are|||
|||Beginning: RMB12,428,451.86|
|restated accordingly.|||
|(2) “R&D expense” is added to the income||Administrative expense:|
|statement, and R&D expense originally|||
|||2018: RMB-52,726,585.28|
|recorded in “administrative expense” is|||
|||2017: RMB-34,578,167.96|
|reclassified as a separate item of “R&D|||
|expense”. “Including: Interest expense” and|||
|||R&D expense:|
|“interest income” are added under “finance|||
|||2018: RMB52,726,585.28|
|costs” in the income statement. Comparative|||
|data are restated accordingly.||2017: RMB34,578,167.96|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 VII Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period
□ Applicable√ Not applicable
No such cases in the Reporting Period.
VIII YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IX Engagement and Disengagement of Independent Auditor
Current independent auditor:
|||
|-|-|
|Name of the domestic independent auditor|Beijing Zhongzheng Tiantong Certified Public Accountants LLP|
|The Company’s payment to the domestic independent auditor|130|
|(RMB’0,000)||
|How many consecutive years the domestic independent auditor||
||3|
|has provided audit service for the Company||
|Names of the certified public accountants from the domestic||
||Tong Quanyong, Luo Dongri|
|independent auditor writing signatures on the auditor’s report||
|How many consecutive years the certified public accountants||
|from the domestic independent auditor have provided audit|3|
|service for the Company||
|Name of the foreign independent auditor (if any)|Naught|
|The Company’s payment to the foreign independent auditor||
||0|
|(RMB’0,000) (if any)||
|How many consecutive years the foreign independent auditor has||
||Naught|
|provided audit service for the Company (if any)||
|Names of the certified public accountants from the foreign||
|independent auditor writing signatures on the auditor’s report (if|Naught|
|any)||
|How many consecutive years the certified public accountants||
|from the foreign independent auditor have provided audit service|Naught|
|for the Company (if any)||

Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes√ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018√ Applicable□ Not applicable
In the Reporting Period, the Company engaged Beijing Zhongzheng Tiantong Certified Public Accountants LLP as its internal control auditor with the total audit fees of RMB 0.48 million.
X Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable√ Not applicable
XI Insolvency and Reorganization
□ Applicable√ Not applicable
No such cases in the Reporting Period.
XII Major Legal Matters
□ Applicable√ Not applicable
No such cases in the Reporting Period.
XIII Punishments and Rectifications
□ Applicable√ Not applicable
No such cases in the Reporting Period.
XIV Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
√Applicable□ Not applicable
In the Reporting Period, the Company and its controlling shareholder and actual controller were not involved in any unsatisfied court judgments, large-amount overdue liabilities or the like.
XV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for Employees
□ Applicable√ Not applicable
No such cases in the Reporting Period.
XVI Major Related-Party Transactions
1. Continuing Related-Party Transactions
√Applicable□ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||As % of||||Obtaina|||
||||||||total|Approv|||ble||Index|
||Relation||||||||Over|||||
|||||||Total|value of|ed||Method|market||to|
||ship|Type of|Specific|Pricing|Transact||||the|||||
|Related||||||value|all|transacti||of|price for|Disclos|disclose|
||with the|transacti|transacti|principl|ion||||approve|||||
|party||||||(RMB’0|same-ty|on line||settleme|same-ty|ure date|d|
||Compan|on|on|e|price||||d line or|||||
|||||||,000)|pe|(RMB’0||nt|pe||informa|
||y||||||||not|||||
||||||||transacti|,000)|||transacti||tion|
||||||||ons||||ons|||
|||Purchasi||||||||||||
|||ng||||||||||||
|Foshan||products||||||||||||
||Under|||||||||||||
|NationSta||and|Purchas|||||||||||
||same|||||||||||30|www.c|
|r||receivin|e of|Market||9,522.3||||Remitta||||
||actual||||9,522.3||4.05%|20,000|Not||9,522.3|March|ninfo.c|
|Optoelect||g labor|material|price||7||||nce||||
||controll||||7||||||7|2018|om.cn|
|ronics||service|s|||||||||||
||er|||||||||||||
|Co., Ltd.||from||||||||||||
|||related||||||||||||
|||party||||||||||||
|||Purchasi||||||||||||
|Guangdo||ng||||||||||||
|ng||products||||||||||||
||Under|||||||||||||
|Fenghua||and|Purchas|||||||||||
||same|||||||||||30|www.c|
|Advanced||receivin|e of|Market||||||Remitta||||
||actual||||852.06|852.06|0.36%|1,100|Not||852.06|March|ninfo.c|
|Technolo||g labor|material|price||||||nce||||
||controll|||||||||||2018|om.cn|
|gy||service|s|||||||||||
||er|||||||||||||
|Holding||from||||||||||||
|Co., Ltd.||related||||||||||||
|||party||||||||||||
|||Purchasi||||||||||||
|||ng||||||||||||
||Enterpri|||||||||||||
|||products||||||||||||
||se|||||||||||||
|Prosperity||and|Purchas|||||||||||
||controll|||||||||||||
|Electrical||receivin|e of|Market||||||Remitta||||
||ed by||||72.99|72.99|0.03%||||72.99||N/A|
|(China)||g labor|material|price||||||nce||||
||related|||||||||||||
|Co., Ltd.||service|s|||||||||||
||natural|||||||||||||
|||from||||||||||||
||person|||||||||||||
|||related||||||||||||
|||party||||||||||||
|Prosperity|Shareho|Purchasi||||||||||||
||||Purchas|||||||||||
|Lamps &|lder that|ng||||||||||30|www.c|
||||e of|Market||||||Remitta||||
|Compone|holds|products|||606.61|606.61|0.26%|600|Yes||606.61|March|ninfo.c|
||||material|price||||||nce||||
|nts|over 5%|and||||||||||2018|om.cn|
||||s|||||||||||
|Limited|shares|receivin||||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||of the|g labor||||||||||||
||Compan|service||||||||||||
||y|from||||||||||||
|||related||||||||||||
|||party||||||||||||
|||Purchasi||||||||||||
|||ng||||||||||||
||Enterpri|||||||||||||
|Hangzhou||products||||||||||||
||se|||||||||||||
|Times||and|Purchas|||||||||||
||controll|||||||||||30|www.c|
|Lighting||receivin|e of|Market||||||Remitta||||
||ed by||||67.33|67.33|0.03%|200|Not||67.33|March|ninfo.c|
|and||g labor|material|price||||||nce||||
||related|||||||||||2018|om.cn|
|Electrical||service|s|||||||||||
||natural|||||||||||||
|Co., Ltd.||from||||||||||||
||person|||||||||||||
|||related||||||||||||
|||party||||||||||||
||Enterpri|Purchasi||||||||||||
||se|ng||||||||||||
|Siteco|where|products||||||||||||
|Prosperity|related|and|Purchas|||||||||||
|Lighting|natural|receivin|e of|Market||||||Remitta||||
||||||25.10|25.1|0.01%||||25.10||N/A|
|(Langfan|person|g labor|material|price||||||nce||||
|g) Co.,|holds|service|s|||||||||||
|Ltd.|the post|from||||||||||||
||of|related||||||||||||
||Director|p arty||||||||||||
|||Purchasi||||||||||||
|Guangdo||ng||||||||||||
|ng||products||||||||||||
||Under|||||||||||||
|Zhongke||and|Purchas|||||||||||
||same|||||||||||30|www.c|
|Hongwei||receivin|e of|Market||||||Remitta||||
||actual||||65.32|65.32|1.30%|100|Not||65.32|March|ninfo.c|
|Semicond||g labor|equipme|price||||||nce||||
||controll|||||||||||2018|om.cn|
|uctor||service|nt|||||||||||
||er|||||||||||||
|Equipmen||from||||||||||||
|t Co.,Ltd||related||||||||||||
|||party||||||||||||
|||Purchasi||||||||||||
|Guangdo||||||||||||||
|||ng||||||||||||
|ng|Under|||||||||||||
|||products|Purchas|||||||||||
|HuaShen|same|||||||||||||
|||and|e of|Market||||||Remitta||||
|g data|actual||||160.00|160|3.18%||||||N/A|
|||receivin|equipme|price||||||nce|160.00|||
|solid-state|controll|||||||||||||
|||g labor|nt|||||||||||
|storage|er|||||||||||||
|||service||||||||||||
|Co., Ltd||||||||||||||
|||from||||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||related||||||||||||
|||party||||||||||||
|||Purchasi||||||||||||
|||ng||||||||||||
|Guangdo||||||||||||||
|||products||||||||||||
|ng|Under|||||||||||||
|||and|Purchas|||||||||||
|Electronic|same|||||||||||30|www.c|
|||receivin|e of|Market||||||Remitta||||
|Technolo|actual||||152.99|152.99|3.04%|300|Not|||March|ninfo.c|
|||g labor|equipme|price||||||nce|152.99|||
|gy|controll|||||||||||2018|om.cn|
|||service|nt|||||||||||
|Research|er|||||||||||||
|||from||||||||||||
|Institute||||||||||||||
|||related||||||||||||
|||party||||||||||||
|||Selling||||||||||||
||Shareho|||||||||||||
|||products||||||||||||
||lder that|||||||||||||
|Prosperity||and||||||||||||
||holds|||||||||||||
|Lamps &||providin||||||||||30|www.c|
||over 5%||Selling|Market||||||Remitta||||
|Compone||g labor|||3,500.7|3,500.7|0.92%|3,600|Not||3,500.7|March|ninfo.c|
||shares||products|p rice||||||nce||||
|nts||service|||0||||||0|2018|om.cn|
||of the|||||||||||||
|Limited||to||||||||||||
||Compan|||||||||||||
|||related||||||||||||
||y|||||||||||||
|||party||||||||||||
|||Selling||||||||||||
||Enterpri|products||||||||||||
||se|and||||||||||||
|Prosperity||||||||||||||
||controll|providin||||||||||30|www.c|
|Electrical|||Selling|Market||||||Remitta||||
||ed by|g labor|||21.55|21.55|0.01%|50|Not||21.55|March|ninfo.c|
|(China)|||products|p rice||||||nce||||
||related|service||||||||||2018|om.cn|
|Co., Ltd.||||||||||||||
||natural|to||||||||||||
||person|related||||||||||||
|||party||||||||||||
|||Selling||||||||||||
|Prosperity|Enterpri|products||||||||||||
|(Hangzho|se|and||||||||||||
|u)|controll|providin||||||||||30|www.c|
||||Selling|Market||||||Remitta||||
|Lighting|ed by|g labor|||0.00|0.00|0.00%|30|Not||0.00|March|ninfo.c|
||||products|price||||||nce||||
|and|related|service||||||||||2018|om.cn|
|Electrical|natural|to||||||||||||
|Co., Ltd.|person|related||||||||||||
|||party||||||||||||
|Hangzhou|Enterpri|Selling||||||||||||
|Times|se|products|Selling|Market||||||Remitta||||
||||||7.38|7.38|0.00%||||7.38||N/A|
|Lighting|controll|and|products|p rice||||||nce||||
|and|ed by|providin||||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Electrical|related|g labor||||||||||||
|Co., Ltd.|natural|service||||||||||||
||person|to||||||||||||
|||related||||||||||||
|||party||||||||||||
|||Selling||||||||||||
|Guangdo||products||||||||||||
|ng|Under|and||||||||||||
|HuaShen|same|providin||||||||||||
||||Selling|Market||||||Remitta||||
|g data|actual|g labor|||237.35|237.35|0.06%||||||N/A|
||||products|p rice||||||nce|237.35|||
|solid-state|controll|service||||||||||||
|storage|er|to||||||||||||
|Co., Ltd||related||||||||||||
|||party||||||||||||
|||Selling||||||||||||
|Guangzho||||||||||||||
|||products||||||||||||
|u||||||||||||||
||Under|and||||||||||||
|Dianshen||||||||||||||
||same|providin||||||||||||
|g|||Selling|Market||||||Remitta||||
||actual|g labor|||0.11|0.11|0.00%||||0.11||N/A|
|Property|||products|p rice||||||nce||||
||controll|service||||||||||||
|Managem||||||||||||||
||er|to||||||||||||
|ent Co.,||||||||||||||
|||related||||||||||||
|Ltd||||||||||||||
|||party||||||||||||
|||Selling||||||||||||
|Guangdo||products||||||||||||
|ng Rising|Under|and||||||||||||
|Optoelect|same|providin||||||||||||
||||Selling|Market||||||Remitta||||
|ronic|actual|g labor|||0.25|0.25|0.00%||||0.25||N/A|
||||products|p rice||||||nce||||
|Technolo|controll|service||||||||||||
|gy Co.,|er|to||||||||||||
|Ltd.||related||||||||||||
|||party||||||||||||
|||||||15,292.||||||||
|Total||||--|--||--|25,980|--|--|--|--|--|
|||||||11||||||||
|Large-amount sales return in detail||||N/A||||||||||
|||||In March 2018, the Company estimated the total value of its continuing transactions with||||||||||
|Give the actual situation in the||||||||||||||
|||||related parties Foshan NationStar Optoelectronics Co., Ltd., Guangdong Fenghua Advanced||||||||||
|Reporting Period (if any) where an||||||||||||||
|||||Technology Holding Co., Ltd., Prosperity Lamps & Components Limited, Prosperity||||||||||
|estimate had been made for the total||||||||||||||
|||||Electrical (China) Co., Ltd., Prosperity (Hangzhou) Lighting and Electrical Co., Ltd. and||||||||||
|value of continuing related-party||||||||||||||
|||||Hangzhou Times Lighting and Electrical Co., Ltd. Concerning the purchases from its||||||||||
|transactions by type to occur in the||||||||||||||
|||||related parties, the actual amount in 2018 so far was RMB115.24777 million, accounting for||||||||||
|Reporting Period||||||||||||||
|||||51.68% of the estimate in 2018. As for the sales to its related parties, the actual amount in||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
||2018 so far was RMB37.6734 million, accounting for 102.37% of the estimate in 2018.|
|Reason for any significant difference||
|between the transaction price and the|N/A|
|market reference price (if applicable)||

2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable√ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable√ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable√ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
√ Applicable□ Not applicable
1. On 28 June 2017, the Company held the
15th
Meeting of the
8th
Board of Directors, and the Proposal on Renewing the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined and approved at the meeting. On the same day, the Company signed the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. (hereinafter referred to as “Rising Finance”), and Rising Finance would provide deposit and settlement services for the Company for a term of one year. During the term of validity of the Agreement, the daily deposit balance of the Company in Rising Finance Company shall not exceed RMB150 million. During the Reporting Period, the daily deposit balance of the Company in Rising Finance Company was RMB149 million.
2. On 26 June 2018, the Company held the
23rd
Meeting of the
8th
Board of Directors, and the Proposal on Signing the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. was examined and approved at the meeting. On the same day, the Company signed the Financial Services Agreement with Guangdong Rising Finance Co., Ltd. (hereinafter referred to as “Rising Finance”), and Rising Finance would provide deposit and settlement services for the Company for a term of one year. During the term of validity of the Agreement, the daily deposit balance of the Company in Rising Finance Company shall not exceed RMB150 million. During the Reporting Period, the daily deposit balance of the Company in Rising Finance Company was RMB149million.
Index to the current announcements about the said related-party transactions disclosed:
||||
|-|-|-|
|Title of announcement|Disclosure date|Disclosure website|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Announcement on Renewing Financial ServiceAgreement with Guangdong Rising FinanceCo., Ltd.|||
||29 June 2017|www.cninfo.com.cn|
|Announcement on Signing Financial ServiceAgreement with Guangdong Rising FinanceCo., Ltd.|||
||27 June 2018|www.cninfo.com.cn|

XVII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable√ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable√ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable√ Not applicable
No such cases in the Reporting Period.
2. Major guarantees
□ Applicable√ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
√ Applicable□ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RMB'0,000
||||||
|-|-|-|-|-|
|Specific type|Capital resources|Amount incurred|Undue Balance|Overdue amount|
|Bank financial products|Self-owned funds|50,000|24,000|0|
|Structural deposits|Self-owned funds|67,000|60,000|0|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
|Total|117,00|0 84,000|0|0|

 Particulars of cash entrusted for wealth management with single significant amount or low security, bad liquidity, and no capital preservation
√ Applicable□ Not applicable
Unit: RMB'0,000
||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||||||Index|
|||||||||||||||||to|
|||||||||||||||||transa|
||||||||||Annua||||Allow|Prescr|||
|||Type|||||||||Actual|Receip|||Plan|ction|
||||||||||lized|Expect|||ance|ibed|||
|||of||Source||||Deter|||gain/lo|t/paym|||for|summ|
||Type||||Begin||Use of||yield|ed|||for|proced|||
|Truste||wealth|Princi|of||Endin||minati|||ss in|ent of|||more|ary|
||of||||ning||princi||rate|yield|||impair|ure|||
|e||manag|pal|princi||g date||on of|||Report|such|||transa|and|
||trustee||||date||pal||for|(if|||ment|execut|||
|||ement||pal||||yield|||ing|gain/lo|||ction|other|
||||||||||refere|any)|||(if|ed or|||
|||product|||||||||Period|ss|||or not|infor|
||||||||||nce||||any)|not|||
|||||||||||||||||matio|
|||||||||||||||||n (if|
|||||||||||||||||any)|
|China|||||||||||||||||
|Guang|||||||||||||||||
|fa||||||||Repay|||||||||
|||Princip||The|||||||||||||
|Bank,||||||||ment|||||||||
|||al-prot||Comp|28|||||||||||www.|
|Guang||||||7||of||||To be|||||
|||ected||any’s|Septe||Invest|||||||||cninfo|
|zhou|Bank||3,000|||Januar||princi|4.10%|34.04|31.68|receiv||Yes|Yes||
|||with||own|mber||ment|||||||||.com.c|
|develo||||||y 2019||pal||||ed|||||
|||floatin||idle|2018|||||||||||n|
|pment||||||||with|||||||||
|||g yield||funds|||||||||||||
|area||||||||yield|||||||||
|sub-br|||||||||||||||||
|anch|||||||||||||||||
|China|||||||||||||||||
|Guang|||||||||||||||||
|fa||||||||Repay|||||||||
|||Princip||The|||||||||||||
|Bank,||||||||ment|||||||||
|||al-prot||Comp|12|||||||||||www.|
|Guang||||||11||of||||To be|||||
|||ected||any’s|Octob||Invest|||||||||cninfo|
|zhou|Bank||5,000|||Januar||princi|4.10%|51.11|44.93|receiv||Yes|Yes||
|||with||own|er||ment|||||||||.com.c|
|develo||||||y 2019||pal||||ed|||||
|||floatin||idle|2018|||||||||||n|
|pment||||||||with|||||||||
|||g yield||funds|||||||||||||
|area||||||||yield|||||||||
|sub-br|||||||||||||||||
|anch|||||||||||||||||
|Huaxi||Princip||The|19|21|Invest|Repay||||To be||||www.|
||Bank||3,000||||||4.10%|31.68|24.7|||Yes|Yes||
|a||al-prot||Comp|Octob|Januar|ment|ment||||receiv||||cninfo|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Bank,||ected||any’s|er|y 2019||of||||ed|||.com.c|
|Fosha||with||own|2018|||princi|||||||n|
|n||floatin||idle||||pal||||||||
|branch||g yield||funds||||with||||||||
|||||||||yield||||||||
|PingA||||||||||||||||
|n||||||||Repay||||||||
|||Princip||The||||||||||||
|Bank,||||||||ment||||||||
|||al-prot||Comp|17||||||||||www.|
|Fosha||||||15||of||||To be||||
|||ected||any’s|Octob||Invest||||||||cninfo|
|n|Bank||3,000|||Januar||princi|3.95%|29.22|24.35|receiv|Yes|Yes||
|||with||own|er||ment||||||||.com.c|
|Jiangw||||||y 2019||pal||||ed||||
|||floatin||idle|2018||||||||||n|
|an||||||||with||||||||
|||g yield||funds||||||||||||
|sub-br||||||||yield||||||||
|anch||||||||||||||||
|China||||||||||||||||
|Guang||||||||||||||||
|fa||||||||Repay||||||||
|||Princip||The||||||||||||
|Bank,||||||||ment||||||||
|||al-prot||Comp|23||||||||||www.|
|Guang||||||21||of||||To be||||
|||ected||any’s|Octob||Invest||||||||cninfo|
|zhou|Bank||5,000|||Januar||princi|4.10%|50.55|38.75|receiv|Yes|Yes||
|||with||own|er||ment||||||||.com.c|
|develo||||||y 2019||pal||||ed||||
|||floatin||idle|2018||||||||||n|
|pment||||||||with||||||||
|||g yield||funds||||||||||||
|area||||||||yield||||||||
|sub-br||||||||||||||||
|anch||||||||||||||||
|PingA||||||||||||||||
|n||||||||Repay||||||||
|||Princip||The||||||||||||
|Bank,||||||||ment||||||||
|||al-prot||Comp|8|18|||||||||www.|
|Fosha||||||||of||||To be||||
|||ected||any’s|Nove|Februa|Invest||||||||cninfo|
|n|Bank||3,000|||||princi|4.10%|34.37|18.2|receiv|Yes|Yes||
|||with||own|mber|ry|ment||||||||.com.c|
|Jiangw||||||||pal||||ed||||
|||floatin||idle|2018|2019|||||||||n|
|an||||||||with||||||||
|||g yield||funds||||||||||||
|sub-br||||||||yield||||||||
|anch||||||||||||||||
|China||||||||||||||||
|Guang||||||||Repay||||||||
|||Princip||The||||||||||||
|fa||||||||ment||||||||
|||al-prot||Comp|9|13|||||||||www.|
|Bank,||||||||of||||To be||||
|||ected||any’s|Nove|Februa|Invest||||||||cninfo|
|Guang|Bank||2,000|||||princi|4.10%|21.57|11.91|receiv|Yes|Yes||
|||with||own|mber|ry|ment||||||||.com.c|
|zhou||||||||pal||||ed||||
|||floatin||idle|2018|2019|||||||||n|
|develo||||||||with||||||||
|||g yield||funds||||||||||||
|pment||||||||yield||||||||
|area||||||||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|sub-br||||||||||||||
|anch||||||||||||||
|Total|24,000|--|--|--|--|--|--|252.54|194.52|--|--|--|--|

 Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment of cash entrusted for wealth management
□ Applicable√ Not applicable
(2) Entrusted Loans
□ Applicable√ Not applicable
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable√ Not applicable
No such cases in the Reporting Period.
XVIII Corporate Social Responsibility (CSR)
1. Measures Taken to Fulfill CSR Commitment
We have always attached importance to the accomplishment of our social value. With “provide returns for shareholders, provide a platform for employees, create value for customers and create prosperity for the society” as our mission, we take on the social responsibilities to protect the interests of our creditors, employees, customers, suppliers and community. We have been utilizing resources in a scientific, rational way, effectively protecting the natural environment and safeguarding social safety so as to promote common, harmonious and sustainable development of the Company and the society.
1. Protection of the rights and interests of our shareholders and creditors
We continuously improve our corporate governance structure, regulate our operation and enhance our management on information disclosure and investor relations. We treat all our investors fairly and justly, ensure their rights to know about, participate in and vote on the significant events of the Company, and safeguard the legal rights and interests of all our shareholders, especially our minority shareholders.
2. Protection of the rights and interests of our employees
Considering employees the most valuable resource for our survival and development, we constantly improve our employment system, improve the compensation packages for our employees and attach importance to talent cultivation so as to provide opportunities and space for the sustainable development of our employees as well as realize the common development of the employees and the Company. We also pay attention to the health of our employees, attach importance to production safety and labor protection, and improve the working and living conditions for our employees so as to formulate harmonious and stable labor relations.
3. Protection of the rights and interests of our customers and consumers
We have been upholding the “Customer First” principle in our provision of quality products and services to
customers. We operate honestly and disallow any unfair trade practice against commercial ethics, market rules and
the fair competition principle. We also improve our product quality and after-sales services and try to build a
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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. Environmental protection and sustainable development
As an active response to thegovernment’s call for building an environment-friendly and resource-saving society, we take on our responsibility of environmental protection and strictly abide by thegovernment’s laws and regulations in environmental protection. In the Reporting Period, we enhanced theR&D, promotion and sale of environment-friendly and high-efficient products. We have passed the ISO14001 environmental management system certification, passed theprovince’s voluntary clean production examination and won the title of “Clean Production Enterprise in Guangdong Province”. At the same time, the identification of Green Factory of the Company has been examined and approved by the Ministry of National Industry and Information Technology. The Company becomes the demonstration unit of the second batch of the National Green Factory
6. Public relations and welfare
We attach importance to the realization of our social value and see creating a prosperous society as a commitment that we should take on, trying to boost the local economy through our own development. We have been granted by the local government the title of “Foshan Over-100-Million Tax Payer” for many years due to our contributions in boosting the harmonious development of the Company and the community.
2. Measures Taken for Targeted Poverty Alleviation
The Companydidn’t take any targeted measures to help people lift themselves out of poverty during the Reporting Period, no subsequent plan temporarily too.
3. Issues Related to Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection authorities.
No
In strict accordance with thegovernment’s requirements, the Company has been conscientiously carrying out environment-related work, including establishing and improving various related systems, and continuously increasing related expenditure. These environment improvement efforts have helped build a good image of the Company in relation to environmental protection. Meanwhile, theCompany’s environmental protecting facilities have been running stably, with the discharge of waste gas and water in compliance with the relevant standards. No pollution incidents have occurred.
In addition to the environmental protectionauthorities’ quarterly examination and supervision, the Company has also entrusted, on a yearly basis, an independent institution to exam theCompany’s waste gas treatment systems, as well as waste water and noise discharges, so as to minimize environment risk. All the examinations and tests have been documented and released to the employees on the environmental protection and safety bulletin boards at every workshop. Employees at all levels, with a strong awareness of environment protection, have been cooperating closely with each other to implement the policy of “Save Energy, Reduce Consumption, Lower Pollution and Increase Efficiency”. In all, theCompany’s environment risk is controllable and its environment
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 management keeps improving.
XIX Other Significant Events
□ Applicable√ Not applicable
No such cases in the Reporting Period.
XX Significant Events of Subsidiaries
√ Applicable□ Not applicable
The Company convened the
26th
Meeting of the
8th
Board of Directors on 7 September 2018, which reviewed and approved the Proposal on Cancellation of Wholly-owned Subsidiary Guangdong FSL Finance Lease Co., Ltd. As of the end of the Reporting Period, the Company was in the process of liquidating and cancelling the Guangdong FSL Finance Lease Co., Ltd.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before||Increase/decrease in the Reporting Period (+/-)|||||After||
||||||Shares as|||||
|||||Shares as||||||
||||||dividend|||||
|||||dividend||||||
|||Percentag|New||converted||||Percentag|
||Shares|||converted||Other|Subtotal|Shares||
|||e (%)|issues||from||||e (%)|
|||||from||||||
||||||capital|||||
|||||profit||||||
||||||reserves|||||
||12,582,00|||||||13,968,65||
|1. Restricted shares||0.99%|||1,258,200|128,451|1,386,651||1.00%|
||3|||||||4||
|1.3 Shares held by other||||||||||
||4,465,974|0.35%|||446,597|128,451|575,048|5,041,022|0.36%|
|domestic investors||||||||||
|Among which: Shares held||||||||||
||3,860,675|0.30%|||386,067|-9,661|376,406|4,237,081|0.30%|
|by domestic legal persons||||||||||
|Shares held by||||||||||
||605,299|0.05%|||60,530|138,112|198,642|803,941|0.06%|
|domestic natural persons||||||||||
|1.4 Shares held by foreign||||||||||
||8,116,029|0.64%|||811,603|0|811,603|8,927,632|0.64%|
|investors||||||||||
|Shares held by||||||||||
||8,116,029|0.64%|||811,063|0|811,603|8,927,632|0.64%|
|foreign natural persons||||||||||
||1,259,550,||||125,955,0||125,826,6|1,385,377||
|||99.01%||||-128,451|||99.00%|
|2. Unrestricted shares|865||||86||35|,500||
|2.1 RMB-denominated|974,879,5||||97,487,95||97,359,50|1,072,239||
|||76.63%||||-128,451|||76.62%|
|ordinary shares|46||||4||3|,049||
|2.2 Domestically listed|284,671,3||||28,467,13||28,467,13|313,138,4||
|||22.38%||||0|||22.38%|
|foreign shares|19||||2||2|51||
||1,272,132,||||127,213,2||127,213,2|1,399,346||
|3. Total shares||100.00%||||0|||100.00%|
||868||||86||86|,154||

Reasons for share changes:
√ Applicable□ Not applicable
1. According to the Resolution of the 2017 Annual General Meeting, the Company completed a bonus issue of one
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 additional share for every 10 existing shares from capital reserves on 16 May 2018, representing an increment of 127,213,286 shares to theCompany’s total shares.
2. 9,661 restricted shares held by domestic legal persons became domestic naturalpersons’ holdings during the Reporting Period.
3. During the Reporting Period, some directors and supervisors, as well as all the senior management increased their shareholdings in the Company, representing an increase of 128,451 restricted shares.
Approval of share changes:
√ Applicable□ Not applicable
According to the 2017 Profit Distribution Plan, which was reviewed and approved at the 2017 Annual General Meeting on 26 April 2018, based on theCompany’s total shares of 1,272,132,868 at the end of 2017, a cash dividend of RMB3.29 (tax inclusive, dividends for B-shareholders to be paid in the Hong Kong dollars) per 10 shares would be distributed to the A- and B-shareholders, with a bonus issue of one additional share for every 10 existing shares from capital reserves, representing an increment of 127,213,286 shares to theCompany’s total shares.
Transfer of share ownership:
□ Applicable√ Not applicable
Progress on any share repurchases:
□ Applicable√ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable√ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to theCompany’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
√ Applicable□ Not applicable
The Company has completed the bonus issue of one additional share for every 10 existing shares from capital reserves in the Reporting Period, with its total shares increasing from 1,272,132,868 to 1,399,346,154. Thischange’s effects on the basic earnings per share, diluted earnings per share, equity per share attributable to theCompany’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,
respectively, are as follows:
|||||
|-|-|-|-|
||2017||2018|
|Item|Based on former total|Based on new total shares|Based on new total shares|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
||shares|||
|Basic earnings per share(RMB/share)|0.5819|0.5290|0.2699|
|Diluted earnings per share(RMB/share)|0.5819|0.5290|0.2699|
|Net assets per share(RMB/share)|3.76|3.42|3.09|

Other information that the Company considers necessary or is required by the securities regulator to be disclosed:□ Applicable√ Not applicable
2. Changes in Restricted Shares
√ Applicable□ Not applicable
Unit: share
||||||||
|-|-|-|-|-|-|-|
||||||Reason for||
||Beginning|Released in|Increase in|Ending restricted|||
|Shareholder|||||restriction/release|Date of release|
||restricted shares|Reporting Period|Reporting Period|shares|||
||||||from restriction||
||||||Lock-up of senior||
|Liu Xingming|380,523|0|63,627|444,150|management’s|Uncertain|
||||||shares||
||||||Lock-up of senior||
|Tang Qionglan|12,150|0|17,880|30,030|management’s|Uncertain|
||||||shares||
||||||Lock-up of senior||
|Wei Bin|35,602|0|20,142|55,744|management’s|Uncertain|
||||||shares||
||||||Lock-up of senior||
|Jiao Zhigang|40,458|0|16,091|56,549|management’s|Uncertain|
||||||shares||
||||||Lock-up of senior||
|Chen Yu|20,370|0|14,329|34,699|management’s|Uncertain|
||||||shares||
||||||Lock-up of senior||
|Zhang Yong|25,995|0|15,552|41,547|management’s|Uncertain|
||||||shares||
||||||Lock-up of senior||
|Zhang Xuequan|20,033|0|18,256|38,289|management’s|Uncertain|
||||||shares||
|Xu Xiaoping|7,575|0|11,152|18,727|Lock-up of senior|Uncertain|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
||||||management’s||
||||||shares||
||||||Lock-up of senior||
|Ye Zhenghong|39,321|0|9,625|48,946|management’s|Uncertain|
||||||shares||
|Total|582,027|0|186,654|768,681|--|--|

 II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable√ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
√ Applicable□ Not applicable
On 26 April 2018, the Company held the 2017 Annual General Meeting, where the 2017 Final Dividend Plan was reviewed and approved. TheCompany’s 2017 Final Dividend Plan was: Based on theCompany’s total shares of 1,272,132,868 at the end of 2017, a cash dividend of RMB3.29 (tax inclusive, dividends for B-shareholders to be paid in the Hong Kong dollars) per 10 shares would be distributed to the A- and B-shareholders, with a bonus issue of one additional share for every 10 existing shares from capital reserves, representing an increment of 127,213,286 shares to theCompany’s total shares; theCompany’s total share capital changed from 1,272,132,868 to 1,399,346,154. The change in theCompany’s total share capital did not result in any change in its shareholder structure and asset-liability structure.
3. Existing Staff-Held Shares
□ Applicable√ Not applicable
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
|||||||||
|-|-|-|-|-|-|-|-|
|||||||Number of||
|||Number of||||||
|||||Number of||preferred||
|||ordinary||||||
|||||preferred||shareholders||
|Number of||shareholders at||||||
|||||shareholders with||with resumed||
|ordinary|91,021|the month-end|89,842||0||0|
|||||resumed voting||voting rights at||
|shareholders||prior to the||||||
|||||rights (if any) (see||the month-end||
|||disclosure of this||||||
|||||note 8)||prior to the||
|||Report||||||
|||||||disclosure of this||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Report (if any)(see note 8)||
|5% or greater shareholders or top 10 shareholders|||||||||
|||||Increase/d|||Shares in pledge or frozen||
||||Total shares|ecrease in|Restricted||||
|Name of|Nature of|Shareholdin||||Unrestricted|||
||||held at the|the|shares||||
|shareholder|shareholder|g percentage||||shares held|Status|Shares|
||||period-end|Reporting|held||||
|||||Period|||||
|Hong Kong WahShing HoldingCompany Limited|Foreign legalperson|13.47%|188,496,430|||188,496,430|||
||||||||In pledge|92,363,251|
|Prosperity Lamps& ComponentsLimited|Foreign legalperson|10.50%|146,934,857|||146,934,857|||
|Shenzhen RisingInvestmentDevelopment Co.,Ltd.|State-ownedlegal person|5.12%|71,696,136|||71,696,136|||
||||||||In pledge|28,300,000|
|GuangdongElectronicsInformationIndustry GroupLtd.|State-ownedlegal person|4.74%|66,393,501|||66,393,501|||
||||||||In pledge|32,532,815|
|Central HuijinAsset ManagementCo., Ltd.|State-ownedlegal person|2.42%|33,878,900|||33,878,900|||
|EssenceInternationalSecurities (HongKong) Co., Ltd.|Foreign legalperson|2.10%|29,332,186|1,472,277||29,332,186|||
|Hong Kong RisingInvestmentDevelopment Co.,Ltd.|Foreign legalperson|1.82%|25,482,252|||25,482,252|||
|DBS Vickers(HongKong) Ltd A/CClients|Foreign legalperson|1.58%|22,102,137|-3,908,193||22,102,137|||
|China MerchantsSecurities (HongKong) Co., Ltd|Foreign legalperson|0.88%|12,333,836|293,939||12,333,836|||
|Zhuang Jianyi|Foreign|0.85%|11,903,509||8,927,632|2,975,877|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
||natural person||||
|Strategic investors or general|||||
|corporations becoming top-ten|||||
|||Naught|||
|shareholders due to placing of|||||
|new shares (if any) (see Note 3)|||||
|||Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen|||
|||Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group|||
|Related or acting-in-concert||Ltd. and Hong Kong Rising Investment Development Co., Ltd. are acting-in-concert parties;|||
|parties among the shareholders||and Prosperity Lamps & Components Limited and Zhuang Jianyi are acting-in-concert parties.|||
|above||Apart from that, it is unknown whether there is among the top 10 shareholders any other related|||
|||parties or acting-in-concert parties as defined in the Administrative Measures for the Acquisition|||
|||of Listed Companies.|||
|Top 10 unrestricted shareholders|||||
||||Type of shares||
|Name of shareholder||Unrestricted shares at the Period-end|||
||||Type|Shares|
|Hong Kong Wah Shing HoldingCompany Limited||188,496,430|RMB-denomina||
||||ted ordinary|188,496,430|
||||stock||
|Prosperity Lamps & ComponentsLimited||146,934,857|RMB-denomina||
||||ted ordinary|146,934,857|
||||stock||
|Shenzhen Rising InvestmentDevelopment Co., Ltd.||71,696,136|RMB-denomina||
||||ted ordinary|71,696,136|
||||stock||
|Guangdong ElectronicsInformation Industry Group Ltd.||66,393,501|RMB-denomina||
||||ted ordinary|66,393,501|
||||stock||
|Central Huijin Asset ManagementCo., Ltd.||33,878,900|RMB-denomina||
||||ted ordinary|33,878,900|
||||stock||
|Essence International Securities(Hong Kong) Co., Ltd.||29,332,186|Domestically||
||||listed foreign|29,332,186|
||||stock||
|Hong Kong Rising InvestmentDevelopment Co., Ltd.||25,482,252|Domestically||
||||listed foreign|25,482,252|
||||stock||
|DBS Vickers (Hong Kong) LtdA/C Clients||22,102,137|Domestically||
||||listed foreign|22,102,137|
||||stock||
|China Merchants Securities (HongKong) Co., Ltd||12,333,836|Domestically||
|||||12,333,836|
||||listed foreign||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
|||stock||
|Shenzhen Xingsen AssetManagement Co., Ltd—Phase IIPrivate Fund of Xingsen|7,839,176|RMB-denomina||
|||ted ordinary|7,839,176|
|||stock||
|Related or acting-in-concert|Among the top 10 unrestricted ordinary shareholders, Hong Kong Wah Shing Holding Company|||
|parties among the top ten|Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics|||
|unrestricted public shareholders|Information Industry Group Ltd. and Hong Kong Rising Investment Development Co., Ltd. are|||
|and between the top ten|acting-in-concert parties; Apart from that, it is unknown whether there is among the top 10|||
|unrestricted public shareholders|shareholders any other related parties or acting-in-concert parties as defined in the|||
|and the top ten shareholders|Administrative Measures for the Acquisition of Listed Companies.|||

