FOSHANELECTRICALANDLIGHTINGCO.,LTD. INTERIMREPORT2018 August2018 PartIImportantNotes,TableofContentsandDefinitions TheBoardofDirectors(orthe“Board”),theSupervisoryCommitteeaswellasthedirectors,supervisorsandseniormanagementofFoshanElectricalandLightingCo.,Ltd.(hereinafterreferredtoasthe“Company”)herebyguaranteethefactuality,accuracyandcompletenessofthecontentsofthisReportanditssummary,andshallbejointlyandseverallyliableforanymisrepresentations,misleadingstatementsormaterialomissionstherein. HeYong,theCompany’slegalrepresentative,LiuXingming,theCompany’sGeneralManager,andTangQionglan,theCompany’sChiefFinancialOfficer(CFO)herebyguaranteethattheFinancialStatementscarriedinthisReportarefactual,accurateandcomplete. AlltheCompany’sdirectorshaveattendedtheBoardmeetingforthereviewofthisReportanditssummary. Anyplansforthefutureandotherforward-lookingstatementsmentionedinthisReportanditssummaryshallNOTbeconsideredasabsolutepromisesoftheCompanytoinvestors.Therefore,investorsareremindedtoexercisecautionwhenmakinginvestmentdecisions. TheCompanyhasdescribedinthisReporttherisksoffiercermarketcompetition,risinglaborcosts,rawmaterialpricefluctuations,inventoryvaluationloss,exchangeratefluctuationsanddoubtfulreceivableaccounts.Pleasereferto“XRisksFacingtheCompanyandCountermeasures”under“PartIVOperatingPerformanceDiscussionandAnalysis”ofthisReport. ThisReporthavebeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionsshallprevail. TheCompanyhasnointerimdividendplan,eitherintheformofcashorstock. TableofContents InterimReport2018.......................................................................................................................... 1 PartIImportantNotes,TableofContentsandDefinitions........................................................... 2 PartIICorporateInformationandKeyFinancialInformation................................................... 5 PartIIIBusinessSummary............................................................................................................... 8 PartIVOperatingPerformanceDiscussionandAnalysis........................................................... 12 PartVSignificantEvents................................................................................................................ 29 PartVIShareChangesandShareholderInformation................................................................ 39 PartVIIPreferredShares............................................................................................................... 45 PartVIIIDirectors,SupervisorsandSeniorManagement......................................................... 46 PartIXCorporateBonds................................................................................................................ 48 PartXFinancialStatements........................................................................................................... 49 PartXIDocumentsAvailableforReference............................................................................... 164 Definitions Term Definition FoshanElectricalandLightingCo.,Ltd.anditsconsolidatedsubsidiaries, The“Company”,“FSL”or“we” exceptwherethecontextotherwiserequires CSRC TheChinaSecuritiesRegulatoryCommission SZSE TheShenzhenStockExchange Generalmeeting GeneralmeetingofFoshanElectricalandLightingCo.,Ltd. BoardofDirectors TheboardofdirectorsofFoshanElectricalandLightingCo.,Ltd. TheSupervisoryCommittee ThesupervisorycommitteeofFoshanElectricalandLightingCo.,Ltd. ExpressedintheChinesecurrencyofRenminbi,expressedintenthousand RMB,RMB’0,000 Renminbi The“ReportingPeriod”or“CurrentPeriod” Theperiodfrom1January2018to30June2018 PartIICorporateInformationandKeyFinancialInformation ICorporateInformation Stockname FSL,FSL-B Stockcode 000541,200541 Stock exchange for stock ShenzhenStockExchange listing CompanynameinChinese 佛山电器照明股份有限公司 Abbr.(ifany) 佛山照明 CompanynameinEnglish(if FOSHANELECTRICALANDLIGHTINGCO.,LTD. any) Abbr.(ifany) FSL Legalrepresentative HeYong IIContactInformation BoardSecretary SecuritiesRepresentative Name LinYihui HuangYufen No.64,FenjiangNorthRoad,ChanchengNo.64,FenjiangNorthRoad,Chancheng Address District, Foshan City, GuangdongDistrict, Foshan City, Guangdong Province,P.R.China Province,P.R.China Tel. 0757-82810239 0757-82966028 Fax 0757-82816276 0757-82816276 Emailaddress fsl-yh@126.com fslhyf@163.com IIIOtherInformation 1.ContactInformationoftheCompany Indicatebytickmarkwhetheranychangeoccurredtotheregisteredaddress,officeaddressandtheirzipcodes,websiteaddressandemailaddressoftheCompanyintheReportingPeriod. □Applicable√Notapplicable NochangeoccurredtothesaidinformationintheReportingPeriod,whichcanbefoundinthe2017AnnualReport. 2.MediaforInformationDisclosureandPlacewherethisReportisKept IndicatebytickmarkwhetheranychangeoccurredtotheinformationdisclosuremediaandtheplaceforkeepingtheCompany’speriodicreportsintheReportingPeriod. □Applicable√Notapplicable ThenewspapersdesignatedbytheCompanyforinformationdisclosure,thewebsitedesignatedbytheCSRCfordisclosingtheCompany’speriodicreportsandtheplaceforkeepingsuchreportsdidnotchangeintheReportingPeriod.Thesaidinformationcanbefoundinthe2017AnnualReport. IVKeyFinancialInformation Indicatebytickmarkwhetherthereisanyretrospectivelyrestateddatuminthetablebelow. □Yes√No H12018 H12017 Change(%) Operatingrevenue(RMB) 2,064,779,289.99 2,023,925,582.84 2.02% Net profit attributable to the listed 229,277,455.82 228,494,660.57 0.34% company’sshareholders(RMB) Net profit attributable to the listed company’sshareholdersbeforeexceptional 228,028,236.71 227,184,233.70 0.37% items(RMB) Netcashgeneratedfrom/usedinoperating 144,723,778.38 -31,063,187.22 565.90% activities(RMB) Basicearningspershare(RMB/share) 0.1638 0.1633 0.31% Dilutedearningspershare(RMB/share) 0.1638 0.1633 0.31% Weightedaveragereturnonequity(%) 5.32% 4.99% 0.33% 30June2018 31December2017 Change(%) Totalassets(RMB) 5,238,861,184.94 5,675,811,824.29 -7.70% Equityattributabletothelistedcompany’s 4,266,885,850.25 4,779,115,459.39 -10.72% shareholders(RMB) VAccountingDataDifferencesunderChina’sAccountingStandardsforBusinessEnterprises(CAS)andInternationalFinancialReportingStandards(IFRS)andForeignAccountingStandards 1.NetProfitandEquityDifferencesunderCASandIFRS □Applicable√Notapplicable NosuchdifferencesfortheReportingPeriod. 2.NetProfitandEquityDifferencesunderCASandForeignAccountingStandards □Applicable√Notapplicable NosuchdifferencesfortheReportingPeriod. XIExceptionalGainsandLosses √Applicable□Notapplicable Unit:RMB Item ReportingPeriod Note Gainorlossondisposalofnon-currentassets(inclusiveof -70,182.97 impairmentallowancewrite-offs) Governmentsubsidieschargedtocurrentprofitorloss(exclusive ofgovernmentsubsidiesgivenintheCompany’sordinarycourse ofbusinessatfixedquotasoramountsaspergovernment’s 914,699.96 uniformstandards) Non-operatingincomeandexpenseotherthanabove 633,590.02 Less:Incometaxeffects 228,691.99 Non-controllinginterestseffects(netoftax) 195.91 Total 1,249,219.11 -- ExplanationofwhytheCompanyreclassifiesasrecurrentanexceptionalgain/lossitemdefinedorlistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic―ExceptionalGain/LossItems: □Applicable√Notapplicable NosuchcasesfortheReportingPeriod. PartIIIBusinessSummary ICoreBusinessScopeoftheCompanyinReportingPeriod IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries? No. 1.TheCompany’sCoreBusinessScopeorProducts Wedesign,manufactureandmarkethigh-quality,greenandenergy-efficientlightingproductsandelectricalproducts,aswellasprovidecomprehensivelightingandelectricalsolutions.OurproductsmainlyincludeelectricalproductssuchasLEDlightsourcesandluminaries,traditionallightsourcesandswitches,whicharewidelyusedforindoorandoutdoorlighting,landscapelighting,motorvehiclelightingandbuildings’electricalswitchsystems,amongothers.Currently,wehavethreemajoroperatingdivisions,namely,lighting,electricalproductsandvehiclelighting.Uponyearsofdevelopment,wehavewonquitemanyhonorssuchasthetitleof“TheKingofLampsinChina”,andour“FSL”and“Fenjiang”brandshavebeencertifiedas“FamousChinaBrands”. 2.Mainbusinessmodels (1)Procurementmodel Wemainlyprocurerawmaterialssuchaslampbeads,lampholders,electroniccomponents,aluminumsubstrate,plasticparts,metalmaterials,quartztubesandfuelbywayofbidsinvitation.Abidsinvitationsupervisorycommitteeconsistingofpersonnelfromseveraldepartmentswillbesetupinthefuture.Foreverykindofourmainrawmaterials,weusuallyhaveafewsupplierstochoosefrominprocurementsothattheprocurementpriceswouldbefair,thesupplyofrawmaterialsintimeandthegoodqualityoftherawmaterialsensured. (2)Productionmodels ①Productionoftheconventionalproducts Concerningtheconventionalproducts,weanalyzesalesofeverymonthandpredictfuturemarketdemandsoastoformulateaproductionplanforthecomingmonth.Andourworkshopsproduceaccordingtotheplantoavoidextrastockandatthesametimeensurethatthereisenoughforsale. ②Productionaccordingtoorders Differentfromtheconventionallightingproductswhichareoflittlevariationinspecifications,LEDlightingproductsareatafastpaceofrenewalanddifferentcustomersoftenhavedifferentrequirementsregardingthe products’appearancesandperformanceindexes.Therefore,wehavetoorganizeindividualizedproductionforsomeordersforLEDlightingproducts,exportordersinparticular.Forthiskindoforders,weformulateourproductionplansbasedonthemandthenmakeprocurementplansaccordingtotheproductionplans,whichwillhelpeffectivelycontrolthestockandtheprocurementpricesofrawmaterials,reducecapitaloccupationandimproveouroperatingefficiencytothemaximum. ③Combinationofindependentproductionandoutsourcing Withahighproductioncapacity,weproducemostofourproductsandpartsonourown.Onlyasmallportionofpartsandlow-techproductsisoutsourcedtosub-manufacturers,whowillproduceinstrictaccordancewithourrequirements.Wewillalsotagalongtheirproductionprocessesandexaminecarefullythequalityoftheproductsfinished.Inthisway,oursupplyofproductsisguaranteed. (3)Salesmodel Domestically,wemainlyadoptacommercialagentmodel,sellingourproductstocommercialagentsthroughvariouschannelsandsettingupbusinessdivisionsunderthesalesdepartmenttofollowuptheuseofourproductsbycustomersandproviderelevantsupport.Intermsofchannels,besidesconsolidatingwholesale,wewillalsofocusonthedevelopmentoffranchisedstores,illuminationengineering&commerciallighting,e-commerce&retailsalesandautomotivelightingforabiggermarketshare. Foroverseasmarkets,weprimarilyadoptOEM/ODMmodelsandalsosellunderourownbrands(throughagents). 3.Maindrivingforcesforgrowth (1)Rapiddevelopmentoftheindustry Astheemergingindustryinvolvedinthecountry’sstrategies,LEDindustryrapidlydevelopedintheworldinrecentyearsduetoitsfeaturesofhighefficiencyandenergy-saving,greenenvironmentalprotection,aswellaslongservicelife.ThankstotherapiddevelopmentoftheLEDindustry,theCompanyachievedgoodbusinessperformance. (2)TheCompany’sownadvantages ByrightoftheCompany’sadvantagesintechnology,brand,channel,andscale,theCompanyfirmlygraspedtheopportunitiesbroughtbytheindustry’srapiddevelopment,consistentlypushedforwardthetechnologyupgradeofmainproducts,reinforcedmarketdevelopment,andoptimizedthesalesstructureofproductsthroughsustainableR&Dinputandtechnologyinnovation.Andatthesametime,bymeansofeffectivecontrolonprocurementandmanufacturingcost,theCompanyraisedtheefficiencyofmanagementandproducts,improveditscomprehensive competitiveness,overcamethedifficultiesandchallengesresultedfromtheseriousmarketsituation,andkeptthesustainablegrowthofitsoperatingrevenueandprofit. IIMaterialChangesinMajorAssets 1.MaterialChangesinMajorAssets Majorassets Mainreasonformaterialchanges Equityassets NomaterialchangeduringtheReportingPeriod Fixedassets NomaterialchangeduringtheReportingPeriod Intangibleassets NomaterialchangeduringtheReportingPeriod Constructioninprogress NomaterialchangeduringtheReportingPeriod TheendingamountwasdownbyRMB379.9681million,or27.32%,fromthebeginning Available-for-salefinancialassets amount,primarilydrivenbyfairvaluedecreasesintheCurrentPeriod 2.MajorAssetsOverseas □Applicable√Notapplicable IIICoreCompetitivenessAnalysis IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries? No. ThecorecompetitivenessoftheCompanymainlyreflectsonfoursaspectslistedbelow: Channeladvantage TheCompanyhasbeenstickingtothemarketingstrategyofdeeplyfocusingandrefiningchannels.Throughyearsofdevelopmentandexperienceaccumulation,theCompanycurrentlyhasfourmajorsaleschannelsforthedomesticmarket,whichcontainsthecirculationandwholesaleschannel,theexclusiveshopchannel,theE-businessretailchannel,andtheengineeringcommerciallightingchannel,formingamarketingnetworkcoveringthewholecountry.AndtheCompanyprimarilyservesasanOEMpartnerforinternationallyfamouslightingcompaniesandoverseassupermarkets,andsellsitsownFSL-brandedproductsontheoverseasmarket.Replyingonstrongandperfectsaleschannels,productsoftheCompanycanrapidlyenterthemarket,whichhassignificantlyimprovedtheCompany’smarketdevelopmentcapabilityandcompetitiveness. Brandadvantage TheCompanykeepsfocusingonthepositioning,corevalue,andfeaturesofFSLbrand,andcontinuallyimprovedthebrandrecognitionandreputationofFSLbrandbyproductdesign,endsales,advertisement,speciallightingexhibition,andsoon.Atpresent,FSLandFenJiangamongthethreebrandsoftheCompanyarebothfamoustrademarksinChina.TheFSLbrandhasbecomeoneofthemostinfluentialandpopularbrandsinChina,andthepowerfulbrandinfluencehasbecomethemaindriverforcontinuoussalesgrowthoftheCompany. Technologyadvantage TheCompanyhasalwaysbeenattachingimportancetoR&Dofnewproductsandtechnologies,increasingtheinputonindependentinnovationontechnologiesandproducts,andperfectingtheimprovementprocessforR&Dandtechniqueofallproducts.TheCompanyabsorbsandtrainstechnicaltalents,setupinnovativeincentivemechanismandperformancemechanism,andfullyprovideswithsupportsinfund,talents,andmechanisms. Scaleadvantage TheCompanyisoneofthefirstenterprisestostepintotheindustryofproducingandsellinglightingproducts,withproductionbasesinFoshan,NanjingandXinxiang.TheCompanypossessesthemanufacturecultureofrefiningproductionandthelarge-scalemanufacturingcapabilitybyyearsofexperienceaccumulation.Particularlyintherecentyears,theCompanyhasgreatlyincreasedmanufacturingefficiencyandreducedcoststhroughahigherlevelofautomaticproductionandITapplication.Thelarge-scaleandcentralizedproductionbringsobviouseconomicbenefitstotheCompany,whichnotonlyshowsinmanufacturecostofproducts,butalsoshowsinaspectssuchasrawmaterialprocurementandproductpricing. PartIVOperatingPerformanceDiscussionandAnalysis IOverview Thefirsthalfof2018sawchangesinChina’seconomywithmountingpressureonforeigntrade.Domestically,inspiteofasteadyeconomy,growthininvestmentandconsumptiondemandregisterednewlowsamiddeleveraging.Internationally,exportgrowthwasundergreaterpressurecausedbythetighteningmonetarypoliciesofdevelopedeconomies,decreasingliquidityacrosstheglobeandrisingtradefrictions.Infaceoftheseeconomicchangesandthefiercecompetitionindustrywide,theCompany’smanagementcontinuedtofocusonthestrategicobjectivesof“Cutting-EdgeTechnologies,Internationally-FamousBrandsandLarge-ScaleProduction”theBoardhadputforward,strengtheninginnovation,optimizingtheproductmixandimprovingmanufacturingandmanagement.Asaresult,theCompanydeliveredagoodoperatingperformancefortheReportingPeriod.Forthisperiod,theCompanyrecordedoperatingrevenueofRMB2.065billion,up2.02%comparedtothesameperiodoflastyear,andnetprofitattributabletothelistedcompany’sshareholdersofRMB0.229billion,representingayear-on-yeargrowthof 0.34%. TheworkthattheCompanyhasdoneinthefirsthalfof2018issummarizedasfollows: 1.Strengtheningmarketexpansionforbettercompetitiveness (1)Domestically,theCompanyhasmadenewchangestoitsdistributionchannelsforbettercompetitiveness. Inlightofchangesintheindustry,theCompanyhasreformeditsdistributionchannels,helpingdistributorsshiftfrompassivitytoinitiative,adoptingflatmanagementondistributionchannels,andstrengtheningcontroloverchannelterminals.Additionally,theCompanyhasadjustedandintegrateditsdistributionchannels,andhasmadecleartheprioritiesforallthesechannels,soastoincreasecompetitivenessinthisrespect. (2)Asforexport,theCompanycontinuedtomaintaingoodandstablecooperationwithvaluedcustomers.OrderskeptincreasingastheCompanyfurtherextendeditsproductrange,offeredproductswithhighaddedvalueandenhancedcustomerservice.Inaddition,continuouseffortwasspentonattractingnewcustomerstodrivefuturegrowth. 2.Enhancinginnovationandimprovingmanufacturing TheCompanyhasenhancedinnovationintheReportingPeriod.Agreaterfocuswasgivenonsmartlighting,healthylightingandsmartelectricalproducts.Italsofocusedonproducttransitionsandthedevelopmentofnewproducts,particularlyhigh-endproducts.Todoso,itbroughtinhigh-endR&Dtalentandreformedthe performanceappraisalsystemforR&Dpersonnelsoastofurtherstimulatetheircreativity. Toreducemarginalcostsinprocurement,manufacturing,equipment,etc.,modularization,standardizationandgeneralizationwerepromotedinproductdesign.Meanwhile,theCompanycontinuedtoautomateitsproductionlinesinadeeperandfastermanner.Itwastryingtoimprovemanufacturingthroughleanmanagementandautomation. 3.Optimizingtheproductmixwithsmartlightingproductsbeinglaunchedtothemarketoneafteranother DuringtheReportingPeriod,theCompanyreinforcedthedevelopmentofsmartlightingproductsandsuccessfullydeveloped129specifications.AnditalsoshoweditsstrengthinsmartlightingandelectricalproductstothemarketatlargeinternationalanddomesticlightingexhibitionsandsmartshowroomsincludingtheLight+BuildingexhibitionatFrankfurt,GermanyandtheGuangzhouInternationalLightingExhibition.TheCompany’ssmartlightingproductshavestartedtogeneratesalesrevenueintheReportingPeriod,andtheCompanywillstrengthenthemarketingoftheseproductsinthesecondhalfoftheyear. Inadditiontoagreaterinvestmentinsmartproducts,theCompanyalsocontinuedtopromotetheshiftofitsproductsfromlightsourcestoluminariesthroughenrichingtheluminaryportfoliowithahigherproportionofmedium-andhigh-endluminaries. 4.Reinforcingcontrolovercostsandexpensesformoreeconomicbenefits TheCompanygotdowntodetailsinproductionmanagementandenhancedcontroloverprocessindexes.Itkeptmaterialconsumptionandproductqualityindexeswellundercontrolwithadouble-appraisalsystem.Italsoenhancedcontrolovercostsandexpenses,seekingbettereconomicbenefits.Additionally,productcostestimatesandproductionanalysesweremadeonamonthlybasisandproductionsummariesweregiveninatimelymannertopreventrisks. IIAnalysisofCoreBusinesses Year-on-yearchangesinkeyfinancialdata: Unit:RMB H12017/Opening H12018 Change(%) Mainreasonforchange balance Operatingrevenue 2,064,779,289.99 2,023,925,582.84 2.02% Costofsales 1,579,291,867.89 1,546,931,779.85 2.09% Sellingexpense 103,917,010.47 81,651,993.69 27.27% Administrativeexpense 104,474,031.52 98,790,821.60 5.75% Financecosts -13,085,476.61 -7,115,907.36 -83.89%Ariseinexchangeincome asaresultofthe depreciationoftheChinese yuanagainsttheU.S.dollar Incometaxexpense 47,044,145.70 42,597,501.35 10.44% Agreaterinvestmentin R&Dexpense 95,631,724.63 57,719,395.64 65.68% R&D Net cash generated Adeclineincashusedin from/usedinoperating 144,723,778.38 -31,063,187.22 565.90% operatingactivities activities Net cash generated Alowerinvestmentin from/usedininvesting 600,534,333.44 -112,026,375.71 636.07%banks’wealthmanagement activities products Net cash generated from/usedinfinancing -405,163,764.00 -522,068,416.83 22.39% activities Increasesinnetcash Netincreaseincashand 341,479,690.92 -664,245,623.25 151.41%generatedfromoperating cashequivalents andinvestingactivities Adeclineininventory Assetimpairmentloss 16,006,869.83 24,059,719.35 -33.47% valuationallowances Ahigherincomefrom Investmentincome 24,509,870.36 14,009,282.02 74.95%banks’wealthmanagement products Adeclineingovernment Otherincome 1,018,385.17 3,302,994.36 -69.17%subsidiesthataroseinthe ordinarycourseofbusiness Adeclineinincomethat Non-operatingincome 1,669,856.43 2,719,401.52 -38.59%aroseoutsidetheordinary courseofbusiness Adeclineinnon-current Non-operatingexpense 191,749.42 4,758,983.01 -95.97% assetdisposalloss Adeclineinthefairvalueof Othercomprehensive -322,975,351.39 23,025,471.14 -1,502.69%available-for-salefinancial income,netoftax assets Adeclineinthefairvalueof Totalcomprehensive -90,800,665.90 254,910,447.38 -135.62%available-for-salefinancial income assets Disinvestmentofsome Monetaryassets 914,968,599.68 570,184,208.96 60.47%banks’wealthmanagement products Accountsreceivable 994,690,386.07 756,291,432.56 31.52%Astrongriseinexportsales withlongerdaysofsales outstanding Adeclineintheprincipal Interestreceivable 1,589,090.91 12,428,451.86 -87.21% amount Ariseinreceivableexport Otherreceivables 37,100,965.10 21,215,215.15 74.88% VATrebates Decreasesinunduebanks’ wealthmanagement Othercurrentassets 348,511,668.85 1,006,062,102.56 -65.36% productsandstructured deposits Mainlyduetotheincrease Notespayable 2,652,485.00 0.00 N/Ainthesettlementofpayment bybankacceptancebills Ahighercorporateincome Taxespayable 46,542,385.81 27,350,670.40 70.17%taxasaresultofhigher profits Adeclineinthefairvalueof Deferredincometax 69,465,031.60 126,460,250.96 -45.07%available-for-salefinancial liabilities assets Totalnon-current A decline in deferred 81,245,862.13 138,318,581.45 -41.26% liabilities incometaxliabilities Thepayoutofstock Capitalreserves 158,608,173.07 285,821,459.07 -44.51%dividendsfromcapital reserves Adeclineinthefairvalueof Othercomprehensive 393,631,982.39 716,607,333.78 -45.07%available-for-salefinancial income assets MaterialchangestotheprofitstructureorsourcesoftheCompanyintheReportingPeriod: □Applicable√Notapplicable NosuchchangesintheReportingPeriod. Breakdownofcorebusinesses: Unit:RMB YoYchangein YoYchangein Operating Grossprofit YoYchangein Costofsales operatingrevenue grossprofit revenue margin costofsales(%) (%) margin(%) Byoperatingdivision Lightingproducts2,048,839,316.621,568,876,663.19 23.43% 1.91% 2.05% -0.10% andluminaries Byproductcategory Traditional 499,418,090.27 366,184,296.06 26.68% -8.44% -10.06% 1.33% lightingproducts LEDlighting 1,492,862,750.591,165,722,527.98 21.91% 6.76% 7.61% -0.62% products Electrical 56,558,475.76 36,969,839.15 34.63% -15.25% -21.23% 4.96% products Byoperatingsegment Domestic 1,207,645,957.52 855,005,195.87 29.20% -3.25% -6.96% 2.83% Overseas 841,193,359.10 713,871,467.32 15.14% 10.34% 15.44% -3.74% IIIAnalysisofNon-CoreBusinesses √Applicable□Notapplicable Unit:RMB Amount As%oftotalprofit Source/Reason Exceptionalorrecurrent Gains on banks’ wealth Investmentincome 24,509,870.36 8.78%managementproductsandExceptional bonusesfrominvestees Allowancesfordoubtful Assetimpairments 16,006,869.83 5.73%accountsandinventory Exceptional valuationallowances Governmentsubsidiesand Non-operating other income that arose 1,669,856.43 0.60% Exceptional income outsidetheordinarycourse ofbusiness Non-operating Non-currentassetdisposal 191,749.42 0.07% Exceptional expense loss IVAnalysisofAssetsandLiabilities 1.MaterialChangesinAssetComposition Unit:RMB 30June2018 30June2017 Changein As%oftotal As%of percentage Reasonformaterialchange Amount Amount (%) assets totalassets Monetaryassets 914,968,599.68 17.47%815,038,019.29 14.12% 3.35% Astrongriseinexportsales Accounts 994,690,386.07 18.99%862,433,866.95 14.94% 4.05%withlongerdaysofsales receivable outstanding Inventories 718,166,451.66 13.71%733,151,791.00 12.70% 1.01% Long-termequity 176,473,300.95 3.37%209,858,507.98 3.64% -0.27% investments Fixedassets 511,806,666.21 9.77%436,897,311.33 7.57% 2.20% Construction in 189,368,112.34 3.61%147,360,531.44 2.55% 1.06% progress Mainlyduetothesaleofsome GuoxuanHi-Techstocksinthe thirdquarteroftheprevious Available-for-sale 1,758,739,646.3 1,010,613,407.54 19.29% 30.46% -11.17%periodandthedecreaseinthe financialassets 6 fairvalueofavailable-for-sale financialassetsinthecurrent period. 2.AssetsandLiabilitiesatFairValue √Applicable□Notapplicable Unit:RMB Gain/losson Cumulative Impairment fair-value Purchasedin Soldin Beginning fair-value allowancefor Item changesin Reporting Reporting Endingamount amount changescharged Reporting Reporting Period Period toequity Period Period Financialassets 3. Available-for-s 1,086,953,227.20 -379,968,129.06 706,985,098.14 ale financial assets Subtotal of 1,086,953,227.20 -379,968,129.06 706,985,098.14 financialassets Totalofabove 1,086,953,227.20 -379,968,129.06 706,985,098.14 Financial 0.00 0.00 liabilities MaterialchangesinthemeasurementattributesofthemajorassetsintheReportingPeriod: □Yes√No 3.RestrictedAssetRightsasatPeriod-End Unit:RMB Item Endingcarryingamount Reasonforrestriction Monetaryassets 3,304,699.80 Security depositsfor forwardforex settlementandsaleandquotas Notesreceivable 3,500,000.00 InpledgefortheFSLnotepool Total 6,804,699.80 VInvestmentsMade 1.TotalInvestmentAmount √Applicable□Notapplicable TotalinvestmentamountofReporting Totalinvestmentamountofsameperiodof Change(%) Period(RMB) lastyear(RMB) 0.00 0.00 0.00% 2.SignificantEquityInvestmentsMadeinReportingPeriod □Applicable√Notapplicable 3.SignificantNon-EquityInvestmentsOngoinginReportingPeriod □Applicable√Notapplicable 4.FinancialInvestments (1)SecuritiesInvestments √Applicable□Notapplicable Unit:RMB Gain/LoAccumu sson lated Initial Beginnifair-valufair-valuPurchasSoldinGain/los SecuritySecuritySecurity Measure ng e e edin Reporti sin EndingAccountFunding investm ment carryingchangeschangesReporti ng Reporticarrying type code name methodamount in charged ng Period ng amountingtitlesource entcost Reporti Period Period ng to Period equity Domesti Fair 1,011,8 -372,73 AvailablThe Guoxuan160,000 639,103 cally/Ov002074 value 38,873. 4,895.0 e-for-salCompan High-tech,000.00 ,978.50 erseas method 50 0 e y’sown listed financiamoney stock lassets Domesti Availabl The cally/Ov China Fair e-for-sal 30,828, 75,114, -7,233,2 67,881, Compan erseas 601818Everbrigh value e 816.00 353.70 34.06 119.64 y’sown listed tBank method financia money stock lassets Domesti Availabl The cally/Ov e-for-sal Xiamen 292,574Cost 292,574 10,971,292,574 Compan erseas N/A e Bank ,133.00method ,133.00 417.60,133.00 y’sown listed financia money stock lassets Foshan Domesti branchof Availabl The cally/Ov Guangdo e-for-sal 500,000Cost 500,000 500,000 Compan erseas N/A ng e .00method .00 .00 y’sown listed Develop financia money stock ment lassets Bank 1,380,0 -379,96 1,000,0 483,902 10,971, Total -- 27,360. 