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yea√ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: legal person
||||||
|-|-|-|-|-|
||Legal||||
|Name of controlling|||Unified social credit||
||representative/pers|Date of establishment||Principal activity|
|shareholder|||code||
||on in charge||||
|||||Development, production and sale|
|||||of electronics, IT products and|
|||||electrical appliances, operation of|
|||||electronic information networks|
|||||and computers, electronic|
|||||computer technology service, and|
|||||equipment and venue rental|
|||||service; sale of electronic|
|Guangdong Electronics|||||
|||||computers and fittings, electronic|
|Information Industry|He Yong|19 October 2000|91440000725458764N||
|||||components, electron devices, and|
|Group Ltd.|||||
|||||electrical machinery and|
|||||equipment; wholesale of coal;|
|||||energy performance contracting|
|||||service, development and|
|||||consulting service of energy-saving|
|||||technology, and manufacture and|
|||||installation of energy-saving|
|||||equipment; parking lot operation|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
|||||(188 Yueken Road, Tianhe District,|
|||||Guangzhou, Guangdong Province,|
|||||P.R.China); import and export of|
|||||goods; and training of professional|
|||||and technical personnel.|
|||||Equity and venture capital|
|||||investment (approval shall be|
|||||obtained for each specific|
|||||investment project); industrial|
|||||investment (approval shall be|
|||||obtained for each specific|
|||||investment project); trustee service|
|||||for asset management (not|
|Shenzhen Rising|||||
|||||including securities, insurance,|
|Investment Development|Wu Xiaohui|27 August 2003|91440300754255560K||
|||||funds, financial service, human|
|Co., Ltd.|||||
|||||resources consulting service and|
|||||other restricted business); and|
|||||investment information consulting|
|||||service, economic information|
|||||consulting service, investment|
|||||management planning, corporate|
|||||identity design (excluding|
|||||restricted business).|
|Guangdong Rising|||||
||Che Zuobin|14 November 2014|91440400315213166P|Investment and asset management|
|Finance Holding Co., Ltd.|||||
|Hong Kong Rising|||||
|Investment Development|Deng Qian|11 July 2001|764105|Investment and asset management|
|Limited|||||
||At the end of the Reporting Period,||||
||1、Guangdong Electronics Information Industry Group Ltd. held 79,753,050 shares in Foshan||||
||NationStar Optoelectronics Co., Ltd., representing 12.90% of the total shares of Foshan NationStar||||
||Optoelectronics Co., Ltd..||||
||2、Shenzhen Rising Investment Development Co., Ltd. held 4,192,734 shares in Guangdong Fenghua||||
|Shareholdings of|||||
||Advanced Technology Holding Co., Ltd., accounting for 0.47% of total shares of Guangdong Fenghua||||
|controlling shareholder in|Advanced Technology Holding Co., Ltd.; and held 139,715,902 shares in Shenzhen Zhongjin Lingnan||||
|other listed companies at|Nonfemet Co., Ltd., representing 3.91% of total shares of Shenzhen Zhongjin Lingnan Nonfemet Co.,||||
|home or abroad in|Ltd. Shenzhen Rising Investment Development Co., Ltd. held 1,302,027 shares in Dongjiang||||
|reporting period|Environmental Co. Ltd, accounting for 0.15% of total shares of Dongjiang Environmental Co., Ltd; and||||
||held 9,024,363 shares in Central China Securities Co., Ltd, accounting for 0.23% of the total shares of||||
||Central China Securities Co., Ltd.||||
||3. Guangdong Rising Finance Holding Co., Ltd. held 7,551,648 shares in Shenzhen Zhongjin Lingnan||||
||Nonfemet Co., Ltd, accounting for 0.21% of Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd ’s total||||
||shares; and held 16,260,400 shares in Dongjiang Environmental Co. Ltd, accounting for 1.83% of total||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|shares of Dongjiang Environmental Co. Ltd, and held 5,791,924 in Foshan NationStar Optoelectronics|
|Co., Ltd, accounting for 0.94% of the total shares of Foshan NationStar Optoelectronics Co., Ltd.|

 Change of the controlling shareholder in the Reporting Period:
□ Applicable√ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets management
Type of the actual controller: legal person
||||||
|-|-|-|-|-|
||Legal||||
|||Date of|Unified social credit||
|Name of actual controller|representative/per|||Principal activity|
|||establishment|code||
||son in charge||||
|||||Asset management and|
|||||operation, equity management|
|||||and operation, investment|
|||||operation, and management and|
|||||re-investment of investment|
|||||earnings; other business|
|||||authorized by the state-owned|
|||||assets administration of the|
|||||Guangdong Province; contractor|
|||||service for overseas projects and|
|||||domestic projects calling for|
|||||international bids, contractor|
|Guangdong Rising Assets|||||
||Xu Guang|23 December 1999|91440000719283849E|service for survey, consulting,|
|Management Co., Ltd.|||||
|||||design and supervision of the|
|||||aforesaid overseas projects,|
|||||export of equipment and|
|||||materials for the aforesaid|
|||||overseas projects, and dispatch|
|||||of contract workers for the|
|||||aforesaid overseas projects;|
|||||property rental service; and|
|||||exploitation, sale and deep|
|||||processing of rare earth|
|||||(operated by the branches with|
|||||the relevant licenses).|
|Shareholdings of the actual|At the end of the Reporting Period, Guangdong Rising Assets Management Co., Ltd. directly or||||
|controller in other listed|indirectly held the following stakes in other listed companies at home or abroad:||||
|companies at home or abroad in|1. a 42.87% stake of 129,372,517 shares in Rising Nonferrous (stock code: 600259);||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
|this Reporting Period|2. a 32.49% stake of 1,159,811,571 shares in Zhongjin Lingnan Nonfemet (stock code: 000060);|
||3. a 20.50% stake of 183,495,085 shares in Fenghua Advanced (stock code: 000636);|
||4. a 21.32% stake of 131,804,995 shares in NationStar Optoelectronics (stock code: 002449);|
||5. a 21.03% stake of 186,526,928 A shares and H shares in Dongjiang Environment (stock code:|
||002672);|
||6. a 6.94% stake of 5,614,082,653 shares in China Telecom (stock code: 00728. HK).|
||7. a 0.23%stake of 9,024,363 shares in Central China Securities (stock code: 601375);|

Change of the actual controller during the Reporting Period:
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company:
State-owned Assets Supervision and Administration Commission of
thePeople’s Government of Guangdong Province
100%
Guangdong Rising Assets Management Co., Ltd.
100% 100% 100% Guangdong Rising Finance Holding Hong Kong Rising Investment Guangdong Electronics Co., Ltd. Development Limited Information Industry Group Ltd.0.541% 100% 4.745% 100%%
Shenzhen Rising Investment Hong Kong Wah Shing Holding Development Co., Ltd. 1.821% Company Limited5.124% 13.470% Foshan Electrical and Lighting Co., Ltd.
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable√ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 4. Other10% or Greater Corporate Shareholders
√ Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name of corporate|Legal representative /|Date of|||
||||Registered capital|Business scope|
|shareholder|company principal|establishment|||
|||||Import and export of electronics,|
|||||electric lighting products, lamps,|
|Prosperity Lamps &||||electric lighting equipment, etc.,|
||Zhuang Jianyi|28 April 1978|HKD2 million||
|Components Limited||||and design, installation and|
|||||after-sales service of lighting|
|||||solutions|

5. Limitations on Shareholding Decrease by theCompany’s Controlling Shareholder, Actual Controller, Reorganizer and Other Commitment Makers
□ Applicable√ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part VII Preferred Shares
□ Applicable√ Not applicable
No preferred shares in the Reporting Period.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part VIII Directors, Supervisors, Senior Management and Staff I Change in Shareholdings of Directors, Supervisors and Senior Management
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Increase|Decrease|||
|||||||||||Other||
|||Incumb|||||Beginning|in the|in the||Ending|
|||||||||||increase/d||
|Name|Office title|ent/For|Gender|Age|Start of|End of|shareholding|Reporting|Reporting||shareholdi|
||||||tenure|tenure||||ecrease||
|||mer|||||(share)|Period|Period||ng (share)|
|||||||||||(share)||
|||||||||(share)|(share)|||
||||||25|25||||||
||Board|Incumb||||||||||
|He Yong|||Male|58|December|December|0|0|0|0|0|
||Chairman|ent||||||||||
||||||2015|2018||||||
||||||25|25||||||
|Zhuang|Vice Board|Incumb||||||||||
||||Male|67|December|December|10,821,372|0|0|1,082,137|11,903,509|
|Jianyi|Chairman|ent||||||||||
||||||2015|2018||||||
||||||25|25||||||
|||Incumb||||||||||
|Cheng Ke|Director||Male|44|December|December|10,500|0|0|1,050|11,550|
|||ent||||||||||
||||||2015|2018||||||
||||||25|25||||||
|||Incumb||||||||||
|Qi Siyin|Director||Male|38|December|December|0|0|0|0|0|
|||ent||||||||||
||||||2015|2018||||||
||||||25|25||||||
|Huang||Incumb||||||||||
||Director||Male|49|December|December|0|0|0|0|0|
|Zhiyong||ent||||||||||
||||||2015|2018||||||
||||||25|25||||||
|Liu|Director &|Incumb||||||||||
||||Male|56|December|December|507,364|31,000|0|53,836|592,200|
|Xingming|GM|ent||||||||||
||||||2015|2018||||||
||||||25|25||||||
|Zhang|Independe|Incumb||||||||||
||||Female|69|December|December|0|0|0|0|0|
|Nan|nt Director|ent||||||||||
||||||2015|2018||||||
||||||25|25||||||
||Independe|Incumb||||||||||
|Lu Rui|||Male|43|December|December|0|0|0|0|0|
||nt Director|ent||||||||||
||||||2015|2018||||||
||||||25|25||||||
||Independe|Incumb||||||||||
|Lyu Wei|||Male|54|December|December|0|0|0|0|0|
||nt Director|ent||||||||||
||||||2015|2018||||||
||Chairman|||||25||||||
|||Incumb|||24 July|||||||
|Li Jinkun|of the||Male|54||December|0|0|0|0|0|
|||ent|||2018|||||||
||Supervisor|||||2018||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||y|||||||||||
||Committee|||||||||||
||||||25|25||||||
|Zhuang||Incumb||||||||||
||Supervisor||Male|33|December|December|0|0|0|0|0|
|Junjie||ent||||||||||
||||||2015|2018||||||
|Ye|||||25|25||||||
|||Incumb||||||||||
|Zhenghon|Supervisor||Male|45|December|December|52,428|6,900|0|5,933|65,261|
|||ent||||||||||
|g|||||2015|2018||||||
||||||20|25||||||
|||Incumb||||||||||
|Lin Qing|Supervisor||Male|49|September|December|20,530|0|0|2,053|22,583|
|||ent||||||||||
||||||2016|2018||||||
||||||20|25||||||
|Liang||Incumb||||||||||
||Supervisor||Female|44|September|December|0|0|0|0|0|
|Yueyi||ent||||||||||
||||||2016|2018||||||
|||||||25||||||
||Board|Incumb|||26 January|||||||
|Lin Yihui|||Male|64||December|29,600|19,300|0|4,890|53,790|
||Secretary|ent|||2016|||||||
|||||||2018||||||
|||||||25||||||
|Tang||Incumb|||26 January|||||||
||CFO||Female|48||December|16,200|20,200|0|3,640|40,040|
|Qionglan||ent|||2016|||||||
|||||||2018||||||
|||||||25||||||
|||Incumb|||26 January|||||||
|Wei Bin|Vice GM||Male|49||December|47,469|20,100|0|6,757|74,326|
|||ent|||2016|||||||
|||||||2018||||||
|||||||25||||||
|Jiao||Incumb|||26 January|||||||
||Vice GM||Male|46||December|53,944|14,600|0|6,855|75,399|
|Zhigang||ent|||2016|||||||
|||||||2018||||||
|||||||25||||||
|||Incumb|||26 January|||||||
|Chen Yu|Vice GM||Male|46||December|27,160|14,900|0|4,206|46,266|
|||ent|||2016|||||||
|||||||2018||||||
|||||||25||||||
|Zhang||Incumb|||26 January|||||||
||Vice GM||Male|44||December|34,660|15,700|0|5,036|55,396|
|Yong||ent|||2016|||||||
|||||||2018||||||
|||||||25||||||
|Zhang||Incumb|||26 January|||||||
||Vice GM||Male|41||December|26,711|19,700|0|4,641|51,052|
|Xuequan||ent|||2016|||||||
|||||||2018||||||
|||||||25||||||
|Xu||Incumb|||26 January|||||||
||Vice GM||Male|48||December|10,100|12,600|0|2,270|24,970|
|Xiaoping||ent|||2016|||||||
|||||||2018||||||
||Chairman|||||||||||
|Liang|||||25|8 June||||||
||of the|Former|Female|43|||0|0|0|0|0|
|Yuefei|||||December|2018||||||
||Supervisor|||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||y||||2015|||||||
||Committee|||||||||||
||||||||||||13,016,34|
|Total|--|--|--|--|--|--|11,658,038|175,000|0|1,183,304||
||||||||||||2|

 Note: The management used an equity incentive fund to purchase shares of theCompany’s stock at the end of the year.
II Change of Directors, Supervisors and Senior Management
√Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Office title|Type of change|Date of change|Reason for change|
||Chairman of the||||
|||||Elected as the Chairman of the Supervisory Committee|
|Li Jinkun|Supervisory|Appointed|24 July 2018||
|||||in the 8th Supervisory Committee|
||Committee||||
||Chairman of the||||
|Liang Yuefei|Supervisory|Left|8 June 2018|Job turnover|
||Committee||||

III Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors, supervisors and senior management:
1. Working Experience of the Directors
Mr. He Yong: Han nationality, born in September 1960, a member of the Communist Party of China. He graduated from Open University of Hong Kong with a MBA. He once acted as the Vice-minister of the Operating and Management Department of Guangdong Rising Assets Management Co., Ltd., the Chairman of the Reform and Stableness Office, the Minister of the Operating and Management Department, the Supervisor of Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd., the GM of Guangdong Electronics Information Industry Group Ltd. and Deputy Secretary. Now he serves as the Chairman of the Board of Directors of Guangdong Electronics Information Industry Group Ltd., the Party Secretary and the Chairman of Foshan NationStar Optoelectronics Co., Ltd., the Chairman of Foshan Sigma Venture Capital Co., Ltd. And he has been the Board Chairman of the Company since December 2015.
Mr. Zhuang Jianyi: born in 1951, with abachelor’s degree and MBA. He now acts as the Chairman of Hong Kong Youchang Lighting Equipment, and has been engaged in the electric light source equipment production as well as the trading business for about 40 years. From 1995 to 2010, he acted as the Directors, the Vice Chairman and the Chairman of the Company. And he was elected as a vice chairman of the
8th
Board of the Company in December 2015.
Mr. Cheng Ke: Han nationality, born in February 1974, a member of the Communist Party of China and an auditor with thebachelor’s degree. He once acted as the Attendant of the Audit Division of Guangzhou Dongshan Corporate Authority of Guangzhou Military Logistics Department, the Assistant Supervisor, the Supervisor, the Senior Executive and the Vice-Minister of the Financing Plan Department of Guangdong Rising Assets
Management Co., Ltd., Vice GM of Hubei Ashennan Expressway Development Co., Ltd., Hubei Gdrising Han-E
Expressway Co., Ltd. and Hubei Han-Cai Expressway Co., Ltd. and now acts as the Minister of the Financing
Plan Department of Guangdong Rising Assets Management Co., Ltd. and the Director of Guangdong Rising
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Finance Co., Ltd, Foshan NationStar Optoelectronics Co., Ltd, and Hong Kong Rising Investment Development Limited. And he was elected as a director of the
8th
Board of the Company in December 2015.
Mr. Qi Siyin: Chinese nationality, with no right of permanent residence abroad. Born in May 1980, a member of the Communist Party of China, postgraduate degree, dualmaster’s degrees. He ever worked in Guangdong Provincial Expressway Development Co., Ltd., former investor relations management clerk, investor relations management director, information disclosure director and securities affairs representative of the Securities Department. He has been working in Guangdong Rising Assets Management Co., Ltd. as Senior Director of Capital Operation Department, Deputy Secretary of the Communist Youth League, Deputy Director and Director; as Director and Deputy General Manager of Hong Kong Rising Investment Co., Ltd since 2007. Currently, he works as the Office Director of Board of Directors in Guangdong Rising Assets Management Co., Ltd, the director of Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd, Guangdong Fenghua Advanced Technology Holding Co., Ltd, Foshan NationStar Optoelectronics Co., Ltd, Guangdong Nanyue Bank Co., Ltd, and E Fund Management Co., Ltd. In October 2016, he elected as the director of the
8th
Board of Directors of the Company.
Mr. Huang Zhiyong: Han nationality, born in August 1969, a member of the Communist Party of China and an engineer. He graduated from Xidian University with abachelor’s degree of Electronic Devices Structures. He once acted as the Vice GM of Shenzhen Primatronix (Nanho) Electronics Ltd., the Minister of Enterprise Development Department and the GM Assistant of Guangdong Electronics Information Industry Group Ltd. He now acts as the Vice GM and a member of Communist Party of China of Guangdong Electronics Information Industry Group Ltd. and the Chairman of Shenzhen Yuebao Electronic Technology Co., Ltd. And he was elected as a director of the
8th
Board of the Company in December 2015.
Mr. Liu Xingming: Born in June 1962, a member of the Communist Party of China and an engineer with abachelor’s degree. He joined the Company in 1983, and acted as Vice GM from 1997 to 2005; acted as GM of the Company from December 2005 to November 2008; acted as Vice GM of the Company in December 2008; elected as the Director of the Company from 1995 to Dec. 2015; acted as Vice Director of the Board from April 2011 to December 2015; from April 2012 up to now, he acted as the GM and Vice Director of the Board; after 1995, he was elected as the Director of the Company; and he was elected as a director of the Company in April 2016. In July 2015, he was elected as the Party Secretary of the Company.
Ms. Zhang Nan (Independent Director): Han nationality, born in February 1949, a member of the Communist Party of China and a senior economist. She graduated from Chinese Academy of Social Sciences with a master degree of economic law. She once acted as the Vice-Minister of Beijing Electronic Instruments Industry System Office, Deputy Director of Audit and Regulations Bureau, the Director, the Deputy Director and the Chief of the research laboratory of SETC, the Regulations Bureau and the Economic cadre training center as well as the bureau-level Supervisor of the large enterprises of the Board of Supervisors of the State-owned Assets Supervision and Administration Commission and retired in March 2009. She used to be an Independent Director of CSCL and Guandgong Rising Nonferrous Metals Co., Ltd. And she was elected as an independent director of the
8th
Board of the Company in December 2015.
Mr. Lu Rui (Independent Director): Chinese Han Nationality, no permanent residency abroad, born in January 1975. He is now a professor of Finance, doctorial tutor, the Head of the Accounting and Capital Operation Research Center of the Lingnan College of Sun Yat-Sen University. He graduated in 2003 from the Management Accounting of Sun Yat-Sen University with amaster’s degree of Management; and in 2006, he graduated from the Management Accounting of Sun Yat-Sen University with adoctor’s degree of Management. He acted as the Teaching Assistant and the Lecturer of the Financial Accounting Department of Guangzhou Finance& Trade Management Institute during the period from July 1996 to August 2003; the Lecturer and associate professor of the Finance and Taxation Department of Lingnan College of Sun Yat-Sen University during the period from July
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 2006 to October 2012; and the associate professor of Finance of the Lingnan College of Sun Yat-Sen University during the period from November 2012 to June 2016. And he has been a profession of Finance and doctorial tutor at the Lingnan College of Sun Yat-Sen University since July 2016. His other academic and social posts mainly include: the member of Expert Committee of China Association for Public Companies, a national leading accounting professional recognized by the Ministry of Finance, the member of All-China Financial Youth Federation, the member of the senior member of Accounting Society of China, the member of Accounting Society of America; the Independent Director of Xilong Scientific Co., Ltd., Guangzhou Goaland Energy Conservation Tech Co., Ltd., and Bank of Guangzhou; the Director of Guangzhou Zijing Education Co., Ltd. And he was elected as an independent director of the
8th
Board of the Company in December 2015.
Mr. Lyu Wei (Independent Director): Chinese Nationality, born in December 1964. He is a doctoral candidate in economic administration at Fudan University and adoctor’s degree holder in economics. He was a teaching assistant, a lecturer, a departmental chief, an associate profession and then a professor at Fudan University during the period from August 1989 to March 2003. And he has been working in Shanghai Jiao Tong University since April 2003. He was a professor and doctoral tutor of the Department of Business Administration of the Antai Management School of Shanghai Jiao Tong University during the period from April 2003 to March 2006, and he has been the head of the SJTU-USC Cultural Creativity Industries School from October 2014 to May 2015; and has been a professor and doctoral tutor of the Department of Business Administration of the Antai Economics and Management School of Shanghai Jiao Tong University since April 2006. an independent director of Shanghai Shibei Hi-tech Co., Ltd. since September 2012; and an independent director of Shanghai Lujiazui Finance& Trade Zone Development Co., Ltd. since May 2015. And he was elected as an independent director of the 8th Board of the Company in December 2015.
2. Working Experience of the Supervisors
Mr. Li Jinkun: Han nationality, born in August 1964, is a accountant with college degree. He once was the cashier, accountant, and deputy chief of human resource office in Guangzhou Branch of China Nonferrous Metals Industry Corporation; Financial manager in Guangzhou Nonfemet Industrial Development Co., Ltd and Guangzhou Jintao Economic Development Co., Ltd; Deputy Director of Financial Audit Dept., Director of Accounting Dept, and Director of Financial Audit Dept. in Guangdong Rising Nonferrous Metals Group Co., Ltd; the group leader in the first working group of Supervisory Committee, and deputy director of Discipline Inspection Audit Dept. in Guangdong Rising Assets Management Co., Ltd; now he hold the posts of leader of working group of Supervisory Committee accredited from working Dept. of Audit Supervisory Committee of Guangdong Rising Assets Management Co., Ltd, and Chairman of the Supervisory Committee of Foshan NationStar Optoelectronics Co., Ltd. And he was elected as the Chairman of the Supervisory Committee of the 8th Supervisory Committee of the Company in July 2018.
Mr. Zhuang Junjie: Born in September 1985, a Hong Kong permanent resident. He graduated with abachelor’s degree and once acted as the Consultant Manager of Accenture Software and now acts as the Director of Hong Kong Youchang Lighting Equipment Co., Ltd. And he was elected as a supervisor of the
8th
Supervisory Board of the Company in December 2015.
Mr. Ye Zhenghong: Born in June 1973, a member of the Communist Party of China with a college degree. He joined the Company from July 1995; worked in the Machine Repair Shop from July 1995 to June 1997; worked in the Mechanical Power Department from July 1997 to January 2001; acted as Equipment Management Director in T8 Fluorescent Lamp Factory from February 2001 to January 2005; acted as Director of Machine Repair Workshop from May 2005 to January 2007; acted as Chief Officer of Machinery Dynamic Department from May 2006 to December 2007; and acted as factory director of T8 Fluorescent Lamp Factory from January 2008 to November 2013; and acted as factory director of LED of T8 from December 2013 up to now; the Chairman of the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 5th
Board of Supervisors and the Employee Supervisor of the
6th, 7th
and
8th
Board of Supervisors.
Mr. Lin Qing: born in September 1969, member of the Communist Party of China, undergraduate degree, electric light source engineer; has been working in the company since August 1991; worked as mercury lamp workshop technician and workshop director from June 1996 to February 2002; as the workshop director and factory director of the fluorescent lamp factory from March 2002 to September 2009; as the director of Technology Department since October 2009; in July 2015, elected as a discipline committee member of thecompany’s CPC committee. And he was elected as a Employee Supervisor of the Company in September 2016.
Ms. Liang Yueyi: born in June 1974, member of the Communist Party of China, college degree; has been working in the company since August 1995; worked as the Secretary to the President from August 1995 to September 2002; as clerk of the Import& Export Trade Department from October 2002 to December 2006; as the Deputy Manager of the Import& Export Trade Department since January 2007; a member of thecompany’s CPC committee since July 2015; as a female member of thecompany’s labor union since April 2016. And she was elected as a Employee Supervisor of the Company in September 2016..
3. Working experience of the Senior Management Staff
Mr. Liu Xingming: Born in Jun. 1962, a member of the Communist Party of China and an engineer with abachelor’s degree. He joined the Company in 1983, and acted as Vice GM from 1997 to 2005; acted as GM of the Company from December 2005 to November 2008; acted as Vice GM of the Company in December 2008; elected as the Director of the Company from 1995 to December 2015; acted as Vice Chairman of the Board from April 2011 to December 2015; from April 2012 up to now, he acted as the GM of the Company; and he was elected as a director of the Company in April 2016. In July 2015, he was elected as the Party Secretary of the Company. Mr. Lin Yihui: Born in November 1954, a member of the Communist Party of China with amaster’s degree in Economics. He was in active service in force from December 1970 to 1986 and acted as posts of command, battalion and group; works in Foshan International Trust and Investment Company from 1986 to September 2000 and acted as Section Chief and Vice GM and was in charge of the securities business of the Company as well as host the works such as the underwritten offering and listing recommendation of the shares of various companies over years; acted as the
1st
and
2nd
Directors of the Company; worked as Board Secretary of the Company from October 2000 to April 2010; acted as Party Secretary of the Company from May. 2010 to July 2015. He has acted as the Secretary of the Company since May 2013.
Ms. Tang Qionglan: born in March 1970, member of the Communist Party of China, bachelor degree, China Certified Public Accountant, worked as an accountant in Foshan Certified Public Accountants, served as audit manager of BDO China Shu Lun Pan Certified Public Accountants LLP Foshan Branch; as Deputy Manager of the Finance Department, Manager, Chief Financial Officer, Deputy General Manager and Chief Financial Officer of Foshan NationStar Optoelectronics Co., Ltd. from October 2008 to January 2016. In January 2016, he elected as the Chief Financial Officer of the Company.
Mr. Wei Bin: Born in May 1969, a member of the Communist Party of China and an engineer with abachelor’s degree. He joined in the Company in 1991, and responsible for the product development of the graduate school of the Company from March 1992 to December 1996, acted as Workshop Manager of Energy Saving Lamp Workshop from January 1997 to December 2004, acted as Workshop Manager of HID Workshop from January to December 2005, acted as Workshop Manager of T5 Workshop from 2006 to November 2008, acted as the Department Director of the Technology Department from November 2008 to 2009 and acted as Vice GM of the Company from September 2009.
Mr. Jiao Zhigang: Born in May 1972, a member of the Communist Party of China with abachelor’s degree. He graduated from South China University of Technology in July 1994, and at the same year he entered Foshan Electrical and Lighting Co., Ltd. He acted as Warehouse Director of the Company from August 1995 to September
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 2013, acted as Department Director of Human Resources Department from May 2010 to September 2013; selected as Employee Supervisor from March 2007 to September 2013, and as Chairman of the Supervisory of the Company from May 2010 to September 2013. He acted as Vice GM of the Company in September 2013.
Mr. Chen Yu: Born in December 1972, a member of the Communist Party of China, college graduate and engineer. He entered Foshan Electrical and Lighting Co., Ltd. in July 1994. And acted as workshop manager of parabolic reflector, coating film, energy saving lamp, factory director of the branch factory of Gaoming and workshop manager of general bulbs from January 1997 to December 2012, acted as Director of Production Department, OEM Department and Mechanical Dynamics Department from January to August 2013, acted as Director of Production Department and OEM Department from September 2013 to May 2014 as well as acted as Vice GM of the Company from May 2014.
Mr. Xu Xiaoping: born in July 1970, member of the Communist Party of China, postgraduate degree, engineer. Worked as Deputy General Manager and General Manager of Guangdong Fenghua Advanced Technology Holding Co., Ltd.Xin’gu Branch from September 2000 to December 2013, also as the General Manager of Guangdong Fenghua Semiconductor Technology Co., Ltd. from January 2011 to December 2013, and Deputy Director of Headquarters Operations Center from January 2013 to February 2015; as the General Manager of Guangdong Fenghua Advanced Technology Holding Co., Ltd. Lihua Branch from March 2015 to January 2016; won the first prize of scientific and technological progress of Zhaoqing in 2008; won the title of the “Ninth Batch of Top Talents of Zhaoqing” in 2010; served as Deputy General Manager of the company in January 2016. Mr. Zhang Yong: Born in June 1974, a member of the Communist Party of China and a mechanical engineer with a college degree. From July 1997, he joined in the Foshan Electrical and Lighting Co., Ltd. and successively acted as Deputy Director and Director of Lamp Filament Appliance Workshop from October 1999 to June 2008; acted as Factory Director of Gaoming Fluorescent Lamp Factory and Factory Director of Gaoming Branch Factory from July 2008 to December 2008; respectively acted as Department Director of Product Department, OEM Department, Mechanical Dynamics Department and Infrastructure Department from January 2009 to December 2012; acted as General Manager Assistant from March 2013 to August 2016. He was a supervisor and the Chairman of the Board of Supervisors of the Company from September 2013 to August 2016; has been the chairman of the Labor Union of the Company since September 2013; was elected as the Deputy Party Secretary in July 2015; and has been a vice GM of the Company since August 2016.
Mr. Zhang Xuequan: Born in December 1977, a member of the Communist Party of China with abachelor’s degree. He joined the Company in October 1996. He worked in the former Iodine-tungsten Lamp Workshop from October to December 1996; worked in the Technology Department and then the Quality Control Department from January 1997 to August 2002; acted as the Workshop Manager of Lamp Workshop from September 2002 to May 2008; acted as the Department Director of the Business Management Department of the Company from June 2008 to August 2016. He has concurrently acted as the Office Director since February 2016. He has been the Party Branch Secretary for the Administrative Office of the Company from July 2010 to June 2017, and a member of the party committee of the Company since July 2015. He was a supervisor of the Company from May 2013 to August 2016 and has been a vice GM of the Company since August 2016.
Offices held concurrently in shareholding entities:
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
|||Office held in the|||Remuneration or|
|Name|Shareholding entity|shareholding|Start of tenure|End of tenure|allowance from the|
|||entity|||shareholding entity|
||Guangdong Electronics Information|Chairman, Party||||
|He Yong|||||Yes|
||Industry Group Ltd.|Secretary||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
||Prosperity Lamps & Components|||
|Zhuang Jianyi||Chairman|Yes|
||Limited|||
||Guangdong Electronics Information|||
|Huang Zhiyong||Vice GM|Yes|
||Industry Group Ltd.|||
||Prosperity Lamps & Components|||
|Zhuang Junjie||Director|Yes|
||Limited|||

Offices held concurrently in other entities:
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Remuneration or|
|Name|Other entity|Office held in the|Start of tenure|End of tenure|allowance from|
|||entity||||
||||||the entity|
||Guangdong Rising Assets Management|Planning and||||
|Cheng Ke|||||Yes|
||Co., Ltd.|Finance Manager||||
||Guangdong Rising Assets Management|Capital Operation||||
|Qi Siyin|||||Yes|
||Co., Ltd.|Manager||||
|||leader of working||||
|||group of||||
|||Supervisory||||
||Guangdong Rising Assets Management|Committee||||
|Li Jinkun|||||Yes|
||Co., Ltd|accredited from||||
|||working Dept. of||||
|||Audit Supervisory||||
|||Committee||||
||Lingnan (University) College of Sun|Professor and||||
|Lu Rui|||||Yes|
||Yat-Sen University|doctoral tutor||||
||Antai Economics and Management|Professor and||||
|Lyu Wei|||||Yes|
||School of SJTU|doctoral tutor||||

Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior management as well as those who left in the Reporting Period:
□ Applicable√ Not applicable
IV Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior management:
The Remuneration& Appraisal Committee under the Board of Directors decides the remuneration of directors, supervisors and senior management in accordance with the Plan for Decision-making procedure for the
Implementing the Equity Incentive Mechanism for Middle-and Top-Rank Management remuneration of directors,
supervisors and senior management
Personnel, Compensation Plan for Executive Officers, and the Salary System reviewed and
approved on the 2001 AnnualShareholders’ General Meeting, and the particulars on
completing current main financial indexes& operating goals, as well as the fulfillment of job
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|tBasis for determining theremuneration of directors,supervisors and senior management|
|Actual payment of the remunerationof directors, supervisors and seniormanagement|

Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB'0,000
||||||||
|-|-|-|-|-|-|-|
||||||Total before-tax||
|||||||Any|
|||||Incumbent/Forme|remuneration||
|Name|Office title|Gender|Age|||remuneration|
|||||r|from the||
|||||||from related party|
||||||Company||
|He Yong|Board Chairman|Male|58|Incumbent||Yes|
||Vice Board||||||
|Zhuang Jianyi||Male|67|Incumbent||Yes|
||Chairman||||||
|Cheng Ke|Director|Male|44|Incumbent||Yes|
|Qi Siyin|Director|Male|38|Incumbent||Yes|
|Huang Zhiyong|Director|Male|49|Incumbent||Yes|
|Liu Xingming|Director & GM|Male|56|Incumbent|177.54|No|
||Independent||||||
|Zhang Nan||Female|69|Incumbent||No|
||Director||||||
||Independent||||||
|Lu Rui||Male|43|Incumbent|14.4|No|
||Director||||||
||Independent||||||
|Lyu Wei||Male|54|Incumbent|14.4|No|
||Director||||||
||Chairman of the||||||
|Li Jinkun|Supervisory|Male|54|Incumbent||Yes|
||Committee||||||
|Zhuang Junjie|Supervisor|Male|33|Incumbent||Yes|
|Ye Zhenghong|Supervisor|Male|45|Incumbent|54.87|No|
|Lin Qing|Supervisor|Male|49|Incumbent|36.34|No|
|Liang Yueyi|Supervisor|Female|44|Incumbent|62.95|No|
|Lin Yihui|Board Secretary|Male|64|Incumbent|105.2|No|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|Tang Qionglan|CFO|Female|48|Incumbent|110.34|No|
|Wei Bin|Vice GM|Male|49|Incumbent|105.54|No|
|Jiao Zhigang|Vice GM|Male|46|Incumbent|96.54|No|
|Chen Yu|Vice GM|Male|46|Incumbent|95.3|No|
|Zhang Yong|Vice GM|Male|44|Incumbent|98.54|No|
|Zhang Xuequan|Vice GM|Male|41|Incumbent|98.54|No|
|Xu Xiaoping|Vice GM|Male|48|Incumbent|81.54|No|
||Chairman of the||||||
|Liang Yuefei|Supervisory|Female|43|Former||Yes|
||Committee||||||
|Total|-|-|-|-|1,152.04|-|

 Equity incentives for directors, supervisors and senior management in the Reporting Period:
□ Applicable√ Not applicable
V Employees
1. Number, Functions and Educational Backgrounds of Employees
|||
|-|-|
|Number of in-service employees of the Company|5,090|
|Number of in-service employees of main subsidiaries|4,144|
|Total number of in-service employees|9,234|
|Total number of employees with remuneration in this Reporting||
||9,234|
|Period||
|Number of retirees to whom the Company or its main||
||0|
|subsidiaries need to pay retirement pension||
|Functions||
|Function|Number of employees|
|Production|7,519|
|Sales|827|
|Technical|673|
|Financial|50|
|Administrative|165|
|Total|9,234|
|Educational backgrounds||
|Educational background|Number of employees|
|College and above|1,697|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
|Technical secondary school and high school|1,560|
|Below high school|5,977|
|Total|9,234|

 2. Employee Remuneration Policy
The general principal of theemployee’s remuneration policy is: as for the external part, the Company should maintain the market competitiveness of the talents by possessing of the attraction and as for the internal part, should possess of the impartiality and consistency. The salary level of the external labor market and the social average salary level as well as the wage guiding issued by the governmental department are the important reference basis for the confirm of the salary standard of the Company; to confirm different pay grade according to different positions and the position characteristics and to furthest incentive the enthusiasm of the employees; to abide with the principal of giving priority to efficiency and give consideration of the fairness and to object to the equalitarianism when distributing the remunerations, to pay with generous compensation for those excellent employees who creates great value, to appropriately incline to the key talents and the market supply shortage talents; the lowest salary of the Company should not be lower than the local lowest salary standard.
3. Employee Training Plans
The Company has been setting great store on the training and development work of the employees, and combined with the actual situation, annual plan, the position nature and the responsibilities as well as the development demands, the Company built up a serious of training plan through the methods of having classes by internal lecturers and external engaged professors, which with multiple levels, channels, fields and ways to strengthen the employee training work, including the new employee orientation training, the on-the-job personnel professional training, the frontline staff skills training, skills training for sales personnel, and skills training for managerial personnel, etc., to constantly improve the overall quality of the current employees for realizing the win-win situation and mutual progress.
4. Labor Outsourcing
□ Applicable√ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part IX Corporate Governance
I General Information of Corporate Bonds
During the Reporting Period, in strict accordance with relevant requirements of Company Law, Securities Law, Code of Corporate Governance of Listed Companies and Rules of Stock Listing of Shenzhen Stock Exchange as well as other relevant laws, rules and regulations, the Company continuously perfected the corporate governance structure and set up an effective corporate governance system. At present, the Company has set up governance structure of responsibleShareholders’ General Meeting, the Board of Directors, the Supervisory Committee and managers, who performed right of decision-making, execution and supervision respectively according to their duties; besides, the Company set up special committees of the Board of Directors and system for independent directors. The Company strengthened information disclosure of principal shareholders and persons acting-in-concert, forbidden shareholders of the Company to misapply their rights. The Company separated from the principal shareholder in personnel, assets, business, financial affairs and organizational, and was absolutely impendent. The Company timely revised and perfected various systems in accordance with the latest issued laws& rules and relevant regulations of CSRC and Shenzhen Stock Exchange. And the corporate governance is basically in line with the requirements of relevant laws, regulations and regulatory documents.
Indicate by tick market whether there is any material incompliance with the regulatory documents issued by the CSRC governing the governance of listed companies.
□ Yes√ No
No such cases in the Reporting Period.
II TheCompany’s Independence from Its Controlling Shareholder in Business, Personnel, Asset, Organization and Financial Affairs
The Company is completely separated from its controlling shareholder in aspects such as business, personnel, assets, institutions and finance and possesses independent and complete business and self-dependent operating ability.
1. As for the business, the Company is independent of the controlling shareholders and the subordinate enterprises and owns the independent business departments and management system as well as possesses of impendent and entire business and self-dependent operating ability.
2. As for the personnel, the Company formulates the independent management system such as the labor, personnel and the salary, possesses the independent personnel department and the operating management team. The Senior Executives of the Company are serving at the Company in full time and receiving the salary from the Company. 3. As for the assets, the assets of the Company are independent and entire with clear ownership, and possesses the independent production system, BOP system and the supporting facilities, as well as possesses the legal ownership of the land, factories, equipments related to the production and operating and the assets such as the trademark, patent and the non-patent technology, and possesses the entire control and govern power of all the assets of the Company without any behavior such as any controlling shareholder occupies the assets of the Company.
4. As for the institutions, the Company set up the independent and entire organizations and institutions, and the construction as well as the operating of the corporate governance institutions is executed strictly executed according to the Articles of Association, and the production and operating as well as the offices are entirely independent from the controlling shareholders with any situation of working under one roof with the controlling
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018shareholders.。
5. As for the finance, the Company set up the independent finance department and builds up the independent and normative accounting and financial control system according to the requirements of the ASBE, set up the independent bank account and pays the taxes legally and independently and the Company could make the financial decisions independently without any situation of the shareholding intervenes the capital usage.
III Horizontal Competition
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
|||Nature of|||Solution’s|
||Name of controlling|||||
|Type of issue||controlling|Cause for issue|Solution|progress and|
||shareholder|||||
|||shareholder|||follow-up plan|
|||||Controlling shareholders||
|||||have made a commitment:||
|||||(I). Eliminating the||
|||||horizontal competition||
|||||between Foshan NationStar||
|||||Optoelectronics Co., Ltd.||
|||||and the Company through||
|||||business integration or other||
|||||ways or arrangements||
|||||before 4 December 2019.||
|||||(II) Commitment of other||
||Guangdong|||arrangements for avoiding||
||Electronics||Some enterprises|horizontal competition. As||
||Information||controlled by the|for avoiding the horizontal||
||Industry Group Ltd.,|Local State-owned|controlling|competition with Foshan||
||Shenzhen Rising|Assets|shareholders engage|Electrical and Lighting, the||
|Horizontal||||||
||Investment|Supervision and|in the same or similar|further commitments on the|Ongoing|
|competition||||||
||Development Co.,|Administration|business with the|relevant arrangements made||
||Ltd., Hong Kong|Commission|Company, which|by the Electronics Group,||
||Rising Investment||incurs horizontal|Shenzhen Guangdong||
||Development||competition.|Rising Investment and Hong||
||Limited|||Kong Guangdong Rising||
|||||Investment as follows: 1.||
|||||the commitment maker will||
|||||execute the supervision and||
|||||restriction on the production||
|||||and the operating activities||
|||||of the company and the||
|||||relevant enterprises except||
|||||for the above enterprises||
|||||currently involved with the||
|||||horizontal competition with||
|||||Foshan Electrical and||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|Lighting and if there is same|
|or similar situation occurs|
|horizontal competition with|
|Foshan Electrical and|
|Lighting from the future|
|promises and the relevant|
|enterprises on the products|
|or business, the commitment|
|maker following measures|
|to solve the problem: (1)|
|when commits to adopt the|
|Foshan Electrical and|
|Lighting considers it is|
|necessary, the Company and|
|the relevant enterprises|
|would decrease the|
|shareholding until entirely|
|completes the transfer of the|
|held relevant assets and|
|business; (2) when Foshan|
|Electrical and Lighting|
|considers it is necessary,|
|should take preference to|
|purchase the relevant assets|
|and business held by the|
|commitment maker and the|
|relevant enterprises through|
|appropriate methods; 2.each|
|commitment made by the|
|commitment maker on|
|eliminating or avoiding the|
|horizontal competition is|
|also adapted to the|
|subordinate enterprises|
|directly or indirectly|
|controlled by the|
|commitment maker and the|
|Company owns the|
|obligation to urge and|
|ensure the other subordinate|
|enterprises to carry out each|
|events and arrangement|
|stated on the document and|
|to strictly abide to the whole|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
|||||commitments. 3. If the||
|||||commitment maker or the||
|||||subordinate enterprises||
|||||directly or indirectly||
|||||controlled by the company||
|||||violated the above||
|||||commitments that led to the||
|||||losses of Foshan Electrical||
|||||and Lighting, the||
|||||commitment maker should||
|||||pay for the reasonable||
|||||compensation.”||
|||||The controlling shareholders||
|||||committed: 1. guaranteed to||
|||||strictly abide by the each||
|||||regulation from the CSRC,||
|||||the normative laws||
|||||documents of SZSE and the||
|||||Articles of Association of||
|||||Foshan Electrical and||
|||||Lighting. Among the||
|||||production and operating||
|||||activities since then, the||
||Guangdong|||||
|||||promisee would not take||
||Electronics|||||
|||||advantage of the position of||
||Information||Related-party|||
|||||the controlling shareholders||
||Industry Group Ltd.,||transactions existed|||
|||||and the actual controller to||
||Shenzhen Rising||between some|||
|Related-party||||carry out any behavior that||
||Investment|Local SASAC|enterprises controlled||Ongoing|
|transactions||||harm the benefits of Foshan||
||Development Co.,||by the controlling|||
|||||Electrical and Lighting and||
||Ltd., Hong Kong||shareholders and the|||
|||||other shareholders; 2. the||
||Rising Investment||Company|||
|||||promisee and the other||
||Development|||||
|||||subsidiaries, the branch||
||Limited|||||
|||||companies, the joint||
|||||ventures or associated||
|||||companies (hereinafter||
|||||referred to as the “relevant||
|||||enterprises”) will try their||
|||||best to avoid and reduce the||
|||||related transactions with||
|||||Foshan Electrical and||
|||||Lighting and its||
|||||subsidiaries; 3. as for the||
|||||related transactions which||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|are indeed necessary and|
|could not be avoided|
|between the promisee, the|
|relevant enterprises and|
|Foshan Electrical and|
|Lighting, will strictly abide|
|by the market principles of|
|fairness, justice with|
|valuable consideration.|
|When the Annual General|
|Meeting or the Board of|
|Directors is executing the|
|voting on the related|
|transactions which involved|
|with the promisee and the|
|relevant enterprises, should|
|execute the obligation of|
|avoiding the voting and at|
|the same time execute the|
|transactions vetting process|
|as well as the information|
|disclosure obligations|
|according to the relevant|
|laws and regulations and the|
|normative documents. If|
|violated the above|
|commitments and caused|
|the losses to Foshan|
|Electrical and Lighting as|
|well as the subsidiaries and|
|other shareholders, the|
|promisee should assume|
|compensation liability.|

IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
|||||||
|-|-|-|-|-|-|
|||Investor|||Index to disclosed|
|Meeting|Type||Date of the meeting|Disclosure date||
|||participation ratio|||information|
||||||Announcement on|
|The 2017 Annual|Annual General||||Resolutions of|
|||38.37%|26 April 2018|27 April 2018||
|General Meeting|Meeting||||2017 Annual|
||||||General Meeting|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
||||||(No. 2018-009)|
||||||disclosed on|
||||||www.cninfo.com.cn|
||||||Announcement on|
||||||Resolutions of the 1st|
|The 1st Extraordinary|||||Extraordinary|
||Extraordinary|||||
|General Meeting of||38.43%|24 July 2018|25 July 2018|General Meeting of|
||General Meeting|||||
|2018|||||2018 (No. 2018-025)|
||||||disclosed on|
||||||www.cninfo.com.cn|

 2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting Rights
□ Applicable√ Not applicable
V Performance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
|||||||||
|-|-|-|-|-|-|-|-|
|Attendance of independent directors at board meetings and general meetings||||||||
||Total number|||||The||
||||Board|||||
||of board|||Board|Board|independent||
|||Board|meetings|||||
||meetings the|||meetings|meetings the|director failed|General|
|Independent||meetings|attended by|||||
||independent|||attended|independent|to attend two|meetings|
|director||attended on|way of|||||
||director was|||through a|director failed|consecutive|attended|
|||site|telecommunica|||||
||eligible to|||proxy|to attend|board meetings||
||||tion|||||
||attend|||||(yes/no)||
|Zhang Nan|8|2|6|0|0|No|1|
|Lu Rui|8|1|7|0|0|No|0|
|Lyu Wei|8|0|7|1|0|No|0|

 2. Objections Raised by Independent Directors on Matters of the Company
Indicate by tick mark whether any independent directors raised any objections on any matter of the Company.□ Yes√ No
No such cases in the Reporting Period.
3. Other Information about the Performance of Duty by Independent Directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes□ No
Suggestions from independent directors adopted or not adopted by the Company:
During the Reporting Period, in accordance with the requirements of Company Law, Code of Governance of
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Listed Companies, Guidance on the Establishment of the Independent Directors System of the Listed Companies, Articles of Association and relevant systems, the independent directors of the Company attended the board sessions held during the Reporting Period, carefully reviewed the proposals proposed on the sessions, paid attention to the operation of the Company, performed the duties sincerely and diligently, and issued independent opinion on purchase of financial products, related-party transactions, profit distribution, etc., as well as proposed precious advices on perfection of systems and decision of routine operation of the Company, so as to play an active role in protecting the legal right of the Company and its shareholders.
VI Performance of Duty by Specialized Committees under the Board in the Reporting Period (I) Work Accomplished by the Audit Committee
According to the related provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange, as well as the Rules of Implementation for the Audit Committee of the Board, the Audit Committee diligently performed the following work duties:
On 15 March 2018, the Audit Committee convened to discuss and approve the following topics:
(1) 2017 financial audit and internal control audit report of the Company;
(2) The proposal for renewing the engagement of accounting firm;
Considering that Beijing Zhongzheng Tiantong Certified Public Accountants (LLP) is professional and experienced in financial audit of listed companies, and performed its duties diligently in the Company's financial audit work and internal control audit work in 2017, playing the role of the auditing agency well. Moreover, after a year of auditing, it is familiar with theCompany’s business development and financial status. Therefore, the Audit Committee proposed to continue to employ Beijing Zhongzheng Tiantong Certified Public Accountants (special ordinary partnership) as the annual financial auditing agency and internal control auditing agency of the Company in 2018.
(3) 2017 annual work report and 2018 work plan of the Audit Department.
(II) The work of the Remuneration and Assessment Committee
On 15 March 2018, the Remuneration and Assessment Committee of the Board of Directors convened a meeting to assess of the remuneration of the senior management of the Company based on the major financial indicators and business objectives of the Company in 2017, the scope of work and major responsibilities of the senior management of the Company and the indicators of assessment system related to the seniormanagement’s job performance. It was considered that the remuneration of the senior management personnel of the Company in 2017 was determined based on the principle of “Remuneration Plan for Senior Management” and the relevant regulations of “Remuneration System” of the Company. The implementation of the Company's accrued incentive fund was in line with the “Establishment of Equity Incentive System for Middle and Senior Management” which was reviewed and approved at the general meeting of shareholders. The incentives implemented by the Company for middle and senior management personnel, business and technology elites was legal and reasonable, and it was conducive to improve the integration of interests of the management and the Company as well as shareholders. VII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period.
□ Yes√ No
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 The Supervisory Committee raised no objections in the Reporting Period.
VIII Appraisal of and Incentive for Senior Management
The senior management of the Company is appointed by the Board of Directors, evaluated by the Remuneration and Appraisal Committee of the Board of Directors according to their work abilities, duty performance and fulfillment of the operating performance management, and paid according to Establishing Equity Incentive System for Middle and Senior Management and Remuneration System of the company considered and passed at the AnnualShareholders’ General Meeting of the Company in 2001, the Remuneration Plan for Executive Officers considered and approved by the Board and salary system of the Company.
IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes√ No
2. Internal Control Self-Evaluation Report
||||
|-|-|-|
|Disclosure date of the internal control|||
||29 March 2019||
|self-evaluation report|||
|Index to the disclosed internal control|||
||See www.cninfo.com.cn for the Internal Control Self-Evaluation Report 2018||
|self-evaluation report|||
|Evaluated entities’ combined assets|||
||100.00%||
|as % of consolidated total assets|||
|Evaluated entities’ combined|||
|operating revenue as % of|100.00%||
|consolidated operating revenue|||
|Identification standards for internal control weaknesses|||
||Weaknesses in internal control over financial|Weaknesses in internal control not related to|
|Type|||
||reporting|financial reporting|
||Defect with one of the following|Defect with one of the following|
||characteristics should be recognized as a|characteristics should be recognized as a|
||serious defect: 1. the defect involved with the|serious defect: 1. being punished for|
||malpractices of the Directors, the Supervisors|seriously violating the national laws, the|
||and the Senior Executives; 2. the controlled|administrative laws and regulations and the|
||environment is invalid; 3. the CPA discovered|normative documents; 2. the Company|
|Nature standard|any significant misstatement from the current|suffers a serious economic loss due to any|
||financial report while the internal control|serious errors made in decision-making|
||could not discover the mistake during the|caused by serious lack of decision-making|
||operating process; 4. the supervision from the|procedures on significant events or unfair|
||Corporate Audit Committee and the internal|decision-making; 3. the Company’s|
||audit institution on the internal control. If|reputation has been unrepairably damaged by|
||there met with one of the situation of the|any conduct in violation of laws and|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
||following, should be recognized as an|regulations which produces a far-reaching|
||important defect: 1. the recognized important|negative impact and draws the public’s|
||defect is not solved during the reasonable|attention widely; 4. the major business|
||period; 2. corrects the published financial|involved with the production and operating|
||report; 3. the function of the internal audit of|of the Company lack of the system control or|
||the Company is invalid; 4. the control of|the system control is invalid; 5. the results of|
||whether execute the selection and the|the internal control assessment turn out to|
||application of the accounting policies|include any serious defects and such defects|
||according to the Generally Accepted|fail to be rectified effectively within 12|
||Accounting Principles is invalid.|months. Defects with the following|
|||characteristics should be recognized as|
|||important defects: 1. owing to partly lack of|
|||the decision-making process on significant|
|||events and the undemocratic|
|||decision-making process which caused the|
|||decision-making mistake that led the|
|||Company face with certain economic losses;|
|||2. the negative influences owning to the|
|||unlawful acts and the irregularities h involve|
|||with wide range and cause public concern|
|||among the partial regions which bring|
|||certain harms to the reputation of the|
|||Company; 3. the system of the major|
|||business involved with the production and|
|||operating of the Company is incomplete or|
|||partially invalid; 4. the results of the internal|
|||control assessment turn out to include any|
|||serious defects and such defects fail to be|
|||rectified effectively within 6 months.|
||Based on the data of the 2018 consolidated|According to the quantitative criterion of the|
||statements, the quantitative criterion of|internal control defects of the financial|
||confirming the important degree of the|report, the quantitative criterion of the|
||misstatement (including the false negatives)|internal control defects assessment of the|
||from of the consolidated statements of the|non-financial report confirmed by the|
||listed companies is as follows: serious defect:|Company is as follows: serious defect:|
|Quantitative standard|||
||misstatement≥1.0% of the total assets|misstatement≥1.0% of the total assets|
||amount; important defects: 0.5% of the total|amount; important defects: 0.5% of the total|
||assets amount ≤misstatement＜1.0% of the|assets amount ≤misstatement＜1.0% of the|
||total assets amount; common defects:|total assets amount; common defects:|
||misstatement ＜ 0.5% of the total assets|misstatement＜0.5% of the total assets|
||amount.|amount.|
|Number of material weaknesses in|||
|internal control over financial|0||
|reporting|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
|Number of material weaknesses in||
|internal control not related to financial|0|
|reporting||
|Number of serious weaknesses in||
|internal control over financial|0|
|reporting||
|Number of serious weaknesses in||
|internal control not related to financial|0|
|reporting||

X IndependentAuditor’s Report on Internal Control
√ Applicable□ Not applicable
|||
|-|-|
|Opinion paragraph in the independent auditor’s report on internal control||
|Beijing Zhongzheng Tiantong Certified Public Accountants LLP considered that: Foshan Electrical and Lighting Co., Ltd.||
|maintained effective internal control of the financial report in all significant aspects on 31 December 2018 according to the Basic||
|Standards for Internal Control and relevant regulations.||
|Independent auditor’s report on||
||Disclosed|
|internal control disclosed or not||
|Disclosure date|29 March 2019|
|Index to such report disclosed|See www.cninfo.com.cn for the Auditor’s Report on Internal Control|
|Type of the auditor’s opinion|Unmodified unqualified opinion|
|Material weaknesses in internal||
|control not related to financial|None|
|reporting||

Indicate by tick mark whether any modified opinion is expressed in the independentauditor’s report on theCompany’s internal control.
□ Yes√ No
Indicate by tick mark whether the independentauditor’s report on theCompany’s internal control is consistent with the internal control self-evaluation report issued by theCompany’s Board.
√ Yes□ No
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part X Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of thisReport’s approval or were due but could not be redeemed in full?
No.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part XI Financial Statements
I IndependentAuditor’s Report
|||
|-|-|
|Type of the independent auditor’s opinion|Unmodified unqualified opinion|
|Date of signing this report|27 March 2019|
|Name of the independent auditor|Beijing Zhongzheng Tiantong Certified Public Accountants LLP|
|No. of independent auditor’s report|ZZTT (2019) Auditor’s Report No. 0701004|
|Names of certified public accountants|Tong Quanyong, Luo Dongri|

Text of the IndependentAuditor’s Report
IndependentAuditor’s Report
ZZTT (2019)Auditor’s Report No. 0701004 To the Shareholders of Foshan Electrical and Lighting Co., Ltd.
I Opinion
We have audited the financial statements of Foshan Electrical and Lighting Co., Ltd. (the “Company”), which comprise the consolidated balance sheets and balance sheet of the company as the parent as of 31 December 2018, the consolidated income statement and income statement of the company as the parent, consolidated cash flow statement and cash flow statement of the company as the parent and consolidated statement of changes inowners’ equity and statement of changes inowners’ equity of the company as the parent for the year then ended, as well as the notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated and parent company financial position of the Company at 31 December 2018,, and the consolidated and the company as the parent operating results and cash flows for the year then ended, in conformity with the Chinese Accounting Standards (CAS).
II Basis for Opinion
We conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Our responsibilities under those standards are further described in theAuditor’s Responsibilities for Audit of Financial
Statements section of our report. We are independent of the Company in accordance with the China Code of
Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 the said Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
III Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. And key audit matter identified in our audit is summarized as follows:
(I) Recognition of Revenue
1. Event description
The Company is mainly engaged in the research and development, production and sales of lighting products. As stated in the notes “III. Significant Accounting Policies and Accounting Estimation (XXII)” and “V. Notes on the Key Items in the Consolidated Financial Statements (II)” to the consolidated financial statements, the Company takes the transfer of major risks and remunerations in respect of commodity ownership to the buyers as the recognition time of revenue. In addition, it has formulated specific policies for the recognition of revenue for different types of business with revenue. In 2018, it achieved an operating revenue of RMB3,801,955,946.76. As operating revenue is one of the key performance indicators of The Company and there are hereditary risks of the revenue being manipulated to achieve the objective or expected level, we identify the recognition of revenue as a key audit event.
2. Audit response
With regard toFSL’s revenue recognition, we mainly implemented the following procedures:
(1)We have learned about and tested the effectiveness of the design and implementation of key internal control in respect of the recognition of revenue to ensure the effectiveness of internal control.
(2)We obtained sales contracts and sales order ledgers and selected some contracts to check the key terms, such as delivery and acceptance, payment and settlement, replacement and returns policies, etc.;
(3)obtained credit limits for trade customers and approval records for the credit limits to check whether there had been any credit sale business without approval;
(4)checked the business registration information of the trade customers, obtained and checked the list of related parties through the National Enterprise Credit Information Publicity System to identify whether the Company was related to any of its trade customers.
(5)We selected theCompany’s revenue and trading samples and verified invoices, shipping documents and customs declaration documents for export;
(6)obtained the records of returns and replacement to check whether there had been any significant abnormal returns or replacement.
(7)By reference to the audit procedures for other revenue, we identified the authenticity and completeness of the revenue for the current period, such as the inspection of periodic letters of reconciliation and records of post-period payment returns; and verified the balance of accounts receivable with the trade customers through letters of confirmation.
(II) Provision for Falling Prices in Inventory
1. Event description
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 As stated in the notes “III. Significant Accounting Policies and Accounting Estimation (XI)” and “V. Notes on the Key Items in the Consolidated Financial Statements (V)” to the consolidated financial statements, on the balance sheet date, the Company adopted the measurement method of inventories according to the lower of inventory cost and net realizable value, and on 31 December 2018, the inventory value of the Company was RMB767,319,599.00. In view of the big inventory value of the Company and as the recognition of the net realizable value of inventories involves the estimation and judgment of the management, we identify the withdrawal of provision for falling prices in inventory as a key audit event.
2. Audit response
With regard toFSL’s inventory valuation allowances, we mainly implemented the following procedures:
(1)We have learned about and tested the effectiveness of the design and implementation of key internal control in respect of the withdrawal of provision for falling prices in inventory to ensure the effectiveness of internal control. (2)We obtained the policies on the withdrawal of provision for falling prices in inventory to analyze and evaluate their reasonableness.
(3)We obtained the statement on the withdrawal of provision for falling prices in inventory to check and determine whether the data source of the net realizable value of inventories was reasonable and recalculate whether the withdrawal amount of provision for falling prices in inventory was accurate.
(4)By reference to the counting of inventories, we observed the inventory storage place and conditions to identify any dead, damaged or defective inventories.
(5)We obtained the product profitability analysis table and sales price adjustment documents to analyze and calculate the unit sale price and changes in gross profits in respect of key products and conduct a general analysis on the reasonableness of the proportion and amount of the withdrawal of provision for falling prices in inventory. IV Other Information
TheCompany’s management is responsible for the other information. The other information comprises all of the information included in theCompany’s 2018 Annual Report other than the financial statements and ourauditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
V Responsibilities of Management and Those Charged with Governance for Financial Statements
TheCompany’s management is responsible for the preparation of the financial statements that give a fair view in accordance with CAS, and for designing, implementing and maintaining such internal control as the management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 In preparing the financial statements, the management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing theCompany’s financial reporting process. VIAuditor’s Responsibilities for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of themanagement’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required by CAS to drawusers’ attention in ourauditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, we should express modified opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any noteworthy deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
中国注册会计师： Beijing Zhongzheng Tiantong Certified Chinese CPA:
（项目合伙人） Public Accountants LLP （EngagementPartner）
童全勇 Tong Quanyong
中国注册会计师： Chinese CPA:
罗东日 Beijing· China Luo Dongri
27 March 2019
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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.
Unit: RMB
||||
|-|-|-|
|Item|31 December 2018|31 December 2017|
|Current assets:|||
|Monetary capital|896,646,719.87|570,184,208.96|
|Settlement reserve|||
|Interbank loans granted|||
|Financial assets at fair value through|||
|profit or loss|||
|Derivative financial assets|||
|Notes and accounts receivable|941,927,209.55|824,659,624.97|
|Including: Notes receivable|107,506,613.50|68,368,192.41|
|Accounts receivable|834,420,596.05|756,291,432.56|
|Prepayments|13,811,905.18|33,095,313.35|
|Premiums receivable|||
|Reinsurance receivables|||
|Receivable reinsurance contract reserve|||
|Other receivables|21,745,690.53|33,643,667.01|
|Including: Interest receivable|5,152,364.04|12,428,451.86|
|Dividends receivable|||
|Financial assets purchased under resale|||
|agreements|||
|Inventories|767,319,599.00|746,466,889.87|
|Assets classified as held for sale|||
|Current portion of non-current assets|||
|Other current assets|864,093,663.30|1,006,062,102.56|
|Total current assets|3,505,544,787.43|3,214,111,806.72|
|Non-current assets:|||
|Loans and advances to customers|||
|Available-for-sale financial assets|897,716,590.20|1,390,581,536.60|
|Held-to-maturity investments|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Long-term receivables|||
|Long-term equity investments|182,458,559.69|179,414,105.14|
|Investment property|||
|Fixed assets|512,106,912.39|483,520,866.64|
|Construction in progress|224,624,447.16|162,814,991.68|
|Productive living assets|||
|Oil and gas assets|||
|Intangible assets|172,725,277.21|155,544,720.36|
|R&D expense|||
|Goodwill|||
|Long-term prepaid expense|6,852,985.35|9,088,933.56|
|Deferred income tax assets|37,831,704.45|37,675,828.79|
|Other non-current assets|48,305,435.42|43,059,034.80|
|Total non-current assets|2,082,621,911.87|2,461,700,017.57|
|Total assets|5,588,166,699.30|5,675,811,824.29|
|Current liabilities:|||
|Short-term borrowings|||
|Borrowings from central bank|||
|Customer deposits and interbank|||
|deposits|||
|Interbank loans obtained|||
|Financial liabilities at fair value through|||
||477,200.00||
|profit or loss|||
|Derivative financial liabilities|||
|Notes and accounts payable|985,280,820.92|539,303,554.54|
|Advances from customers|43,850,788.04|48,706,778.49|
|Financial assets sold under repurchase|||
|agreements|||
|Handling charges and commissions|||
|payable|||
|Payroll payable|96,088,621.59|81,948,630.59|
|Taxes payable|25,354,466.37|27,350,670.40|
|Other payables|43,115,011.68|40,548,489.03|
|Including: Interest payable|||
|Dividends payable|||
|Reinsurance payables|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Insurance contract reserve|||
|Payables for acting trading of securities|||
|Payables for underwriting of securities|||
|Liabilities directly associated with assets|||
|classified as held for sale|||
|Current portion of non-current liabilities|||
|Other current liabilities|||
|Total current liabilities|1,194,166,908.60|737,858,123.05|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Including: Preferred shares|||
|Perpetual bonds|||
|Long-term payables|||
|Long-term payroll payable|||
|Provisions|||
|Deferred income|155,000.31|11,858,330.49|
|Deferred income tax liabilities|52,530,509.00|126,460,250.96|
|Other non-current liabilities|||
|Total non-current liabilities|52,685,509.31|138,318,581.45|
|Total liabilities|1,246,852,417.91|876,176,704.50|
|Owners’ equity:|||
|Share capital|1,399,346,154.00|1,272,132,868.00|
|Other equity instruments|||
|Including: Preferred shares|||
|Perpetual bonds|||
|Capital reserves|158,608,173.07|285,821,459.07|
|Less: Treasury stock|||
|Other comprehensive income|297,667,872.80|716,607,333.78|
|Specific reserve|||
|Surplus reserves|809,456,186.20|772,953,002.36|
|General reserve|||
|Retained earnings|1,654,181,032.39|1,731,600,796.18|
|Total equity attributable to owners of the|||
||4,319,259,418.46|4,779,115,459.39|
|Company as the parent|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Non-controlling interests|22,054,862.93|20,519,660.40|
|Total owners’ equity|4,341,314,281.39|4,799,635,119.79|
|Total liabilities and owners’ equity|5,588,166,699.30|5,675,811,824.29|

 Legal representative: He Yong General Manager: Liu Xingming Chief Financial Officer: Tang Qionglan 2. Balance Sheet of the Company as the Parent
Unit: RMB
||||
|-|-|-|
|Item|31 December 2018|31 December 2017|
|Current assets:|||
|Monetary capital|848,949,693.91|502,169,100.40|
|Financial assets at fair value through|||
|profit or loss|||
|Derivative financial assets|||
|Notes and accounts receivable|900,843,331.26|814,698,352.02|
|Including: Notes receivable|104,945,398.61|67,268,192.41|
|Accounts receivable|795,897,932.65|747,430,159.61|
|Prepayments|25,444,445.34|70,580,941.09|
|Other receivables|43,538,848.72|51,918,913.09|
|Including: Interest receivable|5,152,364.04|9,744,035.20|
|Dividends receivable|||
|Inventories|692,681,479.03|670,527,529.71|
|Assets classified as held for sale|||
|Current portion of non-current assets|||
|Other current assets|856,504,839.81|777,495,203.31|
|Total current assets|3,367,962,638.07|2,887,390,039.62|
|Non-current assets:|||
|Available-for-sale financial assets|897,716,590.20|1,390,581,536.60|
|Held-to-maturity investments|||
|Long-term receivables|||
|Long-term equity investments|466,251,661.95|663,207,207.40|
|Investment property|||
|Fixed assets|427,947,613.74|404,667,257.11|
|Construction in progress|222,570,503.14|161,024,975.28|
|Productive living assets|||
|Oil and gas assets|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Intangible assets|129,452,067.42|112,251,734.86|
|R&D expense|||
|Goodwill|||
|Long-term prepaid expense|5,106,268.25|8,209,699.77|
|Deferred income tax assets|35,908,741.15|32,985,075.62|
|Other non-current assets|46,852,235.42|42,661,573.80|
|Total non-current assets|2,231,805,681.27|2,815,589,060.44|
|Total assets|5,599,768,319.34|5,702,979,100.06|
|Current liabilities:|||
|Short-term borrowings|||
|Financial liabilities at fair value through|||
||477,200.00||
|profit or loss|||
|Derivative financial liabilities|||
|Notes and accounts payable|1,134,173,851.66|719,912,246.75|
|Advances from customers|41,912,301.85|47,306,971.94|
|Payroll payable|84,220,746.16|60,345,714.81|
|Taxes payable|17,528,644.83|13,294,037.24|
|Other payables|114,073,355.23|96,824,757.90|
|Including: Interest payable|||
|Dividends payable|||
|Liabilities directly associated with assets|||
|classified as held for sale|||
|Current portion of non-current liabilities|||
|Other current liabilities|||
|Total current liabilities|1,392,386,099.73|937,683,728.64|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Including: Preferred shares|||
|Perpetual bonds|||
|Long-term payables|||
|Long-term payroll payable|||
|Provisions|||
|Deferred income||11,548,330.26|
|Deferred income tax liabilities|52,530,509.00|126,460,250.96|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Other non-current liabilities|||
|Total non-current liabilities|52,530,509.00|138,008,581.22|
|Total liabilities|1,444,916,608.73|1,075,692,309.86|
|Owners’ equity:|||
|Share capital|1,399,346,154.00|1,272,132,868.00|
|Other equity instruments|||
|Including: Preferred shares|||
|Perpetual bonds|||
|Capital reserves|166,211,779.15|293,425,065.15|
|Less: Treasury stock|||
|Other comprehensive income|297,672,884.34|716,608,088.78|
|Specific reserve|||
|Surplus reserves|809,456,186.20|772,953,002.36|
|Retained earnings|1,482,164,706.92|1,572,167,765.91|
|Total owners’ equity|4,154,851,710.61|4,627,286,790.20|
|Total liabilities and owners’ equity|5,599,768,319.34|5,702,979,100.06|

 Legal representative: He Yong General Manager: Liu Xingming Chief Financial Officer: Tang Qionglan 3. Consolidated Income Statement
Unit: RMB
||||
|-|-|-|
|Item|2018|2017|
|1. Revenue|3,801,955,946.76|3,800,188,261.54|
|Including: Operating revenue|3,801,955,946.76|3,800,188,261.54|
|Interest income|||
|Premium income|||
|Handling charge and|||
|commission income|||
|2. Costs and expenses|3,434,851,843.15|3,451,947,340.47|
|Including: Cost of sales|2,922,833,510.40|2,940,069,129.71|
|Interest expense|||
|Handling charge and|||
|commission expense|||
|Surrenders|||
|Net claims paid|||
|Net amount provided as|||
|insurance contract reserve|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Expenditure on policy|||
|dividends|||
|Reinsurance premium|||
|expense|||
|Taxes and surcharges|36,377,330.18|38,737,499.83|
|Selling expense|237,485,389.89|213,812,639.74|
|Administrative expense|173,871,085.61|179,002,806.58|
|R&D expense|52,726,585.28|34,578,167.96|
|Finance costs|-26,115,179.16|10,972,282.52|
|Including: Interest|||
||371,567.15||
|expense|||
|Interest|||
||11,450,858.00|9,311,141.78|
|income|||
|Asset impairment loss|37,673,120.95|34,774,814.13|
|Add: Other income|31,210,613.26|6,876,386.18|
|Investment income (“-” for loss)|53,329,524.74|522,604,626.66|
|Including: Share of profit or|||
||6,165,040.30|2,222,185.57|
|loss of joint ventures and associates|||
|Gain on changes in fair value (“-”|||
||-477,200.00||
|for loss)|||
|Foreign exchange gain (“-” for|||
|loss)|||
|Asset disposal income (“-” for|||
||-78,039.44|-10,790.68|
|loss)|||
|3. Operating profit (“-” for loss)|451,089,002.17|877,711,143.23|
|Add: Non-operating income|3,808,610.50|3,420,866.46|
|Less: Non-operating expense|3,827,826.27|8,329,138.20|
|4. Profit before tax (“-” for loss)|451,069,786.40|872,802,871.49|
|Less: Income tax expense|71,919,450.25|126,982,552.23|
|5. Net profit (“-” for net loss)|379,150,336.15|745,820,319.26|
|5.1 Net profit from continuing|||
||379,150,336.15|745,820,319.26|
|operations (“-” for net loss)|||
|5.2 Net profit from discontinued|||
|operations (“-” for net loss)|||
|Net profit attributable to owners of|||
||377,615,133.62|740,308,725.30|
|the Company as the parent|||
|Net profit attributable to|||
||1,535,202.53|5,511,593.96|
|non-controlling interests|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|6. Other comprehensive income, net of|||
||-418,939,460.98|-417,364,038.47|
|tax|||
|Attributable to owners of the|||
||-418,939,460.98|-417,364,038.47|
|Company as the parent|||
|6.1 Items that will not be|||
|reclassified to profit or loss|||
|6.1.1 Changes caused by|||
|remeasurements on defined benefit|||
|pension schemes|||
|6.1.2 Share of other|||
|comprehensive income of investees that|||
|will not be reclassified to profit or loss|||
|under equity method|||
|6.2 Items that may subsequently be|||
||-418,939,460.98|-417,364,038.47|
|reclassified to profit or loss|||
|6.2.1 Share of other|||
|comprehensive income of investees that|||
|||-21,831,908.42|
|will be reclassified to profit or loss|||
|under equity method|||
|6.2.2 Gain/Loss on changes in|||
|fair value of available-for-sale financial|-418,935,204.44|-395,531,375.05|
|assets|||
|6.2.3 Gain/Loss arising from|||
|reclassification of held-to-maturity|||
|investments to available-for-sale|||
|financial assets|||
|6.2.4 Effective gain/loss on cash|||
|flow hedges|||
|6.2.5 Differences arising from|||
|translation of foreign|||
||-4,256.54|-755.00|
|currency-denominated financial|||
|statements|||
|6.2.6 Other|||
|Attributable to non-controlling|||
|interests|||
|7. Total comprehensive income|-39,789,124.83|328,456,280.79|
|Attributable to owners of the|||
||-41,324,327.36|322,944,686.83|
|Company as the parent|||
|Attributable to non-controlling|||
||1,535,202.53|5,511,593.96|
|interests|||
|8. Earnings per share|||
|8.1 Basic earnings per share|0.2699|0.5290|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|8.2 Diluted earnings per share|0.2699|0.5290|

 Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before the combinations was RMB0.00, with the amount for last year being RMB0.00.
Legal representative: He Yong General Manager: Liu Xingming Chief Financial Officer: Tang Qionglan 4. Income Statement of the Company as the Parent
Unit: RMB
||||
|-|-|-|
|Item|2018|2017|
|1. Operating revenue|3,702,821,298.76|3,708,507,664.85|
|Less: Cost of sales|2,937,650,787.51|2,969,826,402.98|
|Taxes and surcharges|27,577,025.83|26,665,351.14|
|Selling expense|209,377,549.84|194,724,192.62|
|Administrative expense|157,272,662.59|156,867,996.54|
|R&D expense|51,004,161.82|30,347,513.45|
|Finance costs|-25,129,599.00|11,678,797.13|
|Including: Interest expense|371,567.15||
|Interest income|10,435,158.99|8,575,017.55|
|Asset impairment loss|37,157,044.60|31,993,956.76|
|Add: Other income|28,953,872.06|5,041,565.24|
|Investment income (“-” for loss)|81,803,713.29|514,832,777.29|
|Including: Share of profit or|||
||6,165,040.30|2,222,185.57|
|loss of joint ventures and associates|||
|Gain on changes in fair value (“-”|||
||-477,200.00||
|for loss)|||
|Asset disposal income (“-” for|||
|loss)|||
|2. Operating profit (“-” for loss)|418,192,050.92|806,277,796.76|
|Add: Non-operating income|3,361,305.10|3,066,550.72|
|Less: Non-operating expense|3,284,428.73|3,305,063.89|
|3. Profit before tax (“-” for loss)|418,268,927.29|806,039,283.59|
|Less: Income tax expense|53,237,088.87|109,455,530.30|
|4. Net profit (“-” for net loss)|365,031,838.42|696,583,753.29|
|4.1 Net profit from continuing|||
||365,031,838.42|696,583,753.29|
|operations (“-” for net loss)|||
|4.2 Net profit from discontinued|||
|operations (“-” for net loss)|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|5. Other comprehensive income, net of|||
||-418,935,204.44|-417,363,283.47|
|tax|||
|5.1 Items that will not be reclassified|||
|to profit or loss|||
|5.1.1 Changes in caused by|||
|remeasurements on defined benefit|||
|pension schemes|||
|5.1.2 Share of other|||
|comprehensive income of investees that|||
|will not be reclassified to profit or loss|||
|under equity method|||
|5.2 Items that may subsequently be|||
||-418,935,204.44|-417,363,283.47|
|reclassified to profit or loss|||
|5.2.1 Share of other|||
|comprehensive income of investees that|||
|||-21,831,908.42|
|will be reclassified to profit or loss|||
|under equity method|||
|5.2.2 Gain/Loss on changes in fair|||
|value of available-for-sale financial|-418,935,204.44|-395,531,375.05|
|assets|||
|5.2.3 Gain/Loss arising from|||
|reclassification of held-to-maturity|||
|investments to available-for-sale|||
|financial assets|||
|5.2.4 Effective gain/loss on cash|||
|flow hedges|||
|5.2.5 Differences arising from|||
|translation of foreign|||
|currency-denominated financial|||
|statements|||
|5.2.6 Other|||
|6. Total comprehensive income|-53,903,366.02|279,220,469.82|
|7. Earnings per share|||
|7.1 Basic earnings per share|||
|7.2 Diluted earnings per share|||

Legal representative: He Yong General Manager: Liu Xingming Chief Financial Officer: Tang Qionglan 5. Consolidated Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Item|2018|2017|
|1. Cash flows from operating activities:|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Proceeds from sale of commodities|||
||3,605,503,899.24|3,619,290,013.43|
|and rendering of services|||
|Net increase in customer deposits and|||
|interbank deposits|||
|Net increase in borrowings from|||
|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|||
|Net increase in proceeds from|||
|disposal of financial assets at fair value|||
|through profit or loss|||
|Interest, handling charges and|||
|commissions received|||
|Net increase in interbank loans|||
|obtained|||
|Net increase in proceeds from|||
|repurchase transactions|||
|Tax rebates|143,119,777.70|112,779,670.77|
|Cash generated from other operating|||
||95,378,324.30|60,474,356.68|
|activities|||
|Subtotal of cash generated from|||
||3,844,002,001.24|3,792,544,040.88|
|operating activities|||
|Payments for commodities and|||
||2,142,755,608.20|2,448,023,788.20|
|services|||
|Net increase in loans and advances to|||
|customers|||
|Net increase in deposits in central|||
|bank and in interbank loans granted|||
|Payments for claims on original|||
|insurance contracts|||
|Interest, handling charges and|||
|commissions paid|||
|Policy dividends paid|||
|Cash paid to and for employees|645,756,586.20|687,278,446.70|
|Taxes paid|222,679,823.50|213,491,815.63|
|Cash used in other operating|||
||214,822,496.29|227,928,797.56|
|activities|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Subtotal of cash used in operating|||
||3,226,014,514.19|3,576,722,848.09|
|activities|||
|Net cash generated from/used in|||
||617,987,487.05|215,821,192.79|
|operating activities|||
|2. Cash flows from investing activities:|||
|Proceeds from disinvestment|220,000,000.00|167,044,960.00|
|Investment income|51,208,590.20|197,311,986.47|
|Net proceeds from disposal of fixed|||
|assets, intangible assets and other|507,597.20|1,739,927.00|
|long-lived assets|||
|Net proceeds from disposal of|||
|subsidiaries or other business units|||
|Cash generated from other investing|||
|activities|||
|Subtotal of cash generated from|||
||271,716,187.40|366,096,873.47|
|investing activities|||
|Payments for acquisition of fixed|||
|assets, intangible assets and other|168,587,186.18|223,289,509.83|
|long-lived assets|||
|Payments for investments|80,000,000.00|723,604,335.25|
|Net increase in pledged loans granted|||
|Net payments for acquisition of|||
|subsidiaries and other business units|||
|Cash used in other investing|||
|activities|||
|Subtotal of cash used in investing|||
||248,587,186.18|946,893,845.08|
|activities|||
|Net cash generated from/used in|||
||23,129,001.22|-580,796,971.61|
|investing activities|||
|3. Cash flows from financing activities:|||
|Capital contributions received|||
|Including: Capital contributions by|||
|non-controlling interests to subsidiaries|||
|Increase in borrowings obtained|||
|Net proceeds from issuance of bonds|||
|Cash generated from other financing|||
|activities|||
|Subtotal of cash generated from|||
|financing activities|||
|Repayment of borrowings|||
|Payments for interest and dividends|418,531,713.57|539,956,095.34|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Including: Dividends paid by|||
|subsidiaries to non-controlling interests|||
|Cash used in other financing|||
|activities|||
|Subtotal of cash used in financing|||
||418,531,713.57|539,956,095.34|
|activities|||
|Net cash generated from/used in|||
||-418,531,713.57|-539,956,095.34|
|financing activities|||
|4. Effect of foreign exchange rate|||
||2,516,772.72|-4,167,559.42|
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|||
||225,101,547.42|-909,099,433.58|
|equivalents|||
|Add: Cash and cash equivalents,|||
||570,184,208.96|1,479,283,642.54|
|beginning of the period|||
|6. Cash and cash equivalents, end of the|||
||795,285,756.38|570,184,208.96|
|period|||

Legal representative: He Yong General Manager: Liu Xingming Chief Financial Officer: Tang Qionglan 6. Cash Flow Statement of the Company as the Parent
Unit: RMB
||||
|-|-|-|
|Item|2018|2017|
|1. Cash flows from operating activities:|||
|Proceeds from sale of commodities|||
||3,483,708,617.22|3,498,984,831.17|
|and rendering of services|||
|Tax rebates|143,095,603.13|112,779,670.77|
|Cash generated from other operating|||
||83,179,427.33|54,666,997.92|
|activities|||
|Subtotal of cash generated from|||
||3,709,983,647.68|3,666,431,499.86|
|operating activities|||
|Payments for commodities and|||
||2,348,474,172.05|2,825,997,236.90|
|services|||
|Cash paid to and for employees|408,213,944.72|303,882,045.65|
|Taxes paid|136,626,264.27|103,612,962.70|
|Cash used in other operating|||
||191,822,944.12|237,297,152.74|
|activities|||
|Subtotal of cash used in operating|||
||3,085,137,325.16|3,470,789,397.99|
|activities|||
|Net cash generated from/used in|||
||624,846,322.52|195,642,101.87|
|operating activities|||
|2. Cash flows from investing activities:|||
|Proceeds from disinvestment|200,000,000.00|167,044,960.00|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Investment income|76,706,836.19|205,798,152.73|
|Net proceeds from disposal of fixed|||
|assets, intangible assets and other||1,693,927.00|
|long-lived assets|||
|Net proceeds from disposal of|||
|subsidiaries or other business units|||
|Cash generated from other investing|||
|activities|||
|Subtotal of cash generated from|||
||276,706,836.19|374,537,039.73|
|investing activities|||
|Payments for acquisition of fixed|||
|assets, intangible assets and other|160,084,524.03|206,165,249.35|
|long-lived assets|||
|Payments for investments|80,000,000.00|558,800,147.75|
|Net payments for acquisition of|||
|subsidiaries and other business units|||
|Cash used in other investing|||
|activities|||
|Subtotal of cash used in investing|||
||240,084,524.03|764,965,397.10|
|activities|||
|Net cash generated from/used in|||
||36,622,312.16|-390,428,357.37|
|investing activities|||
|3. Cash flows from financing activities:|||
|Capital contributions received|||
|Increase in borrowings obtained|||
|Net proceeds from issuance of bonds|||
|Cash generated from other financing|||
|activities|||
|Subtotal of cash generated from|||
|financing activities|||
|Repayment of borrowings|||
|Payments for interest and dividends|418,531,713.57|534,295,804.56|
|Cash used in other financing|||
|activities|||
|Sub-total of cash used in financing|||
||418,531,713.57|534,295,804.56|
|activities|||
|Net cash generated from/used in|||
||-418,531,713.57|-534,295,804.56|
|financing activities|||
|4. Effect of foreign exchange rate|||
||2,482,708.91|-4,166,804.42|
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|245,419,630.02|-733,248,864.48|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|equivalents|||
|Add: Cash and cash equivalents,beginning of the period|||
||502,169,100.40|1,235,417,964.88|
|6. Cash and cash equivalents, end of theperiod|||
||747,588,730.42|502,169,100.40|

Legal representative: He Yong General Manager: Liu Xingming Chief Financial Officer: Tang Qionglan 7. Consolidated Statements of Changes inOwners’ Equity
2018
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||2018|||||||||||||
||Equity attributable to owners of the Company as the parent|||||||||||||
|||Other equity||||||||||Non-co||
|Item|||||||Other||||Retaine||Total|
|||instruments||||Less:||||||ntrollin||
||Share||||Capital||compre|Specific|Surplus|General|d||owners’|
|||Prefer|Perpet|||Treasur||||||g||
||capital||||reserves||hensive|reserve|reserves|reserve|earning||equity|
|||red|ual|Other||y stock||||||interests||
||||||||income||||s|||
|||shares|bonds|||||||||||
|1. Balances as at|1,272,||||||||||1,731,6||4,799,6|
||||||285,821||716,607||772,953|||20,519,||
|the end of the prior|132,86||||||||||00,796.||35,119.|
||||||,459.07||,333.78||,002.36|||660.40||
|year|8.00||||||||||18||79|
|Add: Adjustments||||||||||||||
|for changed||||||||||||||
|accounting||||||||||||||
|policies||||||||||||||
|Adjustments for||||||||||||||
|corrections of||||||||||||||
|previous errors||||||||||||||
|Adjustments for||||||||||||||
|business||||||||||||||
|combinations||||||||||||||
|under common||||||||||||||
|control||||||||||||||
|Other||||||||||||||
|adjustments||||||||||||||
|2. Balances as at|1,272,||||||||||1,731,6||4,799,6|
||||||285,821||716,607||772,953|||20,519,||
|the beginning of|132,86||||||||||00,796.||35,119.|
||||||,459.07||,333.78||,002.36|||660.40||
|the year|8.00||||||||||18||79|
|3. Increase/||||||||||||||
||127,21||||-127,21||-418,93||||||-458,32|
|decrease in the|||||||||36,503,||-77,419,|1,535,2||
||3,286.||||3,286.0||9,460.9||||||0,838.4|
|period (“-” for|||||||||183.84||763.79|02.53||
||00||||0||8||||||0|
|decrease)||||||||||||||
|3.1 Total|||||||-418,93||||377,615|1,535,2|-39,789,|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||
|-|-|-|-|-|-|-|-|
|comprehensive|||9,460.9||,133.62|02.53|124.83|
|income|||8|||||
|3.2 Capital||||||||
|increased and||||||||
|reduced by owners||||||||
|3.2.1||||||||
|Ordinary shares||||||||
|increased by||||||||
|shareholders||||||||
|3.2.2 Capital||||||||
|increased by||||||||
|holders of other||||||||
|equity instruments||||||||
|3.2.3||||||||
|Share-based||||||||
|payments included||||||||
|in owners’ equity||||||||
|3.2.4 Other||||||||
||||||-455,03||-418,53|
|3.3 Profit||||36,503,||||
||||||4,897.4||1,713.5|
|distribution||||183.84||||
||||||1||7|
|3.3.1||||||||
|||||36,503,|-36,503,|||
|Appropriation to||||||||
|||||183.84|183.84|||
|surplus reserves||||||||
|3.3.2||||||||
|Appropriation to||||||||
|general reserve||||||||
|3.3.3||||||||
||||||-418,53||-418,53|
|Appropriation to||||||||
||||||1,713.5||1,713.5|
|owners (or||||||||
||||||7||7|
|shareholders)||||||||
|3.3.4 Other||||||||
|3.4 Transfers|127,21|-127,21||||||
|within owners’|3,286.|3,286.0||||||
|equity|00|0||||||
|3.4.1 Increase||||||||
||127,21|-127,21||||||
|in capital (or share||||||||
||3,286.|3,286.0||||||
|capital) from||||||||
||00|0||||||
|capital reserves||||||||
|3.4.2 Increase||||||||
|in capital (or share||||||||
|capital) from||||||||
|surplus reserves||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||
|-|-|-|-|-|-|-|-|
|3.4.3 Loss||||||||
|offset by surplus||||||||
|reserves||||||||
|3.4.4||||||||
|Changes in||||||||
|defined benefit||||||||
|pension schemes||||||||
|transferred to||||||||
|retained earnings||||||||
|3.4.5 Other||||||||
|3.5 Specific||||||||
|reserve||||||||
|3.5.1 Increase||||||||
|in the period||||||||
|3.5.2 Used in||||||||
|the period||||||||
|3.6 Other||||||||
|4. Balances as at|1,399,||||1,654,1||4,341,314,281.39|
|||158,608|297,667|809,456||22,054,||
|the end of the|346,15||||81,032.|||
|||,173.07|,872.80|,186.20||862.93||
|period|4.00||||39|||

 2017
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||2017|||||||||||||
||Equity attributable to owners of the Company as the parent|||||||||||||
|||||||||||||Non-co||
|||Other equity||||||||||||
|Item|||||||Other|||||ntrollin|Total|
|||instruments||||Less:|||||Retaine|||
||Share||||Capital||compre|Specific|Surplus|General||g|owners’|
|||Prefer|Perpet|||Treasur|||||d|||
||capital||||reserves||hensive|reserve|reserves|reserve||interest|equity|
|||red|ual|Other||y stock|||||earnings|||
||||||||income|||||s||
|||shares|bonds|||||||||||
|1. Balances as at|1,272,||||||1,133,9||||1,564,6||5,005,4|
||||||285,821||||733,924|||15,008,||
|the end of the prior|132,86||||||71,372.||||15,925.||74,643.|
||||||,459.07||||,951.81|||066.44||
|year|8.00||||||25||||99||56|
|Add: Adjustments||||||||||||||
|for changed||||||||||||||
|accounting||||||||||||||
|policies||||||||||||||
|Adjustments for||||||||||||||
|corrections of||||||||||||||
|previous errors||||||||||||||
|Adjustments for||||||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||
|-|-|-|-|-|-|-|-|
|business||||||||
|combinations||||||||
|under common||||||||
|control||||||||
|Other||||||||
|adjustments||||||||
|2. Balances as at|1,272,||1,133,9||1,564,6||5,005,4|
|||285,821||733,924||15,008,||
|the beginning of|132,86||71,372.||15,925.||74,643.|
|||,459.07||,951.81||066.44||
|the year|8.00||25||99||56|
|3. Increase/||||||||
||||-417,36||||-205,83|
|decrease in the||||39,028,|166,984|5,511,5||
||||4,038.4||||9,523.7|
|period (“-” for||||050.55|,870.19|93.96||
||||7||||7|
|decrease)||||||||
|3.1 Total|||-417,36|||||
||||||740,308|5,511,5|328,456|
|comprehensive|||4,038.4|||||
||||||,725.30|93.96|,280.79|
|income|||7|||||
|3.2 Capital||||||||
|increased and||||||||
|reduced by owners||||||||
|3.2.1||||||||
|Ordinary shares||||||||
|increased by||||||||
|shareholders||||||||
|3.2.2 Capital||||||||
|increased by||||||||
|holders of other||||||||
|equity instruments||||||||
|3.2.3||||||||
|Share-based||||||||
|payments included||||||||
|in owners’ equity||||||||
|3.2.4 Other||||||||
||||||-573,32||-534,29|
|3.3 Profit||||39,028,||||
||||||3,855.1||5,804.5|
|distribution||||050.55||||
||||||1||6|
|3.3.1||||||||
|||||39,028,|-39,028,|||
|Appropriation to||||||||
|||||050.55|050.55|||
|surplus reserves||||||||
|3.3.2||||||||
|Appropriation to||||||||
|general reserve||||||||
|3.3.3|||||-534,29||-534,29|
|Appropriation to|||||5,804.5||5,804.5|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||
|-|-|-|-|-|-|-|-|
|owners (or|||||6||6|
|shareholders)||||||||
|3.3.4 Other||||||||
|3.4 Transfers||||||||
|within owners’||||||||
|equity||||||||
|3.4.1 Increase||||||||
|in capital (or share||||||||
|capital) from||||||||
|capital reserves||||||||
|3.4.2 Increase||||||||
|in capital (or share||||||||
|capital) from||||||||
|surplus reserves||||||||
|3.4.3 Loss||||||||
|offset by surplus||||||||
|reserves||||||||
|3.4.4||||||||
|Changes in||||||||
|defined benefit||||||||
|pension schemes||||||||
|transferred to||||||||
|retained earnings||||||||
|3.4.5 Other||||||||
|3.5 Specific||||||||
|reserve||||||||
|3.5.1 Increase||||||||
|in the period||||||||
|3.5.2 Used in||||||||
|the period||||||||
|3.6 Other||||||||
|4. Balances as at|1,272,||||1,731,6||4,799,6|
|||285,821|716,607|772,953||20,519,||
|the end of the|132,86||||00,796.||35,119.|
|||,459.07|,333.78|,002.36||660.40||
|period|8.00||||18||79|

 Legal representative: He Yong General Manager: Liu Xingming Chief Financial Officer: Tang Qionglan 8. Statements of Changes inOwners’ Equity of the Company as the Parent
2018
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||2018|||||||||||
|Item|Share|Other equity instruments|||Capital|Less:|Other|Specific|Surplus|Retaine|Total|
||capital|Preferre|Perpetu|Other|reserves|Treasury|comprehe|reserve|reserves|d|owners’|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||d shares|a l bonds||stock|nsive||earnings|equity|
|||||||income||||
|1. Balances as at||||||||1,572,1||
||1,272,13|||293,425,0||716,608,0|772,953,0||4,627,286|
|the end of the prior||||||||67,765.||
||2,868.00|||65.15||88.78|02.36||,790.20|
|year||||||||91||
|Add: Adjustments||||||||||
|for changed||||||||||
|accounting||||||||||
|policies||||||||||
|Adjustments for||||||||||
|corrections of||||||||||
|previous errors||||||||||
|Other||||||||||
|adjustments||||||||||
|2. Balances as at||||||||1,572,1||
||1,272,13|||293,425,0||716,608,0|772,953,0||4,627,286|
|the beginning of||||||||67,765.||
||2,868.00|||65.15||88.78|02.36||,790.20|
|the year||||||||91||
|3. Increase/||||||||||
|decrease in the|127,213,|||-127,213,||-418,935,|36,503,18|-90,003,|-472,435,|
|period (“-” for|286.00|||286.00||204.44|3.84|058.99|079.59|
|decrease)||||||||||
|3.1 Total||||||||||
|||||||-418,935,||365,031|-53,903,3|
|comprehensive||||||||||
|||||||204.44||,838.42|66.02|
|income||||||||||
|3.2 Capital||||||||||
|increased and||||||||||
|reduced by owners||||||||||
|3.2.1||||||||||
|Ordinary shares||||||||||
|increased by||||||||||
|shareholders||||||||||
|3.2.2 Capital||||||||||
|increased by||||||||||
|holders of other||||||||||
|equity instruments||||||||||
|3.2.3||||||||||
|Share-based||||||||||
|payments included||||||||||
|in owners’ equity||||||||||
|3.2.4 Other||||||||||
|||||||||-455,03||
|3.3 Profit|||||||36,503,18||-418,531,|
|||||||||4,897.4||
|distribution|||||||3.84||713.57|
|||||||||1||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|3.3.1|||||||
|||||36,503,18|-36,503,||
|Appropriation to|||||||
|||||3.84|183.84||
|surplus reserves|||||||
|3.3.2|||||||
||||||-418,53||
|Appropriation to||||||-418,531,|
||||||1,713.5||
|owners (or||||||713.57|
||||||7||
|shareholders)|||||||
|3.3.3 Other|||||||
|3.4 Transfers|||||||
||127,213,|-127,213,|||||
|within owners’|||||||
||286.00|286.00|||||
|equity|||||||
|3.4.1 Increase|||||||
|in capital (or share|127,213,|-127,213,|||||
|capital) from|286.00|286.00|||||
|capital reserves|||||||
|3.4.2 Increase|||||||
|in capital (or share|||||||
|capital) from|||||||
|surplus reserves|||||||
|3.4.3 Loss|||||||
|offset by surplus|||||||
|reserves|||||||
|3.4.4 Changes|||||||
|in defined benefit|||||||
|pension schemes|||||||
|transferred to|||||||
|retained earnings|||||||
|3.4.4 Other|||||||
|3.5 Specific|||||||
|reserve|||||||
|3.5.1 Increase|||||||
|in the period|||||||
|3.5.2 Used in|||||||
|the period|||||||
|3.6 Other|||||||
|4. Balances as at|||||1,482,1|4,154,851,710.61|
||1,399,34|166,211,7|297,672,8|809,456,1|||
|the end of the|||||64,706.||
||6,154.00|79.15|84.34|86.20|||
|period|||||92||

2017
Unit: RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||2017|||||||||
|Item||||||||||
||Share|Other equity instruments|Capital|Less:|Other|Specific|Surplus|Retaine|Total|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||capital||||reserves|Treasury|comprehe|reserve|reserves|dearnings|owners’|
|||Preferre|Perpetu|||||||||
|||||Other||stock|nsive||||equity|
|||d shares|a l bonds|||||||||
||||||||income|||||
|1. Balances as at||||||||||1,448,9||
||1,272,13||||293,425,0||1,133,971||733,924,9||4,882,362|
|the end of the prior||||||||||07,867.||
||2,868.00||||65.15||,372.25||51.81||,124.94|
|year||||||||||73||
|Add: Adjustments||||||||||||
|for changed||||||||||||
|accounting||||||||||||
|policies||||||||||||
|Adjustments for||||||||||||
|corrections of||||||||||||
|previous errors||||||||||||
|Other||||||||||||
|adjustments||||||||||||
|2. Balances as at||||||||||1,448,9||
||1,272,13||||293,425,0||1,133,971||733,924,9||4,882,362|
|the beginning of||||||||||07,867.||
||2,868.00||||65.15||,372.25||51.81||,124.94|
|the year||||||||||73||
|3. Increase/||||||||||||
|decrease in the|||||||-417,363,||39,028,05|123,259|-255,075,|
|period (“-” for|||||||283.47||0.55|,898.18|334.74|
|decrease)||||||||||||
|3.1 Total||||||||||||
||||||||-417,363,|||696,583|279,220,4|
|comprehensive||||||||||||
||||||||283.47|||,753.29|69.82|
|income||||||||||||
|3.2 Capital||||||||||||
|increased and||||||||||||
|reduced by owners||||||||||||
|3.2.1||||||||||||
|Ordinary shares||||||||||||
|increased by||||||||||||
|shareholders||||||||||||
|3.2.2 Capital||||||||||||
|increased by||||||||||||
|holders of other||||||||||||
|equity instruments||||||||||||
|3.2.3||||||||||||
|Share-based||||||||||||
|payments included||||||||||||
|in owners’ equity||||||||||||
|3.2.4 Other||||||||||||
|3.3 Profit|||||||||39,028,05|-573,32|-534,295,|
|distribution|||||||||0.55|3,855.1|804.56|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
||||||1||
|3.3.1|||||||
|||||39,028,05|-39,028,||
|Appropriation to|||||||
|||||0.55|050.55||
|surplus reserves|||||||
|3.3.2|||||||
||||||-534,29||
|Appropriation to||||||-534,295,|
||||||5,804.5||
|owners (or||||||804.56|
||||||6||
|shareholders)|||||||
|3.3.3 Other|||||||
|3.4 Transfers|||||||
|within owners’|||||||
|equity|||||||
|3.4.1 Increase|||||||
|in capital (or share|||||||
|capital) from|||||||
|capital reserves|||||||
|3.4.2 Increase|||||||
|in capital (or share|||||||
|capital) from|||||||
|surplus reserves|||||||
|3.4.3 Loss|||||||
|offset by surplus|||||||
|reserves|||||||
|3.4.4 Changes|||||||
|in defined benefit|||||||
|pension schemes|||||||
|transferred to|||||||
|retained earnings|||||||
|3.4.4 Other|||||||
|3.5 Specific|||||||
|reserve|||||||
|3.5.1 Increase|||||||
|in the period|||||||
|3.5.2 Used in|||||||
|the period|||||||
|3.6 Other|||||||
|4. Balances as at|||||1,572,1||
||1,272,13|293,425,0|716,608,0|772,953,0||4,627,286|
|the end of the|||||67,765.||
||2,868.00|65.15|88.78|02.36||,790.20|
|period|||||91||