0.008,129.0 0.00 0.00 59,231. ,949.00 417.60 20 6 14 Disclosure date of announcementonBoard’s consent for securities investments Disclosure date of announcement on general meeting’s consent for securities investments (if any) (2)InvestmentsinDerivativeFinancialInstruments √Applicable□Notapplicable Ending Relation Purchas Impairm investmActual Connect Initial Beginni Soldin ship Typeof edin ent Endingentas%gain/loss Operati ed investm Start End ng Reporti withthe derivativ Reporti allowaninvestm ofthe in ngparty transacti ent date date investm ng Compan e ng ce(if ent CompanReportin on amount ent Period y Period any) y’s gPeriod ending net assets Forward Foshan Not forex 30 branch US$1229May US$12 US$10 connectNot settleme Novemb 1.54% ofBank million2018 million million ed nt er2018 ofChina portfolio Foshan branch of Forward IndustriNot forex 21 US$1219June US$12 US$12 aland connectNot settleme Decemb 1.85% million2018 million million Commeed nt er2018 rcial portfolio Bankof China US$24 US$24 US$22 Total -- -- 0 0 0 3.39% 0 million million million Fundingsource AllfromtheCompany’sownmoney Legalmattersinvolved(ifapplicable)N/A Disclosure date of board announcementapprovingderivative23May2018 investment(ifany) Disclosuredateofgeneralmeeting announcementapprovingderivative investment(ifany) RiskAnalysisofForwardExchangeSettlementBusiness:1.Riskofexchangerate fluctuations.Inthecaseoflargefluctuationsintheexchangerate,thequotedpriceofthe bank’sforwardexchangeratemaybelowerthantheCompany’squotedexchangeratetothe customer,whichwillmaketheCompanyunabletolockthequotedexchangeratetothe customerorthebank’sforwardexchangeratemaydeviatefromtheexchangerateatthetime Analysis of risks and control oftheCompany’sactualreceiptandpayment,andcausesexchangelosses.2.Riskof measuresassociatedwithderivative customerdefault.Thecustomer’saccountsreceivablemaybeoverdue,andthepaymentfor investmentsheldinReportingPeriod goodscannotberecoveredwithinthepredictablepaybackperiod,whichwillresultintheloss (includingbutnotlimitedtomarket oftheCompanyduetothedelayedforwardsettlement.3.Riskofpaybackprediction.The risk, liquidity risk, credit risk, marketingdepartmentshallmadecorrespondingpaybackpredictionbasedoncustomerorders operationalrisk,legalrisk,etc.) andexpectedorders.However,duringtheactualimplementationprocess,customersmay adjusttheirordersandpredictions,whichwillresultintheCompany’sincorrectpayback predictionandcausetheriskofdelayeddeliveryofforwardexchangesettlement. AdoptedRiskControlMeasures:1.TheCompanywillstrengthentheresearchandanalysisof theexchangerate.Whentheexchangeratefluctuatesgreatly,itwilladjustthebusiness strategyinatimelymannertostabilizetheexportbusinessandavoidexchangelossestothe utmost.2.TheManagementSystemforForwardSettlementandSalesofForeignExchanges reviewedandapprovedbytheboardofdirectorsoftheCompanystipulatesthatallforward foreignexchangesettlementbusinessesoftheCompanyshallbebasedonthenormal productionandoperation,andreliedonspecificbusinessoperationstoavoidandprevent variousexchangeraterisks.However,speculativetransactionandinterestarbitragearenot allowed.Atthesametime,thesystemclearlydefinestheoperatingprinciples,approval authority,responsibledepartmentandresponsibleperson,internaloperationprocedures, informationisolationmeasures,internalriskreportingsystem,riskmanagementprocedures, andinformationdisclosurerelatedtotheforwardsettlementbusinessaswell.Infact,the systemisconducivetostrengthenthemanagementoftheCompany’sforwardforeign exchangesettlementbusinessandpreventinvestmentrisks.3.Inordertopreventanydelayin theforwardexchangesettlement,theCompanywillstrengthenthemanagementofaccounts receivable,activelycollectreceivables,andavoidanyoverduereceivables.Inthemeantime, theCompanyplanstoincreasetheexportpurchasesandpurchasecorrespondingcredit insurancesoastoreducetheriskofdefaultandcustomerdefault.4.TheCompany’sforward foreignexchangesettlementtransactionsmustbebasedontheCompany’sforeignexchange earningsprediction.Besides,theCompanyshallstrictlycontrolthescaleofitsforward foreignexchangesettlementbusiness,andmanageallrisksthattheCompanymayfacewithin acontrollablerange.5.TheinternalauditdepartmentoftheCompanyshallchecktheactual signingandexecutionsituationofalltradingcontractsonaregularorirregularbasis. Atpresent,theCompanyhasinvestedvariousderivativesincludingForwardExchange Settlement3+3Portfolio.Thisproductportfolioissuperiortootherordinaryforward settlementproductsduringthesameperiod.Thefirstthreesessionsofvestingconditionsof thisportfolioare:thespotexchangerateatmaturityislowerthantheagreedfront-end exchangerate,andtheexchangesettlementshallbecarriedoutbasedontheagreedfront-end Changesinmarketpricesorfairexchangerate;ifthespotexchangerateatmaturityishigherthantheagreedfront-endvalueofderivativeinvestmentsinexchangerate,theCompanycanchoosenottosettletheexchangeorchoosetosettletheReportingPeriod(fairvalueanalysisexchangebasedonthespotexchangerateatmaturity.Theback-endthreesessionsofvestingshouldincludemeasurementmethodconditionsare:thespotexchangerateatmaturityislowerthantheagreedback-endexchange and related assumptions andrate,andtheCompanycanchoosenottosettletheexchangeorchoosetosettletheexchange parameters) basedonthespotexchangerateatmaturity;ifthespotexchangerateatmaturityishigher thantheagreedback-endexchangerate,theexchangesettlementshallbecarriedoutbasedon theagreedback-endexchangerate.Atpresent,intermsofForwardExchangeSettlement3+3 PortfoliopurchasedbytheCompany,thespotexchangeratesatmaturityareallhigherthan theagreedfront-endexchangerates,andtheCompanychoosesnottoexercisetheright. Therefore,theproduct’sfairvaluehasnotchanged. Majorchangesinaccountingpolicies andspecificaccountingprinciples adoptedforderivativeinvestmentsinN/A ReportingPeriodcomparedtolast reportingperiod TheindependentdirectorsoftheCompanyareoftheopinionthatduringtheReporting Period,theCompanycarriedoutforwardforexsettlementinstrictcompliancewiththe CompanyLaw,theRegulationsofthePeople’sBankofChinaonForeignExchange Opinionofindependentdirectorson Settlement,SaleandPaymentandtheCompany’sManagementRulesforForwardForeign derivative investments and risk ExchangeSettlementandSale,amongothers,aswellaswithintheBoard’sauthorization. control Suchtradingisprimarilyaimedtopreventexchangeratefluctuationsfromimpactingthe Company’sexportbusinessandoperatingearnings,withnospeculativetradinginvolved.Itis anecessity,andtheriskiswellundercontrol. VISaleofMajorAssetsandEquityInvestments 1.SaleofMajorAssets □Applicable√Notapplicable NosuchcasesintheReportingPeriod. 2.SaleofMajorEquityInvestments □Applicable√Notapplicable VIIMajorMajority-andMinority-OwnedSubsidiaries √Applicable□Notapplicable Majormajority-ownedsubsidiariesandthoseminority-ownedsubsidiarieswithanover10%effectontheCompany’snetprofit: Unit:RMB Relationsh Core Registered Operating Operating Name ipwiththebusiness Totalassets Netassets Netprofit capital revenue profit Company Foshan Chansheng Manufactu Electronic Subsidiary 1,000,000.00 48,752,843.81 39,098,142.2358,127,777.14 4,800,994.91 3,543,195.43 ring BallastCo., Ltd. FSL Chanchang Manufactu OptoelectroSubsidiary 72,782,944.00144,050,544.49120,398,662.1042,855,759.0512,676,786.06 9,507,589.54 ring nicsCo., Ltd. Foshan Taimei Manufactu Times Subsidiary 500,000.00 74,421,738.83 25,521,131.4673,606,152.87 5,155,744.92 3,544,952.10 ring Luminaries Co.,Ltd. FSL New LightSource Manufactu Subsidiary 50,000,000.00 57,318,734.75 55,239,940.4610,244,292.40 556,013.45 417,010.09 Technology ring Co.,Ltd. FSL (Xinxiang) Manufactu Subsidiary 35,418,439.76 53,882,960.16 48,947,360.2436,485,086.33 2,441,965.86 1,831,807.32 Lighting ring Co.,Ltd. Guangdong Fozhao Financing SubsidiaryFinance 200,000,000.00232,595,632.53232,046,258.60 3,599,940.97 2,699,955.74 Lease Co., Ltd. FSL Lighting Manufactu Subsidiary 15,000,000.00 63,887,644.88 53,004,382.6736,790,893.75 2,465,779.07 1,989,507.21 Equipment ring Co.,Ltd. Nanjing Fozhao Lighting Manufactu Subsidiary 41,683,200.00 58,494,154.01 53,718,298.4530,844,358.73 8,749,230.09 4,195,784.75 Components ring Manufacturi ngCo.,Ltd. FSLZhida Electric Manufactu Subsidiary 50,000,000.00 98,490,502.83 47,256,225.7756,884,635.54 4,981,466.73 3,742,334.78 Technology ring Co.,Ltd. FSL Lighting Manufactu Subsidiary 195,812.50 334,199.31 64,257.99 -128,357.82 -128,357.82 ring GmbH SubsidiariesobtainedordisposedintheReportingPeriod: □Applicable√Notapplicable Informationaboutthemajormajority-andminority-ownedsubsidiaries: ―FoshanChanshengElectronicBallastCo.,Ltd.wasinvestedandestablishedbytheCompanyandMr.Ma Henglaiandhadsetupandobtainedlicenseforbusinesscorporationon26August2003.TheCompanyholds75%equitiesofthesaidcompany;thereforethesaidsubsidiarywasincludedintothescopeoftheconsolidatedfinancialstatementssincethedateoffoundation. On24December2013,theCompanyandMr.MaHenglaisignedtheequitytransferagreement.TheCompanypurchased25%equityofFoshanChanshengElectronicBallastCo.,Ltd.heldbyMr.MaHenglai.Afterthepurchasing,theCompanyheld100%equityofFoshanChanshengElectronicBallastCo.,Ltd. ―FSLChanchangOptoelectronicsCo.,Ltd.(renamedin19June2018from“FoshanChanchangElectricAppliances(Gaoming)Co.,Ltd.”),whichisaSino-foreignjointventureinvestedandestablishedbytheCompanyandProsperityLampsandComponentsLtd,hadobtainedlicenseforbusinesscorporationon23August2005throughapprovalbyForeignTradeandEconomicCooperationBureauofGaomingDistrict,Foshanwithdocument“MWJMYZi[2005]No.79”.TheCompanyholds70%equitiesofthesaidcompany;thereforethesaidsubsidiarywasincludedintothescopeoftheconsolidatedfinancialstatementssincethedateoffoundation. On23August2016,theCompanyandProsperityLampsandComponentsLtdsignedtheequitytransferagreement.TheCompanypurchased30%equityofFoshanChanchangElectricAppliances(Gaoming)Co.,Ltd.heldbyProsperityLampsandComponentsLtd.Afterthepurchasing,theCompanyheld100%equityofFoshanChanchangElectricAppliances(Gaoming)Co.,Ltd. ―FoshanTaimeiTimesLuminariesCo.,Ltd.,whichisaSino-foreignjointventureinvestedandestablishedbytheCompanyandRebackNorthAmericaInvestmentLimited,hadobtainedlicenseforBusinessCorporationon5December2005throughapprovalbyForeignTradeandEconomicCooperationBureauofGaomingDistrict,Foshanwithdocument“MWJMYZi[2005]No.97”.TheCompanyholds70%equitiesofthesaidcompany;thereforethesaidsubsidiarywasincludedintothescopeoftheconsolidatedfinancialstatementssincethedateoffoundation. ―FSLNewLightSourceTechnologyCo.,Ltd.(itspredecessorwas“FSLLuminariesCo.,Ltd.”anditchangeditsnameto“FSLNewLightSourceTechnologyCo.,Ltd.”on17December2014),whichisinvestedandestablishedbytheCompanytogetherwithFoshanHaozhiyuanTradingCo.,Ltd.,ShanghaiLiangqiElectricCo.,Ltd,ChangzhouSanfengElectrical&LightingCo.,Ltd.,HenanXingchenElectrical&LightingCo.,Ltd.,FoshanHongbangElectrical&LightingCo.,Ltd.,HebeiJinfenTradingCo.,Ltd.,obtainingitslicenseforBusinessCorporationon27September2009.TheCompanyholds60%equitiesofthiscompany.Thereforethesaidsubsidiarywasincludedintothescopeoftheconsolidatedfinancialstatementssincethedateoffoundation. On25September2009and19November2010,theequitytransferagreementwassignedbetweentheCompany andtheminorityshareholders,inwhichtheminorityshareholdersrespectivelytransferredtheirequitiesofFSLLuminariesCo.,Ltd.totheCompany.Aftertransfer,theCompanyholds100%equitiesofFSLLuminariesCo.,Ltd. ―FSL(Xinxiang)LightingCo.,Ltd.isalimitedliabilitycompanywhichisinvestedandestablishedbytheCompany,obtainingitslicenseforBusinessCorporationon17April2009.TheCompanyholds100%equitiesofthesaidcompany,thereforethesaidsubsidiarywasincludedintothescopeoftheconsolidatedfinancialstatementssincedateoffoundation.On27August2013,the3rdSessionofthe7thBoardofDirectorsreviewedandapprovedtoinvestanotherRMB2million(landinanindustrialparkinXinxiang,HenanProvinceandmonetaryfunds)inFSL(Xinxiang)Lighting,increasingtheregisteredcapitalofFSL(Xinxiang)LightingtoRMB35,418,439.76. ―FSLLightingEquipmentCo.,Ltd.isalimitedliabilitycompanyinvestedandestablishedbytheCompanywiththeregisteredcapitalofRMB15million,whichhadobtaineditslicenseforBusinessCorporationon8May2013.AndtheCompanyholds100%equitiesofthiscompany.Thereforethesaidsubsidiarywasincludedintothescopeoftheconsolidatedfinancialstatementssincethedateoffoundation. ―InaccordancewiththeequitytransferagreementsignedbetweentheCompanyandProsperityLampsandComponentsLtd.on27August2008,ProsperityLampsandComponentsLtd.transferred100%equitiesofNanjingFozhaoLightingComponentsManufacturingCo.,Ltd.(formerlyknownas“Prosperity(Nanjing)LightingComponentsCo.,Ltd.”,andchangednameto“NanjingFozhaoLightingComponentsManufacturingCo.,Ltd.”on15November2010.)totheCompany.Therefore,NanjingFozhaoLightingComponentsManufacturingCo.,Ltd.becameawholly-ownedsubsidiaryoftheCompany.Thesaidsubsidiarywasincludedintothescopeoftheconsolidatedfinancialstatementssincethemergerdate. ―FSLZhidaElectricTechnologyCo.,Ltd.(FSLZhida)wasincorporatedbytheCompany,FoshanZhibidaEnterpriseManagementCo.,Ltd.andDongguanBaidaSemiconductorMaterialCo.,Ltd.onajointinvestmentbasis.FSLZhidaobtaineditsbusinesslicenseon21October2016.Holdingastakeof51%init,theCompanyhasincludedFSLZhidainitsconsolidatedfinancialstatementssincethedateofFSLZhida’sincorporation. ―FSLLightingGmbHisalimitedliabilitycompanysetupbytheCompanyinGermanywitharegisteredcapitalof25,000euro.Itgotthebusinesslicenseon30November2017whose100%stockequityisheldbytheCompany,anditisincludedintothescopeoftheCompany’sconsolidatedfinancialstatementsfromthedateofitsestablishment. VIIIStructuredBodiesControlledbytheCompany □Applicable√Notapplicable IXPerformanceForecastforJanuary-September2018 WarningofforecastnegativenetprofitforJanuary-September2018orconsiderableYoYchangetherein,aswellasthereasons: □Applicable√Notapplicable XRisksFacingtheCompanyandCountermeasures 1.Riskofintensifiedmarketcompetition Fromthemacroperspective,withthedeleveragingcampaigninthefinancesector,declininggrowthindomesticinvestmentandconsumption,theimplementationofrealestatecontrolpolicies,theconflictscausedbyinternationaltradeprotectionismandotherfactors,theindustrymayfacetheriskoflackofgrowthmomentum.Fromtheindustryperspective,asafullycompetitiveindustry,lightingapplicationsarenotonlysubjecttothecompetitionofcompaniesinthefieldoforiginalapplications,butalsothecompetitionofLEDupstreamanddownstreamchipcompaniesaswellaspackagingcompaniesthatgraduallyextendstothelightingapplicationfield.Ifthemarketcompetitionintensifiesfurtherinthefuture,theprofitabilityoftheCompanymaybenegativelyimpacted. Countermeasures:TheCompanywillfocusonmainbusiness.Throughincreasingresearch&developmentinvestmentconstantly,theCompanywillimprovetechnicalinnovationabilityandaddedvalueofproducts;continuetogiveplaytothecostadvantagesinproductmanufacturingandimprovesupplyabilityofhigh-qualityproducts.Atthesametime,byoptimizingmarketingnetwork,theCompanywillimprovebrandimage,improveservicequality,intensifycustomerrelationshipmanagementandincreasecorecompetitivecapacityofthecompanyconstantly. 2.Riskofrisinglaborcostsandrawmaterialpricefluctuations Duetotheinfluenceofdomesticlaborsupplyanddemandaswellasemploymentpolicies,laborcostskeepincreasing,especiallyinthePearlRiverDeltaregionwithmoredevelopedeconomy.Inaddition,rawmaterialsoftheCompanyaccountforahighproportionofoperationcosts.Assomerawmaterialpricesareassociatedwithuncontrollablefactorssuchasglobalmarketconditionsandnationalmacroeconomicpolicies,thereisariskofpricefluctuationofrawmaterials. Countermeasures:Byincreasingquantityofqualifiedsuppliers,expandingbiddingandtenderingrange,perfectingsupplychainmanagement,payingattentiontomarketdynamics,collectinginformation,analyzingandpre-judgingsupplyofmainrawmaterialsandpricetrend,theCompanycandecreaseprocurementcosts;byimprovingautomatic,intelligentproductionlevelandbyimplementingtechnicaltransformation,technologyimprovementandothermeasures,theCompanycanimproveproductionefficiencyandreduceproductcost;byintensifyingproductiontechnologyandfieldmanagement,theCompanycancontrolproductcosts. 3.Riskofinventoryvaluationloss AsoftheendoftheReportingPeriod,theinventoryamountishigh,andtheinventorymainlyincludesrawmaterials,semi-finishedproductsandfinishedproducts.Duetothelargenumberofproducttypesandmodels,theinventoryamountoftheCompanyisrelativelyhigh.Moreover,asthesalesrevenueoftheCompanyincreasesyearbyyear,therawmaterialsandinventoriesthatarestoredtomeetproductionandsaleswillincreasesimultaneously.ItwillleadtoahigherinventorymaintainedintheCompany.Incasechangesoccurtoproductpricesordemandinthefuturemarket,theCompanymayexperienceariskofinventorydepreciation. Countermeasures:TheCompanycanintensifytheanalysisofsalesandchangeinfuturemarketdemand,onthebasisofassuringproductionandsales,theCompanycancontrolinventoryscalereasonably. 4.Riskofexchangeratefluctuations TheRMBexchangerateinChinaisbasedonmarketsupplyanddemand,withreferencetoabasketofcurrenciesforregulationandamanagedfloatingexchangeratesystem.Exchangeratefluctuationswillhappenwiththefluctuationsofglobaleconomy,simmeringtensionofsomeregionsandthemonetarypoliciesofvariouscountries.Exportaccountsforaround40%oftheCompany’sbusiness,andismostlysettledintheU.S.dollar.Iftheexchangeratefluctuatessignificantly,businessperformanceoftheCompanywillbeaffected. Countermeasures:Byintensifyingsettlementcurrencymanagement,knowingexchangeratepoliciesandfluctuationtrendofsettlementcurrenciesintime,andcarryingoutforwardforexsettlementwhenthetimingisright,theCompanycanweakentherisksbroughtbyexchangeratefluctuationsasmuchaspossible. 5.Riskofdoubtfulaccountsreceivable WiththeexpansionofsalesscaleoftheCompany,theamountofaccountsreceivablehasincreased.ThemaindebitcustomersoftheCompanyarealllong-termcustomerswithgoodbusinessreputations.Majoradversechangesinthefinancialstatusofmajordebtorsmayresultintheriskofuncollectibleaccountsreceivable. Countermeasures:Byperfectingcreditfileofcustomers,evaluatingcreditstatusofcustomersregularly,adopting methodofpledgeofcustomers’assets,andpurchasinginsuranceoncertainexportsales,theCompanycanreducerisksfrombaddebtsofaccountsreceivable.Bystrengtheningthemanagementofapprovalofcontract,theCompanycanavoidlegalrisksincurredduringimplementationofcontract.TheCompanycanreinforcethemanagementandcollectioneffortsofaccountsreceivable,implementpre-warningtreatmentforaccountsreceivablewithupcomingdeadlineduringimplementation,andanalyzeandreportaccountsreceivableregularly. PartVSignificantEvents IAnnualandExtraordinaryGeneralMeetingsConvenedduringReportingPeriod 1.GeneralMeetingsConvenedduringReportingPeriod Investor Dateofresolution Indextodisclosed Meeting Type Conveneddate participationratio disclosure resolutions Announcement No. 2018-009 on the 2017 Annual Resolutionsofthe2017 Annual 38.37%26April2018 27April2018 GeneralMeeting Annual General Meetingdisclosedon www.cninfo.com.cn 2.ExtraordinaryGeneralMeetingsConvenedatRequestofPreferredShareholderswithResumedVotingRights □Applicable√Notapplicable IIInterimDividendPlan □Applicable√Notapplicable TheCompanyhasnointerimdividendplan,eitherintheformofcashorstock. IIICommitmentsoftheCompany’sActualController,Shareholders,RelatedPartiesandAcquirers,aswellastheCompanyItselfandOtherEntitiesFulfilledinReportingPeriodorOngoingatPeriod-End □Applicable√Notapplicable NosuchcasesintheReportingPeriod. IVEngagementandDisengagementofIndependentAuditor Aretheinterimfinancialstatementsaudited? □Yes√No Theinterimfinancialstatementsareunaudited. VExplanationsGivenbyBoardofDirectorsandSupervisoryCommitteeRegardingIndependentAuditor's“ModifiedOpinion”forReportingPeriod □Applicable√Notapplicable VIExplanationsGivenbyBoardofDirectorsRegardingIndependentAuditor's“ModifiedOpinion”forLastYear □Applicable√Notapplicable VIIInsolvencyandReorganization □Applicable√Notapplicable NosuchcasesintheReportingPeriod. VIIILegalMatters Materiallawsuitsorarbitrations: □Applicable√Notapplicable NosuchcasesintheReportingPeriod. Otherlegalmatters: √Applicable□Notapplicable Indexto Involvedamount Decisionsand Executionof Disclosure Generalinformation Provision Progress disclosed (RMB’0,000) effects decisions date information Suitandcounter-suit Theamount betweenFSLand involvedinthe DongguanFozhao suitfiledbyFSL Linton againstLintonis None(uncertain Energy-Saving RMB10.5158 beforethecourt Firsttrial TechnologiesCo., Pending N/A million,whilethedecisioncomes underway Ltd.(hereinafter amountofthe out) referredtoas counter-suiteis “Linton”)onasales RMB13.2791 andpurchase million contract SuitfiledbyFSL RMB8.9779 None(FSListhe Thedefendant Secondtrial againstGuangdong wasorderedto N/A million plaintiff) underway Hengyu payRMB8.9779 Construction millionandthe EngineeringCo., overdueinterest Ltd.onasalesand toFSLfor purchasecontract construction service,aswell astocoverall thecourtcosts inthefirsttrial. Thedefendant hasappliedfor anappeal followingFSL’s applicationfor enforcement. Thedefendant wasorderedto pay RMB14.2208 SuitfiledbyFSL millionandthe againstBeijing liquidated ZhongaoZhengshi damagestoFSL LightingCo.,Ltd. RMB19.2764 None(FSListhe Secondtrial forproduct N/A andnaturalperson million plaintiff) underway sales,withJiang JiangZhenghaoona Zhenghao salesandpurchase bearingthejoint contract responsibility. Thedefendant hasappliedfor anappeal. Thedefendant SuitfiledbyFSL wasorderedto againstGuiyang payRMB0.4878Thedecisionof Xingshuangying RMB0.7122 None(FSListhe Enforcement millionandthe thefirsttrialhas TradeCo.,Ltd.onamillion plaintiff) underway interesttoFSL comeout salesandpurchase forproduct contract sales. Suitfiledbythe insolvency FSLhasagreed administratorof RMB0.4999 topayRMB0.42 FSLisready Huangshan None Closed million millionina topay HongchuanLighting settlement. Co.,Ltd.against FSLonanamount receivablebythe plaintiff IXPunishmentsandRectifications □Applicable√Notapplicable NosuchcasesintheReportingPeriod. XCreditQualityoftheCompanyaswellasItsControllingShareholderandActualController √Applicable□Notapplicable IntheReportingPeriod,theCompanyanditscontrollingshareholderandactualcontrollerwerenotinvolvedinanyunsatisfiedcourtjudgments,large-amountoverdueliabilitiesorthelike. XIEquityIncentivePlans,EmployeeStockOwnershipPlansorOtherIncentiveMeasuresforEmployees □Applicable√Notapplicable NosuchcasesintheReportingPeriod. XIIMajorRelated-PartyTransactions 1.ContinuingRelated-PartyTransactions √Applicable□Notapplicable Obtaina As%of ble total Approve market Index Relation Transact Total valueof d Over Methodpricefor to ship TypeofSpecificPricing ion Related value all transactiapprove of same-tyDisclosudisclos withthetransactitransactiprinciplpric(RM party (RMB’0same-tyonlinedlineorsettleme pe redate ed Compan on on e B’0,000 ,000) pe (RMB’0 not nt transacti inform y )e transacti ,000) ons ation ons (RMB’0 ,000) ProsperiSharehoPurchasi ty lderthatng Purchas 30 www.c Lamps holds productse ofMarket Remitta 384.45 384.45 0.31% 600Not 384.45March ninfo.c & over5%and materialprice nce 2018 om.cn Componshares receivins ents of theglabor LimitedCompanservice y from related party Purchasi ng ProsperiEnterpri products ty se and Purchas Electriccontroll receivine ofMarket Remitta al ed by 72.99 72.99 0.06% 72.99 N/A glabormaterialprice nce (China)related service s Co., individu from Ltd. al related party Purchasi Hangzh ng Enterpri ou products se Times and Purchas controll 30 www.c Lighting receivine ofMarket Remitta ed by 36.89 36.89 0.03% 200Not 36.89 March ninfo.c and glabormaterialprice nce related 2018 om.cn Electric service s individu al Co., from al Ltd. related party Purchasi ng Foshan products NationSUnder and Purchas tar same 30 www.c receivine ofMarket Remitta Optoeleactual 4,359.58 3.48% 20,000Not March ninfo.c glabormaterialprice 4,359.58 nce 4,359.58 ctronicscontroll 2018 om.cn service s Co., er from Ltd. related party Guangd Purchasi ong ng Under products Fenghua Purchas same and 30 www.c Advanc e ofMarket Remitta actual receivin 517.29 517.29 0.41% 1,100Not 517.29March ninfo.c ed materialprice nce controllglabor 2018 om.cn Holding s er service Co., Ltd. from related party Purchasi Guangd ng ong products ElectronUnder and Purchas ic same www.c receivine ofMarket Remitta Technolactual 76.07 76.07 2.03% 300Not 76.07 ninfo.c glaborequipmeprice nce ogy controll om.cn service nt Researcer from h related Institute party Purchasi ng MTM products Under Semicon and Purchas same 30 www.c ductor receivine ofMarket Remitta actual 32.33 32.33 0.86% 100Not 32.33 March ninfo.c Equipm glaborequipmeprice nce controll 2018 om.cn entCo., service nt er Ltd. from related party Purchasi ng products Under and Purchas same Vollsun receivine ofMarket Remitta actual 160.00 160 4.26% 160.00 N/A Ltd. glaborequipmeprice nce controll service nt er from related party Selling Shareho Prosperi products lderthat ty and holds Lamps providin 30 www.c over5% Selling Market Remitta & glabor 1,887.18 0.91% 3,600Not March ninfo.c shares productsprice 1,887.18 nce 1,887.18 Compon service 2018 om.cn of the ents to Compan Limited related y party ProsperiEnterpriSelling 30 www.c Selling Market Remitta ty se products 4.63 4.63 0.00% 30Not 4.63 March ninfo.c productsprice nce (Hangzhcontrolland 2018 om.cn ou) ed byprovidin Lightingrelated glabor and individuservice Electrical to al Co., related Ltd. party Selling ProsperiEnterpriproducts ty se and Electriccontrollprovidin 30 www.c Selling Market Remitta al ed byglabor 17.54 17.54 0.01% 50Not 17.54 March ninfo.c productsprice nce (China)related service 2018 om.cn Co., individuto Ltd. al related party Selling Guangd Enterpriproducts ong se and Rising controllprovidin Optoele Selling Market Remitta ed byglabor 0.06 0.06 0.00% 0.06 N/A ctronic productsprice nce related service Technol individuto ogyCo., al related Ltd. party Total -- -- 7,549.01 -- 25,980 -- -- -- -- -- Large-amountsalesreturnindetail N/A InMarch2018,theCompanyestimatedthetotalvalueofitscontinuingtransactionswith GivetheactualsituationintherelatedpartiesFoshanNationStarOptoelectronicsCo.,Ltd.,GuangdongFenghuaAdvancedReportingPeriod(ifany)whereanHoldingCo.,Ltd.,ProsperityLamps&ComponentsLimited,ProsperityElectrical(China)estimatehadbeenmadeforthetotalCo.,Ltd.,Prosperity(Hangzhou)LightingandElectricalCo.,Ltd.andHangzhouTimesvalueofcontinuingrelated-partyLightingandElectricalCo.,Ltd.Concerningthepurchasesfromitsrelatedparties,theactualtransactionsbytypetooccurintheamountin2018sofarwasRMB56.3959million,accountingfor25.29%oftheestimate.As ReportingPeriod forthesalestoitsrelatedparties,theactualamountin2018sofarwasRMB19.0941million, accountingfor51.89%oftheestimate. Reasonforsignificantdifference betweentransactionpriceandmarketN/A referenceprice(ifapplicable) 2.Related-PartyTransactionsRegardingPurchasesorSalesofAssetsorEquityInterests □Applicable√Notapplicable NosuchcasesintheReportingPeriod. 3.Related-PartyTransactionsRegardingJointInvestmentsinThirdParties □Applicable√Notapplicable NosuchcasesintheReportingPeriod. 4.CreditsandLiabilitieswithRelatedParties □Applicable√Notapplicable NosuchcasesintheReportingPeriod. 5.OtherMajorRelated-PartyTransactions √Applicable□Notapplicable 1.On28June2017,theCompanyheldthe15thmeetingofthe8thBoardofDirectors,andtheProposalonRenewingtheFinancialServicesAgreementwithGuangdongRisingFinanceCo.,Ltd.wasexaminedandapprovedatthemeeting.Onthesameday,theCompanysignedtheFinancialServicesAgreementwithGuangdongRisingFinanceCo.,Ltd.(hereinafterreferredtoas“RisingFinance”),andRisingFinancewouldprovidedepositandsettlementservicesfortheCompanyforatermofoneyear.DuringthetermofvalidityoftheAgreement,thedailydepositbalanceoftheCompanyinRisingFinanceCompanyshallnotexceedRMB150million.DuringtheReportingPeriod,thedailydepositbalanceoftheCompanyinRisingFinanceCompanywasRMB148million. 2.On26June2018,theCompanyheldthe23rdmeetingofthe8thBoardofDirectors,andtheProposalonSigningtheFinancialServicesAgreementwithGuangdongRisingFinanceCo.,Ltd.wasexaminedandapprovedatthemeeting.Onthesameday,theCompanysignedtheFinancialServicesAgreementwithGuangdongRisingFinanceCo.,Ltd.(hereinafterreferredtoas“RisingFinance”),andRisingFinancewouldprovidedepositandsettlementservicesfortheCompanyforatermofoneyear.DuringthetermofvalidityoftheAgreement,thedailydepositbalanceoftheCompanyinRisingFinanceCompanyshallnotexceedRMB150million.DuringtheReportingPeriod,thedailydepositbalanceoftheCompanyinRisingFinanceCompanywasRMB148million.Indextothecurrentannouncementsaboutthesaidrelated-partytransactionsdisclosed: Titleofannouncement Disclosuredate Disclosurewebsite AnnouncementonRenewingFinancialService AgreementwithGuangdongRisingFinance29June2017 www.cninfo.com.cn Co.,Ltd. AnnouncementonSigningFinancialService AgreementwithGuangdongRisingFinance27June2018 www.cninfo.com.cn Co.,Ltd. XIIIOccupationoftheCompany’sCapitalbyControllingShareholderorItsRelatedPartiesforNon-OperatingPurposes □Applicable√Notapplicable NosuchcasesintheReportingPeriod. XIVMajorContractsandTheirExecution 1.Entrustment,ContractingandLeases (1)Entrustment □Applicable√Notapplicable NosuchcasesintheReportingPeriod. (2)Contracting □Applicable√Notapplicable NosuchcasesintheReportingPeriod. (3)Leases □Applicable√Notapplicable NosuchcasesintheReportingPeriod. 