Legal representative: He Yong General Manager: Liu Xingming Chief Financial Officer: Tang Qionglan
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 III Company profile
Foshan Electrical and Lighting Co., Ltd. (hereinafter referred to as “the Company”), a joint-stock limited company jointly founded by Foshan Electrical and Lighting Company, Nanhai Wuzhuang Color Glazed Brick Field, and Foshan Poyang Printing Industrial Co. on 20 October 1992 by raising funds under the approval of YGS (1992) No. 63 Document issued by the Joint Examination Group for Experimental Enterprises in Stock System of Guangdong Province and the Economic System Reform Commission of Guangdong Province, is an enterprise with its shares held by both the corporate and the natural persons. As approved by China Securities Regulatory Commission with Document (1993) No. 33, the Company publicly issued 19.3 million shares of social public shares (A shares) to the public in October 1993, and was listed in Shenzhen Stock Exchange for trade on 23 November 1993. The Company was approved to issue 50,000,000 B shares on 23 July 1995. And, as approved to change into a foreign-invested stock limited company on 26 August 1996 by (1996) WJMZEHZ No. 466 Document issued by the Ministry of Foreign Trade and Economic Cooperation of thePeople’s Republic of China. On 11 December 2000, as approved by China Securities Regulatory Commission with ZJGS Zi[2000] No. 175 Document, the Company additionally issued 55,000,000 A shares. At approved by theShareholders’ General Meeting 2006, 2007, 2008, 2014 and 2017 the Company implemented the plan of capitalization of capital reserve, after the transfer, the registered capital of the Company has increased to RMB1,399,346,154.00.
Credibility code of the Company: 91440000190352575W.
Legal representative: Mr. He Yong
Address: No. 64, Fenjiang North Road, Foshan, Guangdong Province
Main business of the company and its subsidiaries (hereinafter referred to as “the Company”): lighting products and electro technical products.
The business term of the Company is long-term, which was calculated from the date of issuance of License of Business Corporation.
The Financial Report was approved and authorized for issue by the Board of Directors on 27 March 2019. The consolidation scope of the financial statement during the Reporting Period including the Company and the 10 subordinate subsidiaries such as FSL Chanchang Optoelectronics Co., Ltd. ( referred to as “Chanchang Company”), Foshan Chansheng Electronic Ballast Co., Ltd. ( referred to as “Chansheng Company”), Foshan Taimei Times Lamps and Lanterns Co., Ltd. ( referred to as “Taimei Company”), Nanjing Fozhao Lighting Components Co., Ltd. ( referred to as “Nanjing Fozhao”), FSL (Xinxiang) Lighting Co., Ltd. ( referred to as “Xinxiang Company”), Foshan Electrical and Lighting New Light Source Technology Co., Ltd. ( referred to as “New Light Source Company”), Foshan Lighting Lamps& Components Co., Ltd. ( referred to as “Lamps& Components Company”) and FSL Zhida Electric Technology Co., Ltd ( referred to as “Zhida Electric Technology”), and FSL LIGHTING GmbH (referred to as “FSL LIGHTING”) and Guangdong Fozhao Financial Leasing Co., Ltd. ( referred to as “Leasing Company”).
For details, see relevant contents in Note VIII “Changes in the consolidation scope”, and Note IX “Equities in other entities”
IV Basis for Preparation of Financial 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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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 Companydidn’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
Is the Company subject to any disclosure requirements for special industries?
No.
Reminders of the specific accounting policies and accounting estimations:
The Company confirmed the specific accounting policies and estimations according to production and operation features, mainly reflecting in the method of provision for accounts receivables bad debt (Note 11. Account Receivables), pricing method of inventory (Note 12. Inventory), depreciation of fixed assets and amortization of intangible assets (Note 16. Fixed Assets and Note 21. Intangible Assets), and recognized time point of income (Note 28. Income), 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 theCompany’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.
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 finalcontroller’s consolidated financial statement of the owner's equity of the merged
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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 finalcontroller’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 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 theCompany’s, necessary adjustment should be made in accordance with theCompany’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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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 andowner’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 initialshareholders’ equity, if the Articles of Corporation or Agreementdidn’t stipulate that minority shareholders should be responsible for it, then the balance need to offset theshareholders’ 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 minorityshareholders’ 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 thecombination’s period-begin to the end of the reporting period need to be included into consolidated income statement; the cash flow of subsidiaries from thecombination’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 sheetdoesn’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;
(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.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 8. Recognition Standard for Cash and Cash Equivalents
In theGroup’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 theowner’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 theowners’ 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 theowners’ equity among the consolidated financial statement when compile the consolidated financial statement. When disposing the foreign operation, as for the discounted difference of the foreign financial statement related to the foreign operation should be transferred in the current gains and losses according to the proportion. The foreign cash flow adopts the spot exchange rate on the occurring date of the cash flow. And the influenced amount of the exchange rate changes should be individually listed among the cash flow statement.
10. Financial Instruments
1. Classification, Recognition and Measurement of Financial Assets
Financial assets shall be classified into the following four categories when they are initially recognized: financial assets measured at fair value and of which variations are recorded in the profits and losses for the current period, loans and the account receivables, financial assets available for sale and the investments which will be held to their maturity.
(1) Financial assets measured at fair value and of which variations are recorded in the profits and losses for the current period refer to financial assets held by the Company for the purpose of selling in the near future, including
transactional financial assets, or financial assets designated by the management in the initial recognition to be
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 measured at fair value with variations recorded in the gains and losses for the current period. Financial assets measured at fair value and of which variations are recorded in the profits and losses for the current period are subsequently measured at their fair values. Interest or cash dividends arising from such assets during the holing period are recognized as investment gains. Gains or losses arising from fair value changes are recorded in the gains and losses for the current period at the end of the Reporting Period. When such assets are disposed, the difference between their fair values and initially recognized amounts is recognized as investment gains and the gains and losses arising from fair value changes are adjusted accordingly.
(2) Loan and accounts receivable: the non-derivative financial assets for which there is no quoted price in the active market and of which the recoverable amount is fixed or determinable shall be classified as loan and accounts receivable. The Company shall make subsequent measurement on its loan and accounts receivable on the basis of the post-amortization costs by adopting the actual interest rate, from which gains and losses, when loan and accounts receivable are terminated from recognizing, or are impaired or amortized, shall be recorded into the profits and losses of the current period.
(3)Available-for-sale Financial Assets: the non-derivative financial assets which are designated as available-for-sale financial assets when they are initially recognized as well as the non-derivative financial assets other than loans and accounts receivables, investments held until their maturity; and transaction financial assets. The Company shall make subsequent measurement on available-for-sale financial assets at fair value and recognize the interests or the cash bonus acquired the holding period as the investment income, as well as directly include the profits or losses formed by the changes of the fair value into theowners’ equity at the period-end, until the said financial assets shall be transferred out when they are terminated from recognizing or are impaired, which shall be recorded into the profits and losses of current period.
(4) Held-to-maturity Investments: non-derivative financial asset with a fixed date of maturity, a fixed or determinable recoverable amount and which theCompany’s management holds for a definite purpose or theCompany’s management is able to hold until its maturity. The Company shall make subsequent measurement on its Held-to-maturity Investments on the basis of the post-amortization costs by adopting the actual interest rate, from which gains and losses, when loan and accounts receivable are terminated from recognizing, or are impaired or amortized, shall be recorded into the profits and losses of the current period.
2. Classification, Recognition and Measurement of Financial Liabilities
Financial liabilities shall be classified into the following two categories when they are initially recognized: the transactional financial liabilities; and other financial liabilities. The financial liabilities initially recognized by the Company shall be measured at their fair values. For the transactional financial liabilities, the transaction expenses thereof shall be directly recorded into the profits and losses of the current period; for other categories of financial liabilities, the transaction expenses thereof shall be included into the initially recognized amount.
(1) As for the financial liabilities measured by fair value and its changes be included in the current gains and losses, which including trading financial liabilities and the financial liabilities be appointed to be measured by fair value with the changes be included in the current gains and losses when being initially recognized, should be executed subsequent measurement according to the fair value with the profits or losses formed by the changes of the fair value be included in the current gains and losses.
(2) Other financial liabilities: The Company shall make subsequent measurement on its other financial liabilities on the basis of the post-amortization costs by adopting the actual interest rate, from which gains and losses, when other financial liabilities are terminated from recognizing or amortized, shall be recorded into the profits and losses of the current period.
3. Recognition and Measurement of Financial Asset Transfers
As for the Company transferred nearly all of the risks and rewards related to the ownership of a financial asset to
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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 and recognize the received counter price as a financial liability. Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a financial asset (that is to say, it is not under a circumstance as mentioned in Article 7 of these Standards), 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; (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.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The book value of the transferred financial asset; (2) the sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in the owner's equities.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the entire book value of the transferred financial asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not been stopped, be apportioned according to their respective relative fair value, and the difference between the amounts of the following two items shall be included into the profits and losses of the current period: (1)The book value of the portion whose recognition has been stopped; (2)The sum of consideration of the portion whose recognition has been stopped, and the portion of the accumulative amount of the changes in the fair value originally recorded in the owner's equities which is corresponding to the portion whose recognition has been stopped.
4. De-recognition Conditions of Financial Liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly. Where the Group (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it terminates the recognition of the existing financial liability, and at the same time recognizes the new financial liability. If executed practical modification on the whole or part of the contract regulations of the existing financial liabilities, should terminate to recognize the existing financial liabilities or certain part of it and at the same time recognize the revised financial liabilities as a new financial liabilities.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits and losses of the current period for the gap between the book value which has been terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed).
If the Company re-purchase part of the financial liabilities, should distribute the whole book value of the financial liabilities according to the comparatively fair value between the continued reorganization part and the terminated reorganization part on the re-purchase date. And the difference between the book value distributed to the terminated recognition part and the counter price of the paid part (including the rolled out non-cash assets or the new financial liabilities undertook) should be included in the current gains and losses.
5. Recognition Method of the Fair Value of the Financial Assets and the Financial Liabilities
As for the financial instruments for which there is an active market, the quoted prices in the active market shall be used to determine the fair values thereof. Where there is no active market for a financial instrument, the Company concerned shall adopt value appraisal techniques to determine its fair value. The value appraisal techniques mainly include the prices adopted by the parties, who are familiar with the condition, in the latest market
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 transaction upon their own free will, the current fair value obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization method and the option pricing model, etc.
6. Impairment Test of Financial Assets (excluding the accounts receivable) and Withdrawal Method of Impairment Provision
The Company inspects the book value of the financial assets on the balance sheet date to judge whether there are evidences indicate that the financial assets had occurred impairment owning to the occurrence of one or multiple events.
As for the measurement for impairment of financial assets measured on the basis of the post-amortization costs, where there is any objective evidence proving that a financial asset measured on the basis of post-amortization costs is impaired, should be recognized by the carrying amount of the difference between the said financial asset which shall be written down to the current value of the predicted future cash flow (excluding the loss of future credits not yet occurred) and the amount of the as written down which shall be recognized as loss of the impairment of the asset. When calculating the current value of the estimated future cash flow, should adopt the original effectiveinterests’ rate of the financial assets as the discount rate. The book value of the assets should be written down to the estimated recoverable amount through impairment provision items with the written down amount be included in the current gains and losses. As for the financial assets with individual significant amount, should adopt the individual assessment for ensure whether there are objective evidences indicate the impairment provision and as for the other assets with insignificant amount, should be inspected by individual or group assessment for ensure whether there are objective evidences indicate the impairment provision.
As for the financial assets measured by cost, if there are evidences indicate the impairment of the financial instruments without market price which had not measured by fair value because the fair value could not be reliable measured, the amount of the impairment losses should be measured by the difference between the book value of the financial assets and the current value of the estimated future cash flow acquired from the discounting measurement of the current market return rate of the similar financial assets.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the fair value of theowner’s equity which was directly included shall be transferred out and recorded into the profits and losses of the current period.
7. Recognition Method of Fair Value
Fair value refers to the price that market participants got from the sale of an asset or the price paid for the transfer of a liability among the orderly transactions happened on the measurement date. For a financial instrument with active market, its fair value shall be determined by the quotes in the active market. For a financial instrument with no active market, its fair value shall be determined by adopting value appraisal techniques. When the value is appraised, by adopting the value appraisal techniques applying to the current situations with the support of enough available data and other information, the Company chooses the same input value with features of assets and liabilities considered by market participants in the transactions of relevant assets and liabilities, and gives priority in use of observable input value as far as possible. Unobservable input value shall be used when the relevant observable input value cannot be obtained or the obtainment is not practical.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 11. Notes Receivable and Accounts Receivable
(1) Accounts Receivable with Significant Single Amount for which the Bad Debt Provision is Made Individually
|||
|-|-|
|Definition or amount criteria for an account receivable with a|Top five accounts receivable with the largest balances or|
|significant single amount|accounts accounting for over 10% of the total balance of|
||receivables.|
|Making separate bad-debt provisions for accounts receivable|For an account receivable with a significant single amount, the|
|with a significant single amount|impairment test shall be carried out on it separately. If there is|
||any objective evidence of impairment, the impairment loss is|
||recognized and the bad-debt provision is made according to the|
||difference between the present value of the account receivable’s|
||future cash flows and its carrying amount.|

(2) Accounts Receivable which the Bad Debt Provision is withdrawn by Credit Risk Characteristics
|||
|-|-|
|Group name|Withdrawal method of bad debt provision|
|Common transaction group|Aging analysis method|
|Internal transaction group|Other methods|

In the groups, those adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
||||
|-|-|-|
||Withdrawal proportion of account||
|Aging||Withdrawal proportion of other receivables|
||receivables||
|Within 1 year (including 1 year)|3.00%|3.00%|
|1 to 2 years|10.00%|10.00%|
|2 to 3 years|30.00%|30.00%|
|3 to 4 years|50.00%|50.00%|
|4 to 5 years|80.00%|80.00%|
|Over 5 years|100.00%|100.00%|

 In the groups, those adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
In the groups, those adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(3) Accounts Receivable with an Insignificant Single Amount but for which the Bad Debt Provision is Made Independently
|||
|-|-|
||There are definite evidences indicate the obvious difference o|
|Reason of individually withdrawing bad debt provision||
||thee return ability|
|Withdrawal method for bad debt provision|Withdraw the bad debt provision according to the difference of|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||
|-|
|which the future cash flow lower than the book value.|

12. Inventories
Is the Company subject to any disclosure requirements for special industries?
No.
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.
5. Amortization Method of Turnover Materials
Low-value consumables are amortized in one-off method.
The packaging is amortized in one-off method.
13. 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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 transaction, and the liabilities directly related to these assets transferred in the transaction. In certain circumstances, the disposal group includes goodwill obtained in business combination.
The Company recognizes non-current assets or disposal groups that meet both of the following conditions as held for sale:① Assets or disposal groups can be sold immediately under current conditions based on the practice of selling such assets or disposal groups in similar transactions;② Sales are highly likely to occur, that is, the Company has already made a resolution on a sale plan and obtained a certain purchase commitment, and the sale is expected to will be completed within one year, and the sale has been approved if relevant regulations require relevant authority or regulatory authority of the Company to approve it.
Non-current assets or disposal groups specifically obtained by the Company for resale will be classified by the Company as a held-for-sale category on the acquisition date when they meet the stipulated conditions of “expected to be sold within one year” on the acquisition date, and may well satisfy the category of held-for-sale within a short time (which is usually 3 months).
If one of the following circumstances cannot be controlled by the Company and the transaction between non-related parties fails to be completed within one year, and there is sufficient evidence that the Company still promises to sell the non-current assets or disposal groups, the Company should continue to classify the non-current assets or disposal groups as held-for-sale:①The purchaser or other party unexpectedly sets conditions that lead to extension of the sale. The Company has already acted on these conditions in a timely manner and it is expected to be able to successfully deal with the conditions that led to the extension of the sale within one year after the conditions were set.②Due to unusual circumstances, the non-current assets or disposal groups held for sale failed to be sold within one year. In the first year, the Company has taken necessary measures for these new conditions and the assets or disposal groups meet the conditions of held-for-sale again.
If the Company loses control of a subsidiary due to the sale of investments to its subsidiaries, whether or not the Company retains part of the equity investment after the sale, when the proposed sale of the investment to the subsidiary meets the conditions of held- for-sale, the investment to the subsidiary will be classified as held-for-sale in the individual financial statement of the parent company, and all the assets and liabilities of the subsidiary will be classified as held-for-sale in the consolidated financial statement.
When the company initially measures or re-measures non-current assets or disposal groups held for sale on the balance sheet date, if the book value is higher than the fair value minus the net amount of the sale costs, the book value will be written down to the net amount of fair value minus the sale costs, and the amount written down will be recognized as impairment loss of assets and included in the current profit and loss, and provision for impairment of held-for-sale assets will be made. For the confirmed amount of impairment loss of assets of the disposal groups held for sale, the book value of goodwill of the disposal groups will be offset first, and then the book value of various non-current assets in the disposal groups will be offset according to the proportions. If the net amount that the fair value of the non-current assets or disposal groups held for sale on the follow-up balance sheet date minus the sale costs increases, the previous written-down amount will be restored, and reversed to the asset impairment loss confirmed after the assets being classified as held-for-sale. The reversed amount will be included in the current profit or loss. The book value of goodwill that has been deducted cannot be reversed. Non-current assets held for sale or non-current assets in the disposal group are not subject to depreciation or amortization. Interest and other expenses of liabilities in the disposal group held for sale will be confirmed as before.
When a non-current asset or disposal group ceases be classified as held-for-sale or a non-current asset is removed out from the held-for-sale disposal group due to failure in meeting the classification conditions for the category of held-for-sale, it will be measured by one of the followings whichever is lower:
① The book value before being classified as held for sale will be adjusted according to the depreciation,
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 amortization or impairment that would have been recognized under the assumption that it was not classified as held for sale;
② The recoverable amount.
2. Termination of Operation
Termination of operation refers to a separately identifiable constituent part that satisfies one of the following conditions that has been disposed of by the Company or is classified as held-for-sale:
(1) This constituent part represents an independent main business or a separate main business area.
(2) This constituent part is part of an associated plan that is intended to be disposed of in an independent main business or a separate major business area.
(3) This constituent part is a subsidiary that is specifically acquired for resale.
3. Presentation
In the balance sheet, the Company distinguishes the non-current assets held for sale or the assets in the disposal group held for sale separately from other assets, and distinguish the liabilities in the disposal group held for sale separately from other liabilities. The non-current assets held for sale or the assets in the disposal group held for 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. 14. Long-term Equity Investments
Long-term equity investment refers to theCompany’s long-term equity investment with control, joint control or significant influence on the investee. The long-term equity investment of the Company which has no control, joint control or significant influence on the investee is accounted for as financial assets available-for-sale or financial assets at fair value and changes recognized in profit or loss for the current period. For details of accounting policies, please refer to10. Financial instruments in Notes V.
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, butcan’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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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 theinvestee’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 theinvestee’s identifiable net assets, the difference shall be recorded into the current profits and losses, and the cost of the long-term equity investment shall be adjusted at the same time.
When the equity method is used for accounting, the investment income and other comprehensive income shall be recognized separately according to the net profit or loss and other comprehensive income realized by the investee, and the book value of the long-term equity investment shall be adjusted at the same time. The part entitled shall be calculated according to the profits or cash dividends declared by the investee, and the book value of the long-term equity investment shall be reduced accordingly. For other changes in theowner’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 solddon’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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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 theshareholders’ equity. If the disposal of long-term equity investment in subsidiaries results in the loss of control over the subsidiaries, handle in accordance with the relevant accounting policies described in6（2）. “Principles, Procedures and Methods for the Preparation of Consolidated Statements” in Notes V .
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 theshareholders’ equity shall be treated in the same basis of the investee directly disposing related assets or liabilities by corresponding proportion. Theowner’s equity recognized by the change of theowner’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 ofowner’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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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 22. Impairment of Long-term Assets in Notes V herein.
15. Investment Property
Measurement mode of investment property
Not applicable
16. Fixed Assets
(1) Recognition Conditions
Fixed assets of the Company refers to the tangible assets that simultaneously possess the features as follows: they are held for the sake of producing commodities, rendering labor service, renting or business management; and their useful life is in excess of one accounting year and unit price is higher. No fixed assets may be recognized unless it simultaneously meets the conditions as follows:① The economic benefits pertinent to the fixed asset are likely to flow into the Company; and② The cost of the fixed asset can be measured reliably.
(2) Depreciation Method
||||||
|-|-|-|-|-|
||||Expected net salvage||
|Category of fixed assets|Method|Useful life||Annual deprecation|
||||value||
|Housing and building|Average method of||||
|||3—30 years|5%|31.67%-3.17%|
||useful life||||
|Machinery equipments|Average method of||||
|||2—10 years|5%|47.50%-9.50%|
||useful life||||
|Transportation vehicle|Average method of||||
|||5—10 years|5%|19.00%-9.50%|
||useful life||||
|Electronic equipment|Average method of||||
|||2—8 years|5%|47.50%-11.88%|
||useful life||||

(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
17. Construction in Progress
Is the Company required to observe the disclosure requirements for special industries
No
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,
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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
TheCompany’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 22: Long-term Asset Impairment under Note V for the impairment test method and provision for impairment of construction in progress.
18. Borrowing Costs
The borrowing costs refer to interest and other related costs incurred by the Company as a result of borrowings, including interest on borrowings, amortization of discounts or premiums, ancillary expenses and exchange differences arising from foreign currency borrowings. The borrowing costs incurred by the Company directly attributable to the acquisition, construction or production of assets eligible for capitalization are capitalized and included in the cost of the relevant assets. Other borrowing costs are recognized as expenses according to the amount at the time of occurrence, and are included in the current profits and losses.
1. Principle of capitalization of borrowing costs
Borrowing costs can be capitalized when all the following conditions are met: Asset expenditure has already occurred; borrowing costs have already occurred; construction or production activities necessary to bring the assets to the intended useable or sellable status have already begun.
2. Capitalization period of borrowing costs
Capitalization period refers to the period from the capitalization of borrowing costs starting to the end of capitalization, excluding the period when capitalization is suspended.
If assets that meet the conditions of capitalization are interrupted abnormally in the course of construction or production, and the interruption time exceeds 3 consecutive months, the capitalization of borrowing costs shall be suspended. The borrowing costs incurred during the interruption are recognized as expenses and included in current profits and losses until the acquisition or construction of the assets is resumed. The capitalization of the borrowing costs continues if the interruption is a procedure necessary for the purchase or production of assets eligible for capitalization to meet the intended useable or sellable status.
The borrowing costs shall cease to be capitalized when the purchased or produced assets that meet the conditions of capitalization meet the intended useable or sellable status. The borrowing costs incurred after the assets eligible 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:
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (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.
19. Living Assets
Not applicable
20. Oil and Gas Assets
Not applicable
21. 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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 intangible assets are available untilcan’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 22: Long-term asset impairment under Note V.
(2) Accounting Policy for Internal Research and Development Expenditures
The expenditures in internal research and development projects of the Company are classified into expenditures in research stage and expenditures in development stage. The expenditures in research stage are included in the current profits and losses when incurred. The expenditures in development stage are recognized as intangible assets when meeting the following conditions:
(1) The completion of the intangible assets makes it technically feasible for using or selling;
(2) Having the intention to complete and use or sell the intangible assets;
(3) The way in which an intangible asset generates economic benefits, including the proof that the products produced with the intangible asset have market or the proof of its usefulness if the intangible asset has market and will be used internally;
(4) Having sufficient technical, financial resources and other resources to support the development of the intangible assets and the ability to use or sell the intangible assets;
(5) Expenditure attributable to the development stage of intangible assets can be measured reliably.
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.
22. 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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 in the fair trade; if there is no sales agreement but there is an active market, the fair value is recognized according to thebuyer’s bid of the asset; if there is no sales agreement or active market, the fair value of asset shall be estimated based on the best information that can be obtained. Disposal costs include legal costs related to disposal of assets, related taxes, handling charges, and direct costs incurred to enable the asset reaching sellable status. The present value of the expected future cash flows of the assets is recognized by the amount discounted at appropriate discount rate according to the expected future cash flows arising from the continuing use of the asset and the final disposal. The provision for impairment of assets is calculated and recognized on the basis of individual assets. If it is difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group shall be recognized by the asset group to which the asset belongs. The asset group is the smallest portfolio of assets that can generate cash inflows independently.
The book value of the goodwill presented separately in the financial statements shall be apportioned to the asset group or portfolio of asset groups that is expected to benefit from the synergies of the business combination when the impairment test is conducted. The corresponding impairment loss is recognized if the test results indicate that the recoverable amount of the asset group or portfolio of asset groups containing the apportioned goodwill is lower than its book value. The amount of the impairment loss shall offset the book value of the goodwill apportioned to the asset group or portfolio of asset groups, and offset the book value of other assets in proportion according to the proportion of the book value of other assets except the goodwill in the asset group or portfolio of asset groups.
Once the impairment loss of the above asset is recognized, the portion that the value is restored will not be written back in subsequent periods.
23. 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. 24. 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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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 theemployee’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.
25. Provisions
1. Recognition of Provisions
The obligation such as external guaranty, pending litigation or arbitration, product quality assurance, layoff plan, loss contract, restructuring and disposal of fixed assets, pertinent to a contingencies shall be recognized as an provisions when the following conditions are satisfied simultaneously:① That obligation is a current obligation of the enterprise;② It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation; and③ The amount of the obligation can be measured in a reliable way
2. Measurement of Provisions
The provisions shall be initially measured in accordance with the best estimate of the necessary expenses for the performance of the current obligation. If there is a sequent range for the necessary expenses and if all the outcomes within this range are equally likely to occur, the best estimate shall be determined in accordance with the middle estimate within the range. In other cases, the best estimate shall be conducted in accordance with the following situations, respectively:① If the Contingencies concern a single item, it shall be determined in the light of the most likely outcome.② If the Contingencies concern two or more items, the best estimate should be calculated and determined in accordance with all possible outcomes and the relevant probabilities.③ When all or some of the expenses necessary for the liquidation of an provisions of an enterprise is expected to be compensated by a third party, the compensation should be separately recognized as an asset only when it is
virtually certain that the reimbursement will be obtained. The Company shall check the book value of the
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 provisions on the balance sheet date. The amount of compensation is not exceeding the book value of the recognized provisions.
26. Share-based Payment
Not applicable
27. Other Financial Instruments such as Preferred Shares and Perpetual Bonds
Not applicable
28. Revenue
Is the Company subject to any disclosure requirements for special industries?
No
1. Sale of Goods
No revenue from selling goods may be recognized unless the following conditions are met simultaneously:① The significant risks and rewards of ownership of the goods have been transferred to the buyer by the Company;② The Company retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods;③ The revenue amount could be reliably measured; and④ The relevant economic benefits may flow into the Company, and the relevant cost which had occurred or will occur could be reliably measured.
Specific principles for recognition of the “domestic sale and export” incomes of the Company:
(1) Method for recognition of the domestic sale income: According to thebuyer’s requirements, the Company delivers to the buyer the products that have been considered qualified upon examination. The amount of the income has been determined and the sales invoice has been issued. The payment for the delivered products has been received in full or is expectedly recoverable.
(2) Method for recognition of the export income: The Company produces the products according to the contract signed with the buyer. After the products have been examined as qualified, the Company completes the customs clearing procedure for export. The shipping company loads the products for shipping. The amount of the income has been determined and the export sales invoice has been issued. The payment for the delivered products has been received in full or is expectedly recoverable.
2. Provision of Labor Services
In the case that the results of the labor service transaction can be reliably estimated, the income from the provision of labor services shall be recognized at the balance sheet date by the percentage of completion method according to the progress of the labor transaction.
The result of the provision of labor services can be reliably estimated refers that all the following conditions are met:① The amount of income can be measured reliably;②The relevant economic benefits are likely to inflow to the enterprise;③ The progress of the transaction can be reliably determined;④ The cost incurred and to be incurred in the transaction can be measured reliably.
If the result of the provision of labor servicescan’t be reliably estimated, the income from the provision of labor services shall be recognized according to the cost of labor services that have incurred and are expected to be compensated, and the cost of labor services that have incurred is recognized as the current expenses. If the cost of
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 labor services already incurredisn’t expected to be compensated, the income will not be recognized.
If the contract or agreement between the Company and other enterprises includes the sale of goods and the provision of labor services, and the sale of goods and the provision of labor services can be distinguished and measured separately, the sale of goods and the provision of labor services shall be dealt with separately; if the sale of goods and the provision of labor servicescan’t be distinguished orcan’t be measured separately, the contract will be treated as sale of goods.
3. Income from Transferring the Right to Use Assets
The operating income is calculated and recognized according to the time and method stipulated by relevant contracts and agreements.
4. Interest Income
Recognized when all the following conditions are met:① The amount of income can be measured reliably;② Economic benefits related to the transaction can inflow.
29. 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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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);
(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.
30. 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 inshareholders’ equity shall be recorded intoshareholders’ 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
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 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.
31. Lease
(1) Accounting Treatment of Operating Lease
(1) The lease fee paid by the Company for rented assets shall be apportioned using the straight-line method over the entire lease term without deducting the rent-free period and shall be included in the current period expenses. The initial direct costs related to the lease transaction paid by the Company are included in current expenses. When the lessor of the asset assumes the lease-related expenses that should be borne by the Company, the Company should deduct the part of the expenses from the total rental amount, and the deducted rental expenses are apportioned during the lease term and included in the current expenses.
(2) The rental fees received by the company for leasing assets are apportioned on a straight-line basis over the entire lease term without deducting the rent-free period and are recognized as lease income. The initial direct expenses related to lease transactions paid by the company are included in the current expenses; if the amount is larger, they are capitalized and are recorded in the current period in stages on the same basis as the recognition of lease income during the entire lease period.
When the company assumes the lease-related expenses that should be borne by the lessee, the company deducts the expenses from the total amount of rental income and allocates the deducted rental expenses during the lease period.
(2) Accounting Treatments of Financial Lease
(1) Financing leased assets: on the lease starting date, the Company recorded the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the entering value in an account, recognized the amount of the minimum lease payments as the entering value in an account of long-term account payable, and treated the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. The company adopted the effective interest method to amortize the unrecognized financing expenses during the asset lease period and included it into financial expenses.
(2) Assets leased by finance: On the lease beginning date, the Company recognized the financial lease receivables,
and the difference between the sum of unguaranteed residual values and its present value as unrealized financing
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 income. It is recognized as lease income during any lease period in the future. The initial direct costs incurred by the Company in relation to the lease transaction, were included in the initial measurement of the financial lease receivable and the amount of revenue recognized during the lease period shall be reduced.
32. Other Significant Accounting Policies and Estimates
Not applicable
33. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable□ Not applicable
||||
|-|-|-|
|Changes in accounting policy|Approval procedure|Remark|
|(1) “Notes receivable” and “accounts|||
|||Notes and accounts receivable:|
|receivable” in the balance sheet are presented|||
|||Ending: RMB941,927,209.55|
|together as “notes and accounts receivable”;|||
|||Beginning: RMB824,659,624.97|
|“notes payable” and “accounts payable” as|||
|“notes and accounts payable”; “interest|||
|receivable” and “dividends receivable” in||Notes and accounts payable:|
||Approved at the 29th Meeting of the||
|“other receivables”; “interest payable” and||Ending: RMB985,280,820.92|
||Company’s 8th Board of Directors||
|“dividends payable” in “other payables”;||Beginning: RMB539,303,554.54|
|“disposal of fixed assets” in “fixed assets”;|||
|“engineering materials” in “construction in|||
|||Other receivables:|
|progress”; and “specific payables” in|||
|||Ending: RMB5,152,364.04|
|“long-term payables”. Comparative data are|||
|||Beginning: RMB12,428,451.86|
|restated accordingly.|||
|(2) “R&D expense” is added to the income||Administrative expense:|
|statement, and R&D expense originally|||
|||2018: RMB-52,726,585.28|
|recorded in “administrative expense” is|||
|||2017: RMB-34,578,167.96|
|reclassified as a separate item of “R&D|Approved at the 29th Meeting of the||
|expense”. “Including: Interest expense” and|Company’s 8th Board of Directors||
|||R&D expense:|
|“interest income” are added under “finance|||
|||2018: RMB52,726,585.28|
|costs” in the income statement. Comparative|||
|data are restated accordingly.||2017: RMB34,578,167.96|

(2) Significant Changes in Accounting Estimates
□ Applicable√ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 34. Other
None
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%, 10%, 11%, 16%, 17%|
||service||
|Urban maintenance and construction tax|Turnover tax payable|7%, 5%|
|Enterprise income tax|Taxable income|15%, 25%|
|Educational surtax|Turnover tax payable|3%|
|Local educational surtax|Turnover tax payable|2%|

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
|||
|-|-|
|Taxpayer|Income tax rate|
|Foshan Electrical and Lighting Co., Ltd.|15%|
|FSL Chanchang Optoelectronics Co., Ltd.|25%|
|Foshan Chansheng Electronic Ballast Co., Ltd.|25%|
|Foshan Taimei Times Lamps and Lanterns Co., Ltd.|25%|
|Nanjing Fozhao Lighting Components Manufacturing Co., Ltd.|25%|
|Foshan Electrical & Lighting (Xinxiang) Co., Ltd.|25%|
|FSL New Light Source Technology Co., Ltd.|25%|
|Guangdong Fozhao Financial Leasing Co., Ltd.|25%|
|Foshan Lighting Lamps and Lanterns Co., Ltd.|25%|
|FSL Zhida Electric Technology Co., Ltd.|25%|
|FSL Lighting GMBH|15%|

2. Tax Preference
||
|-|
|The Company passed the re-examination for High-tech Enterprises in 2017, as well as won the “Certificate of|
|High-tech Enterprise” after approval by Department of Science and Technology of Guangdong Province,|
|Department of Finance of Guangdong Province, Guangdong Provincial Bureau of State Taxation and Guangdong|
|Provincial Bureau of Local Taxation. In accordance with relevant 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 2017.|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 3. Other
Paid according to the relevant regulation of the tax law.
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Capital
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Cash on hand|34,937.47|52,031.79|
|Bank deposits|784,166,295.87|565,323,109.99|
|Other monetary capital|112,445,486.53|4,809,067.18|
|Total|896,646,719.87|570,184,208.96|
|Of which: total amount deposited|||
||739,617.83|183,066.93|
|oversees|||

Other notes
Note: Other monetary capital includes cash deposit for notes, cash deposit for future foreign exchange settlement, investment fund deposited in securities companies and e-commerce balance, of which, the cash deposit for notes and cash deposit for future foreign exchange settlement are restricted assets. For details, please refer to Note VII Notes to Items of Consolidated Financial Statements (70. Assets with Restricted Ownership and Right to Use). The monetary capita at the period-end was RMB326,462,510.91 with increase of57.26% compared with that of period-begin which mainly recovery of mature investments in
bank，s
wealth management products at the period-end.
2. Financial Assets at Fair Value through Profit or Loss
□ Applicable√ Not applicable
3. Derivative Financial Assets
□ Applicable√ Not applicable
4. Notes Receivable and Accounts Receivable
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Notes receivable|107,506,613.50|68,368,192.41|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Accounts receivable|834,420,596.05|756,291,432.56|
|Total|941,927,209.55|824,659,624.97|

 (1) Notes Receivable
1) Notes Receivable Listed by Category
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Bank acceptance bill|107,506,613.50|68,368,192.41|
|Total|107,506,613.50|68,368,192.41|

 2) Notes Receivable Pledged by the Company at the Period-end
Unit: RMB
|||
|-|-|
|Item|Amount|
|Bank acceptance bill|44,969,669.60|
|Total|44,969,669.60|

 3) 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 terminated recognition at|
|Item|||
||period-end|the period-end|
|Bank acceptance bill|75,703,189.28||
|Total|75,703,189.28||

4) Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to Execute the Contract or Agreement
None
(2)Accounts Receivable
1) Accounts Receivable Classified by Category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||Carrying amount||Bad debt provision|||Carrying amount||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Carrying|||||Carrying|
|||Proportio|||||Proportio||Withdrawal||
||Amount||Amount||value|Amount||Amount||value|
|||n|||||n||proportion||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Accounts receivable|||||||||||
|with significant|||||||||||
|single amount for|14,220,8||7,110,41||7,110,413|10,061,||10,061,64|||
|||1.61%||50.00%|||1.25%||100.00%||
|which bad debt|27.14||3.57||.57|641.64||1.64|||
|provision separately|||||||||||
|accrued|||||||||||
|Accounts receivable|||||||||||
|withdrawal of bad|||||||||||
||860,060,||32,750,4||827,310,1|795,800||39,509,24||756,291,43|
|debt provision by||97.35%||3.81%|||98.75%||4.96%||
||668.85||86.37||82.48|,674.49||1.93||2.56|
|credit risks|||||||||||
|characteristics|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|9,156,39||9,156,39||||||||
|||1.04%||100.00%|||||||
|which bad debt|6.52||6.52||||||||
|provision separately|||||||||||
|accrued|||||||||||
||883,437,||49,017,2||834,420,596.05|805,862||49,570,88||756,291,432.56|
|Total||100.00%||5.55%|||100.00%||6.15%||
||892.51||96.46|||,316.13||3.57|||

 Accounts receivable with significant single amount for which bad debt provision separately accrued at theperiod-end：
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Accounts receivable (by|Ending balance||||
|unit)|Accounts receivable|Bad debt provision|Withdrawal proportion|Withdrawal reason|
|||||Involved in the lawsuit,|
|||||the Company won the|
|Customer A|14,220,827.14|7,110,413.57|50.00%|lawsuit in the first|
|||||instance, and the other|
|||||side has appealed.|
|Total|14,220,827.14|7,110,413.57|--|--|

Among these groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Ending balance|||
|Aging||||
||Accounts receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Within 1 year|831,204,746.5|8 24,936,142.37|3.00%|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
|Subtotal of within 1 year|831,204,746.58|24,936,142.37|3.00%|
|1 to 2 years|17,716,793.21|1,771,679.33|10.00%|
|2 to 3 years|5,010,688.56|1,503,206.57|30.00%|
|3 to 4 years|2,945,211.17|1,472,605.59|50.00%|
|4 to 5 years|581,884.11|465,507.29|80.00%|
|Over 5 years|2,601,345.22|2,601,345.22|100.00%|
|Total|860,060,668.85|32,750,486.37|3.81%|

 In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB9,516,619.50; the amount of the reversed or collected part during the Reporting Period was of RMB0.00.
3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
|||
|-|-|
|Item|Amount|
|No.1|9,311,484.62|
|No.2|553,475.94|
|No.3|204,814.63|
|Other retails accounts|431.42|
|Total|10,070,206.61|

 Major write-offs of accounts receivable:
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Incurred by a|
||Nature of account|||||
|Receivable from||Amount written off|Reason for write-off|Procedure executed|related-party|
||receivable|||||
||||||transaction or not|
||||The debtor, a former|||
||||subsidiary of the|The Company has||
|Suzhou Mont||||||
||Loan|9,311,484.62|Company, has been|completed the|Yes|
|Lighting Co., Ltd.||||||
||||ruled by court to|approval procedure.||
||||bankruptcy.|||
|Total|--|9,311,484.62|--|--|--|

4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
|Name of units|Relationship withthe Company|Carrying amount|Amount of bad debtprovision withdrawn|Proportion to total accountsreceivable|
|No.1|Non-related party|158,294,196.16|4,748,825.88|17.92%|
|No.2|Non-related party|23,039,477.30|691,184.32|2.61%|
|No.3|Non-related party|19,527,368.40|585,821.05|2.21%|
|No.4|Non-related party|17,070,367.25|664,347.76|1.93%|
|No.5|Non-related party|14,220,827.14|7,110,413.57|1.61%|
|Total||232,152,236.25|13,800,592.58|26.28%|

 5) Derecogniziton of Accounts Receivable due to the Transfer of Financial Assets
None
6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of Accounts Receivable None
5. Prepayments
(1) Listed by Aging
Unit: RMB
||||||
|-|-|-|-|-|
||Ending balance||Beginning balance||
|Aging|||||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|8,074,848.21|58.46%|25,971,834.21|78.48%|
|1 to 2 years|3,525,963.03|25.53%|2,782,505.53|8.41%|
|2 to 3 years|721,403.24|5.22%|3,250,778.25|9.82%|
|Over 3 years|1,489,690.70|10.79%|1,090,195.36|3.29%|
|Total|13,811,905.18|--|33,095,313.35|--|

(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
Unit: RMB
||||||
|-|-|-|-|-|
|Name of units|Relationship with theCompany|Ending balance|Proportion to totalprepayments|Time of prepayments|
|No.1|Non-related party|1,618,754.08|11.72%|Year 2018|
|No.2|Non-related party|1,463,911.36|10.60%|Year 2017|
|No.3|Non-related party|988,800.00|7.16%|Year 2018|
|No.4|Non-related party|698,071.26|5.05%|Year 2017-Year 2018|
|No.5|Non-related party|646,892.77|4.68%|Year 2018|
|Total||5,416,429.47|39.21%||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 6. Other Receivables
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Interest receivable|5,152,364.04|12,428,451.86|
|Other receivables|16,593,326.49|21,215,215.15|
|Total|21,745,690.53|33,643,667.01|

 (1) Interest Receivable
1) Category of Interest Receivable
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Deposits on a regular basis|56,317.78|1,726,993.91|
|Bank financial products|1,944,150.72|4,745,863.01|
|Structural deposits|3,151,895.54|5,955,594.94|
|Total|5,152,364.04|12,428,451.86|

 2) Significant Overdue Interest
None
(2) Dividends Receivable
None
(3) Other Receivables
1) Other Receivables Classified by Category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||Carrying amount||Bad debt provision|||Carrying amount||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Carrying|||||Carrying|
|||Proportio||wal|||Proportio||Withdrawal||
||Amount||Amount||value|Amount||Amount||value|
|||n||proportio|||n||proportion||
|||||n|||||||
|Other receivables|||||||||||
|withdrawn bad debt|||||||||||
||17,924,6||1,331,37||16,593,32|24,013,||2,797,844||21,215,215.|
|provision according||100.00%||7.43%|||98.79%||11.65%||
||98.09||1.60||6.49|060.03||.88||15|
|to credit risks|||||||||||
|characteristics|||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Other receivables|||||||||||
|with insignificant|||||||||||
|single amount for||||||295,120||295,120.0|||
||||||||1.21%||100.00%||
|which bad debt||||||.00||0|||
|provision separately|||||||||||
|accrued|||||||||||
||17,924,6||1,331,37|7.43%|16,593,326.49|24,308,||3,092,964||21,215,215.15|
|Total||100.00%|||||100.00%||12.72%||
||98.09||1.60|||180.03||.88|||

 Other receivables with significant single amount for which bad debt provision separately accrued at the period-end:
□Applicable√Not applicable
Among these groups, other receivables adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Ending balance|||
|Aging||||
||Other receivables|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Within 1 year|14,246,040.33|427,381.20|3.00%|
|Subtotal within 1 year|14,246,040.33|427,381.20|3.00%|
|1 to 2 years|2,151,046.55|215,104.65|10.00%|
|2 to 3 years|1,039,336.77|311,801.03|30.00%|
|3 to 4 years|177,279.44|88,639.72|50.00%|
|4 to 5 years|112,750.00|90,200.00|80.00%|
|Over 5 years|198,245.00|198,245.00|100.00%|
|Total|17,924,698.09|1,331,371.60|7.43%|

 Among these groups, other receivables adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
Among these groups, other receivables adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB2,387,659.65; the amount of the reversed or collected part during the Reporting Period was of RMB0.00.
3) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Unit: RMB
|||
|-|-|
|Item|Amount|
|No.1|3,854,132.93|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
|No.2|295,120.00|
|Total|4,149,252.93|

 4) Other Receivables Classified by Account Nature
Unit: RMB
||||
|-|-|-|
|Nature|Ending carrying amount|Beginning carrying amount|
|VAT export tax refunds|6,252,642.96|5,712,812.04|
|Borrowings and petty cash for employees|3,451,053.16|4,343,208.32|
|Performance bond|2,905,450.00|4,377,639.20|
|Rent, water & electricity fees|765,582.10|1,293,281.97|
|Advance money for street light|||
|||3,777,672.16|
|construction|||
|Other intercourse accounts|4,549,969.87|4,803,566.34|
|Total|17,924,698.09|24,308,180.03|

 5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion to ending||
||||||Ending balance of|
|Name of the entity|Nature|Ending balance|Aging|balance of other||
||||||bad debt provision|
|||||receivables%||
|No.1|Export rebates|6,252,642.96|Within 1 year|34.88%|187,579.29|
|No.2|Social insurance|1,759,840.87|Within 1 year|9.82%|52,795.23|
|No.3|Other|1,266,485.77|Within 3 years|7.07%|166,641.67|
|No.4|Petty cash for|||||
|||895,505.78|Within 2 years|5.00%|36,197.98|
||employees|||||
|No.5|Other|651,344.52|Within 3 years|3.63%|91,198.95|
|Total|--|10,825,819.90|--|60.40%|534,413.12|

 6) Accounts Receivable Involving Government Subsidies
None
7) Derecogniziton of Other Receivables due to the Transfer of Financial Assets
None
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of Other Receivables None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 7. Inventories
Whether the Company need satisfy relevant disclosure requirements governing the real estate industry
No
(1) Category of Inventories
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Falling price|||Falling price||
||Carrying amount||Carrying value|Carrying amount||Carrying value|
|||reserves|||reserves||
|Raw materials|126,493,040.39|1,912,404.69|124,580,635.70|104,733,828.43|2,513,798.75|102,220,029.68|
|Goods in process|34,923,287.33||34,923,287.33|39,662,967.77||39,662,967.77|
|Inventory goods|495,768,205.24|25,743,927.08|470,024,278.16|466,813,177.48|10,984,333.96|455,828,843.52|
|Semi-finished|||||||
||135,536,163.37|787,982.05|134,748,181.32|146,868,534.26|972,725.26|145,895,809.00|
|goods|||||||
|Low priced and|||||||
|easily worn|3,043,216.49||3,043,216.49|2,859,239.90||2,859,239.90|
|articles|||||||
|Total|795,763,912.82|28,444,313.82|767,319,599.00|760,937,747.84|14,470,857.97|746,466,889.87|

 Whether the Company need satisfy relevant disclosure requirements stated in SZSE Industrial Information Disclosure Guidance No.4---Listed Company Specialized in Seed Industry and Planting Businesses or not?
No
Whether the Company need satisfy relevant disclosure requirements stated in SZSE Industrial Information Disclosure Guidance No.11-Listed Company Specialized in Jewelry-related Business or not?
No
(2) Falling Price Reserves of Inventories
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||Increase||Decrease|||
||Beginning||||||
|Item||||Reverse or||Ending balance|
||balance|Withdrawal|Other||Other||
|||||write-off|||
|Raw materials|2,513,798.75|2,657,012.25||3,258,406.31||1,912,404.69|
|Inventory goods|10,984,333.96|22,344,261.44||7,584,668.32||25,743,927.08|
|Semi-finished|||||||
||972,725.26|767,568.11||952,311.32||787,982.05|
|goods|||||||
|Total|14,470,857.97|25,768,841.80||11,795,385.95||28,444,313.82|

Reason for withdrawal and reversal of falling price reserves of inventories
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
|Item|Basis for provision for falling price ofinventory|Reasons for the reverse or write-off offalling price reserves of inventory ofReporting Period|Remark|
|Raw materials|According to the lower of inventory costand net realizable value|Raw materials sales or scrapping||
|Inventory goods|According to the lower of inventory costand net realizable value|Products sales or scrapping||

(3) Notes to the Ending Balance of Inventories Including Capitalized Borrowing Expense
None
(4) Completed but Unsettled Assets Generated from Construction Contacts at the Period-end
None
8. Held-for-sale Assets
None
9. Current Portion of Non-current Assets
None
10. Other Current Assets
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Deductible input tax of VAT|21,691,700.53|25,823,261.05|
|Advance payment of enterprise income tax|2,401,962.77|238,841.51|
|Bank financial products (Note)|240,000,000.00|470,000,000.00|
|Structural deposits (Note)|600,000,000.00|510,000,000.00|
|Total|864,093,663.30|1,006,062,102.56|

 Other notes:
||
|-|
|Note: the bank principal-guaranteed financial products with maturity date more than three months but investment cycle shorter than a|
|year and structural deposit products which cannot be terminated in advance.|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 11. Available-for-sale Financial Assets
(1) List of Available-for-sale Financial Assets
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item|Carrying|Depreciation||Carrying|Depreciation||
||||Carrying value|||Carrying value|
||amount|reserves||amount|reserves||
|Available-for-sale equity||||1,396,431,536.6|||
||903,566,590.20|5,850,000.00|897,716,590.20||5,850,000.00|1,390,581,536.60|
|instruments:||||0|||
|Measured at fair||||1,086,953,227.2|||
||594,088,280.80||594,088,280.80|||1,086,953,227.20|
|value||||0|||
|Measured at cost|309,478,309.40|5,850,000.00|303,628,309.40|309,478,309.40|5,850,000.00|303,628,309.40|
||||897,716,590.20|1,396,431,536.6||1,390,581,536.60|
|Total|903,566,590.20|5,850,000.00|||5,850,000.00||
|||||0|||

(2) Available-for-sale Financial Assets Measured by Fair Value at the Period-end
Unit: RMB
|||||
|-|-|-|-|
||Available-for-sale equity|Available-for-sale debt||
|Category|||Total|
||instruments|instruments||
|Cost of the equityinstruments/amortizedcost of the debtinstruments||||
||243,884,887.46||243,884,887.46|
|Fair value|594,088,280.80||594,088,280.80|
|Changed amount of thefair value that be||||
|accumulatively recorded|350,203,393.34||350,203,393.34|
|in other comprehensiveincome||||

(3) Available-for-sale Financial Assets Measured by Cost at the Period-end
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Carrying amount||||Depreciation reserves||||Shareholdi|Cash|
||||||||||ng|bonus of|
|Investee|Period-beg||||Period-beg||||proportion|the|
|||Increase|Decrease|Period-end||Increase|Decrease|Period-end|||
||inning||||inning||||among the|Reporting|
||||||||||investees|Period|
|Shenzhen|5,850,000.|||5,850,000.|5,850,000.|||5,850,000.|Less than||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|Zhonghao|00|00|00|00|5.00%||
|(Group)|||||||
|Ltd.|||||||
|Chengdu|||||||
|Hongbo|6,000,000.|6,000,000.|||||
||||||6.94%||
|Industrial|00|00|||||
|Co., Ltd.|||||||
|Xiamen|292,574,13|292,574,13||||10,971,417|
||||||4.62%||
|Bank|3.00|3.00||||.60|
|Guangdon|||||||
|g|||||||
||||||Less than||
|Developm|500,000.00|500,000.00|||||
||||||5.00%||
|ent Bank|||||||
|Co., Ltd.|||||||
|Foshan|||||||
|Fochen|||||||
|Road|||||||
||4,554,176.|4,554,176.|||||
|Developm|||||7.66%||
||40|40|||||
|ent|||||||
|Company|||||||
|Limited|||||||
||309,478,30|309,478,30|5,850,000.|5,850,000.||10,971,417|
|Total|||||--||
||9.40|9.40|00|00||.60|

 (4) Changes in Depreciation of Available-for-sale Financial Assets during the Reporting Period
Unit: RMB
|||||
|-|-|-|-|
||Available-for-sale equity|Available-for-sale debt||
|Category|||Total|
||instruments|instruments||
|Withdrawn impairment||||
|balance at the|5,850,000.00||5,850,000.00|
|period-begin||||
|Withdrawn impairment||||
||5,850,000.00||5,850,000.00|
|balance at the period-end||||

(5) Notes to the Available-for-sale Equity Instrument with Serious Fall or Non-transient Fall in Ending Fair Value but without Provisions for Impairment
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 12. Held-to-maturity Investments
None
13. Long-term Receivables
None
14. Long-term Equity Investments
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease||||||||||
||||||||||||Ending|
|||||Gains and|Adjustme|||||||
||||||||Cash|Withdraw|||balance|
|||Additiona||losses|nt of|||||||
||Beginnin||Reduced|||Changes|bonus or|al of||Ending|of|
|Investees||||||||||||
|||l||recognize|other|||||||
||g balance||investmen|||of other|profits|depreciati|Other|balance|depreciati|
|||investmen||d under|comprehe|||||||
||||t|||equity|announce|on|||on|
|||t||the equity|nsive|||||||
||||||||d to issue|reserves|||reserves|
|||||method|income|||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||
|Shenzhen||||||||||||
|Primatron||||||||||||
|ix|179,414,1|||6,165,040|||3,120,585|||182,458,5||
|(Nanho)|05.14|||.30|||.75|||59.69||
|Electronic||||||||||||
|s Ltd.||||||||||||
||179,414,1|||6,165,040|||3,120,585|||182,458,5||
|Subtotal||||||||||||
||05.14|||.30|||.75|||59.69||
||179,414,1|||6,165,040|||3,120,585|||182,458,5||
|Total||||||||||||
||05.14|||.30|||.75|||59.69||

15. Investment Property
None
16. Fixed Assets
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Fixed assets|512,106,912.39|483,520,866.64|
|Total|512,106,912.39|483,520,866.64|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (1) List of Fixed Assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
||Houses and|Machinery|Transportation|Electronic||
|Item|||||Total|
||buildings|equipment|equipment|equipment||
|I. Original carrying||||||
|value||||||
|1. Beginning||||||
||682,933,149.57|689,839,173.35|23,667,381.11|24,917,745.28|1,421,357,449.31|
|balance||||||
|2. Increased||||||
||27,959,491.72|73,825,943.82|188,720.90|2,988,866.69|104,963,023.13|
|amount of the period||||||
|(1) Purchase|1,487,887.17|44,474,378.82|188,720.90|863,057.21|47,014,044.10|
|(2) Transfer||||||
|from construction in|26,471,604.55|29,351,565.00||2,125,809.48|57,948,979.03|
|progress||||||
|(3) Enterprise||||||
|combination increase||||||
|3. Decreased||||||
|||42,105,364.77|1,272,096.75|43,476.96|43,420,938.48|
|amount of the period||||||
|(1) Disposal or||||||
|||35,084,631.93|1,272,096.75|43,476.96|36,400,205.64|
|Scrap||||||
|(2) Equipment||||||
|||7,020,732.84|||7,020,732.84|
|transformation||||||
|4. Ending balance|710,892,641.29|721,559,752.40|22,584,005.26|27,863,135.01|1,482,899,533.96|
|II. Accumulative||||||
|depreciation||||||
|1. Beginning||||||
||409,156,400.86|491,616,205.03|16,048,566.76|18,722,379.66|935,543,552.31|
|balance||||||
|2. Increased||||||
||23,193,911.05|42,398,806.71|1,286,326.83|3,307,588.25|70,186,632.84|
|amount of the period||||||
|(1) Withdrawal|23,193,911.05|42,398,806.71|1,286,326.83|3,307,588.25|70,186,632.84|
|3. Decreased||||||
|||36,345,112.80|818,664.96|64,636.57|37,228,414.33|
|amount of the period||||||
|(1) Disposal or||||||
|||32,203,602.84|818,664.96|64,636.57|33,086,904.37|
|Scrap||||||
|(2) Equipment||4,141,509.96|||4,141,509.96|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
|transformation||||||
|4. Ending balance|432,350,311.91|497,669,898.94|16,516,228.63|21,965,331.34|968,501,770.82|
|III. Depreciation||||||
|reserves||||||
|1. Beginning||||||
|||2,292,602.33||428.03|2,293,030.36|
|balance||||||
|2. Increased||||||
|amount of the period||||||
|(1) Withdrawal||||||
|3. Decreased||||||
|||2,179.61|||2,179.61|
|amount of the period||||||
|(1) Disposal or||||||
|||2,179.61|||2,179.61|
|Scrap||||||
|4. Ending balance||2,290,422.72||428.03|2,290,850.75|
|IV. Carrying value||||||
|1. Ending carrying||||||
||278,542,329.38|221,599,430.74|6,067,776.63|5,897,375.64|512,106,912.39|
|value||||||
|2. Beginning||||||
||273,776,748.71|195,930,365.99|7,618,814.35|6,194,937.59|483,520,866.64|
|carrying value||||||

(2) List of Temporarily Idle Fixed Assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
||Original carrying|Accumulative|Depreciation|||
|Item||||Carrying value|Note|
||value|depreciation|reserves|||
|T5, T8,||||||
|energy-saving lamp|7,940,325.52|5,945,024.07|1,943,741.93|51,559.52||
|production line||||||
|Total|7,940,325.52|5,945,024.07|1,943,741.93|51,559.52||

(3) Fixed Assets Leased in by Financing Lease
None
(4) Fixed Assets Leased out by Operation Lease
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (5) Fixed Assets Failed to Accomplish Certification of Property
None
(6) Proceeds from Disposal of Fixed Assets
None
17. Construction in Progress
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Construction in progress|224,624,447.16|162,814,991.68|
|Total|224,624,447.16|162,814,991.68|

 (1) List of Construction in Progress
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Depreciation|||Depreciation|Carrying value|
||Carrying amount||Carrying value|Carrying amount|||
|||reserves|||reserves||
|Construction inprogress|||||||
||224,624,447.16||224,624,447.16|162,814,991.68||162,814,991.68|
|Total|224,624,447.16||224,624,447.16|162,814,991.68||162,814,991.68|

 (2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Ofwhich:amountofcapitalizedinterestsfor theReporting Period|||
||||||||Proporti||||||
||||||||on of||Accumul||Capitaliz||
||||||||accumul||ated||ation rate||
|||||Transferr|||||||||
|||Beginnin|||Other||ated||amount||of||
||||Increase|ed in||Ending||Job||||Capital|
|Item|Budget|g|||decrease||investme||of||interests||
||||d amount|fixed||balance||schedule||||resources|
|||balance|||d amount||nt in||interest||for the||
|||||assets|||||||||
||||||||construct||capitaliz||Reportin||
||||||||ions to||ation||g Period||
||||||||budget||||||
|Fuwan|||||||||||||
|intellige|52,040,0|25,715,0|15,868,0|||41,583,1|||||||
||||||||81.29%|95.00%||||Other|
|nt|00.00|29.09|80.86|||09.95|||||||
|worksho|||||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||||
|-|-|-|-|-|-|-|-|
|p H||||||||
|Fuwan||||||||
|standard|26,200,0|14,115,3|7,826,94|21,942,2||||
||||||89.18%|95.00%|Other|
|worksho|00.00|45.92|1.93|87.85||||
|p K3||||||||
|Fuwan||||||||
|standard|26,200,0|13,281,6|8,420,81|21,702,4||||
||||||85.71%|95.00%|Other|
|worksho|00.00|20.60|0.33|30.93||||
|p K2||||||||
|Fuwan||||||||
|standard|23,775,0|12,652,9|6,588,49|19,241,4||||
||||||82.79%|90.00%|Other|
|worksho|00.00|55.32|7.04|52.36||||
|p K1||||||||
|Fuwan||||||||
|standard|23,775,0|12,491,8|6,523,25|19,015,0||||
||||||81.84%|90.00%|Other|
|worksho|00.00|25.29|0.53|75.82||||
|p J3||||||||
|Fuwan||||||||
|standard|22,310,0|11,760,0|6,823,82|18,583,8||||
||||||85.93%|95.00%|Other|
|worksho|00.00|18.73|6.56|45.29||||
|p J1||||||||
|Fuwan||||||||
|standard|22,310,0|11,621,4|6,746,21|18,367,6||||
||||||84.96%|95.00%|Other|
|worksho|00.00|57.94|1.94|69.88||||
|p J2||||||||
|Gaoming||||||||
|R&D||||||||
|worksho|40,000,0|897,437.|11,717,6|12,615,0||||
||||||31.54%|40.00%|Other|
|p 11, 12,|00.00|10|60.44|97.54||||
|13, 14||||||||
|and 18||||||||
|Automat||||||||
|ic system||||||||
|of||||||||
|intellige||||||||
|nt||||||||
||21,920,0|8,479,33|3,125,12|11,604,4||||
|producti|||||54.78%|70.00%|Other|
||00.00|3.21|8.20|61.41||||
|on||||||||
|worksho||||||||
|p||||||||
|(worksh||||||||
|op H)||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||||
|-|-|-|-|-|-|-|-|-|
|Family|||||||||
|housing|||||||||
|of Gao|10,100,0|5,827,52|1,865,89||7,693,42||||
|||||||76.75%|95.00%|Other|
|Ming,|00.00|8.35|4.75||3.10||||
|Building|||||||||
|8#|||||||||
|Fuwan|||||||||
|standard|27,000,0|24,045,4|2,321,55|26,367,0|||||
|||||||100.00%|100.00%|Other|
|worksho|00.00|44.08|7.10|01.18|||||
|p E|||||||||
||295,630,|140,887,|77,827,8|26,367,0|192,348,||||
|Total||||||--|--|--|
||000.00|995.63|59.68|01.18|854.13||||

(3) List of the Withdrawal of the Depreciation Reserves for Construction in Progress
None
(4) Engineering Materials
None
18. Productive Living Assets
None
19. Oil and Gas Assets
□ Applicable√ Not applicable
20. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||Non-patent|||
|Item|Land use right|Patent right||Software|Total|
||||technologies|||
|I. Original carrying||||||
|value||||||
|1. Beginning||||||
||211,719,938.60|200,000.00||2,773,651.87|214,693,590.47|
|balance||||||
|2. Increased||||||
||22,021,785.00||||22,021,785.00|
|amount of the period||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
|(1) Purchase|22,021,785.00|||22,021,785.00|
|(2) Internal|||||
|R&D|||||
|(3) Business|||||
|combination increase|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|4. Ending balance|233,741,723.60|200,000.00|2,773,651.87|236,715,375.47|
|II. Accumulated|||||
|amortization|||||
|1. Beginning|||||
||57,449,354.58|200,000.00|1,499,515.53|59,148,870.11|
|balance|||||
|2. Increased|||||
||4,454,752.01||386,476.14|4,841,228.15|
|amount of the period|||||
|(1) Withdrawal|4,454,752.01||386,476.14|4,841,228.15|
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|4. Ending balance|61,904,106.59|200,000.00|1,885,991.67|63,990,098.26|
|III. Depreciation|||||
|reserves|||||
|1. Beginning|||||
|balance|||||
|2. Increased|||||
|amount of the period|||||
|(1) Withdrawal|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|4. Ending balance|||||
|IV. Carrying value|||||
|1. Ending carrying|||||
||171,837,617.01||887,660.20|172,725,277.21|
|value|||||
|2. Beginning|||||
||154,270,584.02||1,274,136.34|155,544,720.36|
|carrying value|||||

The proportion of intangible assets formed from the internalR&D of the Company at the Period-end to the ending balance of
intangible assets was0.00%.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (2) Land Use Right with Certificate of Title Uncompleted
Other notes:
The Company purchased a piece of land located to the north of Zhaoming Road and the east of Hengchang 2 Road, Hecheng Street, Gaoming District, Foshan City during the Reporting Period. As of 31 December 2018, the land use permit is in progress. The management believes there is no substantial legal obstacle to applying for the land use permit.
21.R&D Expense
None
22. Goodwill
None
23. Long-term Prepaid Expense
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||Amortization|Other decreased||
|Item|Beginning balance|Increased amount|||Ending balance|
||||amount of the period|amount||
|Maintenance and||||||
||9,088,933.56|2,798,276.62|5,883,169.76||6,004,040.42|
|decoration expenses||||||
|Other||1,000,367.63|151,422.70||848,944.93|
|Total|9,088,933.56|3,798,644.25|6,034,592.46||6,852,985.35|

 24. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Set-off
Unit: RMB
||||||
|-|-|-|-|-|
||Ending balance||Beginning balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Provision for impairment|||||
||86,933,832.63|13,391,933.49|99,556,953.91|15,311,430.81|
|of assets|||||
|Unrealized profit of|||||
||1,187,129.74|178,069.46|1,795,625.87|269,343.88|
|internal transactions|||||
|Deductible losses|||10,594,861.17|2,648,715.29|
|Depreciation of fixed|||||
||75,022,616.39|11,594,644.46|67,261,836.57|10,420,465.38|
|assets|||||
|Payroll payable|83,969,846.94|12,595,477.04|60,172,489.55|9,025,873.43|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
|Changes in fair value of|||||
|trading financial|477,200.00|71,580.00|||
|liabilities|||||
|Total|247,590,625.70|37,831,704.45|239,381,767.07|37,675,828.79|

 (2) Deferred Income Tax Liabilities Had not Been Off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Ending balance||Beginning balance||
|Item|Taxable temporary|Deferred income tax|Taxable temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|Changes in fair value of|||||
|available-for-sale|350,203,393.34|52,530,509.00|843,068,339.74|126,460,250.96|
|financial assets|||||
|Total|350,203,393.34|52,530,509.00|843,068,339.74|126,460,250.96|

 (3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Mutual set-off amount of|Amount of deferred|Mutual set-off amount of|Amount of deferred|
||deferred income tax|income tax assets or|deferred income tax|income tax assets or|
|Item|||||
||assets and liabilities at|liabilities after off-set at|assets and liabilities at|liabilities after off-set at|
||the period-end|the period-end|the period-begin|the period-begin|
|Deferred income tax||37,831,704.45||37,675,828.79|
|assets|||||
|Deferred income tax||52,530,509.00||126,460,250.96|
|liabilities|||||

(4) List of Unrecognized Deferred Income Tax Assets
None
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years Other notes:
The deferred income tax liabilities of the period-end were RMB-73,929,741.96 with decrease of58.46% compared with that of period-begin which is mainly due to the decrease of fair value of shares in Guoxuan High-tech Co., Ltd. and China Everbright Bank held by the Company during the Reporting Period.
25. Other Non-current Assets
Unit: RMB
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Land purchase and the ownership implicit|||
||41,755,700.00|41,755,700.00|
|of relevant items|||
|Prepayments for business facilities|6,549,735.42|1,303,334.80|
||48,305,435.42|43,059,034.80|

 26. Short-term Borrowings
None
27. Financial Liabilities at Fair Value through Profit or Loss
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Specified as financial liabilities at fair|||
||477,200.00||
|value through profit or loss|||
|Total|477,200.00||

Other notes:
The forward foreign exchange settlement business conducted by the Company during the Reporting Period shall be recognized as trading financial assets or liabilities and measured at fair value.
28. Derivative Financial Liabilities
□ Applicable√ Not applicable
29. Notes Payable and Accounts Payable
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Notes payable|452,683,676.97||
|Accounts payable|532,597,143.95|539,303,554.54|
|Total|985,280,820.92|539,303,554.54|

 (1) Notes Payable Listed by Category
Unit: RMB
||||
|-|-|-|
|Category|Ending balance|Beginning balance|
|Bank’s acceptance bill|452,683,676.97||
|Total|452,683,676.97||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 The total amount of the due but not paid notes payable at the end of the period was of RMB0.00.
(2) List of Accounts Payable
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Accounts payable|532,597,143.95|539,303,554.54|
|Total|532,597,143.95|539,303,554.54|

 (3) Significant Accounts Payable Aging over One Year
None
30. Advances from Customers
(1) List of Advances from Customers
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Advances from customers|43,850,788.04|48,706,778.49|
|Total|43,850,788.04|48,706,778.49|

 (2) Significant Advances from Customers Aging over One Year
None
(3) Settled but Uncompleted Projects Formed by Construction Contracts at the Period-end
None
31. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|I. Short-term salary|81,948,630.59|619,018,718.63|604,878,727.63|96,088,621.59|
|II. Post-employment|||||
|benefit-defined||40,877,858.57|40,877,858.57||
|contribution plans|||||
|Total|81,948,630.59|659,896,577.20|645,756,586.20|96,088,621.59|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (2) List of Short-term Salary
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|1. Salary, bonus,|||||
||81,567,715.47|564,262,272.36|550,104,501.31|95,725,486.52|
|allowance, subsidy|||||
|2. Employee welfare||14,815,720.73|14,815,720.73||
|3. Social insurance||25,745,167.25|25,745,167.25||
|Of which: Medical|||||
|||21,976,720.39|21,976,720.39||
|insurance premiums|||||
|Work-re|||||
|||1,608,468.08|1,608,468.08||
|lated injury insurance|||||
|Materni|||||
|||2,159,978.78|2,159,978.78||
|ty insurance|||||
|4. Housing fund||9,837,672.00|9,837,672.00||
|5. Labor union budget|||||
|and employee education|380,915.12|4,357,886.29|4,375,666.34|363,135.07|
|budget|||||
|Total|81,948,630.59|619,018,718.63|604,878,727.63|96,088,621.59|

 (3) List of Defined Contribution Plans
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|1. Basic pension benefits||39,465,323.37|39,465,323.37||
|2. Unemployment|||||
|||1,412,535.20|1,412,535.20||
|insurance|||||
|Total||40,877,858.57|40,877,858.57||

Other notes:
The Company participates in the scheme of pension insurance and unemployment insurance established by government agencies as required. According to the scheme, fees are paid to it on a monthly basis and at the rate of stipulated by government agencies. In addition to the above monthly deposit fees, the Company no longer assumes further payment obligations. Corresponding expenses are recorded into the current profits or losses or the cost of related assets when incurred.
32. Taxes Payable
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|VAT|3,147,064.81|10,282,705.33|
|Corporate income tax|14,907,122.79|9,181,098.01|
|Personal income tax|704,101.03|1,591,053.45|
|Urban maintenance and construction tax|761,673.03|830,070.63|
|Education Surcharge|544,052.17|596,707.51|
|Property tax|2,374,748.34|893,895.36|
|Land use tax|2,750,413.52|3,831,261.26|
|Other|165,290.68|143,878.85|
|Total|25,354,466.37|27,350,670.40|

 33. Other Payables
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Other payables|43,115,011.68|40,548,489.03|
|Total|43,115,011.68|40,548,489.03|

 (1) Interest Payable
None
(2) Dividends Payable
None
(3) Other Payables
1) Other Payables Listed by Nature
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Performance bond|27,413,254.10|22,458,290.53|
|Expense related to sales|3,568,835.91|10,528,263.61|
|Compensation for lawsuit|1,762,533.43|1,762,533.43|
|Other|10,370,388.24|5,799,401.46|
|Total|43,115,011.68|40,548,489.03|

2) Significant Other Payables Aging over One Year
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 34. Held-for-sale Liabilities
None
35. Current Portion of Non-current Liabilities
None
36. Other Current Liabilities
None
37. Long-term Borrowings
None
38. Bonds Payable
None
39. Long-term Payables
None
40. Long-term Payroll Payable
None
41. Provisions
None
42. Deferred Income
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Reason for|
|Item|Beginning balance|Increase|Decrease|Ending balance||
||||||formation|
||||||Government|
|Government||||||
||11,858,330.49||11,703,330.18|155,000.31|subsidies related to|
|subsidies||||||
||||||assets/income|
|Total|11,858,330.49||11,703,330.18|155,000.31|--|

Item involving government subsidies:
Unit: RMB
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Amount|Amount|||||
||||recorded into|recorded into|Amount||||
|||Amount of||||||Related to|
||Beginning||non-operatin|other income|offset cost in|Other|Ending||
|Item||newly||||||assets/related|
||balance||g income in|in the|the Reporting|changes|balance||
|||subsidy||||||income|
||||the Reporting|Reporting|Period||||
||||Period|Period|||||
|LED|||||||||
|production|||||||||
|||||||||Related to|
|technical|9,852,274.95|||||9,852,274.95|||
|||||||||assets|
|transformatio|||||||||
|n project|||||||||
|Construction|||||||||
|of|||||||||
|Electro-optic|||||||||
|al Institute of||||||||Related to|
||1,000,000.00|||1,000,000.00|||||
|Foshan||||||||income|
|Electrical and|||||||||
|Lighting Co.,|||||||||
|Ltd.|||||||||
|Production|||||||||
|line of 50|||||||||
|million||||||||Related to|
||310,000.23||154,999.92||||155,000.31||
|energy-savin||||||||assets|
|g fluorescent|||||||||
|lamp|||||||||
|Standard|||||||||
|optical|||||||||
|components|||||||||
|||||||||Related to|
|testing|272,669.78||272,669.78||||||
|||||||||assets|
|laboratory|||||||||
|capacity|||||||||
|construction|||||||||
|Overseas|||||||||
|protection|||||||||
|plan of||||||||Related to|
||250,000.00|||250,000.00|||||
|intellectual||||||||income|
|property of|||||||||
|FSL|||||||||
|Standard|||||||||
|research on||||||||Related to|
||173,385.53||173,385.53||||||
|cool LED||||||||income|
|light with|||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
|wide angle||||||
||11,858,330.4|||||
|Total||601,055.23|1,250,000.00|9,852,274.95|155,000.31|
||9|||||

Other notes:
The deferred income of period-end was RMB-11,703,330.18 with decrease of98.69% compared with that of period-begin which is mainly generated from the return of government subsidy of RMB10 million for “project of LED survival transformation” during the Reporting Period.
43. Other Non-current Liabilities
None
44. Share Capital
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease (+/-)||||||
||Beginning|||||||
|||New shares||Bonus issue|||Ending balance|
||balance||Bonus shares||Other|Subtotal||
|||issued||from profit||||
|The sum of|1,272,132,868.00||||||1,399,346,154.00|
|||||127,213,286.00||127,213,286.00||
|shares||||||||