2.MajorGuarantees □Applicable√Notapplicable NosuchcasesintheReportingPeriod. 3.OtherMajorContracts □Applicable√Notapplicable NosuchcasesintheReportingPeriod. XVCorporateSocialResponsibility(CSR) 1.MaterialEnvironmentalIssues IstheCompanyoranyofitssubsidiariesisidentifiedasamajorpolluterbytheenvironmentalprotectionauthorities? No. NeithertheCompanynoranyofitsmajority-ownedsubsidiariesisidentifiedasamajorpolluterbytheenvironmentalprotectionauthoritiesofChina. Instrictaccordancewiththegovernment’srequirements,theCompanyhasbeenconscientiouslycarryingoutenvironment-relatedwork,includingestablishingandimprovingvariousrelatedsystems,andcontinuouslyincreasingrelatedexpenditure.TheseenvironmentimprovementeffortshavehelpedbuildagoodimageoftheCompanyinrelationtoenvironmentalprotection.Meanwhile,theCompany’senvironmentalprotectingfacilitieshavebeenrunningstably,withthedischargeofwastegasandwaterincompliancewiththerelevantstandards.Nopollutionincidentshaveoccurred. Inadditiontotheenvironmentalprotectionauthorities’quarterlyexaminationandsupervision,theCompanyhasalsoentrusted,onayearlybasis,anindependentinstitutiontoexamtheCompany’swastegastreatmentsystems,aswellaswastewaterandnoisedischarges,soastominimizeenvironmentrisk.Alltheexaminationsandtestshavebeendocumentedandreleasedtotheemployeesontheenvironmentalprotectionandsafetybulletinboardsateveryworkshop.Employeesatalllevels,withastrongawarenessofenvironmentprotection,havebeencooperatingcloselywitheachothertoimplementthepolicyof“SaveEnergy,ReduceConsumption,LowerPollutionandIncreaseEfficiency”.Inall,theCompany’senvironmentriskiscontrollableanditsenvironmentmanagementkeepsimproving. 2.MeasuresTakenforTargetedPovertyAlleviation TheCompanytooknosuchmeasuresduringtheReportingPeriod,nordoesithaveanysuchplanfornow. XVIOtherSignificantEvents □Applicable√Notapplicable NosuchcasesintheReportingPeriod. XVIISignificantEventsofSubsidiaries □Applicable√Notapplicable PartVIShareChangesandShareholderInformation IShareChanges 1.ShareChanges Unit:share Before Increase/decreaseinReportingPeriod(+/-) After SharesasSharesas dividend dividend Shares Percentag New convertedconverted Other Subtotal Shares Percentag e(%) issues from from e(%) profit capital reserves 12,582,00 13,968,65 1.Restrictedshares 0.99% 1,258,200 128,4511,386,651 1.00% 3 4 1.3Sharesheldbyother 4,465,974 0.35% 446,597 128,451 575,0485,041,022 0.36% domesticinvestors Amongwhich:Sharesheld 3,860,675 0.30% 386,067 -9,661 376,4064,237,081 0.30% bydomesticlegalpersons Sharesheld by domestic natural 605,299 0.05% 60,530 138,112 198,642 803,941 0.06% persons 1.4Sharesheldbyforeign 8,116,029 0.64% 811,603 811,6038,927,632 0.64% investors Sharesheld 8,116,029 0.64% 811,603 811,6038,927,632 0.64% byforeignnaturalpersons 1,259,550, 125,955,0 125,826,61,385,377 99.01% -128,451 99.00% 2.Unrestrictedshares 865 86 35 ,500 2.1 RMB-denominated974,879,5 97,487,95 97,359,501,072,239 76.63% -128,451 76.62% ordinaryshares 46 4 3 ,049 2.2 Domestically listed284,671,3 28,467,13 28,467,13313,138,4 22.39% 22.38% foreignshares 19 2 2 51 1,272,132, 127,213,2 127,213,21,399,346 3.Totalshares 100.00% 100.00% 868 86 86 ,154 Reasonsforsharechanges: √Applicable□Notapplicable 1.Asresolvedatthe2017AnnualGeneralMeeting,theCompanycompletedabonusissueofoneadditionalshare forevery10existingsharesfromcapitalreserveson16May2018,representinganincrementof127,213,286sharestotheCompany’stotalshares. 2.9,661restrictedsharesheldbydomesticlegalpersonsbecamedomesticnaturalpersons’holdingsduringtheReportingPeriod. 3.DuringtheReportingPeriod,somedirectorsandsupervisors,aswellasalltheseniormanagementincreasedtheirshareholdingsintheCompany,representinganincreaseof128,451restrictedshares. Approvalofsharechanges: √Applicable□Notapplicable Accordingtothe2017FinalDividendPlan,whichwasapprovedatthe2017AnnualGeneralMeetingon26April2018,basedontheCompany’stotalsharesof1,272,132,868attheendof2017,acashdividendofRMB3.29(taxinclusive,dividendsforB-shareholderstobepaidintheHongKongdollars)per10shareswouldbedistributedtotheA-andB-shareholders,withabonusissueofoneadditionalshareforevery10existingsharesfromcapitalreserves,representinganincrementof127,213,286sharestotheCompany’stotalshares. Transferofshareownership: □Applicable√Notapplicable Effectsofsharechangesonthebasicearningspershare,dilutedearningspershare,equitypershareattributabletotheCompany’sordinaryshareholdersandotherfinancialindicatorsoftheprioryearandtheprioraccountingperiod,respectively: √Applicable□Notapplicable TheCompanyhascompletedthebonusissueofoneadditionalshareforevery10existingsharesfromcapitalreservesintheReportingPeriod,withitstotalsharesincreasingfrom1,272,132,868to1,399,346,154.Thischange’seffectsonthebasicearningspershare,dilutedearningspershare,equitypershareattributabletotheCompany’sordinaryshareholdersandotherfinancialindicatorsoftheprioryearandtheprioraccountingperiod,respectively,areasfollows: 2017orasat31December2017 H12018orasat30June 2018 Item Basedonformertotal Basedonnewtotalshares Basedonnewtotalshares shares Basic earnings per share 0.5819 0.5290 0.1638 (RMB/share) Dilutedearningspershare 0.5819 0.5290 0.1638 (RMB/share) Equitypershare(RMB/share) 3.76 3.42 3.05 OtherinformationthattheCompanyconsidersnecessaryorisrequiredbythesecuritiesregulatortobedisclosed:□Applicable√Notapplicable 2.ChangesinRestrictedShares √Applicable□Notapplicable Unit:share Reasonfor Beginning Releasedin Increasein Endingrestricted Shareholder restriction/release Dateofrelease restrictedsharesReportingPeriodReportingPeriod shares fromrestriction Lock-upofsenior LiuXingming 380,523 0 63,627 444,150management’s Uncertain shares Lock-upofsenior TangQionglan 12,150 0 17,880 30,030management’s Uncertain shares Lock-upofsenior WeiBin 35,602 0 20,142 55,744management’s Uncertain shares Lock-upofsenior JiaoZhigang 40,458 0 16,091 56,549management’s Uncertain shares Lock-upofsenior ChenYu 20,370 0 14,329 34,699management’s Uncertain shares Lock-upofsenior ZhangYong 25,995 0 15,552 41,547management’s Uncertain shares Lock-upofsenior ZhangXuequan 20,033 0 18,256 38,289management’s Uncertain shares Lock-upofsenior XuXiaoping 7,575 0 11,152 18,727management’s Uncertain shares YeZhenghong 39,321 0 9,625 48,946Lock-up ofUncertain supervisor’s shares Total 582,027 0 186,654 768,681 -- -- IIIssuanceandListingofSecurities □Applicable√Notapplicable IIIShareholdersandTheirHoldingsatPeriod-End Unit:share Number of preferred Number of ordinary shareholders with resumed 93,117 0 shareholders votingrights(ifany)(seenote 8) 5%orgreaterordinaryshareholdersortop10ordinaryshareholders Increase/de Pledgedorfrozenshares Restricted Nameof Natureof Shareholdin Ordinary creasein Unrestricted ordinary shareholder shareholder gpercentage shares Reporting ordinaryshares Status Shares shares Period Hong Kong Wah Shing Foreign legal Holding 13.47%188,496,430 188,496,430Inpledge 92,363,251 person Company Limited Prosperity Lamps &Foreign legal 10.50%146,934,857 146,934,857 Components person Limited Shenzhen Rising State-owned Investment 5.12% 71,696,136 71,696,136Inpledge 25,300,000 legalperson Development Co.,Ltd. Guangdong Electronics State-owned Information 4.74% 66,393,501 66,393,501Inpledge 32,532,815 legalperson IndustryGroup Ltd. Central Huijin 2.42% 33,878,900 33,878,900 State-owned Asset Management legalperson Co.,Ltd. Essence International Foreign legal Securities 2.09% 29,313,3861,453,477 29,313,386 person (Hong Kong) Co.,Ltd. Hong Kong Rising Foreign legal Investment 1.82% 25,482,252 25,482,252 person Development Co.,Ltd. DBSVickers Foreign legal (HongKong) 1.70% 23,811,009-2,199,321 23,811,009 person LtdA/CClients China Merchants Foreign legal Securities 0.88% 12,322,811282,914 12,322,811 person (HongKong) Co.,Ltd Domestic PengWeiyan 0.86% 12,032,1133,024,336 12,032,113 naturalperson Strategicinvestororgeneral legalpersonbecomingtop-10 N/A ordinaryshareholderdueto rightsissue(ifany)(seenote3) Amongthetop10shareholders,HongKongWahShingHoldingCompanyLimited,Shenzhen RisingInvestmentDevelopmentCo.,Ltd.,GuangdongElectronicsInformationIndustryGroup Related or acting-in-concert Ltd.andHongKongRisingInvestmentDevelopmentCo.,Ltd.areacting-in-concertparties. parties among shareholders Apartfromthat,itisunknownwhetherthereisamongthetop10shareholdersanyotherrelated above partiesoracting-in-concertpartiesasdefinedintheAdministrativeMeasuresfortheAcquisition ofListedCompanies. Top10unrestrictedordinaryshareholders Typeofshares Nameofshareholder Unrestrictedordinaryshares Type Shares HongKongWahShingHolding RMB-denominate 188,496,430 188,496,430 CompanyLimited dordinarystock ProsperityLamps&Components RMB-denominate 146,934,857 146,934,857 Limited dordinarystock Shenzhen Rising Investment 71,696,136RMB-denominate 71,696,136 DevelopmentCo.,Ltd. dordinarystock GuangdongElectronicsInformation RMB-denominate 66,393,501 66,393,501 IndustryGroupLtd. dordinarystock CentralHuijinAssetManagement RMB-denominate 33,878,900 33,878,900 Co.,Ltd. dordinarystock Essence International Securities Domestically 29,313,386listed foreign 29,313,386 (HongKong)Co.,Ltd. stock Hong Kong Rising Investment Domestically 25,482,252listed foreign 25,482,252 DevelopmentCo.,Ltd. stock DBSVickers(HongKong)LtdA/C Domestically 23,811,009listed foreign 23,811,009 Clients stock ChinaMerchantsSecurities(Hong Domestically 12,322,811listed foreign 12,322,811 Kong)Co.,Ltd stock RMB-denominate PengWeiyan 12,032,113 12,032,113 dordinarystock Relatedoracting-in-concertpartiesAmongthetop10unrestrictedordinaryshareholders,HongKongWahShingHoldingamongtop10unrestrictedordinaryCompanyLimited,ShenzhenRisingInvestmentDevelopmentCo.,Ltd.,Guangdongshareholders,aswellasbetweentopElectronicsInformationIndustryGroupLtd.andHongKongRisingInvestmentDevelopment 10 unrestricted ordinaryCo.,Ltd.areacting-in-concertparties.Apartfromthat,itisunknownwhetherthereisamong shareholdersandtop10ordinarythetop10shareholdersanyotherrelatedpartiesoracting-in-concertpartiesasdefinedinthe shareholders AdministrativeMeasuresfortheAcquisitionofListedCompanies. Amongthetop10unrestrictedshareholders,naturalpersonPengWeiyanholds0sharesinthe Top 10 ordinary shareholders Companythroughhercommonstockaccountsand12,032,113sharesintheCompanythrough conductingsecuritiesmargintrading heraccountsofcollateralsecuritiesformargintrading,representingatotalholdingof (ifany)(seenote4) 12,032,113sharesintheCompany. IVChangeofControllingShareholderorActualControllerinReportingPeriod ChangeofthecontrollingshareholderintheReportingPeriod: □Applicable√Notapplicable ThecontrollingshareholderremainedthesameintheReportingPeriod. ChangeoftheactualcontrollerintheReportingPeriod: □Applicable√Notapplicable TheactualcontrollerremainedthesameintheReportingPeriod. PartVIIPreferredShares □Applicable√Notapplicable NopreferredsharesintheReportingPeriod. PartVIIIDirectors,SupervisorsandSeniorManagement IChangesinShareholdingsofDirectors,SupervisorsandSeniorManagement √Applicable□Notapplicable Restricted Decrease Increasein shares Beginning in Ending Beginning Incumbent Reporting grantedin Endingrestricted Name Officetitle shareholdi Reportingshareholdi restricted /Former Period Reporting shares(share) ng(share) Period ng(share)shares(share) (share) Period (share) (share) Director& Liu General Incumbent 507,364 31,000 0 592,200 0 0 0 Xingming Manager Board LinYihui Incumbent 29,600 19,300 0 53,790 0 0 0 Secretary Tang CFO Incumbent 16,200 20,200 0 40,040 0 0 0 Qionglan Vice WeiBin General Incumbent 47,469 20,100 0 74,326 0 0 0 Manager Vice Jiao General Incumbent 53,944 14,600 0 75,399 0 0 0 Zhigang Manager Vice ChenYu General Incumbent 27,160 14,900 0 46,266 0 0 0 Manager Vice Zhang General Incumbent 26,711 19,700 0 51,052 0 0 0 Xuequan Manager Vice Zhang General Incumbent 34,660 15,700 0 55,396 0 0 0 Yong Manager Vice Xu General Incumbent 10,100 12,600 0 24,970 0 0 0 Xiaoping Manager Ye ZhenghonSupervisorIncumbent 52,428 6,900 0 65,261 0 0 0 g Total -- -- 805,636 175,000 01,078,700 0 0 0 Note:Theendingshareholdingsofthedirectors,supervisorsandseniormanagementinthetableaboveequaltheirbeginningholdings,plustheirincreasesintheCurrentPeriod,andplusthestockdividendsfromcapitalreservesaccordingtothe2017finaldividendplan. IIChangeofDirectors,SupervisorsandSeniorManagement √Applicable□Notapplicable Name Officetitle Typeofchange Dateofchange Reasonforchange Chairmanofthe LiangYuefei Supervisory Outgoing 8June2018 Jobchange Committee PartIXCorporateBonds DoestheCompanyhaveanycorporatebondspubliclyofferedonthestockexchange,whichwereunduebeforethedateofthisReport’sapprovalorwereduebutcouldnotberedeemedinfull? No. PartXFinancialStatements IIndependentAuditor’sReport Aretheseinterimfinancialstatementsauditedbyanindependentauditor? □Yes√No Theyareunauditedbysuchanauditor. IIFinancialStatements Currencyunitforthefinancialstatementsandthenotesthereto:RMB 1.ConsolidatedBalanceSheet PreparedbyFoshanElectricalandLightingCo.,Ltd. 30June2018 Unit:RMB Item 30June2018 31December2017 Currentassets: Monetaryassets 914,968,599.68 570,184,208.96 Settlementreserve Interbankloansgranted Financialassetsatfairvaluethrough profitorloss Derivativefinancialassets Notesreceivable 67,325,195.40 68,368,192.41 Accountsreceivable 994,690,386.07 756,291,432.56 Prepayments 30,415,238.48 33,095,313.35 Premiumsreceivable Reinsurancereceivables Receivable reinsurance contract reserve Interestreceivable 1,589,090.91 12,428,451.86 Dividendsreceivable Otherreceivables 37,100,965.10 21,215,215.15 Financialassetspurchasedunder resaleagreements Inventories 718,166,451.66 746,466,889.87 Assetsclassifiedasheldforsale Currentportionofnon-currentassets Othercurrentassets 348,511,668.85 1,006,062,102.56 Totalcurrentassets 3,112,767,596.15 3,214,111,806.72 Non-currentassets: Loansandadvancestocustomers Available-for-salefinancialassets 1,010,613,407.54 1,390,581,536.60 Held-to-maturityinvestments Long-termreceivables Long-termequityinvestments 176,473,300.95 179,414,105.14 Investmentproperty Fixedassets 511,806,666.21 483,520,866.64 Constructioninprogress 189,368,112.34 162,814,991.68 Engineeringmaterials Proceedsfromdisposaloffixed assets Productivelivingassets Oilandgasassets Intangibleassets 153,387,711.51 155,544,720.36 R&Dexpense Goodwill Long-termprepaidexpense 7,405,224.79 9,088,933.56 Deferredincometaxassets 34,933,025.45 37,675,828.79 Othernon-currentassets 42,106,140.00 43,059,034.80 Totalnon-currentassets 2,126,093,588.79 2,461,700,017.57 Totalassets 5,238,861,184.94 5,675,811,824.29 Currentliabilities: Short-termborrowings Borrowingsfromcentralbank Customerdepositsanddepositsfrom banksandotherfinancialinstitutions Interbankloansobtained Financialliabilitiesatfairvalue throughprofitorloss Derivativefinancialliabilities Notespayable 2,652,485.00 Accountspayable 679,471,875.75 539,303,554.54 Advancesfromcustomers 39,197,246.65 48,706,778.49 Financial assets sold under repurchaseagreements Handlingchargesandcommissions payable Payrollpayable 63,799,759.73 81,948,630.59 Taxespayable 46,542,385.81 27,350,670.40 Interestpayable Dividendspayable Otherpayables 35,648,829.55 40,548,489.03 Reinsurancepayables Insurancecontractreserve Payables for acting trading of securities Payables for underwriting of securities Liabilitiesdirectlyassociatedwith assetsclassifiedasheldforsale Current portion of non-current liabilities Othercurrentliabilities Totalcurrentliabilities 867,312,582.49 737,858,123.05 Non-currentliabilities: Long-termborrowings Bondspayable Including:Preferredshares Perpetualbonds Long-termpayables Long-termpayrollpayable Specificpayables Provisions Deferredincome 11,780,830.53 11,858,330.49 Deferredincometaxliabilities 69,465,031.60 126,460,250.96 Othernon-currentliabilities Totalnon-currentliabilities 81,245,862.13 138,318,581.45 Totalliabilities 948,558,444.62 876,176,704.50 Owners’equity: Sharecapital 1,399,346,154.00 1,272,132,868.00 Otherequityinstruments Including:Preferredshares Perpetualbonds Capitalreserves 158,608,173.07 285,821,459.07 Less:Treasuryshares Othercomprehensiveincome 393,631,982.39 716,607,333.78 Specificreserve Surplusreserves 772,953,002.36 772,953,002.36 Generalreserve Retainedearnings 1,542,346,538.43 1,731,600,796.18 Totalequityattributabletoownersof 4,266,885,850.25 4,779,115,459.39 theCompanyastheparent Non-controllinginterests 23,416,890.07 20,519,660.40 Totalowners’equity 4,290,302,740.32 4,799,635,119.79 Totalliabilitiesandowners’equity 5,238,861,184.94 5,675,811,824.29 Legalrepresentative:HeYong GeneralManager:LiuXingming ChiefFinancialOfficer:TangQionglan 2.BalanceSheetoftheCompanyastheParent Unit:RMB Item 30June2018 31December2017 Currentassets: Monetaryassets 624,071,920.48 502,169,100.40 Financialassetsatfairvaluethrough profitorloss Derivativefinancialassets Notesreceivable 66,615,195.40 67,268,192.41 Accountsreceivable 972,172,168.34 747,430,159.61 Prepayments 66,845,395.68 70,580,941.09 Interestreceivable 1,589,090.91 9,744,035.20 Dividendsreceivable Otherreceivables 72,164,535.91 42,174,877.89 Inventories 646,102,715.85 670,527,529.71 Assetsclassifiedasheldforsale Currentportionofnon-currentassets Othercurrentassets 339,075,203.39 777,495,203.31 Totalcurrentassets 2,788,636,225.96 2,887,390,039.62 Non-currentassets: Available-for-salefinancialassets 1,010,613,407.54 1,390,581,536.60 Held-to-maturityinvestments Long-termreceivables Long-termequityinvestments 660,266,403.21 663,207,207.40 Investmentproperty Fixedassets 425,385,486.39 404,667,257.11 Constructioninprogress 187,700,809.13 161,024,975.28 Engineeringmaterials Proceedsfromdisposaloffixed assets Productivelivingassets Oilandgasassets Intangibleassets 109,868,785.34 112,251,734.86 R&Dexpense Goodwill Long-termprepaidexpense 6,193,662.18 8,209,699.77 Deferredincometaxassets 32,668,456.01 32,985,075.62 Othernon-currentassets 42,106,140.00 42,661,573.80 Totalnon-currentassets 2,474,803,149.80 2,815,589,060.44 Totalassets 5,263,439,375.76 5,702,979,100.06 Currentliabilities: Short-termborrowings Financialliabilitiesatfairvalue throughprofitorloss Derivativefinancialliabilities Notespayable 2,652,485.00 Accountspayable 877,507,812.49 719,912,246.75 Advancesfromcustomers 37,809,995.34 47,306,971.94 Payrollpayable 43,953,007.55 60,345,714.81 Taxespayable 35,237,842.58 13,294,037.24 Interestpayable Dividendspayable Otherpayables 99,671,341.22 96,824,757.90 Liabilitiesdirectlyassociatedwith assetsclassifiedasheldforsale Current portion of non-current liabilities Othercurrentliabilities Totalcurrentliabilities 1,096,832,484.18 937,683,728.64 Non-currentliabilities: Long-termborrowings Bondspayable Including:Preferredshares Perpetualbonds Long-termpayables Long-termpayrollpayable Specificpayables Provisions Deferredincome 11,548,330.26 11,548,330.26 Deferredincometaxliabilities 69,465,031.60 126,460,250.96 Othernon-currentliabilities Totalnon-currentliabilities 81,013,361.86 138,008,581.22 Totalliabilities 1,177,845,846.04 1,075,692,309.86 Owners’equity: Sharecapital 1,399,346,154.00 1,272,132,868.00 Otherequityinstruments Including:Preferredshares Perpetualbonds Capitalreserves 166,211,779.15 293,425,065.15 Less:Treasuryshares Othercomprehensiveincome 393,635,179.08 716,608,088.78 Specificreserve Surplusreserves 772,953,002.36 772,953,002.36 Retainedearnings 1,353,447,415.13 1,572,167,765.91 Totalowners’equity 4,085,593,529.72 4,627,286,790.20 Totalliabilitiesandowners’equity 5,263,439,375.76 5,702,979,100.06 Legalrepresentative:HeYong GeneralManager:LiuXingming ChiefFinancialOfficer:TangQionglan 3.ConsolidatedIncomeStatement Unit:RMB Item H12018 H12017 1.Revenue 2,064,779,289.99 2,023,925,582.84 Including:Operatingrevenue 2,064,779,289.99 2,023,925,582.84 Interestincome Premiumincome Handlingchargeandcommission income 2.Operatingcostsandexpenses 1,812,566,821.34 1,764,705,009.46 Including:Costofsales 1,579,291,867.89 1,546,931,779.85 Interestexpense Handlingchargeandcommission expense Surrenders Netclaimspaid Netamountprovidedasinsurance contractreserve Expenditureonpolicydividends Reinsurancepremiumexpense Taxesandsurtaxes 21,962,518.24 20,386,602.33 Sellingexpense 103,917,010.47 81,651,993.69 Administrativeexpense 104,474,031.52 98,790,821.60 Financecosts -13,085,476.61 -7,115,907.36 Assetimpairmentloss 16,006,869.83 24,059,719.35 Add:Gainonchangesinfairvalue(“-” forloss) Investmentincome(“-”forloss) 24,509,870.36 14,009,282.02 Including:Shareofprofitorlossof 179,781.56 1,543,965.79 jointventuresandassociates Foreignexchangegain(“-”forloss) Assetdisposalincome(“-”forloss) -10,790.68 Otherincome 1,018,385.17 3,302,994.36 3.Operatingprofit(“-”forloss) 277,740,724.18 276,522,059.08 Add:Non-operatingincome 1,669,856.43 2,719,401.52 Less:Non-operatingexpense 191,749.42 4,758,983.01 4.Profitbeforetaxation(“-”forloss) 279,218,831.19 274,482,477.59 Less:Incometaxexpense 47,044,145.70 42,597,501.35 5.Netprofit(“-”fornetloss) 232,174,685.49 231,884,976.24 5.1 Net profit from continuing 232,174,685.49 231,884,976.24 operations(“-”fornetloss) 5.2Netprofitfromdiscontinued operations(“-”fornetloss) Netprofitattributabletoownersofthe 229,277,455.82 228,494,660.57 Companyastheparent Net profit attributable to 2,897,229.67 3,390,315.67 non-controllinginterests 6.Othercomprehensiveincome,netof -322,975,351.39 23,025,471.14 tax AttributabletoownersoftheCompany -322,975,351.39 23,025,471.14 astheparent 6.1 Items that will not be reclassifiedtoprofitorloss 6.1.1Changesinnetliabilitiesor assetscausedbyremeasurementson definedbenefitpensionschemes 6.1.2 Share of other comprehensiveincomeofinvesteesthat willnotbereclassifiedtoprofitorloss underequitymethod 6.2Itemsthatmaysubsequentlybe -322,975,351.39 23,025,471.14 reclassifiedtoprofitorloss 6.2.1 Share of other comprehensiveincomeofinvesteesthat willbereclassifiedtoprofitorlossunder equitymethod 6.2.2Gain/Lossonchangesinfair value of available-for-sale financial -322,972,909.70 23,025,471.14 assets 6.2.3 Gain/Loss arising from reclassification of held-to-maturity investmentstoavailable-for-salefinancial assets 6.2.4Effectivegain/lossoncash flowhedges 6.2.5Differencesarisingfrom translation of foreign -2,441.69 currency-denominated financial statements 6.2.6Other Attributable to non-controlling interests 7.Totalcomprehensiveincome -90,800,665.90 254,910,447.38 AttributabletoownersoftheCompany -93,697,895.57 251,520,131.71 astheparent Attributable to non-controlling 2,897,229.67 3,390,315.67 interests 8.Earningspershare 8.1Basicearningspershare 0.1638 0.1633 8.2Dilutedearningspershare 0.1638 0.1633 WherebusinesscombinationsundercommoncontroloccurredintheCurrentPeriod,thenetprofitachievedbytheacquireesbeforethecombinationswasRMB0.00,withtheamountforthesameperiodoflastyearbeingRMB0.00. Legalrepresentative:HeYong GeneralManager:LiuXingming ChiefFinancialOfficer:TangQionglan 4.IncomeStatementoftheCompanyastheParent Unit:RMB Item H12018 H12017 1.Operatingrevenue 2,004,288,444.76 1,980,196,404.29 Less:Costofsales 1,587,394,320.53 1,549,957,656.10 Taxesandsurtaxes 17,214,406.11 14,028,299.06 Sellingexpense 91,117,192.72 74,062,826.39 Administrativeexpense 96,241,158.47 98,398,538.37 Financecosts -12,655,059.12 -4,474,253.64 Assetimpairmentloss 15,224,655.05 23,053,208.55 Add:Gainonchangesinfairvalue (“-”forloss) Investmentincome(“-”forloss) 21,037,840.32 12,903,476.48 Including:Shareofprofitorloss 179,781.56 1,543,965.79 ofjointventuresandassociates Assetdisposalincome(“-”for loss) Otherincome 561,343.06 3,285,240.00 2.Operatingprofit(“-”forloss) 231,350,954.38 241,358,845.94 Add:Non-operatingincome 1,572,451.59 2,461,593.41 Less:Non-operatingexpense 164,104.09 2,041,377.50 3.Profitbeforetaxation(“-”forloss) 232,759,301.88 241,779,061.85 Less:Incometaxexpense 32,947,939.09 34,045,999.98 4.Netprofit(“-”fornetloss) 199,811,362.79 207,733,061.87 4.1 Net profit from continuing 199,811,362.79 207,733,061.87 operations(“-”fornetloss) 4.2Netprofitfromdiscontinued operations(“-”fornetloss) 5.Othercomprehensiveincome,netof -322,972,909.70 23,025,471.14 tax 5.1Itemsthatwillnotbereclassified toprofitorloss 5.1.1Changesinnetliabilitiesor assetscausedbyremeasurementson definedbenefitpensionschemes 5.1.2 Share of other comprehensiveincomeofinvesteesthat willnotbereclassifiedintoprofitor lossunderequitymethod 5.2Itemsthatmaysubsequentlybe -322,972,909.70 23,025,471.14 reclassifiedtoprofitorloss 5.2.1 Share of other comprehensiveincomeofinvesteesthat willbereclassifiedintoprofitorloss underequitymethod 5.2.2Gain/Lossonchangesinfair valueofavailable-for-salefinancial -322,972,909.70 23,025,471.14 assets 5.2.3 Gain/Loss arising from reclassification of held-to-maturity investments to available-for-sale financialassets 5.2.4Effectivegain/lossoncash flowhedges 5.2.5Differencesarisingfrom translation of foreign currency-denominated financial statements 5.2.6Other 6.Totalcomprehensiveincome -123,161,546.91 230,758,533.01 7.Earningspershare 7.1Basicearningspershare 7.2Dilutedearningspershare Legalrepresentative:HeYong GeneralManager:LiuXingming ChiefFinancialOfficer:TangQionglan 5.ConsolidatedCashFlowStatement Unit:RMB Item H12018 H12017 1.Cashflowsfromoperatingactivities: Proceedsfromsaleofcommodities 1,769,237,743.67 1,754,303,637.97 andrenderingofservices Netincreaseincustomerdepositsand depositsfrombanksandotherfinancial institutions Netincreaseinloansfromcentral bank Netincreaseinloansfromother financialinstitutions Premiums received on original insurancecontracts Netproceedsfromreinsurance Net increase in deposits and investmentsofpolicyholders Net increase in proceeds from disposaloffinancialassetsatfairvalue throughprofitorloss Interest, handling charges and commissionsreceived Netincreaseininterbankloans obtained Net increase in proceeds from repurchasetransactions Taxrebates 47,287,499.42 42,499,505.18 Cashgeneratedfromotheroperating 33,545,832.35 28,893,716.10 activities Subtotal of cash generated from 1,850,071,075.44 1,825,696,859.25 operatingactivities Payments for commodities and 1,131,421,056.92 1,114,835,724.72 services Netincreaseinloansandadvancesto customers Netincreaseindepositsincentral bankandininterbankloansgranted Paymentsforclaimsonoriginal insurancecontracts Interest, handling charges and commissionspaid Policydividendspaid Cashpaidtoandforemployees 339,556,840.55 371,942,160.26 Taxespaid 137,020,623.78 262,092,182.25 Cash used in other operating 97,348,775.81 107,889,979.24 activities Subtotalofcashusedinoperating 1,705,347,297.06 1,856,760,046.47 activities Net cash generated from/used in 144,723,778.38 -31,063,187.22 operatingactivities 2.Cashflowsfrominvestingactivities: Proceedsfromdisinvestment 660,000,000.00 Investmentincome 34,539,472.29 15,011,705.23 Netproceedsfromdisposaloffixed assets,intangibleassetsandother 1,626,000.00 long-livedassets Net proceeds from disposal of subsidiariesorotherbusinessunits Cashgeneratedfromotherinvesting activities Subtotal of cash generated from 694,539,472.29 16,637,705.23 investingactivities Paymentsforacquisitionoffixed assets,intangibleassetsandother 90,700,439.05 108,664,080.94 long-livedassets Paymentsforinvestments 20,000,000.00 Netincreaseinpledgedloansgranted Netpaymentsforacquisitionof subsidiariesandotherbusinessunits Cash used in other investing 3,304,699.80 activities Subtotalofcashusedininvesting 94,005,138.85 128,664,080.94 activities Net cash generated from/used in 600,534,333.44 -112,026,375.71 investingactivities 3.Cashflowsfromfinancingactivities: Capitalcontributionsreceived Including:Capitalcontributionsby non-controllingintereststosubsidiaries Increaseinborrowingsobtained Netproceedsfromissuanceofbonds Cashgeneratedfromotherfinancing activities Subtotal of cash generated from financingactivities Repaymentofborrowings Paymentsforinterestanddividends 405,163,764.00 522,068,416.83 Including: Dividends paid by 5,660,290.78 subsidiariestonon-controllinginterests Cash used in other financing activities Subtotalofcashusedinfinancing 405,163,764.00 522,068,416.83 activities Net cash generated from/used in -405,163,764.00 -522,068,416.83 financingactivities 4.Effectofforeignexchangerate 1,385,343.10 912,356.51 changesoncashandcashequivalents 5.Netincreaseincashandcash 341,479,690.92 -664,245,623.25 equivalents Add: Cash and cash equivalents, 570,184,208.96 1,479,283,642.54 beginningoftheperiod 6.Cashandcashequivalents,endofthe 911,663,899.88 815,038,019.29 period Legalrepresentative:HeYong GeneralManager:LiuXingming ChiefFinancialOfficer:TangQionglan 6.CashFlowStatementoftheCompanyastheParent Unit:RMB Item H12018 H12017 1.Cashflowsfromoperatingactivities: Proceedsfromsaleofcommodities 1,712,676,401.03 1,700,716,001.72 andrenderingofservices Taxrebates 47,263,864.23 42,499,505.18 Cashgeneratedfromotheroperating 26,388,452.49 24,406,290.15 activities Subtotal of cash generated from 1,786,328,717.75 1,767,621,797.05 operatingactivities Payments for commodities and 1,263,659,844.11 1,363,028,963.41 services Cashpaidtoandforemployees 209,185,383.63 167,453,782.97 Taxespaid 87,060,201.23 200,061,046.37 Cash used in other operating 85,851,338.88 101,737,482.16 activities Subtotalofcashusedinoperating 1,645,756,767.85 1,832,281,274.91 activities Net cash generated from/used in 140,571,949.90 -64,659,477.86 operatingactivities 2.Cashflowsfrominvestingactivities: Proceedsfromdisinvestment 440,000,000.00 35,000,000.00 Investmentincome 30,667,499.69 28,724,845.24 Netproceedsfromdisposaloffixed assets,intangibleassetsandother 1,580,000.00 long-livedassets Net proceeds from disposal of subsidiariesorotherbusinessunits Cashgeneratedfromotherinvesting activities Subtotal of cash generated from 470,667,499.69 65,304,845.24 investingactivities Paymentsforacquisitionoffixed assets,intangibleassetsandother 85,557,155.41 99,538,768.93 long-livedassets Paymentsforinvestments Netpaymentsforacquisitionof subsidiariesandotherbusinessunits Cash used in other investing 3,304,699.80 activities Subtotalofcashusedininvesting 88,861,855.21 99,538,768.93 activities Net cash generated from/used in 381,805,644.48 -34,233,923.69 investingactivities 3.Cashflowsfromfinancingactivities: Capitalcontributionsreceived Increaseinborrowingsobtained Netproceedsfromissuanceofbonds Cashgeneratedfromotherfinancing activities Subtotal of cash generated from financingactivities Repaymentofborrowings Paymentsforinterestanddividends 405,163,764.00 516,408,126.05 Cash used in other financing activities Sub-totalofcashusedinfinancing 405,163,764.00 516,408,126.05 activities Net cash generated from/used in -405,163,764.00 -516,408,126.05 financingactivities 4.Effectofforeignexchangerate 1,384,289.90 912,356.51 changesoncashandcashequivalents 5.Netincreaseincashandcash 118,598,120.28 -614,389,171.09 equivalents Add: Cash and cash equivalents, 502,169,100.40 1,235,417,964.88 beginningoftheperiod 6.Cashandcashequivalents,endofthe 620,767,220.68 621,028,793.79 period Legalrepresentative:HeYong GeneralManager:LiuXingming ChiefFinancialOfficer:TangQionglan 7.ConsolidatedStatementsofChangesinOwners’Equity H12018 Unit:RMB H12018 EquityattributabletoownersoftheCompanyastheparent Otherequity Non-co Item Other Retaine Total instruments Less: ntrollin Share Capital compreSpecificSurplusGeneral d owners’ PreferPerpet Treasur g capital reserves hensivereservereservesreserveearning equity red ual Other yshares interests income s sharesbonds 1,272, 1,731,6 4,799,6 1.Balancesasof 285,821 716,607 772,953 20,519, 132,86 00,796. 35,119. endofprioryear ,459.07 ,333.78 ,002.36 660.40 8.00 18 79 Add:Adjustments for changed accounting policies Adjustmentsfor corrections of previouserrors Adjustmentsfor business combinations under common control Other adjustments 2.Balancesasof1,272, 1,731,6 4,799,6 285,821 716,607 772,953 20,519, beginningofthe132,86 00,796. 35,119. ,459.07 ,333.78 ,002.36 660.40 year 8.00 18 79 3. Increase/ 127,21 -127,21 -322,97 -189,25 -509,33 decrease in the 2,897,2 3,286. 3,286.0 5,351.3 4,257.7 2,379.4 period (“-” for 29.67 00 0 9 5 7 decrease) 3.1 Total -322,97 229,2772,897,2-90,800, comprehensive 5,351.3 ,455.82 29.67665.90 income 9 3.2 Capital increased and reducedbyowners 3.2.1 Ordinaryshares increasedby shareholders 3.2.2Capital increasedby holdersofother equityinstruments 3.2.3 Share-based paymentsincluded inowners’equity 3.2.4Other -418,53 -418,53 3.3 Profit 1,713.5 1,713.5 distribution 7 7 3.3.1 Appropriation to surplusreserves 3.3.2 Appropriation to generalreserve 3.3.3 -418,53 -418,53 Appropriation to 1,713.5 1,713.5 owners (or 7 7 shareholders) 3.3.4Other 3.4 127,21 -127,21 Carryforwards 3,286. 3,286.0 within owners’ 00 0 equity 3.4.1Increase 127,21 -127,21 incapital(orshare 3,286. 3,286.0 capital) from 00 0 capitalreserves 3.4.2Increase incapital(orshare capital) from surplusreserves 3.4.3Surplus reservesusedto makeuplosses 3.4.4Other 3.5 Specific reserve 3.5.1 Withdrawnforthe period 3.5.2 Used duringtheperiod 3.6Other 1,399, 1,542,3 4,290,3 4.Balancesasof 158,608 393,631 772,953 23,416, 346,15 46,538. 02,740. endoftheperiod ,173.07 ,982.39 ,002.36 890.07 4.00 43 32 31December2017 Unit:RMB H12017 EquityattributabletoownersoftheCompanyastheparent Non-co Total Item Share Otherequity Capital Less: OtherSpecificSurplusGeneralRetainentrollinowners’ capital instruments reservesTreasurcomprereservereservesreserve d g equity PreferPerpet yshareshensive earningsinterest red ual Other income s sharesbonds 1,272, 1,133,9 1,564,6 5,005,4 1.Balancesasof 285,821 733,924 15,008, 132,86 71,372. 15,925. 74,643. endofprioryear ,459.07 ,951.81 066.44 8.00 25 99 56 Add:Adjustments for changed accounting policies Adjustmentsfor corrections of previouserrors Adjustmentsfor business combinations under common control Other adjustments 2.Balancesasof1,272, 1,133,9 1,564,6 5,005,4 285,821 733,924 15,008, beginningofthe132,86 71,372. 15,925. 74,643. ,459.07 ,951.81 066.44 year 8.00 25 99 56 3. Increase/ -417,36 -205,83 decrease in the 39,028, 166,9845,511,5 4,038.4 9,523.7 period (“-” for 050.55 ,870.19 93.96 7 7 decrease) 3.1 Total -417,36 740,3085,511,5328,456 comprehensive 4,038.4 ,725.30 93.96,280.79 income 7 3.2 Capital increased and reducedbyowners 3.2.1 Ordinaryshares increasedby shareholders 3.2.2Capital increasedby holdersofother equityinstruments 3.2.3 Share-based paymentsincluded inowners’equity 3.2.4Other -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 surplusreserves 3.3.2 Appropriation to generalreserve 3.3.3 -534,29 -534,29 Appropriation to 5,804.5 5,804.5 owners (or 6 6 shareholders) 3.3.4Other 3.4 Carryforwards within owners’ equity 3.4.1Increase incapital(orshare capital) from capitalreserves 3.4.2Increase incapital(orshare capital) from surplusreserves 3.4.3Surplus reservesusedto makeuplosses 3.4.4Other 3.5 Specific reserve 3.5.1 Withdrawnforthe period 3.5.2 Used duringtheperiod 3.6Other 4.Balancesasof1,272, 285,821 716,607 772,953 1,731,620,519,4,799,6 endoftheperiod 132,86 ,459.07 ,333.78 ,002.36 00,796.660.4035,119. 8.00 18 79 Legalrepresentative:HeYong GeneralManager:LiuXingming ChiefFinancialOfficer:TangQionglan 8.StatementsofChangesinOwners’EquityoftheCompanyastheParent H12018 Unit:RMB H12018 Otherequityinstruments Other Item Less: Retaine Total Share Capital compreheSpecific Surplus PreferrePerpetu Treasury d owners’ capital Other reserves nsive reserve reserves dsharesalbonds shares earnings equity income 1,572,1 1.Balancesasof1,272,13 293,425,0 716,608,0 772,953,0 4,627,286 67,765. endofprioryear 2,868.00 65.15 88.78 02.36 ,790.20 91 Add:Adjustments for changed accounting policies Adjustmentsfor corrections of previouserrors Other adjustments 2.Balancesasof 1,572,1 1,272,13 293,425,0 716,608,0 772,953,0 4,627,286 beginningofthe 67,765. 2,868.00 65.15 88.78 02.36 ,790.20 year 91 3. Increase/ -218,72 decrease in the127,213, -127,213, -322,972, -541,693, 0,350.7 period (“-” for 286.00 286.00 909.70 260.48 8 decrease) 3.1 Total -322,972, 199,811-123,161, comprehensive 909.70 ,362.79 546.91 income 3.2 Capital increased and reducedbyowners 3.2.1 Ordinaryshares increasedby shareholders 3.2.2Capital increasedby holdersofother equityinstruments 3.2.3 Share-based paymentsincluded inowners’equity 3.2.4Other -418,53 3.3 Profit -418,531, 1,713.5 distribution 713.57 7 3.3.1 Appropriation to surplusreserves 3.3.2 -418,53 Appropriation to -418,531, 1,713.5 owners (or 713.57 7 shareholders) 3.3.3Other 3.4 Carryforwards 127,213, -127,213, within owners’ 286.00 286.00 equity 3.4.1Increase incapital(orshare127,213, -127,213, capital) from 286.00 286.00 capitalreserves 3.4.2Increase incapital(orshare capital) from surplusreserves 3.4.3Surplus reservesusedto makeuplosses 3.4.4Other 3.5 Specific reserve 3.5.1 Withdrawnforthe period 3.5.2 Used duringtheperiod 3.6Other 1,353,4 4.Balancesasof1,399,34 166,211,7 393,635,1 772,953,0 4,085,593 47,415. endoftheperiod 6,154.00 79.15 79.08 02.36 ,529.72 13 31December2017 Unit:RMB H12017 Otherequityinstruments Other Item Less: Retaine Total Share Capital compreheSpecific Surplus PreferrePerpetu Treasury d owners’ capital Other reserves nsive reserve reserves dsharesalbonds shares earnings equity income 1,448,9 1.Balancesasof1,272,13 293,425,0 1,133,971 733,924,9 4,882,362 07,867. endofprioryear 2,868.00 65.15 ,372.25 51.81 ,124.94 73 Add:Adjustments for changed accounting policies Adjustmentsfor corrections of previouserrors Other adjustments 2.Balancesasof 1,448,9 1,272,13 293,425,0 1,133,971 733,924,9 4,882,362 beginningofthe 07,867. 2,868.00 65.15 ,372.25 51.81 ,124.94 year 73 3. Increase/ decrease in the -417,363, 39,028,05123,259-255,075, period (“-” for 283.47 0.55,898.18 334.74 decrease) 3.1 Total -417,363, 696,583279,220,4 comprehensive 283.47 ,753.29 69.82 income 3.2 Capital increased and reducedbyowners 3.2.1 Ordinaryshares increasedby shareholders 3.2.2Capital increasedby holdersofother equityinstruments 3.2.3 Share-based paymentsincluded inowners’equity 3.2.4Other -573,32 3.3 Profit 39,028,05 -534,295, 3,855.1 distribution 0.55 804.56 1 3.3.1 39,028,05-39,028, Appropriation to 0.55 050.55 surplusreserves 3.3.2 -534,29 Appropriation to -534,295, 5,804.5 owners (or 804.56 6 shareholders) 3.3.3Other 3.4 Carryforwards within owners’ equity 3.4.1Increase incapital(orshare capital) from capitalreserves 3.4.2Increase incapital(orshare capital) from surplusreserves 3.4.3Surplus reservesusedto makeuplosses 3.4.4Other 3.5 Specific reserve 3.5.1 Withdrawnforthe period 3.5.2 Used duringtheperiod 3.6Other 1,572,1 4.Balancesasof1,272,13 293,425,0 716,608,0 772,953,0 4,627,286 67,765. endoftheperiod 2,868.00 65.15 88.78 02.36 ,790.20 91 Legalrepresentative:HeYong GeneralManager:LiuXingming ChiefFinancialOfficer:TangQionglan IIICompanyProfile FoshanElectricalandLightingCo.,Ltd.(hereinafterreferredtoas“theCompany”),ajoint-stocklimitedcompanyjointlyfoundedbyFoshanElectricalandLightingCompany,NanhaiWuzhuangColorGlazedBrickField,andFoshanPoyangPrintingIndustrialCo.on20October1992byraisingfundsundertheapprovalofYGS(1992)No.63DocumentissuedbytheJointExaminationGroupforExperimentalEnterprisesinStockSystemofGuangdongProvinceandtheEconomicSystemReformCommissionofGuangdongProvince,isanenterprisewithitssharesheldbyboththecorporateandthenaturalpersons.AsapprovedbyChinaSecuritiesRegulatoryCommissionwithDocument(1993)No.33,theCompanypubliclyissued19.3millionsharesofsocialpublicshares(Ashares)tothepublicinOctober1993,andwaslistedinShenzhenStockExchangefortradeon23November1993.TheCompanywasapprovedtoissue50,000,000Bshareson23July1995.And,asapprovedtochangeintoaforeign-investedstocklimitedcompanyon26August1996by(1996)WJMZEHZNo.466DocumentissuedbytheMinistryofForeignTradeandEconomicCooperationofthePeople’sRepublicofChina.On11December2000,asapprovedbyChinaSecuritiesRegulatoryCommissionwithZJGSZi[2000]No.175Document,theCompanyadditionallyissued55,000,000Ashares.AtapprovedbytheAnnualGeneralMeetingof2006,2007,2008,2014,and2017theCompanyimplementedtheplanofcapitalizationofcapitalreserve,afterthetransfer,theregisteredcapitaloftheCompanyhasincreasedtoRMB1,399,346,154.00 CredibilitycodeoftheCompany:91440000190352575W. Legalrepresentative:Mr.HeYong Address:No.64,FenjiangNorthRoad,Foshan,GuangdongProvince Mainbusinessofthecompanyanditssubsidiaries(hereinafterreferredtoas“theCompany”):lightingproductsandelectrotechnicalproducts. ThebusinesstermoftheCompanyislong-term,whichwascalculatedfromthedateofissuanceofLicenseofBusinessCorporation. TheFinancialReportwasapprovedandauthorizedforissuebytheBoardofDirectorson28August2018. (II).ScopeoftheConsolidatedFinancialStatements TheconsolidationscopeofthefinancialstatementduringtheReportingPeriodincludingtheCompanyandthe10subordinatesubsidiariessuchasFoshanLightingChanchangOptoelectronicsCo.,Ltd.(referredtoas“ChanchangCompany”),FoshanChanshengElectronicBallastCo.,Ltd.(referredtoas“ChanshengCompany”),FoshanTaimeiTimesLampsandLanternsCo.,Ltd.(referredtoas“TaimeiCompany”),NanjingFozhaoLightingComponentsCo.,Ltd.(referredtoas“NanjingFozhao”),FSL(Xinxiang)LightingCo.,Ltd.(referredtoas“XinxiangCompany”),FoshanElectricalandLightingNewLightSourceTechnologyCo.,Ltd.(referredtoas“NewLightSourceCompany”),GuangdongFozhaoLeasingCo.,Ltd.(referredtoas“LeasingCompany”),FoshanLightingLamps&ComponentsCo.,Ltd.(referredtoas“Lamps&ComponentsCompany”)andFSLZhidaElectricTechnologyCo.,Ltd(referredtoas“ZhidaElectricTechnology”),andFSLLightingGmbH(referredtoas“FSLEurope”). Fordetails,seerelevantcontentsinNoteVIII“Changesintheconsolidationscope”,andNoteIX“Equitiesinotherentities” IVBasisforPreparationofFinancialStatements 1.PreparationBasis ThefinancialstatementsoftheCompanyarebasedonthecontinuingoperation,andareconfirmedandmeasuredaccordingtotheactualtransactionsandevents,theAccountingStandardsforBusinessEnterprises-Basic Standards,othervariousspecificaccountingstandards,theapplicationguide,theinterpretationofaccountingstandardsforbusinessenterprises(hereinafterreferredtoastheAccountingStandardsforBusinessEnterprises).Andbasedonthefollowingimportantaccountingpolicies,andaccountingestimations,theyarepreparedaccordingtotherelevantregulationsofRulesfortheInformationDisclosureofCompaniesPubliclyIssuingSecuritiesNo.15-GeneralProvisionsonFinancialReportingofChinaSecuritiesRegulatoryCommission(Revisedin2014).ExcepttheCashFlowStatementpreparedundertheprincipleofcashbasis,therestoffinancialstatementoftheCompanyarepreparedundertheprincipleofaccrualbasis. TheCompanydidn’tfindanythinglikebeingsuspiciousoftheabilityofcontinuingoperationwithin12monthsfromtheendoftheReportingPeriodwithallavailableinformation. 2.Continuation TheCompanyhasnomattersaffectingthecontinuingoperationoftheCompanyandisexpectedtohavetheabilitytocontinuetooperateinthenext12months.ThefinancialstatementsoftheCompanyarepreparedonthebasisofcontinuingoperation. VImportantAccountingPoliciesandEstimations Remindersofthespecificaccountingpoliciesandaccountingestimations: TheCompanyconfirmedthespecificaccountingpoliciesandestimationsaccordingtoproductionandoperationfeatures,mainlyreflectinginthemethodofprovisionforaccountsreceivablesbaddebt(Note11.AccountReceivables),pricingmethodofinventory(Note12.Inventory),depreciationoffixedassetsandamortizationofintangibleassets(Note16.FixedAssetsandNote21.IntangibleAssets),andrecognizedtimepointofincome(Note28.Income),etc. 1.StatementofCompliancewiththeAccountingStandardsforBusinessEnterprises ThefinancialstatementspreparedbytheCompanyareincompliancewiththeAccountingStandardsforBusinessEnterprises,whichfactuallyandcompletelypresenttheCompany’sandtheconsolidatedfinancialpositions,businessresultsandcashflows,aswellasotherrelevantinformation. 2.FiscalYear AfiscalyearstartsonJanuary1standendsonDecember31staccordingtotheGregoriancalendar. 3.OperatingCycle AnoperatingcyclefortheCompanyis12months,whichisalsotheclassificationcriterionfortheliquidityofitsassetsandliabilities. 4.RecordingCurrency RenminbiistherecordingcurrencyforthestatementsoftheCompany,andthefinancialstatementsarelistedandpresentedbyRenminbi. 5.AccountingTreatmentMethodsforBusinessCombinationsundertheSameControlornotundertheSameControl 1.Businesscombinationsunderthesamecontrol Forthemergerofenterprisesunderthesamecontrol,iftheconsiderationofthemergingenterpriseisthatitmakespaymentincash,transfersnon-cashassetsorbearitsdebts,itshall,onthedateofmerger,regardtheshareofthe bookvalueamongfinalcontroller’sconsolidatedfinancialstatementoftheowner'sequityofthemergedenterpriseastheinitialcostofthelong-termequityinvestment.Thedifferencebetweentheinitialcostofthelong-termequityinvestmentandthepaymentincash,non-cashassetstransferredaswellasthebookvalueofthedebtsbornebythemergingpartyshalloffsetagainstthecapitalreserve.Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted. Iftheconsiderationofthemergingenterpriseisthatitissuesequitysecurities,itshall,onthedateofmerger,regardtheshareofthebookvalueamongfinalcontroller’sconsolidatedfinancialstatementoftheowner'sequityofthemergedenterpriseastheinitialcostofthelong-termequityinvestment.Thetotalfacevalueofthestocksissuedshallberegardedasthecapitalstock,whilethedifferencebetweentheinitialcostofthelong-termequityinvestmentandtotalfacevalueofthesharesissuedshalloffsetagainstthecapitalreserve.Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted. 2.Businesscombinationsnotunderthesamecontrol TheCompanymeasuredthepaidassetsastheconsiderationofbusinesscombinationandliabilitieshappenedorundertakenbyfairvalue.Thedifferencebetweenfairvalueanditsbookvalueshallbeincludedintothecurrentlossesandgains.TheCompanydistributedcombinedcostonthepurchasingdate. Thedifferenceofthecombinationcostgreaterthanthefairvalueoftheidentifiablenetassetsoftheacquireeacquiredisrecognizedasgoodwill;thedifferenceofthecombinationcostlessthanthefairvalueoftheidentifiablenetassetsoftheacquireeacquiredisincludedintocurrentlossesandgains. Asfortheassetsotherthanintangibleassetsacquiredfromtheacquireeinabusinesscombination(notlimitedtotheassetswhichhavebeenrecognizedbytheacquiree),iftheeconomicbenefitsbroughtbythemarelikelytoflowintotheCompanyandtheirfairvaluescanbemeasuredreliably,theyshallbeseparatelyrecognizedandmeasuredinlightoftheirfairvalues;intangibleassetwhosefairvaluecanbemeasuredreliablyshallbeseparatelyrecognizedasanintangibleassetandshallmeasuredinlightofitsfairvalue;Asfortheliabilitiesotherthancontingentliabilitiesacquiredfromtheacquiree,iftheperformanceoftherelevantobligationsislikelytoresultinanyout-flowofeconomicbenefitsfromtheCompany,andtheirfairvaluescanbemeasuredreliably,theyshallbeseparatelyrecognizedandmeasuredinlightoftheirfairvalues;Asforthecontingentliabilitiesoftheacquiree,iftheirfairvaluescanbemeasuredreliably,theyshallseparatelyrecognizedasliabilitiesandshallbemeasuredinlightoftheirfairvalues. 6.MethodsforPreparingConsolidatedFinancialStatements 1.Principleofdeterminingthescopeofconsolidation ThescopeofconsolidationoftheconsolidatedfinancialstatementsoftheCompanyisdeterminedonthebasisofcontrol.Controlmeansthattheinvestorshastherighttoinvestintheinvesteeandenjoyavariablereturnthroughtheparticipationoftherelevantactivitiesoftheinvestee,andhastheabilitytousethepowerovertheinvesteetoaffecttheamountofitsreturn.TheCompanyincludesthesubsidiarieswithactualrightofcontrol(includingseparateentitycontrolledbytheParentCompany)intoconsolidatedfinancialstatements. 2.Principles,proceduresandmethodsforthepreparationofconsolidatedstatements (1)Principles,proceduresandmethodsforthepreparationofconsolidatedstatements AllsubsidiariesincludedintothescopeofconsolidatedfinancialstatementsadoptedsameaccountingpoliciesandfiscalyearwiththeCompany.IftheaccountingpoliciesandfiscalyearofthesubsidiariesaredifferenttotheCompany’s,necessaryadjustmentshouldbemadeinaccordancewiththeCompany’saccountingpoliciesandfiscalyearwhenconsolidatedfinancialstatementsareprepared. TheconsolidatedfinancialstatementsarebasedonthefinancialstatementsoftheParentCompanyandsubsidiariesincludedintotheconsolidatedscope.Theconsolidatedfinancialstatementsarepreparedbythe Companywhomakesadjustmenttolong-termequityinvestmenttosubsidiariesbyequitymethodaccordingtootherrelevantmaterialsaftertheoffsetoftheshareheldbytheParentCompanyintheequitycapitalinvestmentoftheParentCompanyandowner’sequityofsubsidiariesandthesignificanttransactionsandintrabranchwithintheCompany. Forthebalanceformedbecausethecurrentlosssharedbytheminorityshareholdersofthesubsidiaryismorethantheshareenjoyedbytheminorityshareholdersofthesubsidiaryintheinitialshareholders’equity,iftheArticlesofCorporationorAgreementdidn’tstipulatethatminorityshareholdersshouldberesponsibleforit,thenthebalanceneedtooffsettheshareholders’equityoftheCompany;iftheArticlesofCorporationorAgreementstipulatedthatminorityshareholdersshouldberesponsibleforit,thenthebalanceneedtooffsettheminorityshareholders’equity. (2)TreatmentmethodofincreasingordisposingsubsidiariesduringtheReportingPeriod DuringtheReportingPeriod,ifthesubsidiarieswereaddedduetoBusinesscombinationsunderthesamecontrol,theninitialbookbalanceofconsolidatedbalancesheetneedtobeadjusted;theincome,expenses,andprofitsofsubsidiariesfromthecombination’speriod-begintotheendofthereportingperiodneedtobeincludedintoconsolidatedincomestatement;thecashflowofsubsidiariesfromthecombination’speriod-begintotheendofthereportingperiodneedtobeincludedintoconsolidatedcashflowstatement.ifthesubsidiarieswereaddedduetoBusinesscombinationsnotunderthesamecontrol,theninitialbookbalanceofconsolidatedbalancesheetdoesn’tneedtobeadjusted;theincome,expenses,andprofitsofsubsidiariesfromthepurchasingdatetotheendofthereportingperiodneedtobeincludedintoconsolidatedincomestatement;thecashflowofsubsidiariesfrompurchasingdatetotheendofthereportingperiodneedtobeincludedintoconsolidatedcashflowstatement. DuringtheReportingPeriod,iftheCompanydisposedthesubsidiaries,thentheincome,expenses,andprofitsofsubsidiariesfromperiod-begintothedisposaldateneedtobeincludedintoconsolidatedincomestatement;thecashflowofsubsidiariesfromperiod-begintothedisposaldateneedtobeincludedintoconsolidatedcashflowstatement. 7.ClassificationofJointArrangementsandAccountingTreatmentofJointOperations Ajointarrangementreferstoanarrangementjointlycontrolledbytwoparticipantsoraboveandbedividedintojointoperationsandjointventures. WhentheCompanyisthejointventurepartyofthejointoperations,shouldrecognizethefollowingitemsrelatedtotheinterestsshareofthejointoperations: (1)Recognizetheassetsindividuallyheldandtheassetsjointlyheldbyrecognizingaccordingtotheholdingshare; (2)Recognizetheliabilitiesundertookindividuallyandtheliabilitiesjointlyheldbyrecognizingaccordingtotheholdingshare; (3)RecognizetherevenuesoccurredfromsellingtheoutputshareofthejointoperationsenjoybytheCompany;(4)Recognizetherevenuesoccurredfromsellingtheassetsofthejointoperationsaccordingtotheholdingshare;(5)RecognizetheexpensesindividuallyoccurredandtheexpensesoccurredfromthejointoperationsaccordingtotheholdingshareoftheCompany. WhentheCompanyisthejointoperationpartyofthejointventures,shouldrecognizetheinvestmentofthejointventuresasthelong-termequityinvestmentandbemeasuredaccordinggtothesaidmethodsofthenotesofthelong-termequityinvestmentofthefinancialstatement. 8.RecognitionStandardforCashandCashEquivalents IntheGroup’sunderstanding,cashandcashequivalentsincludecashonhand,anydepositthatcanbeusedforcover,andshort-term(usuallyduewithin3monthssincethedayofpurchase)andhighcirculatinginvestments, whichareeasilyconvertibleintoknownamountofcashandwhoserisksinchangeofvalueareminimal. 9.ForeignCurrencyandAccountingMethodforForeignCurrency 1.Foreigncurrencybusiness Foreigncurrencyshallberecognizedbyemployingsystematicandreasonablemethods,andshallbetranslatedintotheamountinthefunctionalcurrencyattheexchangeratewhichisapproximatetothespotexchangerateofthetransactiondate.Onthebalancesheetdate,theforeigncurrencymonetaryitemsshallbetranslatedatthespotexchangerate.Thebalanceofexchangearisingfromthedifferencebetweenthespotexchangerateonthebalancesheetdateandthespotexchangerateatthetimeofinitialrecognitionorpriortothebalancesheetdateshallberecordedintotheprofitsandlossesatthecurrentperiodexceptthatthebalanceofexchangearisingfromforeigncurrencyborrowingsforthepurchaseandconstructionorproductionofqualifiedassetsshallbecapitalized.Theforeigncurrencynon-monetaryitemsmeasuredatthehistoricalcostshallstillbetranslatedatthespotexchangerateonthetransactiondate. 2.Translationofforeigncurrencyfinancialstatements Theassetandliabilityitemsinthebalancesheetsshallbetranslatedataspotexchangerateonthebalancesheetdate.Amongtheowner’sequityitems,exceptfortheitemsas“undistributedprofits”,otheritemsshallbetranslatedatthespotexchangerateatthetimewhentheyareincurred.Therevenuesandtheexpensesitemsoftheincomestatementshouldbetranslatedaccordingtothespotrateontheexchangedate. Thedifferenceoftheforeigncurrencyfinancialstatementsoccurredfromtheabovetranslationshouldbelistedunderthe“othercomprehensiveincome”itemoftheowners’equityoftheconsolidatedfinancialstatement.Asfortheforeigncurrencyitemswhichactuallyformintothenetinvestmentoftheforeignoperation,theexchangedifferenceoccurredfromtheexchangeratechangesshouldbelistedunderthe“othercomprehensiveincome”oftheowners’equityamongtheconsolidatedfinancialstatementwhencompiletheconsolidatedfinancialstatement.Whendisposingtheforeignoperation,asforthediscounteddifferenceoftheforeignfinancialstatementrelatedtotheforeignoperationshouldbetransferredinthecurrentgainsandlossesaccordingtotheproportion.Theforeigncashflowadoptsthespotexchangerateontheoccurringdateofthecashflow.Andtheinfluencedamountoftheexchangeratechangesshouldbeindividuallylistedamongthecashflowstatement. 10.FinancialInstruments 1.Classification,recognitionandmeasurementoffinancialassets Financialassetsshallbeclassifiedintothefollowingfourcategorieswhentheyareinitiallyrecognized:financialassetsmeasuredatfairvalueandofwhichvariationsarerecordedintheprofitsandlossesforthecurrentperiod,loansandtheaccountreceivables,financialassetsavailableforsaleandtheinvestmentswhichwillbeheldtotheirmaturity. (1)FinancialassetsmeasuredatfairvalueandofwhichvariationsarerecordedintheprofitsandlossesforthecurrentperiodrefertofinancialassetsheldbytheCompanyforthepurposeofsellinginthenearfuture,includingtransactionalfinancialassets,orfinancialassetsdesignatedbythemanagementintheinitialrecognitiontobemeasuredatfairvaluewithvariationsrecordedinthegainsandlossesforthecurrentperiod.Financialassetsmeasuredatfairvalueandofwhichvariationsarerecordedintheprofitsandlossesforthecurrentperiodaresubsequentlymeasuredattheirfairvalues.Interestorcashdividendsarisingfromsuchassetsduringtheholingperiodarerecognizedasinvestmentgains.GainsorlossesarisingfromfairvaluechangesarerecordedinthegainsandlossesforthecurrentperiodattheendoftheReportingPeriod.Whensuchassetsaredisposed,thedifferencebetweentheirfairvaluesandinitiallyrecognizedamountsisrecognizedasinvestmentgainsandthegainsandlossesarisingfromfairvaluechangesareadjustedaccordingly. (2)Loanandaccountsreceivable:thenon-derivativefinancialassetsforwhichthereisnoquotedpriceinthe activemarketandofwhichtherecoverableamountisfixedordeterminableshallbeclassifiedasloanandaccountsreceivable.TheCompanyshallmakesubsequentmeasurementonitsloanandaccountsreceivableonthebasisofthepost-amortizationcostsbyadoptingtheactualinterestrate,fromwhichgainsandlosses,whenloanandaccountsreceivableareterminatedfromrecognizing,orareimpairedoramortized,shallberecordedintotheprofitsandlossesofthecurrentperiod. (3)Available-for-saleFinancialAssets:thenon-derivativefinancialassetswhicharedesignatedasavailable-for-salefinancialassetswhentheyareinitiallyrecognizedaswellasthenon-derivativefinancialassetsotherthanloansandaccountsreceivables,investmentshelduntiltheirmaturity;andtransactionfinancialassets.TheCompanyshallmakesubsequentmeasurementonavailable-for-salefinancialassetsatfairvalueandrecognizetheinterestsorthecashbonusacquiredtheholdingperiodastheinvestmentincome,aswellasdirectlyincludetheprofitsorlossesformedbythechangesofthefairvalueintotheowners’equityattheperiod-end,untilthesaidfinancialassetsshallbetransferredoutwhentheyareterminatedfromrecognizingorareimpaired,whichshallberecordedintotheprofitsandlossesofcurrentperiod. (4)Held-to-maturityInvestments:non-derivativefinancialassetwithafixeddateofmaturity,afixedordeterminablerecoverableamountandwhichtheCompany’smanagementholdsforadefinitepurposeortheCompany’smanagementisabletoholduntilitsmaturity.TheCompanyshallmakesubsequentmeasurementonitsHeld-to-maturityInvestmentsonthebasisofthepost-amortizationcostsbyadoptingtheactualinterestrate,fromwhichgainsandlosses,whenloanandaccountsreceivableareterminatedfromrecognizing,orareimpairedoramortized,shallberecordedintotheprofitsandlossesofthecurrentperiod. 