 45. Other Equity Instruments
None
46. Capital Reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|Capital premium|||||
||278,575,487.53||127,213,286.00|151,362,201.53|
|(premium on stock)|||||
|Other capital reserves|7,245,971.54|||7,245,971.54|
|Total|285,821,459.07||127,213,286.00|158,608,173.07|

 Other notes, including changes and reason of change:
The capital reserves of period-end was RMB-127,213,286.00 with decrease of44.51% compared with that of period-begin, which was generated from bonus issue from profit.
47. Treasury Shares
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 48. Other Comprehensive Income
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Reporting Period||||||
||||Less: recorded|||||
||||in other|||||
||||||Attributable|||
||||comprehensive|||Attributable||
|||Income|||to owners|||
||||income in|||to||
||Beginning|before||Less:|of the||Ending|
|Item||||||||
||||prior period|||non-control||
||balance|taxation in||Income tax|Company||balance|
||||and transferred|||ling||
|||the Current||expense|as the|||
||||in profit or|||interests||
|||Period|||parent after|||
||||loss in the|||after tax||
||||||tax|||
||||Current|||||
||||Period|||||
|II. Other comprehensive income that|||||-418,939,460.98|||
||716,607,333.|-492,869,20||-73,929,741|||297,667,8|
|may subsequently be reclassified to||||||||
||78|2.94||.96|||72.80|
|profit or loss||||||||
|Gain/Loss on changes in fair|||||-418,935,204.44|||
||716,608,088.|-492,864,94||-73,929,741|||297,672,8|
|value of available-for-sale financial||||||||
||78|6.40||.96|||84.34|
|assets||||||||
|Differences arising from|||||-4,256.54|||
|translation of foreign||||||||
||-755.00|-4,256.54|||||-5,011.54|
|currency-denominated financial||||||||
|statements||||||||
||716,607,333.78|-492,869,20||-73,929,741|-418,939,460.98||297,667,872.80|
|Total of other comprehensive income||||||||
|||2.94||.96||||

 Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized amount:
Other comprehensive income of period-end was RMB-418,939,460.98 with decrease of58.46% compared with that of period-begin which was due to the sharply drop of stock price of Guoxuan High-tech Co., Ltd. and China Everbright Bank held by the Company at the period-end.
49. Specific Reserve
None
50. Surplus Reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Beginning balance|Increase|Decrease|Ending balance|
|Statutory surplus|||||
||636,066,434.00|36,503,183.84||672,569,617.84|
|reserves|||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
|Discretionary surplus||||
||136,886,568.36||136,886,568.36|
|reserves||||
|Total|772,953,002.36|36,503,183.84|809,456,186.20|

 Notes, including changes and reason of change:
In line with regulations stipulated in the articles of association, the statutory surplus reserves withdrawn in the Reporting Period was RMB36,503,183.84.
51. Retained Earnings
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Beginning balance of retained earnings beforeadjustments|||
||1,731,600,796.18|1,564,615,925.99|
|Beginning balance of retained earnings afteradjustments|1,731,600,796.18||
|||1,564,615,925.99|
|Add: Net profit attributable to owners of theCompany as the parent|||
||377,615,133.62|740,308,725.30|
|Less: withdrawal of statutory surplus reserves|36,503,183.84|39,028,050.55|
|Dividend of ordinary shares payable|418,531,713.57|534,295,804.56|
|Ending retained earnings|1,654,181,032.39|1,731,600,796.18|

 List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from same control.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
52. Operating Revenue and Cost of Sales
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same Period of last year||
|Item|||||
||Operating revenue|Cost of sales|Operating revenue|Cost of sales|
|Main operations|3,778,249,951.22|2,904,082,772.16|3,772,966,756.87|2,923,576,970.37|
|Other operations|23,705,995.54|18,750,738.24|27,221,504.67|16,492,159.34|
|Total|3,801,955,946.76|2,922,833,510.40|3,800,188,261.54|2,940,069,129.71|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 53. Taxes and Surtaxes
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Urban maintenance and construction tax|12,673,452.76|14,766,125.68|
|Education Surcharge|5,459,067.96|6,337,699.24|
|Property tax|7,538,403.90|6,267,294.19|
|Land use tax|5,285,219.55|5,100,498.29|
|Vehicle and vessel use tax|16,218.98|29,458.08|
|Stamp Duty|1,719,791.33|1,929,366.41|
|Local education surcharge|3,639,365.84|4,225,132.71|
|Environmental protection tax|45,809.86||
|Deed tax||81,919.14|
|Embankment-protection fees||6.09|
|Total|36,377,330.18|38,737,499.83|

 54. Selling Expense
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Freight|75,271,832.22|74,064,096.99|
|Employee’s remuneration|61,175,236.43|62,624,316.66|
|Business propagandize fees and|||
||37,609,042.39|20,934,592.67|
|advertizing fees|||
|Sales promotion fees|19,875,800.05|23,519,202.35|
|Business travel charges|12,650,960.49|15,564,432.98|
|Dealer meeting expense|3,640,647.76|1,931,896.64|
|Other|27,261,870.55|15,174,101.45|
|Total|237,485,389.89|213,812,639.74|

 55. Administrative Expense
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Employee’s remuneration|106,255,136.92|111,542,556.07|
|Depreciation charge|15,362,970.68|18,031,548.68|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Office expenses|13,142,511.18|10,438,740.91|
|Rent of land and management charge|5,352,109.19|6,413,922.13|
|Amortization of intangible assets|4,841,228.15|4,785,674.77|
|Other|28,917,129.49|27,790,364.02|
|Total|173,871,085.61|179,002,806.58|

 56.R&D Expense
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Employee’s remuneration|34,627,641.09|15,740,158.41|
|Expense on equipment debugging|6,569,264.14|709,307.47|
|Fees for certification testing|4,743,946.71|7,142,203.62|
|Material consumption|2,732,468.55|1,662,221.96|
|Charges related to patents|1,119,733.39|1,888,674.96|
|Depreciation and long-term prepayments|413,561.08|373,325.97|
|Other|2,519,970.32|7,062,275.57|
|Total|52,726,585.28|34,578,167.96|

 Other notes:
1、TheR&D expense of the Reporting Period was RMB18,148,417.32 with increase of52.49% compared with that of last year which was due to the increase in spending onR&D during the Reporting Period and huge increase in labor costs compared with that of last year.
2、In theCompany’sR&D activities, the expense on bench-scale and pilot-scale production is recorded inR&D expense, the revenue generated from the sale of products through bench-scale and pilot-scale production is recorded in core business revenue, and the costs incurred are recorded in the cost of sales of core businesses. 57. Finance Costs
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Interest expense|371,567.15||
|Less: Interest income|11,450,858.00|9,311,141.78|
|Foreign exchange gains or losses|-16,834,523.05|17,501,423.01|
|Other|1,798,634.74|2,782,001.29|
|Total|-26,115,179.16|10,972,282.52|

Other notes:
The finance costs of the Reporting Period decreased largely compared with that of last year, which was mainly due to the increase of
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 foreign exchange gains caused by devaluation of RMB and increase of export business.
58. Asset Impairment Loss
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|I. Bad debt loss|11,904,279.15|13,102,038.01|
|II. Loss on inventory valuation|25,768,841.80|21,672,776.12|
|Total|37,673,120.95|34,774,814.13|

 59. Other Income
Unit: RMB
||||
|-|-|-|
|Sources|Reporting Period|Same period of last year|
|Rewards for Competition among Hundreds|||
||23,710,397.00||
|of Enterprises|||
|Supporting fund for import and export|2,282,553.00|3,249,240.00|
|Subsidy for stabilizing posts|1,091,084.26|2,397,812.18|
|Other|4,126,579.00|1,229,334.00|
|Total|31,210,613.26|6,876,386.18|

 60. Investment Income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Long-term equity investment income|||
||6,165,040.30|2,222,185.57|
|accounted by equity method|||
|Investment income from disposal of long-term|||
|||184,379,575.52|
|equity investment|||
|Investment income from holding of available|||
||18,873,927.57|30,320,839.59|
|for sale financial assets|||
|Investment income from disposal of available|||
|||270,998,081.52|
|for sale financial assets|||
|Income received from financial products and|||
||29,098,956.87|35,305,395.44|
|structural deposits|||
|Other|-808,400.00|-621,450.98|
|Total|53,329,524.74|522,604,626.66|

The investment income of the Reporting Period was RMB-469,275,101.92 with decrease of89.80% compared
with that of last year, which was mainly caused by selling of 8,770,400 shares of Guoxuan High-tech Co., Ltd. in
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 last year but no shares sold during the Reporting Period.
61. Gain on Changes in Fair Value
Unit: RMB
||||
|-|-|-|
|Sources|Reporting Period|Same period of last year|
|Financial liabilities at fair value through|||
||-477,200.00||
|profit or loss|||
|Total|-477,200.00||

62. Asset Disposal Income
Unit: RMB
||||
|-|-|-|
|Sources|Reporting Period|Same period of last year|
|Fixed asset disposal income|-78,039.44|-10,790.68|
|Total|-78,039.44|-10,790.68|

 63. Non-operating Income
Unit: RMB
|||||
|-|-|-|-|
||||Amount recorded in the current|
|Item|Reporting Period|Same Period of last year||
||||non-recurring profit or loss|
|Government subsidy|2,168,255.23|1,185,148.00|2,168,255.23|
|Total income from scrapping of||||
||138,567.76||138,567.76|
|non-current assets||||
|Of which: gains from scrapping||||
||138,567.76||138,567.76|
|of fixed assets||||
|Other|1,501,787.51|2,235,718.46|1,501,787.51|
|Total|3,808,610.50|3,420,866.46|3,808,610.50|

 Government subsidies recorded into current profit orloss：
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether|||||
|||||influence the|Special|||Related to|
||Distribution|Distribution||||Reporting|Same period||
|Item|||Nature|profits or|subsidy or|||assets/related|
||entity|reason||||Period|of last year||
|||||losses of the|not|||income|
|||||year or not|||||
|Standard|||||||||
|||||||||Related to|
|optical||Subsidy||||272,669.78|150,155.29||
|||||||||assets|
|components|||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
|testing|||||
|laboratory|||||
|capacity|||||
|construction|||||
|and product|||||
|quality|||||
|guarantee|||||
|project|||||
|Standard|||||
|research on|||||
|||||Related to|
|cool LED|Subsidy|173,385.53|16,614.47||
|||||income|
|light with|||||
|wide angle|||||
|Production|||||
|line of 50|||||
|million||||Related to|
||Subsidy|154,999.92|154,999.92||
|energy-savin||||assets|
|g fluorescent|||||
|lamp|||||
|Technologica|||||
|l research on|||||
|new type of|||||
|low-cost|||||
|||||Related to|
|LED light|Subsidy||244,668.32||
|||||income|
|source|||||
|module with|||||
|silicon|||||
|substrate|||||
|Other|||||
|miscellaneou||||Related to|
||Rewards|1,567,200.00|618,710.00||
|s government||||income|
|subsidies|||||
|Total||2,168,255.23|1,185,148.00||

64. Non-operating Expense
Unit: RMB
|||||
|-|-|-|-|
||||Amount recorded in the current|
|Item|Reporting Period|Same Period of last year||
||||non-recurring profit or loss|
|Donation|60,000.00|32,804.26|60,000.00|
|Total losses on scrapping of||||
||1,731,682.62|7,733,815.43|1,731,682.62|
|non-current assets||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
|Of which: losses on scrapping||||
||1,731,682.62|7,733,815.43|1,731,682.62|
|of fixed assets||||
|Losses on inventories|1,932,550.28|244,168.20|1,932,550.28|
|Penalty|36,499.25|7,291.00|36,499.25|
|Delaying payment||90,335.04||
|Other|67,094.12|220,724.27|67,094.12|
|Total|3,827,826.27|8,329,138.20|3,827,826.27|

 65. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Current income tax expense|72,075,325.91|121,110,462.58|
|Deferred income tax expense|-155,875.66|5,872,089.65|
|Total|71,919,450.25|126,982,552.23|

 (2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
|||
|-|-|
|Item|Reporting Period|
|Profit before taxation|451,069,786.40|
|Current income tax expense accounted at statutory/applicable tax||
||67,660,467.96|
|rate||
|Influence of applying different tax rates by subsidiaries|6,257,356.04|
|Influence of income tax before adjustment|-64,950.11|
|Influence of non-deductable costs, expenses and losses|2,248,151.29|
|Influence of R&D expense deduction|-3,171,601.61|
|Influence of allowance of making up the prior year deficiency|2,648,715.29|
|Regarded as sales|97,156.57|
|Investment income and final dividend|-3,755,845.18|
|Income tax expense|71,919,450.25|

 66. Other Comprehensive Income
Refer to Note 48 for details.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 67. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Government subsidies received|29,539,856.03|9,306,996.18|
|Cash deposit received|9,433,019.86|19,450,230.83|
|Deposit interest|13,324,810.23|8,516,240.36|
|Income from waste|15,994,366.63|12,641,813.45|
|Income from insurance compensation|7,953,870.72|239,342.12|
|Property and rental income|4,314,891.32|3,707,566.34|
|Other|14,817,509.51|6,612,167.40|
|Total|95,378,324.30|60,474,356.68|

 (2) Cash Used in Other Operating Activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same Period of last year|
|Administrative expense paid in cash|61,534,145.31|67,473,691.23|
|Selling expense paid in cash|132,808,161.86|136,881,035.89|
|Finance costs paid in cash|1,267,358.28|769,269.44|
|Returned government subsidies|10,000,000.00||
|Returned cash deposit|8,876,805.00|22,562,340.00|
|Other|336,025.84|242,461.00|
|Total|214,822,496.29|227,928,797.56|

 (3) Cash Generated from Other Investing Activities
None
(4) Cash Used in Other Investing Activities
None
(5) Cash Generated from Other Financing Activities
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (6) Cash Used in Other Financing Activities
None
68. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Supplemental information|Reporting Period|Same period of last year|
|1. Reconciliation of net profit to net cash|||
||--|--|
|flows generated from operating activities|||
|Net profit|379,150,336.15|745,820,319.26|
|Add: Provision for impairment of assets|37,673,120.95|34,774,814.13|
|Depreciation of fixed assets, oil-gas assets,|||
||70,186,632.84|72,933,789.06|
|and productive living assets|||
|Amortization of intangible assets|4,841,228.15|4,785,674.77|
|Amortization of long-term prepaid expenses|6,034,592.46|5,269,431.90|
|Losses from disposal of fixed assets,|||
|intangible assets and other long-lived assets|78,039.44|10,790.68|
|(gains: negative)|||
|Losses from scrap of fixed assets (gains:|||
||1,593,114.86|7,733,815.43|
|negative)|||
|Losses from changes in fair value (gains:|||
||477,200.00||
|negative)|||
|Investment loss (gains: negative)|-53,329,524.74|-522,604,626.66|
|Decrease in deferred income tax assets|||
||-155,875.66|5,872,089.65|
|(increase: negative)|||
|Decrease in inventory (gains: negative)|-46,621,550.93|-14,458,060.80|
|Decrease in accounts receivable generated|||
||-80,985,456.28|-178,458,100.12|
|from operating activities (gains: negative)|||
|Increase in accounts payable used in|||
||299,045,629.81|54,141,255.49|
|operating activities (decrease: negative)|||
|Net cash generated from/used in operating|617,987,487.05|215,821,192.79|
|activities|||
|2. Significant investing and financing|||
|activities without involvement of cash|--|--|
|receipts and payments|||
|3. Net increase/decrease of cash and cash|--|--|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|equivalent:|||
|Ending balance of cash|795,285,756.38|570,184,208.96|
|Less: beginning balance of cash|570,184,208.96|1,479,283,642.54|
|Net increase in cash and cash equivalents|225,101,547.42|-909,099,433.58|

 (2) Net Cash Paid For Acquisition of Subsidiaries
None
(3) Net Cash Receive from Disposal of the Subsidiaries
None
(4) Cash and Cash Equivalents
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|I. Cash|795,285,756.38|570,184,208.96|
|Including: Cash on hand|34,937.47|52,031.79|
|Bank deposit on demand|783,346,295.87|565,323,109.99|
|Other monetary capital on demand|11,904,523.04|4,809,067.18|
|III. Ending balance of cash and cash|795,285,756.38|570,184,208.96|
|equivalents|||

69. Notes to Items of the Statements of Changes inOwners’ Equity
Notes to the name of “Other” of ending balance of the same period of last year adjusted and the amount adjusted:
Not applicable
70. Assets with Restricted Ownership or Right to Use
Unit: RMB
||||
|-|-|-|
|Item|Ending carrying value|Reason for restriction|
|||Security deposit of notes and security|
|Monetary capital|101,360,963.49|deposit of future foreign exchange|
|||settlement|
|Notes receivable|44,969,669.60|Pledged for notes pool|
|Total|146,330,633.09|--|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 71. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
|||||
|-|-|-|-|
||Ending foreign currency||Ending balance converted to|
|Item||Exchange rate||
||balance||RMB|
|Monetary capital|--|--|105,391,777.95|
|Of which: USD|15,335,737.06|6.8632|105,252,230.59|
|EUR|17,782.85|7.8473|139,547.36|
|HKD||||
|Accounts receivable|--|--|337,468,638.97|
|Of which: USD|49,170,742.36|6.8632|337,468,638.97|
|EUR||||
|HKD||||
|Long-term borrowings|--|--||
|Of which: USD||||
|EUR||||
|HKD||||
|Prepayments|||587,496.65|
|Of which: USD|85,600.98|6.8632|587,496.65|
|Accounts payable|||1,654,299.59|
|Of which: USD|140,871.20|6.8632|966,827.22|
|EUR|87,606.23|7.8473|687,472.37|
|Advances from customers|||18,414,572.52|
|Of which: USD|2,624,162.70|6.8632|18,010,153.44|
|EUR|51,536.08|7.8473|404,419.08|
|Other payables|||480,904.42|
|Of which: USD|70,070.00|6.8632|480,904.42|

 (2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, Recording Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant
Reasons Shall Be Disclosed.
□ Applicable√ Not applicable
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 72. Arbitrage
None
73. Government Subsidy
(1) Basic Information on Government Subsidy
Unit: RMB
|||||
|-|-|-|-|
|Type|Amount|Presented in|Charged to current profit or loss|
|Rewards for Competition||||
||23,710,397.00|Other income|23,710,397.00|
|among Hundreds of Enterprises||||
|Supporting fund for import and||||
||2,282,553.00|Other income|2,282,553.00|
|export||||
|Subsidy for stabilizing posts|1,091,084.26|Other income|1,091,084.26|
|Other|4,126,579.00|Other income|4,126,579.00|
|Standard optical components||||
|testing laboratory capacity||||
||272,669.78|Non-operating income|272,669.78|
|construction and product quality||||
|guarantee project||||
|Standard research on cool LED||||
||173,385.53|Non-operating income|173,385.53|
|light with wide angle||||
|Production line of 50 million||||
||154,999.92|Non-operating income|154,999.92|
|energy-saving fluorescent lamp||||
|Other miscellaneous||||
||1,567,200.00|Non-operating income|1,567,200.00|
|government subsidies||||
|Total|33,378,868.49||33,378,868.49|

 (2) Return of Government Subsidy
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amount|Reason|
|||As per the Notice of the Guangdong|
|||Provincial Development and Reform|
|||Commission on the Solutions for Historical|
|LED survival technological reform||Problems Regarding Projects Invested in|
||10,000,000.00||
|program||the Central Government’s Budget in 2015|
|||and before (YFGJCH [2018] No. 1944),|
|||the Company returned the full amount of|
|||RMB10 million within the Central|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|||Government’s budget to the municipal|
|||bureau of finance as required.|
|Total|10,000,000.00||

74. Other
None
VIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control during the Reporting Period
None
(2) Combination Cost and Goodwill
None
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
None
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair Value
Whether there is a transaction that through multiple transaction step by step to realize business combination and gaining the control during the Reporting Period
□ Yes√ No
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquiree that Cannot Be Determined on the Acquisition Date or during the Period-end of the Merger
None
(6) Other Notes
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 2. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting Period
None
(2) Combination Cost
None
(3) The Carrying Value of Assets and Liabilities of the Combined Party on the Combination Date
None
3. Counter Purchase
None
4. Disposal of Subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
□ Yes√ No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□ Yes√ No
5. Changes in Combination Scope for Other Reasons
None
6. Other
None
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
||||||||
|-|-|-|-|-|-|-|
||Main operating||Nature of|Holding percentage (%)|||
|Name||Registration place||||Way of gaining|
||place||business|Directly|Indirectly||
|Foshan|||||||
||||Production and|||Newly|
|Chansheng|Foshan|Foshan||100.00%|||
||||sales|||established|
|Electronic Ballast|||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
|Co., Ltd.||||||
|Foshan Lighting||||||
|Lamps &|||Production and||Newly|
||Foshan|Foshan||100.00%||
|Components Co.,|||sales||established|
|Ltd.||||||
|Guangdong||||||
|Fozhao New||||||
||||Production and||Newly|
|Light Sources|Foshan|Foshan||100.00%||
||||sales||established|
|Technology Co.,||||||
|Ltd.||||||
|FSL Chanchang||||||
||||Production and||Newly|
|Optoelectronics|Foshan|Foshan||100.00%||
||||sales||established|
|Co., Ltd.||||||
|Foshan Taimei||||||
||||Production and||Newly|
|Times Lamps and|Foshan|Foshan||70.00%||
||||sales||established|
|Lanterns Co., Ltd.||||||
|Foshan Electrical||||||
|& Lighting|||Production and||Newly|
||Xinxiang|Xinxiang||100.00%||
|(Xinxiang) Co.,|||sales||established|
|Ltd.||||||
|Guangdong||||||
||||||Newly|
|Fozhao Financial|Foshan|Foshan|Finance lease|100.00%||
||||||established|
|Leasing Co., Ltd.||||||
|Nanjing Fozhao||||||
|Lighting||||||
||||Production and|||
|Components|Nanjing|Nanjing||100.00%|Acquired|
||||sales|||
|Manufacturing||||||
|Co., Ltd.||||||
|FSL Zhida||||||
|Electric|||Production and||Newly|
||Foshan|Foshan||51.00%||
|Technology Co.,|||sales||established|
|Ltd.||||||
|FSL LIGHTING|||Production and||Newly|
||Germany|Germany||100.00%||
|GmbH|||sales||established|

 (2) Significant Non-wholly-owned Subsidiary
Unit: RMB
||||||
|-|-|-|-|-|
||Shareholding proportion|The profit or loss|Declaring dividends|Balance of|
|Name|of non-controlling|attributable to the|distributed to|non-controlling interests|
||interests|non-controlling interests|non-controlling interests|at the period-end|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
|Foshan Taimei Times||||
|Lamps and Lanterns Co.,|30.00%|1,515,210.98|8,108,064.79|
|Ltd.||||
|FSL Zhida Electric||||
||49.00%|19,991.55|13,946,798.14|
|Technology Co., Ltd.||||

(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance||||||Beginning balance||||||
|||Non-curr|||Non-curr|||Non-curr|||Non-curr||
|Name|Current||Totalassets|Current||Total|Current||Total|Current||Total|
|||ent|||ent|||ent|||ent||
||assets|||liabilities||liabilities|assets||assets|liabilities||liabilities|
|||assets|||liability|||assets|||liability||
|Foshan|||||||||||||
|Taimei|||||||||||||
|Times|||||||||||||
||35,881,0|19,031,5|54,912,5|27,885,7||27,885,7|74,373,9|15,493,3|89,867,3|67,891,1||67,891,1|
|Lamps|||||||||||||
||53.56|31.64|85.20|02.58||02.58|86.81|51.95|38.76|59.40||59.40|
|and|||||||||||||
|Lanterns|||||||||||||
|Co., Ltd.|||||||||||||
|FSL|||||||||||||
|Zhida|||||||||||||
|Electric|74,044,5|10,388,8|84,433,3|40,878,6||40,878,6|89,763,0|10,457,8|100,220,|56,707,0||56,707,0|
|Technolo|33.25|13.87|47.12|57.04||57.04|66.89|49.42|916.31|25.32||25.32|
|gy Co.,|||||||||||||
|Ltd.|||||||||||||
||109,925,|29,420,3|139,345,|68,764,3||68,764,3|164,137,|25,951,2|190,088,|124,598,||124,598,|
|Total|||||||||||||
||586.81|45.51|932.32|59.62||59.62|053.70|01.37|255.07|184.72||184.72|

 Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Reporting Period||||Same period of last year||||
|||||Cash flows||||Cash flows|
||||Total||||Total||
|Name|Operatingrevenue|||from|Operating|||from|
|||Net profit|comprehensi|||Net profit|comprehensi||
|||||operating|revenue|||operating|
||||ve income||||ve income||
|||||activities||||activities|
|Foshan|||||||||
|Taimei Times|||||||||
||138,186,413.51||||153,043,784.|||25,367,729.6|
|Lamps and||5,050,703.26|5,050,703.26|3,857,467.68||5,218,058.76|5,218,058.76||
||||||51|||2|
|Lanterns Co.,|||||||||
|Ltd.|||||||||
|FSL Zhida|96,231,697.2|40,799.09|40,799.09|1,465,964.60|129,462,815.|8,053,421.08|8,053,421.08|-7,105,760.94|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||||
|-|-|-|-|-|-|-|-|-|
|Electric|6||||58||||
|Technology|||||||||
|Co., Ltd.|||||||||
||234,418,110.||||282,506,600.|13,271,479.8|13,271,479.8|18,261,968.6|
|Total||5,091,502.35|5,091,502.35|5,323,432.28|||||
||77||||09|4|4|8|

 (4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the Company
None
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope of Consolidated Financial Statements
None
2. The Transaction of the Company with ItsOwner’s Equity Share Changed but Still Controlling the Subsidiary
None
3. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
None
(2) Main Financial Information of Significant Joint Ventures
None
(3) Main Financial Information of Significant Associated Enterprise
None
(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises
Unit: RMB
||||
|-|-|-|
|||Beginning balance/The same period of last|
||Ending balance/Reporting Period||
|||year|
|Joint venture:|--|--|
|Total carrying value of investment|||
|The total of following items according to the|||
||--|--|
|shareholding proportions|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Associated enterprise:|--|--|
|Total carrying value of investment|182,458,559.69|179,414,105.14|
|The total of following items according to the|||
||--|--|
|shareholding proportions|||
|--Net profit|6,165,040.30|2,222,185.57|
|--Total comprehensive income|6,165,040.30|2,222,185.57|

 (5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises to Transfer Funds to the Company
None
(6) The Excess Loss of Joint Ventures or Associated Enterprises
None
(7) The Unrecognized Commitment Related to Investment to Joint Ventures
None
(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated Enterprises
None
4. Significant Common Operation
None
5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
None
6. Other
None
X. The Risk Related to Financial Instruments
The financial instruments of the Company included: monetary funds, accounts receivable, notes receivable, accounts payable, etc. The details of each financial instrument see relevant items of noteⅦ.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The
operating management of the Company was responsible for the risk management target and the recognition of the
policies.
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (I) Credit risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the other party. The credit risk the Company faced was selling on credit which leads to customer credit risk.
The Company will evaluate credit risk of new customer, and set credit limit, once the balance of account receivable over credit limit, require the customer to pay or producing and delivering goods shall be approved by the management of the Company.
The Company through monthly aging analysis of account receivable and monitoring the collection situation of the customer ensured the overall credit risk of the Company was in control scope. Once appear abnormal situation, the Company should conduct necessary measures to requesting the payment timely.
(II) Liquidity Risk
Liquidity risk is referred to their risk of incurring capital shortage when performing settlement obligation in the way of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient cash to pay the due liabilities. The liquidity risk is centralized controlled by the Financial Department of the Company. The financial department through supervising the balance of the cash and securities can be convert to cash at any time and the rolling prediction of cash flow in future 12 months to ensure the Company have sufficient cash to pay the liabilities under the case of all reasonable prediction, Each financial liability of the Company was estimated due within 1 year.
(III) Market risk
Market risk was referred to risk of the fair value or future cash flow of financial instrument changed due to the change of market price, including: exchange rate risk, interest rate risk and other price risk.
1. Exchange rate risk
Exchange rate risk was referred to risk of possible losses due to changes of exchange rate. The exchange rate risk undertaken by the Company was mainly generated from USD and EUR. On December 31, 2018, all assets and liabilities of the Company were balances in RMB except that the balances of assets and liabilities presented in the NoteⅦ (71) Foreign Currency Monetary Items were in USD and EUR. The exchange rate risk generated from those balance of assets and liabilities in foreign currency might influence the running performance of the Company to some extent.
The Company made efforts to avoid exchange rate risk through forward exchange settlement, improving operation management and promoting the international competitiveness of the Company, etc.
2. Interest rate risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due to the change of market price. There was no bank loan in the Company, thus no RMB benchmark interest rate changes 3. Other price risk
Naught
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
||||||
|-|-|-|-|-|
||Ending fair value||||
|Item|||||
||Fair value measurement|Fair value measurement|Fair value measurement|Total|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
||items at level 1|items at level 2|items at level 3||
|I. Consistent fair value|||||
||--|--|--|--|
|measurement|||||
|(II)Available-for-sale|||||
||594,088,280.80|||594,088,280.80|
|financial assets|||||
|(2) equity instrument|||||
||594,088,280.80|||594,088,280.80|
|investment|||||
|The total amount of assets|||||
|consistently measured at|594,088,280.80|||594,088,280.80|
|fair value|||||
|(VI) Specified as|||||
|financial liabilities at fair|||||
||477,200.00|||477,200.00|
|value through profit or|||||
|loss|||||
|The total amount of|||||
|liabilities consistently|477,200.00|||477,200.00|
|measured at fair value|||||
|II. Inconsistent fair value|||||
||--|--|--|--|
|measurement|||||

2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level 1
In line with the market price of shares on the balance sheet date and forward foreign exchange option exchange rate.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for Consistent and Inconsistent Fair Value Measurement Items at Level 2
None
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for Consistent and Inconsistent Fair Value Measurement Items at Level 3
None
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning and Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
None
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
None
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
None
9. Other
None
XII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
|||||||
|-|-|-|-|-|-|
|||||Proportion of share|Proportion of voting|
|||||held by the|rights owned by the|
|Name|Registration place|Nature of business|Registered capital|Company as the|Company as the|
|||||parent against the|parent against the|
|||||Company|Company|
|Hong Kong Wah||||||
|Shing Holding|Hong Kong|Investment|HKD110,000|13.47%|13.47%|
|Company Limited||||||
|Shenzhen Rising||||||
|Investment|||RMB135.409614|||
||Shenzhen|Investment||5.12%|5.12%|
|Development Co.,|||million|||
|Ltd.||||||
|Guangdong||||||
|Electronics||||||
||Guangzhou|Sales & Production|RMB462 million|4.74%|4.74%|
|Information Industry||||||
|Group Ltd.||||||
|Rising Investment||||||
||||RMB200 million|||
|Development Co.,|Hong Kong|Investment||1.82%|1.82%|
||||and HKD1 million|||
|Ltd.||||||
|Guangdong Rising||||||
|Finance Holding|Zhuhai|Investment|RMB1393 million|0.54%|0.54%|
|Co., Ltd.||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Total|25.70%|25.70%|

 Notes: information on the Company as the parent
（1）The largest shareholder of the Company, Hong Kong Wah Shing Holding Co., Ltd., was the wholly-owned subsidiary of Electronics Group, and Electronics Group, Shenzhen Rising Investment Development Co., Ltd. ( Hereinafter referred to as " Shenzhen Rising " ), Guangdong Rising Finance Holding Co., Ltd. ( Hereinafter referred to as GD Rising Finance) and Rising Investment Development Co., Ltd. ( Hereinafter referred to as " Rising Investment" ) were the wholly-owned subsidiaries of Guangdong Rising Assets Management Co., Ltd. (Hereinafter referred to as “Rising Company”). In line with the relevant stipulation of Corporation Law and Rules on Listed Companies Acquisition, Electronics Group, Shenzhen Rising and Rising Investment were persons acting in concert, and the Rising Company was the actual controller of the Company. As of 30 June 2018, the aforesaid persons acting in concert holding total A, B share of the Company 359,632,344 shares, 25.70% of total share equity of the Company. Guangdong Rising Assets Management Co., Ltd. became the actual controller of the Company.
（2）The increase in the Current Period was the aggregate increase in the shareholdings of the acting-in-concert parties above in a bonus issue from capital reserves.
The final controller of the Company was Guangdong Rising Assets Management Co., Ltd.
2. Subsidiaries of the Company
Refer to Note IX. Equity in Other Entities-1. Equity in Subsidiaries for details.
3. Information on the Joint Ventures and Associated Enterprises of the Company
Refer to Note IX Equity in Other Entities-3. Equity in Joint Ventures or Associated Enterprises for details of significant joint ventures or associated enterprises of the Company.
4. Information on Other Related Parties
|||
|-|-|
|Name|Relationship with the Company|
|PROSPERITY LAMPS & COMPONENTS LTD|Shareholder owning over 5% shares|
|Foshan NationStar Optoelectronics Co. Ltd.|Under same actual controller|
|Guangdong Fenghua Advanced Technology Holding Co., Ltd.|Under same actual controller|
|Guangdong Rising Optoelectronics Co., Ltd.|Under same actual controller|
|Guangdong HuaSheng data solid-state storage Co., Ltd|Under same actual controller|
|Guangdong Rising Finance Limited|Under same actual controller|
|Guangdong Zhongke Hongwei Semiconductor Equipment Co.,||
||Under same actual controller|
|Ltd.||
|Henan Rising Technology Investment Co., Ltd.|Under same actual controller|
|Guangdong Electronic Technology Research Institute|Under same actual controller|
|Guangzhou Diansheng Property Management Co., Ltd.|Under same actual controller|
|Hangzhou Times Lighting and Electrical Co., Ltd.|Company controlled by related natural person|
|Prosperity (Hangzhou) Lighting and Electrical Co., Ltd.|Company controlled by related natural person|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||
|-|-|
|Prosperity Electrical (China) Co., Ltd.|Company controlled by related natural person|
|Siteco Prosperity Lighting (Langfang) Co., Ltd.|Company controlled by related natural person|
||Company controlled by related natural person with significant|
|OSRAM (China) Lighting Co., Ltd.||
||influence|

5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||The approval trade|Whether exceed trade|Same period of last|
|Related party|Content|Reporting Period||||
||||credit|credit or not|year|
|Foshan Nation Star||||||
||Purchase of|||No||
|Optoelectronics||95,223,746.49|200,000,000.00||94,588,261.29|
||materials|||||
|Co., Ltd.||||||
|Guangdong||||||
|Fenghua Advanced|Purchase of|||No||
|||8,520,579.75|11,000,000.00||6,837,866.01|
|Technology Holding|materials|||||
|Co., Ltd.||||||
|Prosperity Lamps||||||
||Purchase of|||||
|and Components||6,066,082.69|6,000,000.00|Yes|1,706,039.87|
||materials|||||
|Ltd.||||||
|Prosperity Electrical|Purchase of|||||
|||729,882.89|||25,737.57|
|(China) Co., Ltd.|materials|||||
|Hangzhou Times||||||
||Purchase of|||No||
|Lighting and||673,304.64|2,000,000.00||1,612,955.60|
||materials|||||
|Electrical Co., Ltd.||||||
|Siteco Prosperity||||||
||Purchase of|||||
|Lighting (Langfang)||251,021.56||||
||materials|||||
|Co., Ltd.||||||
|Guangdong HYB||||||
||Purchase of|||||
|New Energy Co.,|||||933,432.24|
||materials|||||
|Ltd.||||||
|Guangdong||||||
|HuaSheng data|Purchase of|||||
|||1,600,000.00|||400,000.00|
|solid-state storage|equipment|||||
|Co., Ltd||||||
|Guangdong|Purchase of|||No||
|||1,529,914.53|3,000,000.00|||
|Electronic|equipment|||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
|Technology||||||
|Research Institute||||||
|Guangdong||||||
|Zhongke Hongwei|Purchase of|||No||
|||653,196.58|1,000,000.00||466,871.80|
|Semiconductor|equipment|||||
|Equipment Co.,Ltd.||||||
|Total||115,247,729.13|223,000,000.00||106,571,164.38|