2.Classification,RecognitionandMeasurementofFinancialLiabilities Financialliabilitiesshallbeclassifiedintothefollowingtwocategorieswhentheyareinitiallyrecognized:thetransactionalfinancialliabilities;andotherfinancialliabilities.ThefinancialliabilitiesinitiallyrecognizedbytheCompanyshallbemeasuredattheirfairvalues.Forthetransactionalfinancialliabilities,thetransactionexpensesthereofshallbedirectlyrecordedintotheprofitsandlossesofthecurrentperiod;forothercategoriesoffinancialliabilities,thetransactionexpensesthereofshallbeincludedintotheinitiallyrecognizedamount. (1)Asforthefinancialliabilitiesmeasuredbyfairvalueanditschangesbeincludedinthecurrentgainsandlosses,whichincludingtradingfinancialliabilitiesandthefinancialliabilitiesbeappointedtobemeasuredbyfairvaluewiththechangesbeincludedinthecurrentgainsandlosseswhenbeinginitiallyrecognized,shouldbeexecutedsubsequentmeasurementaccordingtothefairvaluewiththeprofitsorlossesformedbythechangesofthefairvaluebeincludedinthecurrentgainsandlosses. (2)Otherfinancialliabilities:TheCompanyshallmakesubsequentmeasurementonitsotherfinancialliabilitiesonthebasisofthepost-amortizationcostsbyadoptingtheactualinterestrate,fromwhichgainsandlosses,whenotherfinancialliabilitiesareterminatedfromrecognizingoramortized,shallberecordedintotheprofitsandlossesofthecurrentperiod. 3.Recognitionandmeasurementoffinancialassettransfers AsfortheCompanytransferrednearlyalloftherisksandrewardsrelatedtotheownershipofafinancialassettothetransferee,shouldderecognizethefinancialassets;asformaintainednearlyalloftherisksandrewardsrelatedtotheownershipofafinancialasset,shouldcontinuetorecognizethetransferredfinancialassetsandrecognizethereceivedcounterpriceasafinancialliability.WheretheCompanydoesnottransferorretainnearlyalloftherisksandrewardsrelatedtotheownershipofafinancialasset(thatistosay,itisnotunderacircumstanceasmentionedinArticle7oftheseStandards),itshalldealwithitaccordingtothecircumstancesasfollows,respectively:(1)Ifitgivesupitscontroloverthefinancialasset,itshallstoprecognizingthefinancialasset;(2)Ifitdoesnotgiveupitscontroloverthefinancialasset,itshall,accordingtotheextentofitscontinuousinvolvementinthetransferredfinancialasset,recognizetherelatedfinancialassetandrecognizetherelevant liabilityaccordingly. Ifthetransferofanentirefinancialassetsatisfiestheconditionsforstoppingrecognition,thedifferencebetweentheamountsofthefollowing2itemsshallberecordedintheprofitsandlossesofthecurrentperiod:(1)Thebookvalueofthetransferredfinancialasset;(2)thesumofconsiderationreceivedfromthetransfer,andtheaccumulativeamountofthechangesofthefairvalueoriginallyrecordedintheowner'sequities. Ifthetransferofpartialfinancialassetsatisfiestheconditionstostoptherecognition,theentirebookvalueofthetransferredfinancialassetshall,betweentheportionwhoserecognitionhasbeenstoppedandtheportionwhoserecognitionhasnotbeenstopped,beapportionedaccordingtotheirrespectiverelativefairvalue,andthedifferencebetweentheamountsofthefollowingtwoitemsshallbeincludedintotheprofitsandlossesofthecurrentperiod:(1)Thebookvalueoftheportionwhoserecognitionhasbeenstopped;(2)Thesumofconsiderationoftheportionwhoserecognitionhasbeenstopped,andtheportionoftheaccumulativeamountofthechangesinthefairvalueoriginallyrecordedintheowner'sequitieswhichiscorrespondingtotheportionwhoserecognitionhasbeenstopped. 4.De-recognitionconditionsoffinancialliabilities Onlywhentheprevailingobligationsofafinancialliabilityarerelievedinallorinpartmaytherecognitionofthefinancialliabilitybeterminatedinallorpartly.WheretheGroup(debtor)entersintoanagreementwithacreditorsoastosubstitutetheexistingfinancialliabilitiesbywayofanynewfinancialliability,andifthecontractualstipulationsregardingthenewfinancialliabilityissubstantiallydifferentfromthatregardingtheexistingfinancialliability,itterminatestherecognitionoftheexistingfinancialliability,andatthesametimerecognizesthenewfinancialliability.Ifexecutedpracticalmodificationonthewholeorpartofthecontractregulationsoftheexistingfinancialliabilities,shouldterminatetorecognizetheexistingfinancialliabilitiesorcertainpartofitandatthesametimerecognizetherevisedfinancialliabilitiesasanewfinancialliabilities. Wheretherecognitionofafinancialliabilityistotallyorpartiallyterminated,theenterpriseconcernedshallincludeintotheprofitsandlossesofthecurrentperiodforthegapbetweenthebookvaluewhichhasbeenterminatedfromrecognitionandtheconsiderationsithaspaid(includingthenon-cashassetsithastransferredoutandthenewfinancialliabilitiesithasassumed). IftheCompanyre-purchasepartofthefinancialliabilities,shoulddistributethewholebookvalueofthefinancialliabilitiesaccordingtothecomparativelyfairvaluebetweenthecontinuedreorganizationpartandtheterminatedreorganizationpartonthere-purchasedate.Andthedifferencebetweenthebookvaluedistributedtotheterminatedrecognitionpartandthecounterpriceofthepaidpart(includingtherolledoutnon-cashassetsorthenewfinancialliabilitiesundertook)shouldbeincludedinthecurrentgainsandlosses. 5.Recognitionmethodofthefairvalueofthefinancialassetsandthefinancialliabilities Asforthefinancialinstrumentsforwhichthereisanactivemarket,thequotedpricesintheactivemarketshallbeusedtodeterminethefairvaluesthereof.Wherethereisnoactivemarketforafinancialinstrument,theCompanyconcernedshalladoptvalueappraisaltechniquestodetermineitsfairvalue.Thevalueappraisaltechniquesmainlyincludethepricesadoptedbytheparties,whoarefamiliarwiththecondition,inthelatestmarkettransactionupontheirownfreewill,thecurrentfairvalueobtainedbyreferringtootherfinancialinstrumentsofthesameessentialnature,thecashflowcapitalizationmethodandtheoptionpricingmodel,etc. 6.Impairmenttestoffinancialassets(excludingtheaccountsreceivable)andwithdrawalmethodofimpairmentprovision TheCompanyinspectsthebookvalueofthefinancialassetsonthebalancesheetdatetojudgewhetherthereareevidencesindicatethatthefinancialassetshadoccurredimpairmentowningtotheoccurrenceofoneormultipleevents. Asforthemeasurementforimpairmentoffinancialassetsmeasuredonthebasisofthepost-amortizationcosts, wherethereisanyobjectiveevidenceprovingthatafinancialassetmeasuredonthebasisofpost-amortizationcostsisimpaired,shouldberecognizedbythecarryingamountofthedifferencebetweenthesaidfinancialassetwhichshallbewrittendowntothecurrentvalueofthepredictedfuturecashflow(excludingthelossoffuturecreditsnotyetoccurred)andtheamountoftheaswrittendownwhichshallberecognizedaslossoftheimpairmentoftheasset.Whencalculatingthecurrentvalueoftheestimatedfuturecashflow,shouldadopttheoriginaleffectiveinterests’rateofthefinancialassetsasthediscountrate.Thebookvalueoftheassetsshouldbewrittendowntotheestimatedrecoverableamountthroughimpairmentprovisionitemswiththewrittendownamountbeincludedinthecurrentgainsandlosses.Asforthefinancialassetswithindividualsignificantamount,shouldadopttheindividualassessmentforensurewhetherthereareobjectiveevidencesindicatetheimpairmentprovisionandasfortheotherassetswithinsignificantamount,shouldbeinspectedbyindividualorgroupassessmentforensurewhetherthereareobjectiveevidencesindicatetheimpairmentprovision. Asforthefinancialassetsmeasuredbycost,ifthereareevidencesindicatetheimpairmentofthefinancialinstrumentswithoutmarketpricewhichhadnotmeasuredbyfairvaluebecausethefairvaluecouldnotbereliablemeasured,theamountoftheimpairmentlossesshouldbemeasuredbythedifferencebetweenthebookvalueofthefinancialassetsandthecurrentvalueoftheestimatedfuturecashflowacquiredfromthediscountingmeasurementofthecurrentmarketreturnrateofthesimilarfinancialassets. Whereanavailable-for-salefinancialassetisimpaired,theaccumulativelossesarisingfromthedecreaseofthefairvalueoftheowner’sequitywhichwasdirectlyincludedshallbetransferredoutandrecordedintotheprofitsandlossesofthecurrentperiod. 7.Recognitionmethodoffairvalue Fairvaluereferstothepricethatmarketparticipantsgotfromthesaleofanassetorthepricepaidforthetransferofaliabilityamongtheorderlytransactionshappenedonthemeasurementdate.Forafinancialinstrumentwithactivemarket,itsfairvalueshallbedeterminedbythequotesintheactivemarket.Forafinancialinstrumentwithnoactivemarket,itsfairvalueshallbedeterminedbyadoptingvalueappraisaltechniques.Whenthevalueisappraised,byadoptingthevalueappraisaltechniquesapplyingtothecurrentsituationswiththesupportofenoughavailabledataandotherinformation,theCompanychoosesthesameinputvaluewithfeaturesofassetsandliabilitiesconsideredbymarketparticipantsinthetransactionsofrelevantassetsandliabilities,andgivespriorityinuseofobservableinputvalueasfaraspossible.Unobservableinputvalueshallbeusedwhentherelevantobservableinputvaluecannotbeobtainedortheobtainmentisnotpractical. 11.Receivables (1)AccountsReceivablewithSignificantSingleAmountforwhichtheBadDebtProvisionisMadeIndividuallyDefinitionoramountcriteriaforanaccountreceivablewithaTopfiveaccountsreceivablewiththelargestbalancesor significantsingleamount accountsaccountingforover10%ofthetotalbalanceof receivables. Makingseparatebad-debtprovisionsforaccountsreceivableForanaccountreceivablewithasignificantsingleamount,the withasignificantsingleamount impairmenttestshallbecarriedoutonitseparately.Ifthereis anyobjectiveevidenceofimpairment,theimpairmentlossis recognizedandthebad-debtprovisionismadeaccordingtothe differencebetweenthepresentvalueoftheaccountreceivable’s futurecashflowsanditscarryingamount.Asfornon-significant accountsreceivableforwhichseparateimpairmentprovisionsare notnecessaryasprovedbytheimpairmenttest,aswellasother significantaccountsreceivablethathavenotbeenimpairedas provedbyaseparateimpairmenttest,theyshallbegrouped accordingtotheircreditrisksandaccountages,andthenthe impairmenttestiscarriedoutonagroupbasis. (2)AccountsReceivablewhichtheBadDebtProvisioniswithdrawnbyCreditRiskCharacteristics Groupname Withdrawalmethodofbaddebtprovision Commontransactiongroup Aginganalysismethod Internaltransactiongroup Othermethods Inthegroups,thoseadoptingaginganalysismethodtowithdrawbaddebtprovision: √Applicable□Notapplicable Withdrawalproportionofaccount Withdrawalproportionofotheraccount Aging receivables receivables Within1year(including1year) 3.00% 3.00% 1to2years 10.00% 10.00% 2to3years 30.00% 30.00% 3to4years 50.00% 50.00% 4to5years 80.00% 80.00% Over5years 100.00% 100.00% Inthegroups,thoseadoptingbalancepercentagemethodtowithdrawbaddebtprovision □Applicable√Notapplicable Inthegroups,thoseadoptingothermethodstowithdrawbaddebtprovision: □Applicable√Notapplicable (3)AccountsReceivablewithanInsignificantSingleAmountbutforwhichtheBadDebtProvisionisMadeIndependently Reasonofindividuallywithdrawingbaddebtprovision Therearedefiniteevidencesindicatetheobviousdifferenceof theereturnability Withdrawthebaddebtprovisionaccordingtothedifferenceof Withdrawalmethodforbaddebtprovision whichthefuturecashflowlowerthanthebookvalue. 12.Inventory IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries? No. 1.Classificationofinventory Inventoryreferstofinishedproducts,goodsinprocess,andmaterialsconsumedintheproductionprocessortheprovisionoflaborservicesheldbytheCompanyforsaleindailyactivities,mainlyincludingrawmaterials,goodsinprocess,materialsintransit,finishedproducts,commodities,turnovermaterials,andcommissionedprocessing materials.Turnovermaterialsincludelow-valueconsumablesandpackaging. 2.Pricingmethodofinventorysentout Theinventoryisvaluedatactualcostwhenacquired,andinventorycostsincludeprocurementcosts,processingcostsandothercosts.Theweightedaveragemethodisusedwhenreceivingorsendingoutinventory. 3.Basisfordeterminingthenetrealizablevalueofinventoryandthemethodofwithdrawalforinventoryimpairment Netrealizablevaluereferstotheestimatedsellingpriceoftheinventoryminustheestimatedcosttobeincurredatthetimeofcompletion,theestimatedsellingexpensesandtherelevanttaxesandfeesindailyactivities.Indeterminingthenetrealizablevalueofinventory,theconclusiveevidenceobtainedisusedasthebasisandthepurposeofholdingtheinventoryandtheimpactoftheeventsafterthebalancesheetdateshouldbetakenintoaccount. Forfinishedproducts,thematerialsusedforsaleandothergoodsusedfordirectsale,thenetrealizablevalueisdeterminedbytheestimatedsellingpriceoftheinventoryminustheestimatedsellingexpensesandrelatedtaxesintheprocessofnormalproductionandoperation. Formaterialsinventoryneedstobeprocessed,thenetrealizablevalueisdeterminedbytheestimatedsellingpriceofthefinishedproductsminustheestimatedcosttobeincurred,theestimatedsalescostsandtherelevanttaxesandfeesintheprocessofnormalproductionandoperation. 4.Inventorysystem TheinventorysystemoftheCompanyisperpetualinventory. 5.Amortizationmethodofturnovermaterials Low-valueconsumablesareamortizedinone-offmethod. Thepackagingisamortizedinone-offmethod. 13.AssetsHeldforSale 1.Assetsheldforsale Whenacompanyreliesmainlyonselling(includingtheexchangesofnon-monetaryassetswithcommercialsubstance)insteadofcontinuingtouseanon-currentassetordisposalgrouptorecoveritsbookvalue,thenon-currentassetordisposalgroupisclassifiedasassetheldforsale.Thenon-currentassetsmentionedabovedonotincludeinvestmentpropertiesthataresubsequentlymeasuredbythefairvaluemodel,biologicalassetsmeasuredbyfairvaluelessnetsellingcosts,assetsformedfromemployeeremuneration,financialassets,deferredincometaxassetsandrightsgeneratedfrominsurancecontracts. Disposalgroupreferstoagroupofassetsthataredisposedoftogetherasawholethroughsaleorothermeansinatransaction,andtheliabilitiesdirectlyrelatedtotheseassetstransferredinthetransaction.Incertaincircumstances,thedisposalgroupincludesgoodwillobtainedinbusinesscombination. TheCompanyrecognizesnon-currentassetsordisposalgroupsthatmeetbothofthefollowingconditionsasheldforsale:①Assetsordisposalgroupscanbesoldimmediatelyundercurrentconditionsbasedonthepracticeofsellingsuchassetsordisposalgroupsinsimilartransactions;②Salesarehighlylikelytooccur,thatis,theCompanyhasalreadymadearesolutiononasaleplanandobtainedacertainpurchasecommitment,andthesaleisexpectedtowillbecompletedwithinoneyear,andthesalehasbeenapprovedifrelevantregulationsrequirerelevantauthorityorregulatoryauthorityoftheCompanytoapproveit. Non-currentassetsordisposalgroupsspecificallyobtainedbytheCompanyforresalewillbeclassifiedbytheCompanyasaheld-for-salecategoryontheacquisitiondatewhentheymeetthestipulatedconditionsof“expectedtobesoldwithinoneyear”ontheacquisitiondate,andmaywellsatisfythecategoryofheld-for-sale withinashorttime(whichisusually3months). IfoneofthefollowingcircumstancescannotbecontrolledbytheCompanyandthetransactionbetweennon-relatedpartiesfailstobecompletedwithinoneyear,andthereissufficientevidencethattheCompanystillpromisestosellthenon-currentassetsordisposalgroups,theCompanyshouldcontinuetoclassifythenon-currentassetsordisposalgroupsasheld-for-sale:①Thepurchaserorotherpartyunexpectedlysetsconditionsthatleadtoextensionofthesale.TheCompanyhasalreadyactedontheseconditionsinatimelymanneranditisexpectedtobeabletosuccessfullydealwiththeconditionsthatledtotheextensionofthesalewithinoneyearaftertheconditionswereset.②Duetounusualcircumstances,thenon-currentassetsordisposalgroupsheldforsalefailedtobesoldwithinoneyear.Inthefirstyear,theCompanyhastakennecessarymeasuresforthesenewconditionsandtheassetsordisposalgroupsmeettheconditionsofheld-for-saleagain. IftheCompanylosescontrolofasubsidiaryduetothesaleofinvestmentstoitssubsidiaries,whetherornottheCompanyretainspartoftheequityinvestmentafterthesale,whentheproposedsaleoftheinvestmenttothesubsidiarymeetstheconditionsofheld-for-sale,theinvestmenttothesubsidiarywillbeclassifiedasheld-for-saleintheindividualfinancialstatementoftheparentcompany,andalltheassetsandliabilitiesofthesubsidiarywillbeclassifiedasheld-for-saleintheconsolidatedfinancialstatement. Whenthecompanyinitiallymeasuresorre-measuresnon-currentassetsordisposalgroupsheldforsaleonthebalancesheetdate,ifthebookvalueishigherthanthefairvalueminusthenetamountofthesalecosts,thebookvaluewillbewrittendowntothenetamountoffairvalueminusthesalecosts,andtheamountwrittendownwillberecognizedasimpairmentlossofassetsandincludedinthecurrentprofitandloss,andprovisionforimpairmentofheld-for-saleassetswillbemade.Fortheconfirmedamountofimpairmentlossofassetsofthedisposalgroupsheldforsale,thebookvalueofgoodwillofthedisposalgroupswillbeoffsetfirst,andthenthebookvalueofvariousnon-currentassetsinthedisposalgroupswillbeoffsetaccordingtotheproportions. Ifthenetamountthatthefairvalueofthenon-currentassetsordisposalgroupsheldforsaleonthefollow-upbalancesheetdateminusthesalecostsincreases,thepreviouswritten-downamountwillberestored,andreversedtotheassetimpairmentlossconfirmedaftertheassetsbeingclassifiedasheld-for-sale.Thereversedamountwillbeincludedinthecurrentprofitorloss.Thebookvalueofgoodwillthathasbeendeductedcannotbereversed.Non-currentassetsheldforsaleornon-currentassetsinthedisposalgrouparenotsubjecttodepreciationoramortization.Interestandotherexpensesofliabilitiesinthedisposalgroupheldforsalewillbeconfirmedasbefore. Whenanon-currentassetordisposalgroupceasesbeclassifiedasheld-for-saleoranon-currentassetisremovedoutfromtheheld-for-saledisposalgroupduetofailureinmeetingtheclassificationconditionsforthecategoryofheld-for-sale,itwillbemeasuredbyoneofthefollowingswhicheverislower: ①Thebookvaluebeforebeingclassifiedasheldforsalewillbeadjustedaccordingtothedepreciation,amortizationorimpairmentthatwouldhavebeenrecognizedundertheassumptionthatitwasnotclassifiedasheldforsale; ②Therecoverableamount. 2.Terminationofoperation TerminationofoperationreferstoaseparatelyidentifiableconstituentpartthatsatisfiesoneofthefollowingconditionsthathasbeendisposedofbytheCompanyorisclassifiedasheld-for-sale: (1)Thisconstituentpartrepresentsanindependentmainbusinessoraseparatemainbusinessarea. (2)Thisconstituentpartispartofanassociatedplanthatisintendedtobedisposedofinanindependentmainbusinessoraseparatemajorbusinessarea. (3)Thisconstituentpartisasubsidiarythatisspecificallyacquiredforresale. 3.Presentation Inthebalancesheet,theCompanydistinguishesthenon-currentassetsheldforsaleortheassetsinthedisposalgroupheldforsaleseparatelyfromotherassets,anddistinguishtheliabilitiesinthedisposalgroupheldforsaleseparatelyfromotherliabilities.Thenon-currentassetsheldforsaleortheassetsinthedisposalgroupheldforsalearenotbeoffsetagainsttheliabilitiesinthedisposalgroupheldforsale.Theyarepresentedascurrentassetsandcurrentliabilitiesrespectively. TheCompanylistsprofitandlossfromcontinuingoperationsandprofitandlossfromoperatingprofitsintheincomestatement.Fortheterminationofoperationsforthecurrentperiod,theCompanyrestatestheinformationoriginallypresentedasprofitorlossofcontinuingoperationinthecurrentfinancialstatementstoprofitorlossofterminationofthecomparableaccountingperiod.Iftheterminationofoperationnolongermeetstheconditionsofheld-for-sale,theCompanyrestatestheinformationoriginallypresentedasaprofitandlossofterminationinthecurrentfinancialstatementstoprofitorlossofcontinuingoperationofthecomparableaccountingperiod. 14.Long-termEquityInvestments Long-termequityinvestmentreferstotheCompany’slong-termequityinvestmentwithcontrol,jointcontrolorsignificantinfluenceontheinvestee.Thelong-termequityinvestmentoftheCompanywhichhasnocontrol,jointcontrolorsignificantinfluenceontheinvesteeisaccountedforasfinancialassetsavailable-for-saleorfinancialassetsatfairvalueandchangesrecognizedinprofitorlossforthecurrentperiod.Fordetailsofaccountingpolicies,pleasereferto10.FinancialinstrumentsinNotesV. Jointcontrolreferstothecontrolthatiscommontoanarrangementinaccordancewiththerelevantagreement,andtherelevantactivitiesofthearrangementmustbeagreeduponbytheparticipantwhohassharedthecontrol.SignificantinfluencereferstotheCompanyhasthepowertoparticipateindecision-makingonthefinancialandoperatingpoliciesoftheinvestee,butcan’tcontrolorjointlycontroltheformulationofthesepolicieswithotherparties. 1.Investmentcostrecognitionforlong-termequityinvestments (1)Forthemergerofenterprisesunderthesamecontrol,itshall,onthedateofmerger,regardtheshareofthebookvalueoftheowner'sequityofthemergedenterpriseastheinitialcostofthelong-termequityinvestment,andthedirectrelevantexpensesoccurredforthemergerofenterprisesshallbeincludedintotheprofitsandlossesofthecurrentperiod. (2)Forthemergerofenterprisesnotunderthesamecontrol,Thecombinationcostsshallbethefairvalues,ontheacquisitiondate,oftheassetspaid,theliabilitiesincurredorassumedandtheequitysecuritiesissuedbytheCompanyinexchangeforthecontrolontheacquiree,andallrelevantdirectcostsincurredtotheacquirerforthebusinesscombination.Whereanyfutureeventthatislikelytoaffectthecombinationcostsisstipulatedinthecombinationcontractoragreement,ifitislikelytooccuranditseffectsonthecombinationcostscanbemeasuredreliably,theCompanyshallrecordthesaidamountintothecombinationcosts. (3)Thecostofalong-termequityinvestmentobtainedbymakingpaymentincashshallbethepurchasecostwhichisactuallypaid.Thecostconsistsoftheexpensesdirectlyrelevanttotheobtainmentofthelong-termequityinvestment,taxesandothernecessaryexpenses. (4)Thecostofalong-termequityinvestmentobtainedonthebasisofissuingequitysecuritiesshallbethefairvalueoftheequitysecuritiesissued. (5)Thecostofalong-terminvestmentobtainedbytheexchangeofnon-monetaryassets(havingcommercialnature)shallberecognizedbaseontakingthefairvalueandrelevantpayabletaxesasthecostoftheassetsreceived. (6)Thecostofalong-termequityinvestmentobtainedbyrecombinationofliabilitiesshallberecognizedatthe fairvalue. 2.Subsequentmeasurementoflong-termequityinvestmentandrecognizedmethodofprofit/loss Thelong-termequityinvestmentwithjointcontrol(exceptforthecommonoperator)orsignificantinfluenceontheinvesteeisaccountedbyequitymethod.Inaddition,theCompany'sfinancialstatementsusecostmethodtocalculatelong-termequityinvestmentsthatcancontroltheinvestee. (1)Long-termequityinvestmentaccountedbycostmethod Whenthecostmethodisusedforaccounting,thelong-termequityinvestmentispricedattheinitialinvestmentcost,andthecostofthelong-termequityinvestmentisadjustedaccordingtoadditionalinvestmentorrecoveredinvestment.Exceptthepriceactuallypaidwhenacquiredinvestmentorcashdividendsorprofitsthathavebeendeclaredbutnotyetpaidincludedintheconsideration,currentinvestmentincomeisrecognizedbythecashdividendsorprofitsdeclaredbytheinvestee. (2)Long-termequityinvestmentaccountedbyequitymethod Whentheequitymethodisusedforaccounting,iftheinitialinvestmentcostofthelong-termequityinvestmentisgreaterthanthefairvalueoftheinvestee’sidentifiablenetassets,theinitialinvestmentcostofthelong-termequityinvestmentshallnotbeadjusted;iftheinitialinvestmentcostislessthanthefairvalueoftheinvestee’sidentifiablenetassets,thedifferenceshallberecordedintothecurrentprofitsandlosses,andthecostofthelong-termequityinvestmentshallbeadjustedatthesametime. Whentheequitymethodisusedforaccounting,theinvestmentincomeandothercomprehensiveincomeshallberecognizedseparatelyaccordingtothenetprofitorlossandothercomprehensiveincomerealizedbytheinvestee,andthebookvalueofthelong-termequityinvestmentshallbeadjustedatthesametime.Thepartentitledshallbecalculatedaccordingtotheprofitsorcashdividendsdeclaredbytheinvestee,andthebookvalueofthelong-termequityinvestmentshallbereducedaccordingly.Forotherchangesintheowner’sequityotherthanthenetprofitorloss,othercomprehensiveincomeandprofitdistributionoftheinvestee,thebookvalueofthelong-termequityinvestmentshallbeadjustedandincludedinthecapitalreserve.Whentheshareofthenetprofitorlossoftheinvesteeisrecognized,thenetprofitoftheinvesteeshallbeadjustedandrecognizedaccordingtothefairvalueoftheidentifiableassetsoftheinvesteewhentheinvestmentismade.IftheaccountingpoliciesandaccountingperiodsadoptedbytheinvesteeareinconsistentwiththeCompany,thefinancialstatementsoftheinvesteeshallbeadjustedaccordingtotheaccountingpoliciesandaccountingperiodsoftheCompanyandtheinvestmentincomeandothercomprehensiveincomeshallberecognizedaccordingly.ForthetransactionsbetweentheCompanyandassociatesandjointventures,iftheassetsmadeorsolddon’tconstitutebusiness,theunrealizedgainsandlossesoftheinternaltransactionsareoffsetbytheproportionattributabletotheCompany,andtheinvestmentgainsandlossesarerecognizedaccordingly.However,thelossofunrealizedinternaltransactionsincurredbytheCompanyandtheinvesteeattributabletotheimpairmentlossofthetransferredassetsshallnotbeoffset.Iftheassetsmadetoassociatesorjointventuresconstitutebusiness,andtheinvestormakeslong-termequityinvestmentbutdoesnotobtainthecontrol,thefairvalueoftheinvestmentshallbetakenastheinitialinvestmentcostofthenewlong-termequityinvestment,andthedifferencebetweeninitialinvestmentandthebookvalueoftheinvestmentisfullyrecognizedinprofitorlossforthecurrentperiod.IftheassetssoldbytheCompanytojointventuresorassociatesconstitutebusiness,thedifferencebetweentheconsiderationandthebookvalueofthebusinessshallbefullycreditedtothecurrentprofitsandlosses.IftheassetspurchasedbyCompanyfromjointventuresorassociatesconstitutebusiness,conductaccountingtreatmentinaccordancewiththeprovisionsofAccountingStandardforBusinessEnterprisesNo.20-Businesscombination,andtheprofitsorlossesrelatedtothetransactionshallberecognizedinfull. Whenthenetlossincurredbytheinvesteeisrecognized,thebookvalueofthelong-termequityinvestmentand otherlong-termequitythatsubstantiallyconstitutethenetinvestmentintheinvesteeshallbewrittendowntozero.Inaddition,iftheCompanyhasanobligationtobearadditionallossestotheinvestee,theestimatedliabilitiesarerecognizedinaccordancewiththeobligationsassumedandincludedinthecurrentinvestmentlosses.Iftheinvesteehasrealizednetprofitinlaterperiod,theCompanywillresumetherecognitionoftheincomeshareaftertheincomesharehasmadeuptheunrecognizedlossshare. (3)Acquisitionofminorityinterests Inthepreparationoftheconsolidatedfinancialstatements,capitalreserveshallbeadjustedaccordingtothedifferencebetweenthelong-termequityinvestmentincreasedduetothepurchaseofminorityinterestsandtheshareofthenetassetsheldbythesubsidiaryfromthedateofpurchase(orthedateofcombination)calculatedaccordingtotheproportionofthenewshareholdingratio,andretainedearningsshallbeadjustedifthecapitalreserveisinsufficienttooffset. (4)Disposaloflong-termequityinvestment Intheconsolidatedfinancialstatements,theparentcompanypartiallydisposesofthelong-termequityinvestmentinthesubsidiarywithoutthelossofcontrol,andthedifferencebetweenthedisposalpriceandthenetassetsofthesubsidiarycorrespondingtothedisposalofthelong-termequityinvestmentisincludedintheshareholders’equity.Ifthedisposaloflong-termequityinvestmentinsubsidiariesresultsinthelossofcontroloverthesubsidiaries,handleinaccordancewiththerelevantaccountingpoliciesdescribedin6.“Preparationmethodofconsolidatedfinancialstatements”inNotesV. Inothercases,thedifferencebetweenthebookvalueandtheactualacquisitionpriceshallberecordedintothecurrentprofitsandlossesforthedisposalofthelong-termequityinvestment. Forlong-termequityinvestmentaccountedbytheequitymethodandresidualequityafterdisposalstillaccountedbytheequitymethod,othercomprehensiveincomeoriginallyincludedintheshareholders’equityshallbetreatedinthesamebasisoftheinvesteedirectlydisposingrelatedassetsorliabilitiesbycorrespondingproportion.Theowner’sequityrecognizedbythechangeoftheowner’sequityoftheinvesteeotherthanthenetprofitorloss,othercomprehensiveincomeandprofitdistributioniscarriedforwardproportionallyintothecurrentprofitsandlosses. Forlong-termequityinvestmentaccountedbythecostmethodandresidualequityafterdisposalstillaccountedbythecostmethod,othercomprehensiveincomeaccountedbyequitymethodorrecognizedbyfinancialinstrumentandaccountedandrecognizedbymeasurementcriteriabeforetheacquisitionofthecontrolovertheinvesteeistreatedinthesamebasisoftheinvesteedirectlydisposingrelatedassetsorliabilities,andcarriedforwardproportionatelyintothecurrentprofitsandlosses.Otherchangesofowner’sequityinnetassetsoftheinvesteeaccountedandrecognizedbytheequitymethodotherthanthenetprofitorloss,othercomprehensiveincomeandprofitdistributionarecarriedforwardproportionallyintothecurrentprofitsandlosses. 3.Impairmentprovisionsforlong-termequityinvestments Fortherelevanttestingmethodandprovisionmakingmethod,see22.ImpairmentofLong-termAssetsinNotesVherein. 15.InvestmentRealEstates Measurementmodeofinvestmentrealestates Notapplicable 16.FixedAssets (1)RecognitionConditions FixedassetsoftheCompanyreferstothetangibleassetsthatsimultaneouslypossessthefeaturesasfollows:theyareheldforthesakeofproducingcommodities,renderinglaborservice,rentingorbusinessmanagement;andtheirusefullifeisinexcessofoneaccountingyearandunitpriceishigher.Nofixedassetsmayberecognizedunlessitsimultaneouslymeetstheconditionsasfollows:①TheeconomicbenefitspertinenttothefixedassetarelikelytoflowintotheCompany;and②Thecostofthefixedassetcanbemeasuredreliably. (2)DepreciationMethod Expectednetsalvage Categoryoffixedassets Method Usefullife Annualdeprecation value Housingandbuilding Average method of 3―30years 5% 31.67%-3.17% usefullife Machineryequipments Average method of 2―10years 5% 47.50%-9.50% usefullife Transportationvehicle Average method of 5―10years 5% 19.00%-9.50% usefullife Electronicequipment Average method of 2―8years 5% 47.50%-11.88% usefullife (3)RecognitionBasis,PricingandDepreciationMethodofFixedAssetsbyFinanceLease Notapplicable 17.ConstructioninProgress 1.Pricingofconstructioninprogress Theconstructionsareaccountedaccordingtotheactualcostsincurred.Theconstructionsshallbecarriedforwardintofixedassetsattheactualcostwhenreachintendedusablecondition.Theborrowingexpenseseligibleforcapitalizationincurredbeforethedeliveryoftheconstructionareincludedintheconstructioncost;afterthedelivery,therelevantinterestexpenseshallberecordedintothecurrentprofitsandlosses. 2.Standardandtimeofconstructioninprogresscarryingforwardintofixedassets TheCompany’sconstructioninprogressiscarriedforwardintofixedassetswhentheconstructioncompletesandreachesintendedusablecondition.Thecriteriafordeterminingtheintendedusableconditionshallmeetoneofthefollowing: (1)Thephysicalconstruction(includinginstallation)offixedassetshasbeencompletedorsubstantiallycompleted;(2)Hasbeenproducedorrunfortrial,andtheresultsindicatethattheassetscanrunnormallyorcanproducestableproductsstably,ortheresultsofthetrialoperationshowthatitcanoperatenormally; (3)Theamountoftheexpenditureonthefixedassetsconstructedislittleoralmostnolongeroccurring; (4)Thefixedassetspurchasedhavereachedthedesignorcontractrequirements,orbasicallyinlinewiththedesignorcontractrequirements. 3.Provisionforimpairmentofconstructioninprogress PleaserefertoNote22:Long-termAssetImpairmentunderNoteVfortheimpairmenttestmethodandprovisionforimpairmentofconstructioninprogress. 18.BorrowingCosts TheborrowingcostsrefertointerestandotherrelatedcostsincurredbytheCompanyasaresultofborrowings,includinginterestonborrowings,amortizationofdiscountsorpremiums,ancillaryexpensesandexchangedifferencesarisingfromforeigncurrencyborrowings.TheborrowingcostsincurredbytheCompanydirectlyattributabletotheacquisition,constructionorproductionofassetseligibleforcapitalizationarecapitalizedandincludedinthecostoftherelevantassets.Otherborrowingcostsarerecognizedasexpensesaccordingtotheamountatthetimeofoccurrence,andareincludedinthecurrentprofitsandlosses. 1.Principleofcapitalizationofborrowingcosts Borrowingcostscanbecapitalizedwhenallthefollowingconditionsaremet:Assetexpenditurehasalreadyoccurred;borrowingcostshavealreadyoccurred;constructionorproductionactivitiesnecessarytobringtheassetstotheintendeduseableorsellablestatushavealreadybegun. 2.Capitalizationperiodofborrowingcosts Capitalizationperiodreferstotheperiodfromthecapitalizationofborrowingcostsstartingtotheendofcapitalization,excludingtheperiodwhencapitalizationissuspended. Ifassetsthatmeettheconditionsofcapitalizationareinterruptedabnormallyinthecourseofconstructionorproduction,andtheinterruptiontimeexceeds3consecutivemonths,thecapitalizationofborrowingcostsshallbesuspended.Theborrowingcostsincurredduringtheinterruptionarerecognizedasexpensesandincludedincurrentprofitsandlossesuntiltheacquisitionorconstructionoftheassetsisresumed.Thecapitalizationoftheborrowingcostscontinuesiftheinterruptionisaprocedurenecessaryforthepurchaseorproductionofassetseligibleforcapitalizationtomeettheintendeduseableorsellablestatus. Theborrowingcostsshallceasetobecapitalizedwhenthepurchasedorproducedassetsthatmeettheconditionsofcapitalizationmeettheintendeduseableorsellablestatus.Theborrowingcostsincurredaftertheassetseligibleforcapitalizationmeettheintendeduseableorsellablestatuscanbeincludedinthecurrentprofitsandlosseswhenincurred. 3.Calculationmethodofcapitalizedamountofborrowingcosts Duringtheperiodofcapitalization,thecapitalizationamountofinterests(includingamortizationofdiscountsorpremiums)foreachaccountingperiodisdeterminedinaccordancewiththefollowingprovisions: (1)Forspecialborrowingsfortheacquisitionorconstructionofassetseligibleforcapitalization,theinterestexpensesactuallyincurredinthecurrentperiodofborrowingsshallberecognizedafterdeductingtheinterestincomeobtainedbydepositingtheunusedborrowingfundsintothebankorinvestmentincomeobtainedfromtemporaryinvestment. (2)Wherethegeneralborrowingisoccupiedfortheacquisitionorconstructionofassetseligibleforcapitalization,theCompanymultipliestheweightedaverageoftheassetexpenditureoftheaccumulatedassetexpenditureexceedingthespecialborrowingbythecapitalizationrateofthegeneralborrowingtocalculatetheamountofinterestthatshouldbecapitalizedforgeneralborrowings.Thecapitalizationrateisdeterminedbasedontheweightedaverageinterestrateofgeneralborrowings. 19.BiologicalAssets Notapplicable 20.Oil-gasAssets Notapplicable 21.IntangibleAssets (1)PricingMethod,UsefulLifeandImpairmentTest 1.Recognitioncriteriaofintangibleassets Intangibleassetsareidentifiablenon-monetaryassetsthatareownedorcontrolledbytheCompanywithoutphysicalform.Theintangibleassetsarerecognizedwhenallthefollowingconditionsaremet:(1)Conformtothedefinitionofintangibleassets;(2)ExpectedfutureeconomicbenefitsrelatedtotheassetsarelikelytoflowintotheCompany;(3)Thecostsoftheassetscanbemeasuredreliably. 2.Initialmeasurementofintangibleassets Intangibleassetsareinitiallymeasuredatcost.Actualcostsaredeterminedbythefollowingprinciples: (1)Thecostoftheacquisitionofintangibleassets,includingthepurchaseprice,relevanttaxesandotherexpensesdirectlyattributabletotheintendeduseoftheasset.Thepaymentofpurchasepriceofintangibleassetsexceedingnormalcredittermsisdeferred,andthecostofintangibleassetshavingfinancingnatureinessenceshallberecognizedbasedonthepresentvalueofthepurchaseprice.ThedifferencebetweentheactualpaymentpriceandthepresentvalueofthepurchasepriceshallberecordedintothecurrentprofitsandlossesinthecreditperiodexceptthatcanbecapitalizedinaccordancewiththeAccountingStandardforBusinessEnterprisesNo.17-BorrowingCost. (2)Thecostofinvestinginintangibleassetsshallberecognizedaccordingtothevalueagreeduponintheinvestmentcontractoragreement,exceptthatthevalueofthecontractoragreementisunfair. 3.Subsequentmeasurementofintangibleassets TheCompanyshalldeterminetheusefullifewhenitobtainsintangibleassets.Theusefullifeofintangibleassetsislimited,andtheyearsoftheusefullifeoroutputthatconstitutestheusefullifeorsimilarmeasurementunitsshallbeestimated.TheintangibleassetsareregardedasintangibleassetswithuncertainusefullifeifthetermthatbringseconomicbenefitstotheCompanyisunforeseeable Intangibleassetswithlimitedusefullifeshallbeamortizedbystraightlinemethodfromthetimewhentheintangibleassetsareavailableuntilcan’tberecognizedasintangibleassets;intangibleassetswithuncertainusefullifeshallnotbeamortized.TheCompanyreviewstheestimatedusefullifeandamortizationmethodofintangibleassetswithlimitedusefullifeattheendofeachyear,andreviewstheestimatedusefullifeofintangibleassetswithuncertainusefullifeineachaccountingperiod.Forintangibleassetsthatevidenceshowstheusefullifeislimited,theusefullifeshallbeestimatedandtheintangibleassetsshallbeamortizedintheestimatedusefullife. 4.Recognitioncriteriaandwithdrawalmethodofintangibleassetimpairmentprovision TheimpairmenttestmethodandwithdrawalmethodforimpairmentprovisionofintangibleassetsaredetailedinNote22:Long-termassetimpairmentunderNoteV. (2)AccountingPolicyforInternalResearchandDevelopmentExpenditures TheexpendituresininternalresearchanddevelopmentprojectsoftheCompanyareclassifiedintoexpendituresinresearchstageandexpendituresindevelopmentstage.Theexpendituresinresearchstageareincludedinthecurrentprofitsandlosseswhenincurred.Theexpendituresindevelopmentstagearerecognizedasintangibleassetswhenmeetingthefollowingconditions: (1)Thecompletionoftheintangibleassetsmakesittechnicallyfeasibleforusingorselling; (2)Havingtheintentiontocompleteanduseorselltheintangibleassets; (3)Thewayinwhichanintangibleassetgenerateseconomicbenefits,includingtheproofthattheproductsproducedwiththeintangibleassethavemarketortheproofofitsusefulnessiftheintangibleassethasmarketandwillbeusedinternally; (4)Havingsufficienttechnical,financialresourcesandotherresourcestosupportthedevelopmentoftheintangibleassetsandtheabilitytouseorselltheintangibleassets; (5)Expenditureattributabletothedevelopmentstageofintangibleassetscanbemeasuredreliably. Thecostofself-developedintangibleassetsincludesthetotalexpenditureincurredsincemeetingintangibleassetsrecognitioncriterionuntilreachingintendeduse.Expendituresthathavebeenexpensedinpreviousperiodsarenolongeradjusted. Non-monetaryassetsexchange,debtrestructuring,governmentsubsidiesandthecostofintangibleassetsacquiredbybusinesscombinationarerecognizedaccordingtorelevantprovisionsofAccountingStandardforBusinessEnterprisesNo.7-Non-monetaryassetsexchange,AccountingStandardforBusinessEnterprisesNo.12-Debtrestructuring,AccountingStandardsforBusinessEnterprisesNo.16-Governmentsubsidies,AccountingStandardforBusinessEnterprisesNo.20-Businesscombinationrespectively. 22.ImpairmentofLong-termAssets Fornon-currentnon-financialassetssuchasfixedassets,constructioninprogress,intangibleassetswithlimitedusefullife,investmentrealestatemeasuredincostmodeandlong-termequityinvestmentsinsubsidiaries,jointventuresandassociates,theCompanydetermineswhetherthereisindicationofimpairmentatbalancesheetdate.Ifthereisindicationofimpairment,thenestimatetheamountofitsrecoverablevalueandtesttheimpairment.Goodwill,intangibleassetswithuncertainusefullifeandintangibleassetsthathavenotyetreacheduseablestateshallbetestedforimpairmenteveryyear,whetherornotthereisanyindicationofimpairment. Iftheimpairmenttestresultsindicatethattherecoverableamountoftheassetislowerthanitsbookvalue,theimpairmentprovisionshallbemadeatthedifferenceandincludedintheimpairmentloss.Therecoverableamountisthehigherofthefairvalueoftheassetminusthedisposalcostandthepresentvalueoftheexpectedfuturecashflowoftheasset.Thefairvalueoftheassetisrecognizedaccordingtothepriceofthesalesagreementinthefairtrade;ifthereisnosalesagreementbutthereisanactivemarket,thefairvalueisrecognizedaccordingtothebuyer’sbidoftheasset;ifthereisnosalesagreementoractivemarket,thefairvalueofassetshallbeestimatedbasedonthebestinformationthatcanbeobtained.Disposalcostsincludelegalcostsrelatedtodisposalofassets,relatedtaxes,handlingcharges,anddirectcostsincurredtoenabletheassetreachingsellablestatus.Thepresentvalueoftheexpectedfuturecashflowsoftheassetsisrecognizedbytheamountdiscountedatappropriatediscountrateaccordingtotheexpectedfuturecashflowsarisingfromthecontinuinguseoftheassetandthefinaldisposal.Theprovisionforimpairmentofassetsiscalculatedandrecognizedonthebasisofindividualassets.Ifitisdifficulttoestimatetherecoverableamountofindividualassets,therecoverableamountoftheassetgroupshallberecognizedbytheassetgrouptowhichtheassetbelongs.Theassetgroupisthesmallestportfolioofassetsthat cangeneratecashinflowsindependently. Thebookvalueofthegoodwillpresentedseparatelyinthefinancialstatementsshallbeapportionedtotheassetgrouporportfolioofassetgroupsthatisexpectedtobenefitfromthesynergiesofthebusinesscombinationwhentheimpairmenttestisconducted.Thecorrespondingimpairmentlossisrecognizedifthetestresultsindicatethattherecoverableamountoftheassetgrouporportfolioofassetgroupscontainingtheapportionedgoodwillislowerthanitsbookvalue.Theamountoftheimpairmentlossshalloffsetthebookvalueofthegoodwillapportionedtotheassetgrouporportfolioofassetgroups,andoffsetthebookvalueofotherassetsinproportionaccordingtotheproportionofthebookvalueofotherassetsexceptthegoodwillintheassetgrouporportfolioofassetgroups. Oncetheimpairmentlossoftheaboveassetisrecognized,theportionthatthevalueisrestoredwillnotbewrittenbackinsubsequentperiods. 23.AmortizationMethodofLong-termDeferredExpenses Long-termdeferredexpensesrefertogeneralexpenseswiththeapportionedperiodoveroneyear(oneyearexcluded)thathaveoccurredbutattributabletothecurrentandfutureperiods.Long-termdeferredexpenseshallbeamortizedaveragelywithinbenefitperiod.Incaseofnobenefitinthefutureaccountingperiod,theamortizedvalueofsuchprojectthatfailstobeamortizedshallbetransferredintotheprofitsandlossesofthecurrentperiod.24.Payroll (1)AccountingTreatmentofShort-termCompensation Short-termcompensationmainlyincludingsalary,bonus,allowancesandsubsidies,employeeservicesandbenefits,medicalinsurancepremiums,birthinsurancepremium,industrialinjuryinsurancepremium,housingfund,laborunionexpenditureandpersonneleducationfund,non-monetarybenefitsetc.Theshort-termcompensationactuallyhappenedduringtheaccountingperiodwhentheactivestaffofferingtheservicefortheGroupshouldberecognizedasliabilitiesandisincludedinthecurrentgainsandlossesorrelevantassetscost.Ofwhichthenon-monetarybenefitsshouldbemeasuredaccordingtothefairvalue. (2)AccountingTreatmentoftheWelfareafterDemission Welfareafterdemissionmainlyincludesdefinedcontributionplansanddefinedbenefitplans.Ofwhichdefinedcontributionplansmainlyincludebasicendowmentinsurance,unemploymentinsurance,annuityfunds,etc.,andthecorrespondingpayableanddepositamountshouldbeincludedintotherelevantassetscostorthecurrentgainsandlosseswhenhappen. (3)AccountingTreatmentoftheDemissionWelfare Ifanenterprisecancelsthelaborrelationshipwithanyemployeepriortotheexpirationoftherelevantlaborcontractorbringsforwardanycompensationproposalforthepurposeofencouragingtheemployeetoacceptalayoff,andshouldrecognizethepayrollliabilitiesoccurredfromthedemissionwelfarebaseontheearlierdatebetweenthetimewhentheGroupcouldnotone-sidedwithdrawthedemissionwelfarewhichofferedbytheplanorlayoffproposalowningtorelievethelaborrelationshipandthedatetheGrouprecognizesthecostrelatedtothereorganizationofthepaymentofthedemissionwelfareandatthesametimeincludeswhichintothecurrentgains andlosses.Butifthedemissionwelfareisestimatedthatcouldnottotallypayaftertheendoftheannualreportwithin12months,shouldbedisposedaccordingtootherlong-termpayrollpayment. (4)AccountingTreatmentoftheWelfareofOtherLong-termStaffs Theinsideemployeeretirementplanistreatedbyadoptingthesameprinciplewiththeabovedismissionwelfare.Thegroupwouldrecordedthesalaryandthesocialsecurityinsurancefeespaidandsoonfromtheemployee’sserviceterminativedatetonormalretirementdateintocurrentprofitsandlosses(dismissionwelfare)undertheconditionthattheymeettherecognitionconditionsofestimatedliabilities. Theotherlong-termwelfarethattheGroupofferstothestaffs,ifmetwiththesettingdrawingplan,shouldbeaccountingdisposedaccordingtothesettingdrawingplan,whiletherestshouldbedisposedaccordingtothesettingrevenueplan. 25.EstimatedLiabilities 1.Recognitionofestimateddebts Theobligationsuchasexternalguaranty,pendinglitigationorarbitration,productqualityassurance,layoffplan,losscontract,restructuringanddisposaloffixedassets,pertinenttoacontingenciesshallberecognizedasanestimateddebtswhenthefollowingconditionsaresatisfiedsimultaneously:①Thatobligationisacurrentobligationoftheenterprise;②Itislikelytocauseanyeconomicbenefittoflowoutoftheenterpriseasaresultofperformanceoftheobligation;and③Theamountoftheobligationcanbemeasuredinareliableway 2.Measurementofestimateddebts Theestimateddebtsshallbeinitiallymeasuredinaccordancewiththebestestimateofthenecessaryexpensesfortheperformanceofthecurrentobligation.Ifthereisasequentrangeforthenecessaryexpensesandifalltheoutcomeswithinthisrangeareequallylikelytooccur,thebestestimateshallbedeterminedinaccordancewiththemiddleestimatewithintherange.Inothercases,thebestestimateshallbeconductedinaccordancewiththefollowingsituations,respectively:①IftheContingenciesconcernasingleitem,itshallbedeterminedinthelightofthemostlikelyoutcome.②IftheContingenciesconcerntwoormoreitems,thebestestimateshouldbecalculatedanddeterminedinaccordancewithallpossibleoutcomesandtherelevantprobabilities.③Whenallorsomeoftheexpensesnecessaryfortheliquidationofanestimateddebtsofanenterpriseisexpectedtobecompensatedbyathirdparty,thecompensationshouldbeseparatelyrecognizedasanassetonlywhenitisvirtuallycertainthatthereimbursementwillbeobtained.TheCompanyshallcheckthebookvalueoftheestimateddebtsonthebalancesheetdate.Theamountofcompensationisnotexceedingthebookvalueoftherecognizedestimatedliabilities. 26.Share-basedPayment Notapplicable 27.OtherFinancialInstrumentssuchasPreferredSharesandPerpetualCapitalSecurities Notapplicable 28.Revenue IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries? No 1.Saleofgoods Norevenuefromsellinggoodsmayberecognizedunlessthefollowingconditionsaremetsimultaneously:①ThesignificantrisksandrewardsofownershipofthegoodshavebeentransferredtothebuyerbytheCompany;②TheCompanyretainsneithercontinuousmanagementrightthatusuallykeepsrelationwiththeownershipnoreffectivecontroloverthesoldgoods;③Therevenueamountcouldbereliablymeasured;and④TherelevanteconomicbenefitsmayflowintotheCompany,andtherelevantcostwhichhadoccurredorwilloccurcouldbereliablymeasured. Specificprinciplesforrecognitionofthe“domesticsaleandexport”incomesoftheCompany: (1)Methodforrecognitionofthedomesticsaleincome:Accordingtothebuyer’srequirements,theCompanydeliverstothebuyertheproductsthathavebeenconsideredqualifieduponexamination.Theamountoftheincomehasbeendeterminedandthesalesinvoicehasbeenissued.Thepaymentforthedeliveredproductshasbeenreceivedinfullorisexpectedlyrecoverable. (2)Methodforrecognitionoftheexportincome:TheCompanyproducestheproductsaccordingtothecontractsignedwiththebuyer.Aftertheproductshavebeenexaminedasqualified,theCompanycompletesthecustomsclearingprocedureforexport.Theshippingcompanyloadstheproductsforshipping.Theamountoftheincomehasbeendeterminedandtheexportsalesinvoicehasbeenissued.Thepaymentforthedeliveredproductshasbeenreceivedinfullorisexpectedlyrecoverable. 2.Provisionoflaborservices Inthecasethattheresultsofthelaborservicetransactioncanbereliablyestimated,theincomefromtheprovisionoflaborservicesshallberecognizedatthebalancesheetdatebythepercentageofcompletionmethodaccordingtotheprogressofthelabortransaction. Theresultoftheprovisionoflaborservicescanbereliablyestimatedrefersthatallthefollowingconditionsaremet:①Theamountofincomecanbemeasuredreliably;②Therelevanteconomicbenefitsarelikelytoinflowtotheenterprise;③Theprogressofthetransactioncanbereliablydetermined;④Thecostincurredandtobeincurredinthetransactioncanbemeasuredreliably. Iftheresultoftheprovisionoflaborservicescan’tbereliablyestimated,theincomefromtheprovisionoflaborservicesshallberecognizedaccordingtothecostoflaborservicesthathaveincurredandareexpectedtobecompensated,andthecostoflaborservicesthathaveincurredisrecognizedasthecurrentexpenses.Ifthecostoflaborservicesalreadyincurredisn’texpectedtobecompensated,theincomewillnotberecognized. IfthecontractoragreementbetweentheCompanyandotherenterprisesincludesthesaleofgoodsandtheprovisionoflaborservices,andthesaleofgoodsandtheprovisionoflaborservicescanbedistinguishedandmeasuredseparately,thesaleofgoodsandtheprovisionoflaborservicesshallbedealtwithseparately;ifthesaleofgoodsandtheprovisionoflaborservicescan’tbedistinguishedorcan’tbemeasuredseparately,thecontractwillbetreatedassaleofgoods. 3.Incomefromtransferringtherighttouseassets Theoperatingincomeiscalculatedandrecognizedaccordingtothetimeandmethodstipulatedbyrelevantcontractsandagreements. 4.Interestincome Recognizedwhenallthefollowingconditionsaremet:①Theamountofincomecanbemeasuredreliably;②Economicbenefitsrelatedtothetransactioncaninflow. 29.GovernmentSubsidies (1)JudgmentBasisandAccountingTreatmentofGovernmentSubsidiesRelatedtoAssets Thegovernmentsubsidiesrelatedtoassetsrefertothegovernmentsubsidiesobtainedforacquisition,constructionorotherwiseformationoflong-termassets.Thegovernmentsubsidiesrelatedtoincomerefertothegovernmentsubsidiesexceptthegovernmentsubsidiesrelatedtoassets. Thespecificstandardofclassifyingthegovernmentsubsidiesassubsidiesrelatedtoassets:governmentsubsidiesforacquisition,constructionorotherwiseformationoflong-termassets. Ifthegovernmentdocumentsdonotspecifythesubsidyobject,thebasesthattheCompanyclassifiedthegovernmentsubsidiesasassets-relatedsubsidiesorincome-relatedsubsidieswereasfollows:(1)Ifthespecificitemsforwhichthesubsidyistargetedarestipulatedingovernmentdocuments,divideaccordingtotherelativeproportionoftheamountofexpenditurethatformsassetsandtheamountofexpenditureincludedinthecostinthebudgetforthatparticularproject,andtheproportionshallbereviewedateachbalancesheetdateandchangedasnecessary;(2)ifthegovernmentdocumentsonlyhaveageneralstatementofthepurposeanddonotspecifyaspecificproject. Ifagovernmentsubsidyisamonetaryasset,itshallbemeasuredaccordingtotheamountreceivedorreceivable.Ifagovernmentsubsidyisanon-monetaryasset,itshallbemeasuredatitsfairvalue,andshallbemeasuredatanominalamount(RMB1)whenthefairvaluecannotbeobtainedreliably. Forconfirmedgovernmentsubsidiesthatneedtobereturned,ifthereisrelevantdeferredincome,thebookbalanceofrelateddeferredincomeshallbewrittenoffandtheexcessshallbechargedtoprofitorlossfortheCurrentPeriod;forothercircumstances,itshallbedirectlychargedtoprofitorlossfortheCurrent. TheCompanyadoptsthegrossmethodtoconfirmgovernmentsubsidies.Thegovernmentsubsidiesrelatedtoassetsarerecognizedasdeferredincome,andarechargedtothecurrentprofitorlossinareasonableandsystematicmannerwithintheusefullivesoftherelevantassets(subsidiesrelatedtothedailyactivitiesoftheCompanyareincludedinotherincome;whilesubsidiesunrelatedtothedailyactivitiesoftheCompanyareincludedinnon-operatingincome).GovernmentsubsidiesmeasuredatnominalamountsaredirectlychargedtoprofitorlossfortheCurrentPeriod.Wheretherelevantassetsaresold,transferred,scrappedordamagedbeforetheendoftheirusefullives,thebalanceofrelatedundistributeddeferredincomeshallbetransferredtotheprofitorlossoftheassetdisposalintheCurrentPeriod. (2)JudgmentBasisandAccountingTreatmentofGovernmentSubsidiesPertinenttoIncomes ThespecificcriteriathattheCompanyclassifiesgovernmentsubsidiesasincomerelatedis:othergovernmentsubsidiesotherthanasset-relatedgovernmentsubsidies. Governmentsubsidiesrelatedtoincomearetreatedasfollows: (1)governmentsubsidiesusedtocompensatetherelevantcosts,expensesorlossesoftheCompanyinthesubsequentperiodshallberecognizedasdeferredincome,andshallbeincludedinthecurrentprofitandlossduringtheperiodofconfirmingtherelevantcosts,expensesorlosses(subsidiesrelatedtothedailyactivitiesoftheCompanyareincludedinotherincome;whilesubsidiesunrelatedtothedailyactivitiesoftheCompanyareincludedinnon-operatingincome); (2)governmentsubsidiesusedtocompensatetherelevantcosts,expensesorlossesincurredbytheCompanyshallbedirectlyincludedinthecurrentprofitsandlosses(subsidiesrelatedtothedailyactivitiesoftheCompanyareincludedinotherincome;whilesubsidiesunrelatedtothedailyactivitiesoftheCompanyareincludedin non-operatingincome). Forgovernmentsubsidiesthatincludebothassets-relatedandincome-relatedparts,theyshouldbedistinguishedseparatelyforaccountingtreatment;forgovernmentsubsidiesthataredifficulttobedistinguished,theyshouldbeclassifiedasincome-related. 30.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities TheincometaxoftheCompanyincludesthecurrentincometaxanddeferredincometax.Botharerecordedintothecurrentgainsandlossesasincometaxexpensesorrevenue,exceptinthefollowingcircumstances: (1)Theincometaxgeneratedfromthebusinesscombinationshallbeadjustedintogoodwill; (2)Theincometaxrelatedtothetransactionoreventdirectlyincludedinshareholders’equityshallberecordedintoshareholders’equity. Atthebalancesheetdate,theCompanyrecognizesthedeferredincometaxassetsordeferredincometaxliabilitiesinaccordancewiththebalancesheetliabilitymethodforthetemporarydifferencebetweenthebookvalueofassetsorliabilitiesanditstaxbase. TheCompanyrecognizesalltaxabletemporarydifferencesasdeferredincometaxliabilitiesunlesstaxabletemporarydifferencesariseinthefollowingtransactions: (1)Theinitialrecognitionofgoodwillortheinitialrecognitionoftheassetsorliabilitiesarisingfromatransactionwiththefollowingcharacteristics:thetransactionisnotabusinesscombinationandneithertheaccountingprofitnorthetaxableincomeisincurredatthetimeofthetransaction; (2)Thetimeofwrite-backoftaxabletemporarydifferencesrelatedtotheinvestmentsinsubsidiaries,associatesandjointventurescanbecontrolledandthetemporarydifferencesarelikelytonotbewrittenbackintheforeseeablefuture. TheCompanyrecognizesthedeferredincometaxassetsarisingfromdeductibletemporarydifferences,subjecttotheamountoftaxableincomeobtainedtooffsetthedeductibletemporarydifferences,unlessthedeductibletemporarydifferencesariseinthefollowingtransactions: (1)Thetransactionisnotabusinesscombination,andthetransactiondoesnotaffecttheaccountingprofitortheamountoftaxableincome; (2)Thedeductibletemporarydifferencesrelatedtotheinvestmentsinsubsidiaries,associatesandjointventuresarenotmetsimultaneously:Temporarydifferencesarelikelytobewrittenbackintheforeseeablefutureandarelikelytobeusedtooffsetthetaxableincomeofdeductibletemporarydifferencesinthefuture. Atthebalancesheetdate,theCompanymeasuresthedeferredincometaxassetsanddeferredincometaxliabilitiesattheapplicabletaxrateoftheperiodexpectedtorecovertheassetorpayofftheliabilitiesaccordingtotaxlaw,andreflectstheincometaxeffectofexpectedassetsrecoveryorliabilitiespayoffmethodatthebalancesheetdate. Atthebalancesheetdate,theCompanyreviewsthebookvalueofthedeferredincometaxassets.Ifitislikelythatsufficienttaxableincomewillnotbeavailabletooffsetthebenefitofthedeferredincometaxassetsinthefutureperiod,thebookvalueofthedeferredincometaxassetswillbewrittendown.Ifitisprobablethatsufficienttaxableincomewillbeavailable,theamountofwrite-downwillbewrittenback. 