 Information of sales of goods and provision of labor service
Unit: RMB
|||||
|-|-|-|-|
|Related party|Content|Reporting Period|Same period of last year|
|Prosperity Lamps and||||
||Sale of products|35,007,006.69|29,179,107.33|
|Components Ltd.||||
|Guangdong HuaSheng data||||
||Sale of products|2,373,517.23||
|solid-state storage Co., Ltd||||
|Prosperity Electrical (China)||||
||Sale of products|215,459.99|278,880.67|
|Co., Ltd.||||
|Prosperity (Hangzhou) Lighting||||
||Sale of products|0.00|64,502.57|
|and Electrical Co., Ltd.||||
|Guangdong Rising||||
||Sale of products|2,456.90|2,811.97|
|Optoelectronics Co., Ltd.||||
|Guangzhou Diansheng Property||||
||Sale of products|1,118.97||
|Management Co., Ltd.||||
|Foshan Nation Star||||
||Sale of products||5,541.88|
|Optoelectronics Co., Ltd.||||
|Hangzhou Times Lighting and||||
||Sale of products|73,790.53||
|Electrical Co., Ltd.||||
|Total||37,673,350.31|29,530,844.42|

 Information of sales/purchase of goods and provision/reception of labor service
The pricing for related-party transactions observes the principle of market subject to the market price when the transaction happens and relevant accounts shall be paid on time based on actual transaction.
(2) Information on Related-party Trusteeship/Contract
None
(3) Information on Related-party Lease
The Company was lessor:
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 None
The Company was lessee:
Unit: RMB
|||||
|-|-|-|-|
|||The lease fee confirmed in the|The lease fee confirmed in the|
|Name of lessor|Category of leased assets|||
|||Reporting Period|same period of last year|
|Guangdong Electronics||||
|Information Industry Group|Vehicles|16,666.67|11,111.12|
|Ltd.||||

(4) Information on Related-party Guarantee
None
(5) Information on Inter-bank Lending of Capital of Related Parties
None
(6) Information on Assets Transfer and Debt Restructuring by Related Party
None
(7) Information on Remuneration for Key Management Personnel
Unit: RMB
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Chairman of the Board|||
|General Manager|1,775,401.52|1,731,686.00|
|Chairman of the Supervisory Committee|||
|Secretary of the Board|1,052,000.00|1,019,078.00|
|Chief Financial Officer|1,103,401.52|1,068,386.00|
|Other|7,589,589.28|7,477,422.00|
||11,520,392.32|11,296,572.00|

 (8) Other Related-party Transactions
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 6. Accounts Receivable and Payable of Related Party
(1) Accounts Receivable
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Ending balance||Beginning balance||
|Item|Related party|||||
|||Carrying amount|Bad debt provision|Carrying amount|Bad debt provision|
||Guangdong Rising|||||
|Interest receivable||49,800.02||1,622,133.34||
||Finance Co., Ltd.|||||
||Prosperity Lamps|||||
|Accounts receivable|and Components|3,676,377.29|110,291.32|4,487,199.01|134,615.97|
||Ltd.|||||
||Guangdong Rising|||||
|Accounts receivable|Data Solid State|2,753,280.00|82,598.40|||
||Disk Co., Ltd.|||||
||OSRAM (China)|||||
|Accounts receivable||117,554.16|35,266.25|117,554.16|11,755.42|
||Lighting Co., Ltd.|||||
||Prosperity|||||
||(Hangzhou) Lighting|||||
|Accounts receivable||86,367.27|69,093.82|86,367.27|43,183.64|
||and Electrical Co.,|||||
||Ltd.|||||
||Guangdong|||||
||Electronics|||||
|Other receivables||19,500.00|585.00|5,000.00|500.00|
||Information Industry|||||
||Group Ltd.|||||
||Henan Rising|||||
|Other receivables|High-tech|||117,000.00|117,000.00|
||Investment Co., Ltd.|||||
||MTM|||||
|Prepayments|Semiconductor|28,368.00||141,840.00||
||Equipment Co., Ltd.|||||
||Prosperity Electrical|||||
|Prepayments||7,521.37||7,521.37||
||(China) Co., Ltd.|||||
|Total||6,738,768.11|297,834.79|6,584,615.15|307,055.03|

 (2) Accounts Payable
Unit: RMB
|||||
|-|-|-|-|
|Item|Related party|Ending carrying amount|Beginning carrying amount|
|Accounts payable|Foshan Nation Star|17,964,138.25|27,606,272.62|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
||Optoelectronics Co., Ltd.|||
||Guangdong Fenghua Advanced|||
|Accounts payable||1,489,703.61|1,806,876.22|
||Technology Holding Co., Ltd.|||
||Prosperity Lamps and|||
|Accounts payable||554,680.06|529,296.77|
||Components Ltd.|||
||Siteco Prosperity Lighting|||
|Accounts payable||251,021.56||
||(Langfang) Co., Ltd.|||
||Hangzhou Times Lighting and|||
|Accounts payable||229,109.60|467,927.45|
||Electrical Co., Ltd.|||
||Prosperity Electrical (China)|||
|Accounts payable||160,759.70|204,381.06|
||Co., Ltd.|||
||Prosperity Lamps and|||
|Other Payables||480,904.43|438,666.14|
||Components Ltd.|||
||Guangdong Electronic|||
|Other Payables||179,000.00||
||Technology Research Institute|||
||Prosperity Electrical (China)|||
|Other Payables||100,000.00|100,000.00|
||Co., Ltd.|||
||MTM Semiconductor|||
|Other Payables||38,600.00|102,484.00|
||Equipment Co., Ltd.|||
||Guangdong Electronics|||
|Other Payables|Information Industry Group|11,111.12|11,111.12|
||Ltd.|||
||Prosperity Electrical (China)|||
|Advances from customers||38,646.66|45,694.74|
||Co., Ltd.|||
|Total||21,497,674.99|31,312,710.12|

 7. Commitments of Related Party
(1)
Commitment: commitments made in acquisition documents or shareholding alteration documents
Commitment maker: Controlling shareholder
Type of commitment: About avoidance of horizontal competition
Contents: Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Rising Investment have made a commitment that the elimination of the horizontal competition between Foshan NationStar Optoelectronics Co., Ltd. and the Company through business integration or other ways or arrangements shall be completed before December 4, 2019.
Date of commitment making: 4 December 2017
Term of commitment: 24 months
Fulfillment: In execution
(2)
Commitment: commitments made in acquisition documents or shareholding alteration documents
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Commitment maker: Controlling shareholder
Type of commitment: About avoidance of horizontal competition
Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Rising Investment have made more commitments as follows to avoid horizontal competition with the Company: 1. They shall conduct supervision and restraint on the production and operation activities of themselves and their relevant enterprises so that besides the enterprise above that is in horizontal competition with the Company for now, if the products or business of them or their relevant enterprises become the same with or similar to those of the Company or its subsidiaries in the future, they shall take the following measures: (1) If the Company thinks necessary, they and their relevant enterprises shall reduce and wholly transfer their relevant assets and business; and (2) If the Company thinks necessary, it is given the priority to acquire first, by proper means, the relevant assets and business of them and their relevant enterprises. 2. All the commitments made by them to eliminate or avoid horizontal competition with the Company are also applicable to their directly or indirectly controlled subsidiaries. They are obliged to urge and make sure that other subsidiaries executewhat’s prescribed in the relevant document and faithfully honor all the relevant commitments. 3. If they or their directly or indirectly controlled subsidiaries break the aforesaid commitments and thus cause a loss for the Company, they shall compensate the Company on a rational basis.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(3)
Commitment: commitments made in acquisition documents or shareholding alteration documents
Commitment maker: Controlling shareholder
Type of commitment: About reduction and regulation of related-party transactions
Content: Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Rising Investment have made a commitment that during their direct or indirect holding of theCompany’s shares, they shall 1. Strictly abide by the regulatory documents of the CSRC and the SZSE, theCompany’s Articles of Association, etc. and not harm the interests of the Company or other shareholders of the Company in their production and operation activities by taking advantage of their position as the controlling shareholder and actual controller; 2. make sure that they or their other controlled subsidiaries, branch offices, jointly-run or associated companies (the “Relevant Enterprises” for short) will try their best to avoid or reduce related-party transactions with the Company or theCompany’s subsidiaries; 3. strictly follow the market principle of justness, fairness and equal value exchange for necessary and unavoidable related-party transactions between them and their Relevant Enterprises and the Company, and withdraw from voting when a related-party transaction with them or their Relevant Enterprises is being voted on at a general meeting or a board meeting, and execute the relevant approval procedure and information disclosure duties pursuant to the applicable laws, regulations and regulatory documents. Where the aforesaid commitments are broken and a loss is thus caused for the Company, its subsidiaries or theCompany’s other shareholders, they shall be obliged to compensate.
Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
(4)
Commitment: commitments made in acquisition documents or shareholding alteration documents
Commitment maker: Controlling shareholder
Type of commitment: About independence
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 In order to ensure the independence of the Company in business, personnel, asset, organization and finance, Electronics Group and its acting-in-concert parties Shenzhen Rising Investment and Hong Kong Rising Investment have made the following commitments: 1. They will ensure the independence of the Company in business: (1) They promise that the Company will have the assets, personnel, qualifications and capabilities for it to operate independently as well as the ability of independent, sustainable operation in the market. (2) They promise not to intervene in theCompany’s business activities other than the execution of their rights as theCompany’s shareholders. (3) They promise that they and their related parties will not be engaged in business that is substantially in competition with theCompany’s business. And (4) They promise that they and their related parties will try their best to reduce related-party transactions between them and the Company; for necessary and unavoidable related-party transactions, they promise to operate fairly following the market-oriented principle and at fair prices, and execute the transaction procedure and the duty of information disclosure pursuant to the applicable laws, regulations and regulatory documents. 2.They will ensure the independence of the Company in personnel: (1) They promise that theCompany’s GM, deputy GMs, CFO, Company Secretary and other senior management personnel will work only for and receive remuneration from the Company, not holding any positions in them or their other controlled subsidiaries other than director and supervisor. (2) They promise theCompany’s absolute independence from their related parties in labor, human resource and salary management. And (3) They promise to follow the legal procedure in their recommendation of directors, supervisors and senior management personnel to the Company and not to hire or dismiss employees beyond theCompany’s Board of Directors and General Meeting. 3. They will ensure the independence and completeness of the Company in asset: (1) They promise that the Company will have a production system, an auxiliary production system and supporting facilities for its operation; legally have the ownership or use rights of the land, plants, machines, trademarks, patents and non-patented technology in relation to its production and operation; and have independent systems for the procurement of raw materials and the sale of its products. (2) They promise that the Company will have independent and complete assets all under theCompany’s control and independently owned and operated by the Company. And (3) They promise that they and their other controlled subsidiaries will not illegally occupy theCompany’s funds and assets in any way, or use theCompany’s assets to provide guarantees for the debts of themselves or their other controlled subsidiaries with. 4. They will ensure the independence of the Company in organization: (1) They promise that the Company has a sound corporate governance structure as a joint-stock company with an independent and complete organization structure. (2) They promise that the operational and management organs within the Company will independently execute their functions according to laws, regulations and theCompany’s Articles of Association. 5. They will ensure the independence of the Company in finance: (1) They promise that the Company will have an independent financial department and financial accounting system with normative, independent financial accounting rules. (2) They promise that the Company will have independent bank accounts and not share bank accounts with its related parties. (3) They promise that theCompany’s financial personnel do not hold concurrent positions in its related parties. (4) They promise that the Company will independently pay its tax according to law. And (5) They promise that the Company can make financial decisions independently and that they will not illegally intervene in theCompany’s use of its funds. Date of commitment making: 4 December 2015
Term of commitment: Long-standing
Fulfillment: In execution
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 8. Other
None
XIII. Stock Payment
1. The Overall Situation of Stock Payment
□Applicable√ Not applicable
2. The Stock Payment Settled in Equity
□Applicable√ Not applicable
3. The Stock Payment Settled in Cash
□Applicable√ Not applicable
4. Modification and Termination of the Stock Payment
None
5. Other
None
XIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on the balance sheet date
Significant commitments on the balance sheet date
As of December 31, 2018, the Company had the following commitments:
Commitment: Commitment made to small and medium shareholders of the company
Type of commitment: Commitment about cash dividends
Contents: The annual profits distributed in cash by the Company shall be not less than30% of the distributable profits of the year.
Date of commitment making: 27 May 2009
Term of commitment: Long-standing
Fulfillment: In execution
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 2. Contingency
(1) Significant Contingency on Balance Sheet Date
1. According to the Supreme People's Court of the People's Supreme People's Court of the People's Republic of China (2017) Supreme People's Court No. 3437 to No. 3466, No. 3499 and No. 3480 Civil Ruling, the Plaintiff of the Securities False Statement Liability Disputes (Retrial Application 32) The 32 people were not satisfied with the Guangdong Provincial Higher People's Court (2016) Guangdong People's Court Decision No. 407-436 and No. 1841-1852 and applied to the Supreme People's Court for a retrial. The Supreme People's Court ruled that it should be tried. As of 31 December 2018, six of the above-mentioned cases had concluded. And as of the date of the audit report, 26 caseshadn’t yet been brought to trial with the amount involved of RMB1,296,807.96.
2. As Dongguan FSL Lindun Energy-saving Technology Co., Ltd. (hereinafter referred to as “Dongguan Lindun”) defaulted on the payment of the Company, the Company filed a lawsuit with Dongguan FirstPeople’s Court on 22 March 2016 (case No.: (2016) GD1971 MCZ No. 6481), and demanded a verdict that Dongguan Lindun should pay overdue payment RMB9,559,837.55 and liquidated damages RMB955,983.76 (total: RMB10,515,821.31). Dongguan Lindun filed Civil Counterclaim with Dongguan FirstPeople’s Court on 28 April 2016 against the Company on the grounds of quality problems in the goods provided by the Company, and requested the Court to order the Company to indemnify a loss of RMB11,727,003.10 and pay liquidated damages RMB1,552,159.76 (total: RMB13,279,162.86). As of the date of the audit report, the above-mentioned case was at the reception stage andhadn’t yet been brought to trial.
3. The lawsuit with Beijing Zhengshi
As Beijing Zhongao Zhengshi Lighting Appliance Co., Ltd. and its subordinate dealers (hereinafter referred to as “Beijing Zhengshi”) defaulted on theCompany’s payment for goods, the Company filed a lawsuit with the Foshan Chancheng DistrictPeople’s Court in September 2017 (Case No.: (2017) Yue 0604 MC No. 13425), demanding an immediately settlement of the payment and overdue liquidated damages of the loan interest rate at the same period from 31 July 2017 from No. 1 defendant, Beijing Zhengshi, as well as jointly and severally liability for the above debt from No. 2 defendant Jiang Zhenghao. On 10 May 2018, inPeople’s Court of Chancheng District, Foshan City (2017) Yue 0604 MC No. 13425 Civil Ruling, Beijing Zhengshi was adjudged to pay the payment for goods of RMB14,220,827.14 and liquidated damages for the Company and Jiang Zhenghao undertook the jointly and severally liability. Beijing Zhengshi and Jiang Zhenghao were not satisfied with the judgment and applied to the Foshan IntermediatePeople’s Court on 24 May 2018 and asked for the revocation of the first instance judgment and rejection of all claims of the Company. As of the date of the audit report, the above-mentioned case was at the reception stage andhadn’t yet been brought to trial.
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant Statements
There was no significant contingency in the Company.
3. Other
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 XV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
None
2. Profit Distribution
Unit: RMB
|||
|-|-|
|Profits or dividends to be distributed|218,298,000.02|
|Profits or dividends announced to be distributed after the approval|218,298,000.02|

 3. Sales Return
None
4. Notes to Other Events after Balance Sheet Date
In accordance with the profit allocation and capitalization of capital reserves for 2018 approved by the Board of Directors on 27 March 2019, based on the total 1,399,346,154 shares as at the end of 2018, the Company intends to distribute a cash dividend of RMB1.56 (tax included and dividends for B-share holders to be paid in the Hong Kong dollars) for every 10 shares held by A-share and B-share holders., with the total distributed cash dividends reaching RMB218,298,000.02. Apart from the aforesaid cash dividend, the Company would not offer bonus issue from capital reserves and bonus issue from profit in this profit distribution.
The proposal is still to be submitted to the 2018 Annual General Meeting for review.
Apart from the aforesaid matters, the Company has no other matters after the balance sheet date of which disclosure is required.
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
None
2. Debt Restructuring
None
3. Assets Replacement
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 4. Pension Plan
None
5. Discontinued Operations
None
6. Segment Information
None
7. Other Significant Transactions and Events with Influence onInvestors’ Decision-making
None
8. Other
(I) About Equity Incentive Fund
On 16 May 2002, the resolution of The 2001 Annual General Meeting of the Company passed the proposal of establishing equity incentive system for middle and senior executives, which stipulated that the assessment target shall be annual return on net assets of6%. When the annual return on net assets reached6%, withdraw equity incentive funds by5% of the net profit, the accruing proportion of incentive funds and the increase ratio of return on net assets should increase simultaneously. The scheme was implemented from the fiscal year 2001. The accrued equity incentive fund of the Company was RMB26.18 million for the present year.
XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Notes Receivable and Accounts Receivable
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Notes receivable|104,945,398.61|67,268,192.41|
|Accounts receivable|795,897,932.65|747,430,159.61|
|Total|900,843,331.26|814,698,352.02|

 (1) Notes Receivable
1) Notes Receivable Listed by Category
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Bank acceptance bill|104,945,398.61|67,268,192.41|
|Total|104,945,398.61|67,268,192.41|

 2) Notes Receivable Pledged by the Company at the Period-end
Unit: RMB
|||
|-|-|
|Item|Amount|
|Bank acceptance bill|44,969,669.60|
|Total|44,969,669.60|

 3) Notes Receivable Endorsed by the Company or Discounted and not due on the Balance Sheet Date at the Period-end
Unit: RMB
||||
|-|-|-|
|||Non-derecognized amount at the|
|Item|Derecognized Amount at the period-end||
|||period-end|
|Bank acceptance bill|73,221,830.13||
|Total|73,221,830.13||

4) Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to Execute the Contract or Agreement
None
(2) Accounts Receivable
1) Accounts Receivable Classified by Category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||Carrying amount||Bad debt provision|||Carrying amount||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Carrying|||||Carrying|
|||Proportio|||||Proportio||Withdrawal||
||Amount||Amount||value|Amount||Amount||value|
|||n|||||n||proportion||
|Accounts receivable|||||||||||
|with significant|||||||||||
|single amount for|14,220,8||7,110,41||7,110,413|10,061,||10,061,64|||
|||1.69%||50.00%|||1.26%||100.00%||
|which bad debt|27.14||3.57||.57|641.64||1.64|||
|provision separately|||||||||||
|accrued|||||||||||
|Accounts receivable|||||||||||
||819,146,||30,359,1||788,787,5|785,497||38,067,10||747,430,15|
|withdrawn bad debt||97.22%||3.71%|||98.74%||4.85%||
||635.09||16.01||19.08|,260.78||1.17||9.61|
|provision according|||||||||||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|to credit risks|||||||||||
|characteristics|||||||||||
|Accounts receivable|9,156,396.52||||||||||
|with insignificant|||||||||||
|single amount for|||9,156,39||||||||
|||1.09%||100.00%|||||||
|which bad debt|||6.52||||||||
|provision separately|||||||||||
|accrued|||||||||||
||842,523,858.75||46,625,9|5.53%|795,897,932.65|795,558||48,128,74||747,430,159.61|
|Total||100.00%|||||100.00%||6.05%||
||||26.10|||,902.42||2.81|||

 Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end:
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Accounts receivable (by|Ending balance||||
|unit)|Accounts receivable|Bad debt provision|Withdrawal proportion|Withdrawal reason|
|||||Involved in the lawsuit;|
|||||the Company won in the|
|Customer A|14,220,827.14|7,110,413.57|50.00%|first instance judgment|
|||||and the other side had|
|||||appealed|
|Total|14,220,827.14|7,110,413.57|--|--|

Among these groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Ending balance|||
|Aging||||
||Accounts receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Within 1 year|781,423,131.44|23,442,693.92|3.00%|
|Subtotal of within 1 year|781,423,131.44|23,442,693.92|3.00%|
|1 to 2 years|15,539,369.62|1,553,936.97|10.00%|
|2 to 3 years|4,940,443.38|1,482,133.02|30.00%|
|3 to 4 years|2,405,984.34|1,202,992.17|50.00%|
|4 to 5 years|485,793.98|388,635.19|80.00%|
|Over 5 years|2,288,724.74|2,288,724.74|100.00%|
|Total|807,083,447.50|30,359,116.01|3.76%|

In the groups, accounts receivable adopted balance percentage method to withdraw bad debt provision:
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018□ Applicable√ Not applicable
In the groups, accounts receivable adopted other methods to withdraw bad debt provision:
Unit: RMB
|||||
|-|-|-|-|
|Name of the group|Ending balance|||
|Internal business group|Accounts receivable|Bad debt provision|Withdrawal reason|
||12,063,187.59||Intercourse fund amongsubsidiaries was notwithdrawn|
|Total|12,063,187.59|||

2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB8,567,357.52; the amount of the reversed or collected part during the Reporting Period was of RMB0.00.
3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
|||
|-|-|
|Item|Amount|
|No.1|9,311,484.62|
|No.2|553,475.94|
|No.3|204,814.63|
|Other driblet small amount|399.04|
|Total|10,070,174.23|

 Major write-offs of accounts receivable:
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Incurred by a|
||Nature of account|||||
|Receivable from||Amount written off|Reason for write-off|Procedure executed|related-party|
||receivable|||||
||||||transaction or not|
||||The debtor, a former|||
||||subsidiary of the|The Company has||
|Suzhou Mont||||||
||Loan|9,311,484.62|Company, has been|completed the|Yes|
|Lighting Co., Ltd.||||||
||||ruled by court to|approval procedure.||
||||bankruptcy.|||
|Total|--|9,311,484.62|--|--|--|

4) Top5 of the Ending Balance of the Accounts Receivable Collected according to Arrears Party
Unit: RMB
||||||
|-|-|-|-|-|
|Name|Relationship with|Carrying amount|Amount of bad debt|Proportion to total accounts|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||||
|-|-|-|-|-|
||the Company||provision withdrawn|receivable|
|No. 1|Non-related party|158,294,196.16|4,748,825.88|18.79%|
|No. 2|Non-related party|23,039,477.30|691,184.32|2.73%|
|No. 3|Non-related party|19,527,368.40|585,821.05|2.32%|
|No. 4|Non-related party|15,322,767.17|611,919.76|1.82%|
|No. 5|Non-related party|14,220,827.14|7,110,413.57|1.69%|
|Total||230,404,636.17|13,748,164.58|27.35%|

 5) Derecogniziton of Accounts Receivable due to the Transfer of Financial Assets
None
6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of Accounts Receivable None
2. Other Receivables
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Interest receivable|5,152,364.04|9,744,035.20|
|Other receivables|38,386,484.68|42,174,877.89|
|Total|43,538,848.72|51,918,913.09|

 (1) Interest Receivable
1) Category of Interest Receivable
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Fixed time deposit|56,317.78|1,726,993.91|
|Bank financial products|1,944,150.72|4,745,863.01|
|Structural deposit|3,151,895.54|3,271,178.28|
|Total|5,152,364.04|9,744,035.20|

 2) Significant Overdue Interest
None
(2) Dividends Receivable
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (3) Other Receivables
1) Other Receivables Disclosed by Category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Beginning balance|||||
||Carrying amount||Bad debt provisionWithdrawalAmountproportion|||Carrying amount||Bad debt provision|||
||Amount||||||||||
|Category|||||Carrying|||||Carrying|
|||Proportio|||||Proportio||Withdrawal||
||||Amount||value|Amount||Amount||value|
|||n|||||n||proportion||
|Other receivables|39,688,102.60|||3.28%|||||||
|withdrawn bad debt|||||||||||
||||1,301,61||38,386,48|44,939,||2,764,316||42,174,877.|
|provision according||100.00%|||||99.35%||6.15%||
||||7.92||4.68|194.60||.71||89|
|to credit risks|||||||||||
|characteristics|||||||||||
|Other receivables|||||||||||
|with insignificant|||||||||||
|single amount for||||||295,120||295,120.0|||
||||||||0.65%||100.00%||
|which bad debt||||||.00||0|||
|provision separately|||||||||||
|accrued|||||||||||
||39,688,102.60||1,301,61|3.28%|38,386,484.68|45,234,||3,059,436||42,174,877.89|
|Total||100.00%|||||100.00%||6.76%||
||||7.92|||314.60||.71|||

 Other receivables with significant single amount for which bad debt provision separately accrued at the end of the period:
□ Applicable√ Not applicable
Among these groups, other receivables adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Ending balance|||
|Aging||||
||Other receivables|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Within 1 year|13,555,968.52|406,679.05|3.00%|
|Subtotal of within 1 year|13,555,968.52|406,679.05|3.00%|
|1 to 2 years|2,132,981.18|213,298.12|10.00%|
|2 to 3 years|1,039,336.77|311,801.03|30.00%|
|3 to 4 years|177,279.44|88,639.72|50.00%|
|4 to 5 years|112,750.00|90,200.00|80.00%|
|Over 5 years|191,000.00|191,000.00|100.00%|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||
|-|-|-|-|
|Total|17,209,315.91|1,301,617.92|7.56%|

 Among these groups, other receivables adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
Among these groups, other receivables adopting other methods to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
|Name of the group|Ending balance|||
|Internal business group|Other receivables|Bad debt provision|Withdrawal reason|
||22,478,786.69||Intercourse fund amongsubsidiaries was notwithdrawn|
|Total|22,478,786.69|||

2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB2,391,434.14; the amount of the reversed or collected part during the Reporting Period was of RMB0.00.
3) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Unit: RMB
|||
|-|-|
|Item|Amount|
|Customer A|3,854,132.93|
|Customer B|295,120.00|
|Total|4,149,252.93|

 4) Other Receivables Classified by Nature
Unit: RMB
||||
|-|-|-|
|Nature|Ending carrying amount|Beginning carrying amount|
|Internal business group|22,478,786.69|21,987,838.89|
|VAT export tax refunds|6,252,642.96|5,712,812.04|
|Borrowings and petty cash for employees|3,294,170.26|4,142,205.92|
|Performance bond|2,905,450.00|4,377,639.20|
|Rental fees and Water & electricity fees|765,582.10|1,293,281.97|
|Advance money for street light construction||3,777,672.16|
|Other intercourse funds|3,991,470.59|3,942,864.42|
|Total|39,688,102.60|45,234,314.60|

5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion to ending||
||||||Ending balance of|
|Name of the entity|Nature|Ending balance|Aging|balance of total other||
||||||bad debt provision|
|||||receivables%||
||Internal business|||||
|No. 1||17,680,353.48|Within 2 years|44.55%||
||group|||||
|No. 2|Export rebates|6,252,642.96|Within 1 year|15.75%|187,579.29|
||Internal business|||||
|No. 3||4,560,386.02|Within 1 year|11.49%||
||group|||||
|No. 4|Social insurance|1,297,341.40|Within 1 year|3.27%|38,920.24|
|No. 5|Other|1,266,485.77|Within 3 years|3.19%|166,641.67|
|Total|--|31,057,209.63|--|78.25%|393,141.20|

 6) Accounts Receivable Involving Government Subsidies
None
7) Derecogniziton of Other Receivables due to the Transfer of Financial Assets
None
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of Other Receivables None
3. Long-term Equity Investment
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Beginning balance|||
|Item||Depreciation|||Depreciation||
||Carrying amount||Carrying value|Carrying amount||Carrying value|
|||reserve|||reserve||
|Investment to|||||||
||283,793,102.26||283,793,102.26|508,153,102.26|24,360,000.00|483,793,102.26|
|subsidiaries|||||||
|Investment to|||||||
|joint ventures and|||||||
||182,458,559.69||182,458,559.69|179,414,105.14||179,414,105.14|
|associated|||||||
|enterprises|||||||
|Total|466,251,661.95||466,251,661.95|687,567,207.40||663,207,207.40|

 (1) Investment to Subsidiaries
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|Investee|Beginning|Increase|Decrease|Ending balance|Depreciation|Ending balance of|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
|||||||
|-|-|-|-|-|-|
||balance|||reserve|depreciation|
|||||withdrawn|reserve|
|Foshan Chansheng||||||
|Electronic Ballast|2,744,500.00||2,744,500.00|||
|Co., Ltd.||||||
|FSL Chanchang||||||
|Optoelectronics|82,507,350.00||82,507,350.00|||
|Co., Ltd.||||||
|Foshan Taimei||||||
|Times Lamps and|350,000.00||350,000.00|||
|Lanterns Co., Ltd.||||||
|Nanjing Fozhao||||||
|Lighting||||||
|Components|72,000,000.00||72,000,000.00|||
|Manufacturing||||||
|Co., Ltd.||||||
|Guangdong||||||
|Fozhao New Light||||||
|Sources|50,077,000.00||50,077,000.00|||
|Technology Co.,||||||
|Ltd.||||||
|Foshan Electrical||||||
|& Lighting||||||
||35,418,439.76||35,418,439.76|||
|(Xinxiang) Co.,||||||
|Ltd.||||||
|Guangdong||||||
|Fozhao Financial|200,000,000.00|200,000,000.00||||
|Leasing Co., Ltd.||||||
|Foshan Lighting||||||
|Lamps &||||||
||15,000,000.00||15,000,000.00|||
|Components Co.,||||||
|Ltd.||||||
|FSL Zhida Electric||||||
|Technology Co.,|25,500,000.00||25,500,000.00|||
|Ltd.||||||
|Suzhou Mont||||||
||24,360,000.00|24,360,000.00||||
|Lighting Co., Ltd.||||||
|FSL Lighting||||||
||195,812.50||195,812.50|||
|GmbH||||||
|Total|508,153,102.26|224,360,000.00|283,793,102.26|||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 (2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease||||||||||
||||||||||||Ending|
|||||Gains and|Adjustme|||||||
||||||||Cash|Withdraw|||balance|
|||Additiona||losses|nt of|||||||
||Beginnin||Reduced|||Changes|bonus or|al of||Ending|of|
|Investee||||||||||||
|||l||recognize|other|||||||
||g balance||investmen|||of other|profits|impairme|Other|balance|depreciati|
|||investmen||d under|comprehe|||||||
||||t|||equity|announce|nt|||on|
|||t||the equity|nsive|||||||
||||||||d to issue|provision|||reserve|
|||||method|income|||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||
|Shenzhen||||||||||||
|Primatron||||||||||||
|ix|179,414,1|||6,165,040|||3,120,585|||182,458,5||
|(Nanho)|05.14|||.30|||.75|||59.69||
|Electronic||||||||||||
|s Ltd.||||||||||||
||179,414,1|||6,165,040|||3,120,585|||182,458,5||
|Subtotal||||||||||||
||05.14|||.30|||.75|||59.69||
||179,414,105.14|||6,165,040|||3,120,585|||182,458,559.69||
|Total||||||||||||
|||||.30|||.75|||||

(3)Other Notes
None
4. Operating Revenue and Cost of Sales
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Operating revenue|Cost of sales|Operating revenue|Cost of sales|
|Main business|3,606,985,537.23|2,858,585,674.76|3,618,724,668.08|2,906,238,292.02|
|Other business|95,835,761.53|79,065,112.75|89,782,996.77|63,588,110.96|
|Total|3,702,821,298.76|2,937,650,787.51|3,708,507,664.85|2,969,826,402.98|

 5. Investment Income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Long-term equity investment income|||
||6,165,040.30|2,222,185.57|
|accounted by equity method|||
|Investment income from disposal of|||
||31,946,218.59|184,379,575.52|
|long-term equity investment|||
|Investment income from holding of|||
||18,873,927.57|30,320,839.59|
|available-for-sale financial assets|||
|Investment income from disposal of|||
|||270,998,081.52|
|available for sale financial assets|||
|Investment income from financial products|||
||25,626,926.83|27,533,546.07|
|and structural deposits|||
|Other|-808,400.00|-621,450.98|
|Total|81,803,713.29|514,832,777.29|

 6. Other
None
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses on the disposal of non-current assets|-1,671,154.30||
|Government grants recognized in the current|||
|period, except for those acquired in the ordinary|||
|course of business or granted at certain quotas or|30,005,231.23||
|amounts according to the government’s unified|||
|standards|||
|Gain/loss from change of fair value of trading|||
|assets and liabilities, and investment gains from|||
|disposal of trading financial assets and liabilities|||
||-477,200.00||
|and available-for-sale financial assets, other than|||
|valid hedging related to the Company’s common|||
|businesses|||
|Other non-operating income and expenses other|||
||-594,356.14||
|than the above|||
|Less: Income tax effects|4,222,066.76||

Foshan Electrical and Lighting Co., Ltd. Annual Report 2018
||||
|-|-|-|
|Non-controlling interests effects|-61,093.92||
|Total|23,101,547.95|--|

Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-recurring Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item□ Applicable√ Not applicable
2. Return on Equity and Earnings Per Share
|||||
|-|-|-|-|
|||EPS (Yuan/share)||
|Profit as of Reporting Period|Weighted average ROE (%)|||
|||EPS-basic|EPS-diluted|
|Net profit attributable to ordinary||0.2699|0.2699|
||8.36%|||
|shareholders of the Company||||
|Net profit attributable to ordinary||||
|shareholders of the Company after||||
||7.85%|0.2533|0.2533|
|deduction of non-recurring profit or||||
|loss||||

3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International and Chinese Accounting Standards
□ Applicable√ Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and Chinese Accounting Standards
□ Applicable√ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas Accounting Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the Foreign Auditing Agent, Such Foreign AuditingAgent’s Name Shall Be Clearly Stated
None
4. Other
None
Foshan Electrical and Lighting Co., Ltd. Annual Report 2018 Part XII Documents Available for Reference
Investors and interested parties can get access to the following materials in the BoardSecretary’s Office in theCompany’s office building:
1. The financial statements signed and sealed by theCompany’s legal representative, General Manager and Chief Financial Officer;
2. The original copy of the IndependentAuditor’s Report signed and sealed by the certified public accountants and stamped by the CPA firm.
3. All the originals of theCompany’s announcements and documents that were disclosed to the public during the Reporting Period on the media designated by the CSRC for information disclosure.
The Board of Directors
Foshan Electrical and Lighting Co., Ltd. 27 March 2019