31.Lease (1)AccountingTreatmentofOperatingLease (1)TheleasefeepaidbytheCompanyforrentedassetsshallbeapportionedusingthestraight-linemethodovertheentireleasetermwithoutdeductingtherent-freeperiodandshallbeincludedinthecurrentperiodexpenses.TheinitialdirectcostsrelatedtotheleasetransactionpaidbytheCompanyareincludedincurrentexpenses. Whenthelessoroftheassetassumesthelease-relatedexpensesthatshouldbebornebytheCompany,theCompanyshoulddeductthepartoftheexpensesfromthetotalrentalamount,andthedeductedrentalexpensesareapportionedduringtheleasetermandincludedinthecurrentexpenses. (2)Therentalfeesreceivedbythecompanyforleasingassetsareapportionedonastraight-linebasisovertheentireleasetermwithoutdeductingtherent-freeperiodandarerecognizedasleaseincome.Theinitialdirectexpensesrelatedtoleasetransactionspaidbythecompanyareincludedinthecurrentexpenses;iftheamountislarger,theyarecapitalizedandarerecordedinthecurrentperiodinstagesonthesamebasisastherecognitionofleaseincomeduringtheentireleaseperiod. Whenthecompanyassumesthelease-relatedexpensesthatshouldbebornebythelessee,thecompanydeductstheexpensesfromthetotalamountofrentalincomeandallocatesthedeductedrentalexpensesduringtheleaseperiod. (2)AccountingTreatmentsofFinancialLease (1)Financingleasedassets:ontheleasestartingdate,theCompanyrecordedtheloweroneofthefairvalueoftheleasedassetandthepresentvalueoftheminimumleasepaymentsontheleasebeginningdateastheenteringvalueinanaccount,recognizedtheamountoftheminimumleasepaymentsastheenteringvalueinanaccountoflong-termaccountpayable,andtreatedthebalancebetweentherecordedamountoftheleasedassetandthelong-termaccountpayableasunrecognizedfinancingcharges.Thecompanyadoptedtheeffectiveinterestmethodtoamortizetheunrecognizedfinancingexpensesduringtheassetleaseperiodandincludeditintofinancialexpenses. (2)Assetsleasedbyfinance:Ontheleasebeginningdate,theCompanyrecognizedthefinancialleasereceivables,andthedifferencebetweenthesumofunguaranteedresidualvaluesanditspresentvalueasunrealizedfinancingincome.Itisrecognizedasleaseincomeduringanyleaseperiodinthefuture.TheinitialdirectcostsincurredbytheCompanyinrelationtotheleasetransaction,wereincludedintheinitialmeasurementofthefinancialleasereceivableandtheamountofrevenuerecognizedduringtheleaseperiodshallbereduced. 32.OtherSignificantAccountingPoliciesandEstimates Notapplicable 33.ChangesinMainAccountingPoliciesandEstimates (1)ChangeofAccountingPolicies □Applicable√Notapplicable (2)SignificantChangesinAccountingEstimates □Applicable√Notapplicable 34.Other None VITaxes 1.MainTaxesandTaxRates Categoryoftaxes Taxbasis Taxrate Salesvolumefromgoodssellingortaxable VAT 3%,6%,10%,11%,16%,17% service Urbanmaintenanceandconstructiontax Turnovertaxpayable 7%,5% Enterpriseincometax Taxableincome 15%,25% Educationalsurtax Turnovertaxpayable 3% Localeducationalsurtax Turnovertaxpayable 2% Notesofthedisclosuresituationofthetaxpayingbodieswithdifferententerprisesincometaxrate Taxpayer Incometaxrate FoshanElectricalandLightingCo.,Ltd. 15% FoshanLightingChanchangOptoelectronicsCo.,Ltd. 25% FoshanChanshengElectronicBallastCo.,Ltd. 25% FoshanTaimeiTimesLampsandLanternsCo.,Ltd. 25% NanjingFozhaoLightingComponentsManufacturingCo.,Ltd. 25% FoshanElectrical&Lighting(Xinxiang)Co.,Ltd. 25% FSLNewLightSourceTechnologyCo.,Ltd. 25% GuangdongFozhaoLeasingCo.,Ltd. 25% FoshanLightingLampsandLanternsCo.,Ltd. 25% FSLZhidaElectricTechnologyCo.,Ltd. 25% FSLLightingGMBH 15% 2.TaxPreference TheCompanypassedthere-examinationforHigh-techEnterprisesin2017,aswellaswonthe“CertificateofHigh-techEnterprise”afterapprovalbyDepartmentofScienceandTechnologyofGuangdongProvince,DepartmentofFinanceofGuangdongProvince,GuangdongProvincialBureauofStateTaxationandGuangdongProvincialBureauofLocalTaxation.InaccordancewithrelevantprovisionsinCorporateIncomeTaxLawofthe People'sRepublicofChinaandtheAdministrationMeasuresforIdentificationofHigh-techEnterprisespromulgatedin2007,theCompanypaidthecorporateincometaxbasedonataxrateof15%withinthreeyearssince1January2017. 3.Other Paidaccordingtotherelevantregulationofthetaxlaw. VII.NotestoMainItemsofConsolidatedFinancialStatements 1.MonetaryFunds Unit:RMB Item Endingbalance Beginningbalance Cashonhand 53,998.39 52,031.79 Bankdeposits 909,808,121.57 565,323,109.99 Othermonetaryfunds 5,106,479.72 4,809,067.18 Total 914,968,599.68 570,184,208.96 Ofwhich:totalamountdeposited 334,199.31 183,066.93 oversees Othernotes: TheendingbalanceofothermonetaryfundsintheReportingPeriodwastherefundabledepositssavedinsecuritiescompany,cashdeposits,ande-commercebalance,amongwhichtheusingrightofcashdepositsoffutureforeignexchangesettlementofRMB2,447,280.00andmarginofRMB857,419.80wererestricted. 2.FinancialAssetsatFairValuethroughProfitorLoss Naught 3.DerivativeFinancialAssets □Applicable√Notapplicable 4.NotesReceivable (1)NotesReceivableListedbyCategory Unit:RMB Item Endingbalance Beginningbalance Bankacceptancebill 67,325,195.40 68,368,192.41 Total 67,325,195.40 68,368,192.41 (2)NotesReceivablePledgedbytheCompanyatthePeriod-end Unit:RMB Item Amount Bankacceptancebill 3,500,000.00 Total 3,500,000.00 (3)NotesReceivablewhichHadEndorsedbytheCompanyorHadDiscountedandHadnotDueontheBalanceSheetDateatthePeriod-end Unit:RMB Amountofrecognitionterminationatthe Amountofnotterminatedrecognitionat Item period-end theperiod-end Bankacceptancebill 113,776,579.30 Total 113,776,579.30 (4)NotesTransferredtoAccountsReceivablebecauseDraweroftheNotesFailstoExecutedtheContractorAgreement Naught 5.AccountsReceivable (1)AccountsReceivableDisclosedbyCategory Unit:RMB Endingbalance Beginningbalance Carryingamount Baddebtprovision Carryingamount Baddebtprovision Category WithdraCarrying Carrying Proportio wal value Proportio Withdrawal value Amount Amount Amount Amount n proportio n proportion n Accountsreceivable withsignificant singleamountfor 9,975,96 9,975,96 10,061, 10,061,64 0.95% 100.00% 1.25% 100.00% whichbaddebt 8.91 8.91 641.64 1.64 provisionseparately accrued Accountsreceivable 1,042,31 47,620,8 994,690,3795,800 39,509,24 756,291,43 withdrawnbaddebt 99.05% 4.57% 98.75% 4.96% 1,223.06 36.99 86.07,674.49 1.93 2.56 provisionaccording tocreditrisks characteristics 1,052,28 57,596,8 994,690,3805,862 49,570,88 756,291,43 Total 100.00% 5.47% 100.00% 6.15% 7,191.97 05.90 86.07,316.13 3.57 2.56 Accountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccruedattheperiod-end √Applicable□Notapplicable Unit:RMB Accountsreceivable（by Endingbalance unit） Accountsreceivable Baddebtprovision Withdrawalproportion Withdrawalreason Thedebtorwasata continuouslossdueto SuzhouMontLighting thescaleandmarketand 9,975,968.91 9,975,968.91 100.00% Co.,Ltd. otherreasons,sonowit isnotsuitabletoproduce continuously. Total 9,975,968.91 9,975,968.91 -- -- Inthegroups,accountsreceivableadoptingaginganalysismethodtoaccruebaddebtprovision: √Applicable□Notapplicable Unit:RMB Endingbalance Aging Accountsreceivable Baddebtprovision Withdrawalproportion Subitemwithin1year Within1year 988,309,695.40 29,649,290.86 3.00% Subtotalwithin1year 988,309,695.40 29,649,290.86 3.00% 1to2years 32,213,727.24 3,221,372.72 10.00% 2to3years 5,878,621.63 1,763,586.49 30.00% 3to4years 1,334,879.69 667,439.85 50.00% 4to5years 11,275,760.17 9,020,608.14 80.00% Over5years 3,298,538.93 3,298,538.93 100.00% Total 1,042,311,223.06 47,620,836.99 4.57% Notesofconfirmingthebasisofthegroups: Inthegroups,accountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision □Applicable√Notapplicable Inthegroups,accountsreceivableadoptingothermethodstowithdrawbaddebtprovision: Naught (2)AccountsReceivableWithdraw,ReversedorCollectedduringtheReportingPeriod ThewithdrawalamountofthebaddebtprovisionduringtheReportingPeriodwasofRMB8,026,000.50;theamountofthereversedorcollectedpartduringtheReportingPeriodwasofRMB0.00. (3)TheActualWrite-offAccountsReceivable Unit:RMB Item Amount Otherretailsaccounts 78.17 Total 78.17 (4)Top5oftheEndingBalanceoftheAccountsReceivableCollectedaccordingtotheArrearsParty Unit:RMB Proportionof endingbalance Endingbalanceofbad Nameofunits Relationship Amount Aging ofthetotal debtprovision accounts receivable Non-connected 191,461,593.37 18.19% 5,743,847.80 No.1 Within1year relationship Non-connected 20,747,221.00 1.97% 684,803.17 No.2 Within2years relationship Non-connected 20,371,305.32 1.94% 611,139.16 No.3 Within1year relationship Non-connected 19,409,126.02 1.84% 582,273.78 No.4 Within1year relationship Non-connected 15,148,133.08 1.44% 454,443.99 No.5 Within1year relationship Total 267,137,378.79 25.39% 8,076,507.90 (5)AccountReceivablewhichTerminatetheRecognitionowningtotheTransferoftheFinancialAssets Naught (6)TheAmountoftheAssetsandLiabilitiesFormedbytheTransferandtheContinuesInvolvementofAccountsReceivable Naught 6.Prepayment (1)ListedbyAgingAnalysis Unit:RMB Endingbalance Beginningbalance Aging Amount Proportion Amount Proportion Within1year 22,468,064.03 73.87% 25,971,834.21 78.48% 1to2years 3,604,426.17 11.85% 2,782,505.53 8.41% 2to3years 111,031.47 0.37% 3,250,778.25 9.82% Over3years 4,231,716.81 13.91% 1,090,195.36 3.29% Total 30,415,238.48 -- 33,095,313.35 -- (2)Top5oftheEndingBalanceofthePrepaymentCollectedaccordingtothePrepaymentTarget Unit:RMB Proportionofthetotal Nameofunits Relationship Endingbalance Aging number No.1 Non-connectedsupplier 2,900,000.00 Over3years 9.53% No.2 Non-connectedsupplier 2,152,731.21 Within1year 7.08% No.3 Non-connectedsupplier 1,556,175.80 Within1year 5.12% No.4 Non-connectedsupplier 1,463,911.36 Within1year 4.81% No.5 Non-connectedsupplier 1,318,800.00 Within2year 4.34% Total 9,391,618.37 30.88% 7.InterestReceivable (1)CategoryofInterestReceivable Unit:RMB Item Endingbalance Beginningbalance Depositsonaregularbasis 222,714.96 1,726,993.91 Bankfinancialproducts 4,745,863.01 Structuraldeposits 1,366,375.95 5,955,594.94 Total 1,589,090.91 12,428,451.86 (2)SignificantOverdueInterest Naught 8.DividendReceivable Naught 9.OtherAccountsReceivable (1)OtherAccountsReceivableDisclosedbyCategory Unit:RMB Endingbalance Beginningbalance Carryingamount Baddebtprovision Carryingamount Baddebtprovision Category WithdraCarrying Carrying Proportio wal value Proportio Withdrawal value Amount Amount Amount Amount n proportio n proportion n Otheraccounts receivablewithdrawn 40,239,2 3,138,33 37,100,9624,013, 2,797,844 21,215,215. baddebtprovision 99.27% 7.80% 98.79% 11.65% 98.09 2.99 5.10060.03 .88 15 accordingtocredit riskscharacteristics Otheraccounts receivablewith insignificantsingle 295,120. 295,120. 295,120 295,120.0 0.73% 100.00% 1.21% 100.00% amountforwhich 00 00 .00 0 baddebtprovision separatelyaccrued 40,534,4 3,433,45 37,100,9624,308, 3,092,964 21,215,215. Total 100.00% 8.47% 100.00% 12.72% 18.09 2.99 5.10180.03 .88 15 OtherreceivablewithsinglesignificantamountandwithdrawalbaddebtprovisionseparatelyattheendofthePeriod □Applicable√Notapplicable Inthegroups,otheraccountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision: √Applicable□Notapplicable Unit:RMB Endingbalance Aging Otheraccountsreceivable Baddebtprovision Withdrawalproportion Subitemwithin1year Within1year 33,350,359.64 1,000,510.79 3.00% Subtotalwithin1year 33,350,359.64 1,000,510.79 3.00% 1to2years 3,432,152.41 343,215.24 10.00% 2to3years 167,542.81 50,262.84 30.00% 3to4years 3,088,998.23 1,544,499.12 50.00% 4to5years 2,000.00 1,600.00 80.00% Over5years 198,245.00 198,245.00 100.00% Total 40,239,298.09 3,138,332.99 7.80% Notesofconfirmingthebasisofthegroups: Inthegroups,otheraccountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision: □Applicable√Notapplicable Inthegroups,otheraccountsreceivableadoptingothermethodstowithdrawbaddebtprovision: □Applicable√Notapplicable (2)BadDebtProvisionWithdrawal,ReversedorRecoveredintheReportingPeriod TheamountofbaddebtprovisionwasRMB340,488.11,theamountofreversedorrecoveredbaddebtprovisionintheReportingPeriodRMB0.00. (3)ParticularsoftheActualVerificationofOtherAccountsReceivableduringtheReportingPeriod Naught (4)OtherAccountReceivableClassifiedbyAccountNature Unit:RMB Nature Endingcarryingamount Beginningcarryingamount VATexporttaxrefunds 18,007,536.67 5,712,812.04 Performancebond 4,671,837.37 4,377,639.20 Staffborrowanddeposit 8,327,131.18 4,343,208.32 Rent,water&electricityfees 420,600.59 1,293,281.97 Advancemoneyforstreetlight 3,777,672.16 3,777,672.16 construction Internalbusinessgroup 295,120.00 295,120.00 Others 5,034,520.12 4,508,446.34 Total 40,534,418.09 24,308,180.03 (5)Top5OtherAccountsReceivableinEndingBalanceCollectedaccordingtotheArrearsParty Unit:RMB Proportionofending Endingbalanceof Nameofunits Nature Endingbalance Aging balanceofthetotal baddebtprovision otheraccounts receivable No.1 Exportrebates 18,007,536.67Within1year 44.43% 540,226.10 Advancemoneyfor No.2 streetlight 3,777,672.16Within4years 9.32% 1,299,397.36 construction No.3 Others 2,122,656.00Within1year 5.24% 63,679.68 No.4 Margin 2,098,341.001-2years 5.18% 209,834.10 No.5 Reservedfunds 1,272,056.18Within1year 3.14% 38,161.69 Total -- 27,278,262.01 -- 67.30% 2,151,298.93 (6)AccountsReceivableInvolvedwithGovernmentSubsidies Naught (7)OtherAccountReceivablewhichTerminatetheRecognitionowningtotheTransferoftheFinancialAssetsNaught (8)TheAmountoftheAssetsandLiabilitiesFormedbytheTransferandtheContinuesInvolvementofOtherAccountsReceivable Naught 10.Inventory (1)CategoryofInventory Unit:RMB Endingbalance Beginningbalance Item Fallingprice Fallingprice Carryingamount Carryingvalue Carryingamount Carryingvalue reserves reserves Rawmaterials 131,750,416.99 2,109,125.27 129,641,291.72 104,733,828.43 2,513,798.75 102,220,029.68 Goodsinprocess 55,616,044.37 55,616,044.37 39,662,967.77 39,662,967.77 Inventorygoods 400,549,699.56 15,543,022.09 385,006,677.47 466,813,177.48 10,984,333.96 455,828,843.52 Self-manufacture dsemi-finished 146,454,910.82 1,151,374.87 145,303,535.95 146,868,534.26 972,725.26 145,895,809.00 product Low-value 2,598,902.15 2,598,902.15 2,859,239.90 2,859,239.90 fugitiveitems Total 736,969,973.89 18,803,522.23 718,166,451.66 760,937,747.84 14,470,857.97 746,466,889.87 WhethertheCompanyneedstocomplywiththedisclosurerequirementsofShenzhenStockExchangeIndustryInformationDisclosureGuidelinesNo.4-Listedcompaniesengagedinseedindustryandplantingbusiness No (2)FallingPriceReservesofInventory Unit:RMB Increasedamount Decreasedamount Beginning Item Reverseor Endingbalance balance Withdrawal Other Other write-off Rawmaterials 2,513,798.75 89,155.54 493,829.02 2,109,125.27 Inventorygoods 10,984,333.96 7,319,251.26 2,760,563.13 15,543,022.09 Self-manufacture dsemi-finished 972,725.26 231,974.42 53,324.81 1,151,374.87 product Total 14,470,857.97 7,640,381.22 3,307,716.96 18,803,522.23 Reasonforthewithdrawalandreverseoffallingpricereservesofinventory: Reasonsforthereverseorwrite-offof Basisforprovisionforfallingpriceof Item fallingpricereservesofinventoryof Remark inventory ReportingPeriod Accordingtothelowerofinventorycost Rawmaterials Rawmaterialssalesorscrapping andnetrealizablevalue Accordingtothelowerofinventorycost Inventorygoods Productssalesorscrapping andnetrealizablevalue Reasonforthewithdrawaloffallingpricereservesofinventory:withdrawnfornon-circulationofasmallnumberofrawmaterials;someinventorygoodsweretemporarilyidleforproductclassification. (3)NotesoftheEndingBalanceoftheInventorywhichIncludesCapitalizedBorrowingExpenses Naught (4)CompletedUnsettledAssetsFormedfromtheConstructionContactatthePeriod-end Naught 11.Held-for-saleAssets Naught 12.Non-currentAssetsDuewithin1Year Naught 13.OtherCurrentAssets Unit:RMB Item Endingbalance Beginningbalance DeductibleinputtaxofVAT 28,511,668.85 25,823,261.05 Advancepaymentofenterpriseincometax 238,841.51 Bankfinancialproducts(Note) 470,000,000.00 Structuraldeposits(Note) 320,000,000.00 510,000,000.00 Total 348,511,668.85 1,006,062,102.56 Othernotes: Note:thebankprincipal-guaranteedfinancialproductswithmaturitydatemorethanthreemonthsbutinvestmentcycleshorterthanayearandstructuraldepositproductswhichcannotbeterminatedinadvance. 14.Available-for-saleFinancialAssets (1)ListofAvailable-for-saleFinancialAssets Unit:RMB Endingbalance Beginningbalance Item Depreciation Depreciation Carryingamount Carryingvalue Carryingamount Carryingvalue reserves reserves Available-for-saleequity 1,016,463,407.545,850,000.001,010,613,407.541,396,431,536.60 5,850,000.001,390,581,536.60 instruments Measuredbyfair 706,985,098.14 706,985,098.141,086,953,227.20 1,086,953,227.20 value Measuredbycost 309,478,309.405,850,000.00 303,628,309.40 309,478,309.40 5,850,000.00 303,628,309.40 Total 1,016,463,407.545,850,000.001,010,613,407.541,396,431,536.60 5,850,000.001,390,581,536.60 (2)Available-for-saleFinancialAssetsMeasuredbyFairValueatthePeriod-end Unit:RMB Categoryofthe Available-for-saleequity Available-for-sale available-for-sale Total instruments liabilitiesinstruments financialassets Costoftheequity instruments/amortized 243,884,887.46 243,884,887.46 costofthedebt instruments Fairvalue 706,985,098.14 706,985,098.14 Changedamountofthe fairvaluethatbe accumulativelyrecorded 463,100,210.68 463,100,210.68 inothercomprehensive income (3)Available-for-saleFinancialAssetsMeasuredbyCostatthePeriod-end Unit:RMB Carryingamount Depreciationreserves Shareholdi Cash ng bonusof InvesteePeriod-beg Period-beg proportion the Increase DecreasePeriod-end Increase DecreasePeriod-endamongtheReporting in in investees Period Shenzhen Zhonghao 5,850,000. 5,850,000.5,850,000. 5,850,000. Lessthan (Group) 00 00 00 00 5.00% 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 Lessthan Developm500,000.00 500,000.00 5.00% entBank Co.,Ltd. Foshan Fochen Road 4,554,176. 4,554,176. Developm 7.66% 40 40 ent Company Limited 309,478,30 309,478,305,850,000. 5,850,000. 10,971,417 Total -- 9.40 9.40 00 00 .60 (4)ChangesoftheImpairmentoftheAvailable-for-saleFinancialAssetsduringtheReportingPeriod Unit:RMB Categoryofthe Available-for-saleequity Available-for-sale available-for-sale Total instruments liabilitiesinstruments financialassets Withdrawnimpairment balanceatthe 5,850,000.00 5,850,000.00 period-begin Withdrawnimpairment 5,850,000.00 5,850,000.00 balanceattheperiod-end (5)RelevantNotesoftheFairValueoftheAvailable-for-saleEquityInstrumentswhichSeriouslyFellorTemporarilyFellbutnotWithdrawntheImpairmentProvision Naught 15.InvestmentHeld-to-maturity Naught 16.Long-termAccountsReceivable Naught 17.Long-termEquityInvestment Unit:RMB Increase/decrease Ending GainsandAdjustme balance Cash Withdraw BeginninAdditiona losses ntof Ending of Investee Reduced Changesbonusor alof gbalance l recognize other balanceimpairme investmen ofother profits impairme Other investmen dundercomprehe nt t equity announce nt t theequity nsive provision dtoissueprovision method income I.Jointventures II.Associatedenterprises Shenzhen Primatron ix 179,414,1 179,781.5 3,120,585 176,473,3 (Nanho) 05.14 6 .75 00.95 Electronic sLtd. 179,414,1 179,781.5 3,120,585 176,473,3 Subtotal 05.14 6 .75 00.95 179,414,1 179,781.5 3,120,585 176,473,3 Total 05.14 6 .75 00.95 Othernotes: TheactualcontrollerofShenzhenPrimatronix(Nanho)ElectronicsLtd.isGuangdongElectronicsInformationIndustrial(group)Corp. 18.InvestmentProperty (1)InvestmentPropertyAdoptingCostMeasurementMode □Applicable√Notapplicable (2)InvestmentPropertyAdoptingFairValueMeasurementMode □Applicable√Notapplicable (3)ListoftheInvestmentPropertyFailedtoCompletedthePropertyCertificate Naught 19.FixedAssets (1)ListofFixedAssets Unit:RMB Housesand Machinery Transportation Electronic Item Total buildings equipment equipment equipment I.Originalcarrying value 1.Beginningbalance 682,933,149.57 689,839,173.35 23,667,381.11 24,917,745.28 1,421,357,449.31 2.Increasedamount 27,268,792.63 33,501,668.80 28,376.07 2,589,689.54 63,388,527.04 oftheperiod (1)Purchase 797,188.08 26,133,191.07 28,376.07 463,880.06 27,422,635.28 (2)Transferof projectunder 26,471,604.55 7,368,477.73 2,125,809.48 35,965,891.76 construction (3)Enterprises combinationincrease 3.Decreased 827,279.14 547,960.00 28,165.00 1,403,404.14 amountoftheperiod (1)Disposalor 787,806.01 547,960.00 28,165.00 1,363,931.01 scrap (2)Equipment 39,473.13 39,473.13 transformation 4.Endingbalance 710,201,942.20 722,513,563.01 23,147,797.18 27,479,269.82 1,483,342,572.21 II.Accumulated desperation 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 11,537,432.84 21,228,837.48 684,845.71 1,547,267.76 34,998,383.79 amountoftheperiod (1)Withdrawal 11,537,432.84 21,228,837.48 684,845.71 1,547,267.76 34,998,383.79 3.Decreased 751,551.71 520,562.00 26,946.75 1,299,060.46 amountoftheperiod (1)Disposalor 746,239.29 520,562.00 26,946.75 1,293,748.04 scrap (2)Equipment 5,312.42 5,312.42 transformation 4.Endingbalance 420,693,833.70 512,093,490.80 16,212,850.47 20,242,700.67 969,242,875.64 III.Depreciation reserves 1.Beginning 2,292,602.33 428.03 2,293,030.36 balance 2.Increased amountoftheperiod (1)Withdrawal 3.Decreased amountoftheperiod (1)Disposalor scrap 4.Endingbalance 2,292,602.33 428.03 2,293,030.36 IV.Carryingvalue 1.Endingcarrying 289,508,108.50 208,127,469.88 6,934,946.71 7,236,141.12 511,806,666.21 value 2.Beginning 273,776,748.71 195,930,365.99 7,618,814.35 6,194,937.59 483,520,866.64 carryingvalue (2)ListofTemporarilyIdleFixedAssets Unit:RMB Originalcarrying Accumulated Depreciation Item Carryingvalue Remark value depreciation reserves Nameofthe announcement: Announcementon Withdrawingthe Preparationforthe T5,T8, AssetsImpairmentonthe energy-savinglamp 7,987,825.52 5,990,334.69 1,945,921.54 51,569.29 IdleEquipmentsand productionline ConstructioninProgress; theAnnouncementNo.: 2015-030;disclosure website: www.cninfo.com.cn Total 7,987,825.52 5,990,334.69 1,945,921.54 51,569.29 (3)FixedAssetsLeasedinfromFinancingLease Naught (4)FixedAssetsLeasedoutfromOperationLease Naught (5)DetailsofFixedAssetsFailedtoAccomplishCertificateofProperty Othernotes ThestandardworkshopEoftheCompanyhadbeencompletedandputintouseaswellascarriedovertofixedassetsinthisyear.Asof30June2018,therelatedcertificatesofpropertywereinprogress.ThemanagementbelievedtherewerenosubstantiallegalimpedimentsinproceedingwiththecertificatesofpropertyandnosignificantunfavorableeffectstonormaloperationoftheCompany. 20.ConstructioninProgress (1)ListofConstructioninProgress Unit:RMB Endingbalance Beginningbalance Item Depreciation Depreciation Carryingamount Carryingvalue Carryingamount Carryingvalue reserves reserves Constructionin 189,368,112.34 189,368,112.34 162,814,991.68 162,814,991.68 progress Total 189,368,112.34 189,368,112.34 162,814,991.68 162,814,991.68 (2)ChangesofSignificantConstructioninProgress Unit:RMB Of Amount Proporti which: Accumul that on the Capitaliz Other ative transferr estimate amountationrate EstimateBeginnin decrease amount Nameof Increase edto Ending dofthe Project ofthe ofthe Capital d g damount of item damount fixed balance project progress capitalizinterestsresources number balance ofthe capitaliz assetsof accumul ed ofthe period ed the ative interests period interests period input ofthe period Fuwan intellige 51,500,025,715,09,608,30 35,323,3 nt 68.59%75.00% Other 00.00 29.09 7.84 36.93 worksho pH Fuwan standard24,500,014,115,34,909,41 19,024,7 77.65%85.00% Other worksho 00.00 45.92 2.88 58.80 pK3 Fuwan standard24,500,013,281,65,009,43 18,291,0 74.66%85.00% Other worksho 00.00 20.60 2.38 52.98 pK2 Fuwan standard23,000,012,491,84,057,47 16,549,2 71.95%75.00% Other worksho 00.00 25.29 2.64 97.93 pJ3 Fuwan standard23,000,012,652,94,065,49 16,718,4 72.69%75.00% Other worksho 00.00 55.32 3.50 48.82 pK1 Fuwan standard21,500,011,760,03,755,78 15,515,8 72.17%80.00% Other worksho 00.00 18.73 3.46 02.19 pJ1 Fuwan standard21,500,011,621,43,755,78 15,377,2 71.52%80.00% Other worksho 00.00 57.94 3.45 41.39 pJ2 Automat icsystem of intellige nt 21,920,08,479,33 8,479,33 producti 38.68%60.00% Other 00.00 3.21 3.21 on worksho p (worksh opH) LEDT8 automati cline transfor mation 8,000,006,971,14321,629. 7,292,77 91.16%99.00% Other (16033) 0.00 2.75 83 2.58 LED third worksho p 70,000 m2 factory 7,500,00 6,026,38 6,026,38 constru 80.35%85.00% Other 0.00 6.72 6.72 ctedby Gao Ming Family housing ofGao 9,000,005,827,521,871,49 7,699,02 85.54%99.00% Other Ming, 0.00 8.35 8.77 7.12 Building 8# Fuwan standard30,000,024,045,41,781,0525,826,5 0.00 86.09%100.00% Other worksho 00.00 44.08 9.03 03.11 pE 265,920,146,961,45,162,225,826,5 166,297, Total -- -- -- 000.00 701.28 60.50 03.11 458.67 (3)ListoftheWithdrawaloftheImpairmentProvisionoftheConstructioninProgress Naught 21.EngineeringMaterial Naught 22.LiquidationofFixedAssets Naught 23.ProductiveBiologicalAssets (1)ProductiveBiologicalAssetsAdoptingCostMeasurementMode □Applicable√Notapplicable (2)ProductiveBiologicalAssetsAdoptingFairValueMeasurementMode □Applicable√Notapplicable 24.OilandGasAssets □Applicable√Notapplicable 25.IntangibleAssets (1)Information Unit:RMB Usingrightof Item Landuseright Patent Non-patents Total Software I.Originalcarryingvalue 1.Beginningbalance 211,719,938.60 200,000.00 2,773,651.87 214,693,590.47 2.Increasedamountof theperiod (1)Purchase (2)InternalR&D (3)Increasefrom enterprisecombination 3.Decreaseinthe ReportingPeriod (1)Disposal 4.Endingbalance 211,719,938.60 200,000.00 2,773,651.87 214,693,590.47 II.Totalaccrued amortization 1.Beginningbalance 57,449,354.58 200,000.00 1,499,515.53 59,148,870.11 2.Increasedamountof 1,936,493.01 220,515.84 2,157,008.85 theperiod (1)Withdrawal 1,936,493.01 220,515.84 2,157,008.85 3.Decreaseinthe ReportingPeriod (1)Disposal 4.Endingbalance 59,385,847.59 200,000.00 1,720,031.37 61,305,878.96 III.Depreciationreserves 1.Beginningbalance 2.Increasedamountof theperiod (1)Withdrawal 3.Decreaseinthe ReportingPeriod (1)Disposal 4.Endingbalance IV.Carryingvalue 1.Endingcarryingvalue 152,334,091.01 1,053,620.50 153,387,711.51 2.Beginningcarrying 154,270,584.02 1,274,136.34 155,544,720.36 value TheproportionoftheintangibleassetsformedfromtheinternalR&DthroughtheCompanytothebalanceoftheintangibleassetsattheperiod-endwas0.00%. (2)DetailsofLandUseRightFailedtoAccomplishCertificateofTitle Naught 26.R&DExpenses Naught 27.Goodwill (1)OriginalCarryingvalueofGoodwill Naught (2)ImpairmentProvisionofGoodwill Naught 28.Long-termUnamortizedExpenses Unit:RMB Amortization Otherdecreased Item Beginningbalance Increasedamount Endingbalance amount amount Maintenanceand 9,088,933.56 1,176,201.48 2,859,910.25 7,405,224.79 decorationexpenses Total 9,088,933.56 1,176,201.48 2,859,910.25 7,405,224.79 29.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities (1)DeferredIncomeTaxAssetsHadnotBeenOff-set Unit:RMB Endingbalance Beginningbalance Item Deductibletemporary Deferredincometax Deductibletemporary Deferredincometax difference assets difference assets Assetsimpairment 112,256,028.63 17,243,788.29 99,556,953.91 15,311,430.81 provision Unrealizedprofitsof 1,324,545.88 198,681.88 1,795,625.87 269,343.88 internaltransactions Deductiblelosses 897,811.61 224,452.90 10,594,861.17 2,648,715.29 Depreciationoffixed 69,138,726.15 10,701,998.82 67,261,836.57 10,420,465.38 assets Payrollpayable 43,760,690.41 6,564,103.56 60,172,489.55 9,025,873.43 Total 227,377,802.68 34,933,025.45 239,381,767.07 37,675,828.79 (2)DeferredIncomeTaxLiabilitiesHadnotBeenOff-set Unit:RMB Endingbalance Beginningbalance Item Taxabletemporary Deferredincometax Taxabletemporary Deferredincometax difference liabilities difference liabilities Changesinfairvalueof available-for-sale 463,100,210.68 69,465,031.60 843,068,339.74 126,460,250.96 financialassets Total 463,100,210.68 69,465,031.60 843,068,339.74 126,460,250.96 (3)DeferredIncomeTaxAssetsorLiabilitiesListedbyNetAmountafterOff-set Unit:RMB Mutualset-offamountof Amountofdeferred Mutualset-offamountof Amountofdeferred deferredincometax incometaxassetsor deferredincometax incometaxassetsor Item assetsandliabilitiesat liabilitiesafteroff-setat assetsandliabilitiesat liabilitiesafteroff-setat theperiod-end theperiod-end theperiod-begin theperiod-begin Deferredincometax 34,933,025.45 37,675,828.79 assets Deferredincometax 69,465,031.60 126,460,250.96 liabilities (4)ListofUnrecognizedDeferredIncomeTaxAssets Naught (5)DeductibleLossesofUnrecognizedDeferredIncomeTaxAssetswillDueintheFollowingYears Naught 30.OtherNon-currentAssets Unit:RMB Item Endingbalance Beginningbalance Landpurchaseandtheownershipimplicit 41,755,700.00 41,755,700.00 ofrelevantitems Prepaymentsforbusinessfacilities 350,440.00 1,303,334.80 Total 42,106,140.00 43,059,034.80 31.Short-termLoans Naught 32.FinancialLiabilitiesatFairValuethroughProfitorLoss Naught 33.DerivativeFinancialLiabilities □Applicable√Notapplicable 34.NotesPayable Unit:RMB Category Endingbalance Beginningbalance Bankacceptancebill 2,652,485.00 Total 2,652,485.00 ThetotalunpaidnotespayabledueatthePeriodendwasRMB0.00. 35.AccountsPayable (1)ListofAccountsPayable Unit:RMB Item Endingbalance Beginningbalance Accountspayable 679,471,875.75 539,303,554.54 Total 679,471,875.75 539,303,554.54 (2)NotesoftheAccountsPayableAgingOverOneYear Naught 36.AdvancefromCustomers (1)ListofAdvancefromCustomers Unit:RMB Item Endingbalance Beginningbalance Advancefromcustomers 39,197,246.65 48,706,778.49 Total 39,197,246.65 48,706,778.49 (2)SignificantAdvancefromCustomersAgingOverOneYear Naught (3)ParticularsofSettledbutUnfinishedProjectsFormedbyConstructionContractatPeriod-end Naught 37.PayrollPayable (1)ListofPayrollPayable Unit:RMB Item Beginningbalance Increase Decrease Endingbalance I.Short-termsalary 81,948,630.59 301,930,908.07 320,079,778.93 63,799,759.73 II.Welfareafter demission-defined 19,477,061.62 19,477,061.62 contributionplans Total 81,948,630.59 321,407,969.69 339,556,840.55 63,799,759.73 (2)ListofShort-termSalary Unit:RMB Item Beginningbalance Increase Decrease Endingbalance 1.Salary,bonus, 81,567,715.47 276,124,154.89 294,250,945.69 63,440,924.67 allowance,subsidy 2.Employeewelfare 6,308,719.45 6,308,719.45 3.Socialinsurance 12,488,143.47 12,488,143.47 Including:Medical 10,721,495.58 10,721,495.58 insurancepremiums Work-relatedinjury 757,389.39 757,389.39 insurance Maternityinsurance 1,009,258.50 1,009,258.50 4.Housingfund 4,841,241.50 4,841,241.50 5.Laborunionbudget andemployeeeducation 380,915.12 2,168,648.76 2,190,728.82 358,835.06 budget Total 81,948,630.59 301,930,908.07 320,079,778.93 63,799,759.73 (3)ListofDrawingScheme Unit:RMB Item Beginningbalance Increase Decrease Endingbalance 1.Basicpensionbenefits 18,665,445.40 18,665,445.40 2.Unemployment 811,616.22 811,616.22 insurance Total 19,477,061.62 19,477,061.62 38.TaxesPayable Unit:RMB Item Endingbalance Beginningbalance VAT 14,500,324.87 10,282,705.33 Corporateincometax 23,592,375.47 9,181,098.01 Personalincometax 1,782,936.65 1,591,053.45 Urbanmaintenanceandconstructiontax 1,013,577.10 830,070.63 Educationsurcharge 723,983.65 596,707.51 Propertytax 2,708,665.52 893,895.36 Landusetax 2,051,969.88 3,831,261.26 Othertaxes 168,552.67 143,878.85 Total 46,542,385.81 27,350,670.40 39.InterestPayable Naught 40.DividendsPayable Naught 41.OtherAccountsPayable (1)OtherAccountsPayableListedbyNatureoftheAccount Unit:RMB Item Endingbalance Beginningbalance Compensationforlawsuit 1,762,533.43 1,762,533.43 Performancebond 23,904,066.25 22,458,290.53 Others 9,982,229.87 16,327,665.07 Total 35,648,829.55 40,548,489.03 (2)OtherSignificantAccountsPayablewithAgingOverOneYear Naught 42.Held-for-saleLiabilities Naught 43.Non-currentLiabilitiesDuewithin1Year Naught 44.OtherCurrentLiabilities Naught 45.Long-termBorrowings Naught 46.BondsPayable Naught 47.Long-termAccountsPayable Naught 48.Long-termPayrollPayable Naught 49.SpecificAccountsPayable Naught 50.Provisions Naught 51.DeferredIncome Unit:RMB Reasonfor Item Beginningbalance Increase Decrease Endingbalance formation Governmentsubsidy Governmentsubsidy 11,858,330.49 77,499.96 11,780,830.53relatedto assets/income Total 11,858,330.49 77,499.96 11,780,830.53 -- Iteminvolvinggovernmentsubsidies: Unit:RMB Amount Amount recordedintorecordedinto Amount Amountof Relatedto Beginning non-operatinotherincomeoffsetcostin Other Ending Item newly assets/related balance gincomein inthe theReporting changes balance subsidy income theReporting Reporting Period Period Period LED production Relatedto technical 9,852,274.95 9,852,274.95 assets transformatio nproject Production line of 50 million Relatedto 310,000.23 77,499.96 232,500.27 energy-savin assets gfluorescent lamp Construction Relatedto 1,000,000.00 1,000,000.00 of income Electro-optic alInstituteof Foshan Electricaland LightingCo., Ltd. Standard optical components Relatedto testing 272,669.78 272,669.78 income laboratory capacity construction Overseas protection planof Relatedto 250,000.00 250,000.00 intellectual income propertyof FSL Standard researchon Relatedto coolLED 173,385.53 173,385.53 income lightwith wideangle 11,858,330.4 11,780,830.5 Total 77,499.96 -- 9 3 52.OtherNon-currentLiabilities Naught 53.ShareCapital Unit:RMB Increase/decrease(+/-) Beginning Newshares Bonusissuefrom Endingbalance balance Bonusshares Other Subtotal issued profit Thesumof 1,272,132,868.00 127,213,286.00 127,213,286.001,399,346,154.00 shares 54.OtherEquityInstrument Naught 55.CapitalReserves Unit:RMB Item Beginningbalance Increase Decrease Endingbalance Capitalpremium 278,575,487.53 127,213,286.00 151,362,201.53 (premiumonstock) Othercapitalreserves 7,245,971.54 7,245,971.54 Total 285,821,459.07 127,213,286.00 158,608,173.07 Othernotes,includingchangesandreasonofchange: Thedecreaseincapitalpremium(premiumonstock)wasmainlycausedbythereviewandapprovalofthe2017ProfitDistributionandBonusIssuefromProfitPlanontheshareholdersmeetingheldon26April2018,inwhich,theCompanyissuesoneshareforevery10shareincapitalreservestothewholeshareholders.Thetotalbonusissuefromprofitwas127,213,286.00shares.Theaforesaidprofitdistributionandbonusissuefromprofitplanhasbeencarriedoutcompletelyon16May2018. 56.TreasuryShares Naught 57.OtherComprehensiveIncome Unit:RMB ReportingPeriod Less:recorded inother Attributable comprehensive Attributable Income toowners Beginning incomein to Ending Item before Less: ofthe balance priorperiod non-controlbalance taxationin Incometax Company andtransferred ling theCurrent expense asthe inprofitor interests Period parentafter lossinthe aftertax tax Current Period II.Othercomprehensiveincomethat 716,607,333.-379,970,57 -56,995,219-322,975,35 393,631,9 maysubsequentlybereclassifiedto 78 0.75 .36 1.39 82.39 profitorloss Gainsorlossesfromchangesin 716,608,088.-379,968,12 -56,995,219-322,972,90 393,635,1 fairvalueofavailable-for-sale 78 9.06 .36 9.70 79.08 financialassets Differencesarisingfrom translationofforeign -755.00 -2,441.69 -2,441.69 -3,196.69 currency-denominatedfinancial statements 716,607,333.-379,970,57 -56,995,219-322,975,35 393,631,9 Totalofothercomprehensiveincome 78 0.75 .36 1.39 82.39 58.SpecificReserve Naught 59.SurplusReserves Unit:RMB Item Beginningbalance Increase Decrease Endingbalance Statutory surplus 636,066,434.00 636,066,434.00 reserves Discretionary surplus 136,886,568.36 136,886,568.36 reserves Total 772,953,002.36 772,953,002.36 60.RetainedProfits Unit:RMB Item ReportingPeriod Sameperiodoflastyear Beginningbalanceofretainedprofitsbefore 1,731,600,796.18 1,564,615,925.99 adjustments Beginningbalanceofretainedprofitsafter 1,731,600,796.18 1,564,615,925.99 adjustments Add:Netprofitattributabletoownersofthe 229,277,455.82 228,494,660.57 Companyastheparent Dividendofordinarysharespayable 418,531,713.57 534,295,804.56 Endingretainedprofits 1,542,346,538.43 1,258,814,782.00 Listofadjustmentofbeginningretainedprofits: (1)RMB0.00beginningretainedprofitswasaffectedbyretrospectiveadjustmentconductedaccordingtotheAccountingStandardsforBusinessEnterprisesandrelevantnewregulations. (2)RMB0.00beginningretainedprofitswasaffectedbychangesinaccountingpolicies. (3)RMB0.00beginningretainedprofitswasaffectedbycorrectionofsignificantaccountingerrors. (4)RMB0.00beginningretainedprofitswasaffectedbychangesincombinationscopearisingfromsamecontrol. (5)RMB0.00beginningretainedprofitswasaffectedtotallybyotheradjustments. 61.OperatingRevenueandCostofSales Unit:RMB ReportingPeriod SamePeriodoflastyear Item Operatingrevenue Costofsales Operatingrevenue Costofsales Mainoperations 2,048,839,316.62 1,568,876,663.19 2,010,535,149.65 1,537,416,165.51 Otheroperations 15,939,973.37 10,415,204.70 13,390,433.19 9,515,614.34 Total 2,064,779,289.99 1,579,291,867.89 2,023,925,582.84 1,546,931,779.85 62.TaxesandSurtaxes Unit:RMB Item ReportingPeriod SamePeriodoflastyear Urbanmaintenanceandconstructiontax 8,264,474.00 7,980,261.34 EducationSurcharge 5,949,176.10 5,707,899.61 Propertytax 4,231,277.07 3,045,704.60 Landusetax 2,590,984.95 2,621,884.53 Vehiclesandvesselsusetax 6,668.80 13,909.92 Stampduty 906,543.92 1,016,936.24 Embankment-protectionfees 6.09 Environmentalprotectiontax 13,393.40 Total 21,962,518.24 20,386,602.33 63.SellingExpense Unit:RMB Item ReportingPeriod SamePeriodoflastyear Employee’sremuneration 30,104,690.49 30,517,319.21 Freight 36,843,018.64 31,103,632.14 Businesstravelcharges 4,436,361.10 5,183,499.37 Businesspropagandizefeesand 9,922,450.58 3,408,430.38 advertizingfees Dealermeetingexpense 2,444,484.12 857,144.15 Salespromotionfees 7,768,266.90 6,799,707.29 Other 12,397,738.64 3,782,261.15 Total 103,917,010.47 81,651,993.69 64.AdministrativeExpense Unit:RMB Item ReportingPeriod SamePeriodoflastyear Employee’sremuneration 65,793,996.37 57,456,446.88 Officeexpenses 5,211,417.98 5,128,247.37 Rentoflandandmanagementcharge 3,135,605.89 3,054,887.77 Amortizationofintangibleassets 2,157,008.85 2,157,808.85 Depreciationcharge 7,850,977.37 9,552,900.65 Other 20,325,025.06 21,440,530.08 Total 104,474,031.52 98,790,821.60 65.FinanceCosts Unit:RMB Item ReportingPeriod SamePeriodoflastyear Interestexpense Less:Interestincome 4,879,439.87 15,609,163.27 Foreignexchangegainsorlosses -9,341,097.44 6,502,463.05 Other 1,135,060.70 1,990,792.86 Total -13,085,476.61 -7,115,907.36 66.AssetImpairmentLoss Unit:RMB Item ReportingPeriod SamePeriodoflastyear I.Baddebtloss 8,366,488.61 10,677,806.99 II.Inventoryfallingpriceloss 7,640,381.22 13,381,912.36 Total 16,006,869.83 24,059,719.35 67.GainonChangesinFairValue Naught 68.InvestmentIncome Unit:RMB Item ReportingPeriod SamePeriodoflastyear Long-termequityinvestmentincome 179,781.56 1,543,965.79 accountedbyequitymethod Investmentincomereceivedfromholdingof 10,971,417.60 6,560,422.50 available-for-salefinancialassets Incomereceivedfromfinancialproductsand 13,358,671.20 6,404,893.95 structuraldeposits Other -500,000.22 Total 24,509,870.36 14,009,282.02 69.AssetDisposalIncome Unit:RMB Sources ReportingPeriod Sameperiodoflastyear Incomefromdisposaloffixedassets -10,790.68 Total -10,790.68 70.OtherIncome Unit:RMB Sources ReportingPeriod Sameperiodoflastyear Subsidyforstabilizingposts 792,403.17 17,754.36 Supportingfundforimportandexport 3,249,240.00 Other 225,982.00 36,000.00 Total 1,018,385.17 3,302,994.36 71.Non-operatingIncome Unit:RMB Amountrecordedinthecurrent Item ReportingPeriod SamePeriodoflastyear non-recurringprofitorloss Governmentsubsidy 914,699.96 584,709.96 914,699.96 Other 755,156.47 2,134,691.56 755,156.47 Total 1,669,856.43 2,719,401.52 1,669,856.43 Governmentsubsidiesrecordedintocurrentprofitorloss Unit:RMB Whether influencethe Special Relatedto Distribution Distribution Reporting Sameperiod Item Nature profitsor subsidyor assets/related entity reason Period oflastyear lossesofthe not income yearornot Dueto engagedin special industrythat thestate Production encouraged lineof50 and million supported, Relatedto Subsidy No No 77,499.96 77,499.96 energy-savin gained assets gfluorescent subsidy lamp (obtainingin linewiththe lawandthe regulationsof national policy) Chancheng District Subsidyfrom Economyand R&D Science Technical Relatedto Award No No 300,000.00 Promotion updatingand income Bureau transformatio Talent n,etc. Subsidy Subsidyfrom R&D Governmenta Technical Relatedto Award No No 20,000.00 lrewardfund updatingand income transformatio n,etc. Subsidyfrom R&D Other odd Technical Relatedto government Award No No 837,200.00 187,210.00 updatingand income subsidies transformatio n,etc. Total -- -- -- -- -- 914,699.96 584,709.96 -- 72.Non-operatingExpense Unit:RMB Amountrecordedinthecurrent Item ReportingPeriod SamePeriodoflastyear non-recurringprofitorloss Totallossesfromdisposalof 70,182.97 4,244,373.75 70,182.97 non-currentassets Ofwhich:lossesfromdisposal 70,182.97 4,244,373.75 70,182.97 offixedassets Donations 2,000.00 Lawsuitcompensation 65,000.00 65,000.00 Other 56,566.45 512,609.26 56,566.45 Total 191,749.42 4,758,983.01 191,749.42 73.IncomeTaxExpense (1)ListofIncomeTaxExpense Unit:RMB Item ReportingPeriod SamePeriodoflastyear Currentincometaxexpense 44,301,342.36 39,780,075.57 Deferredincometaxexpense 2,742,803.34 2,817,425.78 Total 47,044,145.70 42,597,501.35 (2)AdjustmentProcessofAccountingProfitandIncomeTaxExpense Unit:RMB Item ReportingPeriod Profitbeforetaxation 279,218,831.19 Currentincometaxexpenseaccountedatstatutory/applicabletax 41,671,742.41 rate Influenceofapplyingdifferenttaxratesbysubsidiaries 4,549,768.16 Influenceofincometaxbeforeadjustment 2,495,315.01 Influenceofnon-taxableincome -1,672,679.87 Incometaxexpense 47,044,145.70 74.OtherComprehensiveIncome RefertoNote57fordetails. 75.CashFlowStatement (1)CashGeneratedfromOtherOperatingActivities Unit:RMB Item ReportingPeriod SamePeriodoflastyear Depositinterest 10,461,602.02 17,037,947.97 Incomefrominsurancecompensation 50,333.58 132,451.15 Cashdepositincome 1,729,639.24 -3,637,333.34 Propertyandrentalincome 2,110,828.30 1,737,139.33 Incomefromsubsidy 1,911,331.54 5,010,204.36 Incomefromwaste 8,814,180.41 5,756,171.75 Other 8,467,917.26 2,857,134.88 Total 33,545,832.35 28,893,716.10 (2)CashUsedinOtherOperatingActivities Unit:RMB Item ReportingPeriod SamePeriodoflastyear Administrativeexpensepaidincash 20,080,875.34 25,668,559.80 Sellingexpensepaidincash 70,572,897.55 74,020,250.31 Financecostspaidincash 343,210.94 237,632.16 Other 6,351,791.98 7,963,536.97 Total 97,348,775.81 107,889,979.24 (3)CashGeneratedfromOtherInvestingActivities Naught (4)CashUsedinOtherInvestingActivities Unit:RMB Item ReportingPeriod SamePeriodoflastyear Thefutureforeignexchangesettlement 2,447,280.00 securitydeposit Securitydepositonquota 857,419.80 Total 3,304,699.80 (5)CashGeneratedfromOtherFinancingActivities Naught (6)CashUsedinOtherFinancingActivities Naught 76.SupplementalInformationforCashFlowStatement (1)SupplementalInformationforCashFlowStatement Unit:RMB Supplementalinformation ReportingPeriod Sameperiodoflastyear 1.Reconciliationofnetprofittonetcash -- -- flowsgeneratedfromoperatingactivities Netprofit 232,174,685.49 231,884,976.24 Add:Provisionforimpairmentofassets 16,006,869.83 24,059,719.35 Depreciationoffixedassets,oil-gasassets, 34,998,383.79 36,399,142.47 andproductivelivingassets Amortizationofintangibleassets 2,157,008.85 2,157,808.85 Amortizationoflong-termprepaidexpenses 2,859,910.25 1,647,573.52 Lossesfromdisposaloffixedassets, intangibleassetsandotherlong-livedassets 166,326.42 (gains:negative) Lossesonscrapoffixedassets(gains: 70,182.97 4,088,838.01 negative) Investmentloss(gains:negative) -24,509,870.36 -14,009,282.02 Decreaseindeferredincometaxassets 2,742,803.34 2,817,425.78 (gains:negative) Decreaseininventory(gains:negative) 23,967,773.95 17,780,154.35 Decreaseinaccountsreceivablegenerated -280,200,774.50 -214,104,001.05 fromoperatingactivities(gains:negative) Increaseinaccountspayableusedin 134,456,804.77 -123,951,869.14 operatingactivities(decrease:negative) Netcashgeneratedfrom/usedinoperating 144,723,778.38 -31,063,187.22 activities 2. Significant investing and financing activitieswithoutinvolvementofcash -- -- receiptsandpayments 3.Netincrease/decreaseofcashandcash -- -- equivalent: Endingbalanceofcash 911,663,899.88 815,038,019.29 Less:beginningbalanceofcash 570,184,208.96 1,479,283,642.54 Netincreaseincashandcashequivalents 341,479,690.92 -664,245,623.25 (2)NetCashPaidForAcquisitionofSubsidiaries Naught (3)NetCashReceivefromDisposaloftheSubsidiaries Naught (4)CashandCashEquivalent Unit:RMB Item Endingbalance Beginningbalance I.Cash 911,663,899.88 570,184,208.96 Including:Cashonhand 53,998.39 52,031.79 Bankdepositondemand 909,808,121.57 565,323,109.99 Othermonetaryfundondemand 1,801,779.92 4,809,067.18 III.Endingbalanceofcashandcash 911,663,899.88 570,184,208.96 equivalents 77.NotestoItemsoftheStatementsofChangesinOwners’Equity Notestothenameof“Other”ofendingbalanceofthesameperiodoflastyearadjustedandtheamountadjusted: Notapplicable 78.AssetswithRestrictedOwnershiporRighttoUse Unit:RMB Item Endingcarryingvalue Reasonforrestriction Securitydepositoffutureforeignexchange Monetarycapital 3,304,699.80 settlementandquota Notespayable 3,500,000.00PledgedforFSLBankNotesPool Total 6,804,699.80 -- 79.ForeignCurrencyMonetaryItems (1)ForeignCurrencyMonetaryItems Unit:RMB Endingforeigncurrency Endingbalanceconvertedto Item Exchangerate balance RMB Monetarycapital -- -- 12,621,526.35 Including:USD 1,851,278.586.6166 12,249,169.85 EUR 48,664.517.6515 372,356.50 Accountreceivable -- -- 377,725,324.07 Including:USD 57,087,525.936.6166 377,725,324.07 Advancesfromcustomers 19,944,524.61 Including:USD 2,929,395.826.6166 19,382,640.38 EUR 73,434.527.6515 561,884.23 Prepayments 669,198.69 Including:USD 101,139.366.6166 669,198.69 Accountspayable 849,507.92 Including:USD 128,390.406.6166 849,507.92 Otheraccountspayable 463,625.16 Including:USD 70,070.006.6166 463,625.16 (2)NotestoOverseasEntitiesIncluding:forSignificantOverseaEntities,MainOperatingPlace,RecordingCurrencyandSelectionBasisShallBeDisclosed;ifthereAreChangesinRecordingCurrency,RelevantReasonsShallBeDisclosed. □Applicable√notapplicable 80.Arbitrage Qualitativeandquantitativeinformationofrelevantarbitrageinstruments,hedgedriskinlinewiththetypeofarbitragetodisclose: 81.Other VIII.ChangesofConsolidationScope 1.BusinessCombinationNotundertheSameControl (1)BusinessCombinationNotundertheSameControlduringtheReportingPeriod Naught (2)CombinationCostandGoodwill Naught (3)TheIdentifiableAssetsandLiabilitiesofAcquireeonPurchaseDate Naught (4)GainsorlossesfromRe-measurementofEquityHeldbeforethePurchaseDateatFairValue WhetherthereisatransactionthatthroughmultipletransactionstepbysteptorealizebusinesscombinationandgainingthecontrolduringtheReportingPeriod □Yes√No (5)NotestoReasonableConsiderationorFairValueofIdentifiableAssetsandLiabilitiesoftheAcquireethatCannotBeDeterminedontheAcquisitionDateorduringthePeriod-endoftheMerger Naught (6)OtherNotes Naught 2.BusinessCombinationundertheSameControl (1)BusinessCombinationundertheSameControlduringtheReportingPeriod Naught (2)CombinationCost Naught (3)TheCarryingValueofAssetsandLiabilitiesoftheCombinedPartyontheCombinationDate Naught 3.CounterPurchase Naught 4.TheDisposalofSubsidiary Whetherthereisasingledisposaloftheinvestmenttothesubsidiaryandlostcontrol? □Yes√No Whetherthereareseveraldisposalsoftheinvestmenttothesubsidiaryandlostcontrols? □Yes√No 5.ChangesinCombinationScopeforOtherReasons Notetochangesincombinationscopeforotherreasons(suchasnewlyestablishmentorliquidationofsubsidiaries,etc.)andrelevantinformation: Naught 6.Other Naught IX.EquityinOtherEntities 1.EquityinSubsidiary (1)Subsidiaries Mainoperating Registration Natureof Holdingpercentage(%) Name Wayofgaining place place business Directly Indirectly Foshan Chansheng Production and Newly Electronic BallastFoshan Foshan 100.00% sales established Co.,Ltd. Foshan Lighting Lamps & Production and Newly Foshan Foshan 100.00% Components Co., sales established Ltd. GuangdongFozhao Production and Newly NewLightSourcesFoshan Foshan 100.00% sales established Technology Co., Ltd. FSLChanchang Productionand Newly OptoelectronicsCo.,Foshan Foshan 100.00% sales established Ltd. Foshan Taimei Production and Newly TimesLampsandFoshan Foshan 70.00% sales established LanternsCo.,Ltd. FoshanElectrical& Production and Newly Lighting(Xinxiang)Xinxiang) Xinxiang) 100.00% sales established Co.,Ltd. GuangdongFozhao Newly Foshan Foshan Financelease 100.00% LeasingCo.,Ltd. established Nanjing Fozhao Lighting Production and Components Nanjing Nanjing 100.00% Acquired sales ManufacturingCo., Ltd. FSLZhidaElectric Production and Newly TechnologyCo., Foshan Foshan 51.00% sales established Ltd. FSLLighting Productionand Newly GmbH） Germany Germany 100.00% sales established (2)SignificantNon-wholly-ownedSubsidiary Unit:RMB Theprofitorloss Declaringdividends Balanceof Shareholdingproportion attributabletothe distributedto non-controlling Name ofnon-controlling non-controlling non-controlling shareholdersatthe shareholders shareholders shareholders period-end FoshanTaimeiTimes LampsandLanternsCo., 30.00% 1,063,485.63 7,656,339.44 Ltd. FSLZhidaElectric 49.00% 1,833,744.04 15,760,550.63 TechnologyCo.,Ltd. (3)TheMainFinancialInformationofSignificantNotWholly-ownedSubsidiary Unit:RMB Endingbalance Beginningbalance Name CurrentNon-curr Total CurrentNon-curr Total CurrentNon-curr Total CurrentNon-curr Total assets ent assets liabilities ent liabilities assets ent assets liabilities ent liabilities assets liability assets liability Foshan Taimei Times 57,511,716,910,074,421,748,900,6 48,900,674,373,915,493,389,867,367,891,1 67,891,1 Lamps 14.36 24.47 38.83 07.37 07.37 86.81 51.95 38.76 59.40 59.40 and Lanterns Co.,Ltd. FSL Zhida Electric 87,826,810,663,698,490,551,234,2 51,234,289,763,010,457,8100,220,56,707,0 56,707,0 Technolo 82.64 20.19 02.83 77.06 77.06 66.89 49.42 916.31 25.32 25.32 gyCo., Ltd. Unit:RMB ReportingPeriod Sameperiodoflastyear Cashflows Cashflows Name Total Total Operating from Operating from Netprofit comprehensi Netprofit comprehensi revenue operating revenue operating veincome veincome activities activities Foshan TaimeiTimes 73,606,152.8 11,967,649.482,641,917.3 23,327,544.4 Lampsand 3,544,952.103,544,952.10 2,008,910.102,008,910.10 7 2 2 9 LanternsCo., Ltd. FSLZhida Electric 56,884,635.5 66,773,802.1 3,742,334.783,742,334.78-6,170,821.36 5,689,066.625,689,066.62-3,415,460.17 Technology 4 5 Co.,Ltd. (4)SignificantRestrictionsonUsingtheAssetsandLiquidatingtheLiabilitiesoftheCompany Naught (5)FinancialSupportorOtherSupportsProvidedtoStructuralEntitiesIncorporatedintotheScopeofConsolidatedFinancialStatements Naught 2.TheTransactionoftheCompanywithItsOwner’sEquityShareChangedbutStillControllingtheSubsidiary(1)NotetotheOwner’sEquityShareChangedinSubsidiary Naught (2)TheTransaction’sInfluenceontheEquityofNon-controllingShareholdersandtheOwner'sEquityAttributabletotheCompanyastheParent Naught 3.EquityinJointVenturesorAssociatedEnterprises (1)SignificantJointVenturesorAssociatedEnterprises Naught (2)MainFinancialInformationofSignificantJointVentures Naught (3)MainFinancialInformationofSignificantAssociatedEnterprise Naught (4)SummaryFinancialInformationofInsignificantJointVenturesorAssociatedEnterprises Unit:RMB Beginningbalance/Thesameperiodoflast Endingbalance/ReportingPeriod year Jointventure: -- -- Thetotaloffollowingitemsaccordingtothe -- -- shareholdingproportions Associatedenterprise: -- -- Totalcarryingvalueofinvestments 176,473,300.95 179,414,105.14 Thetotaloffollowingitemsaccordingtothe -- -- shareholdingproportions --netprofit 179,781.56 1,543,965.79 --totalcomprehensiveincome 179,781.56 1,543,965.79 (5)NotetotheSignificantRestrictionsontheAbilityofJointVenturesorAssociatedEnterprisestoTransferFundstotheCompany Naught (6)TheExcessLossofJointVenturesorAssociatedEnterprises Naught (7)TheUnrecognizedCommitmentRelatedtoInvestmenttoJointVentures Naught (8)ContingentLiabilitiesRelatedtoInvestmenttoJointVenturesorAssociatedEnterprises Naught 4.SignificantCommonOperation Naught 5.EquityintheStructuredEntityExcludedintheScopeofConsolidatedFinancialStatements Naught 6.Other Naught X.TheRiskRelatedtoFinancialInstruments ThefinancialinstrumentsoftheCompanyincluded:monetaryfunds,accountsreceivable,notesreceivable,accountspayable,etc.ThedetailsofeachfinancialinstrumentseerelevantitemsofnoteⅦ. ThemainrisksoftheCompanyduetofinancialinstrumentswerecreditrisk,liquidityriskandmarketrisk.TheoperatingmanagementoftheCompanywasresponsiblefortheriskmanagementtargetandtherecognitionofthepolicies. (I)Creditrisk Creditriskwasonepartyofthecontractfailedtofulfilltheobligationsandcauseslossoffinancialassetsoftheotherparty.ThecreditrisktheCompanyfacedwassellingoncreditwhichleadstocustomercreditrisk. TheCompanywillevaluatecreditriskofnewcustomer,andsetcreditlimit,oncethebalanceofaccountreceivableovercreditlimit,requirethecustomertopayorproducinganddeliveringgoodsshallbeapprovedbythemanagementoftheCompany. TheCompanythroughmonthlyaginganalysisofaccountreceivableandmonitoringthecollectionsituationofthecustomerensuredtheoverallcreditriskoftheCompanywasincontrolscope.Onceappearabnormalsituation,theCompanyshouldconductnecessarymeasurestorequestingthepaymenttimely. (II)LiquidityRisk Liquidityriskisreferredtotheirriskofincurringcapitalshortagewhenperformingsettlementobligationinthewayofcashpaymentorotherfinancialassets.ThepoliciesoftheCompanyaretoensurethattherewassufficientcashtopaythedueliabilities.TheliquidityriskiscentralizedcontrolledbytheFinancialDepartmentoftheCompany.Thefinancialdepartmentthroughsupervisingthebalanceofthecashandsecuritiescanbeconverttocashatanytimeandtherollingpredictionofcashflowinfuture12monthstoensuretheCompanyhavesufficientcashtopaytheliabilitiesunderthecaseofallreasonableprediction,EachfinancialliabilityoftheCompanywasestimatedduewithin1year. (III)Marketrisk Marketriskwasreferredtoriskofthefairvalueorfuturecashflowoffinancialinstrumentchangedduetothechangeofmarketprice,including:exchangeraterisk,interestrateriskandotherpricerisk. 1.Exchangeraterisk Exchangerateriskwasreferredtoriskofpossiblelossesduetochangesofexchangerate.TheexchangerateriskundertakenbytheCompanywasmainlygeneratedfromUSDandEUR.On30June2018,allassetsandliabilitiesoftheCompanywerebalancesinRMBexceptthatthebalancesofassetsandliabilitiespresentedintheNoteVII(79)ForeignCurrencyMonetaryItemswereinUSDandEUR.TheexchangerateriskgeneratedfromthosebalanceofassetsandliabilitiesinforeigncurrencymightinfluencetherunningperformanceoftheCompanytosomeextent. TheCompanymadeeffortstoavoidexchangerateriskthroughforwardexchangesettlement,improvingoperationmanagementandpromotingtheinternationalcompetitivenessoftheCompany,etc. 2.Interestraterisk Interestrateriskisreferstofluctuationriskofthefairvalueorfuturecashflowoffinancialinstrumentchangeduetothechangeofmarketprice.TherewasnobankloanintheCompany,thusnoRMBbenchmarkinterestratechanges3.Otherpricerisk Naught XI.TheDisclosureofFairValue 1.EndingFairValueofAssetsandLiabilitiesatFairValue Unit:RMB Endingfairvalue Item FairvaluemeasurementFairvaluemeasurement Fairvaluemeasurement Total itemsatlevel1 itemsatlevel2 itemsatlevel3 I.Consistentfairvalue -- -- -- -- measurement (I)Available-for-sale 706,985,098.14 706,985,098.14 financialassets (1)equityinstrument 706,985,098.14 706,985,098.14 investment Thetotalamountofassets 706,985,098.14 706,985,098.14 consistentlymeasuredat fairvalue II.Inconsistentfairvalue -- -- -- -- measurement 2.MarketPriceRecognitionBasisforConsistentandInconsistentFairValueMeasurementItemsatLevel1 Inlinewiththemarketpriceofsharesonthebalancesheetdate 3.ValuationTechniqueAdoptedandNatureandAmountDeterminationofImportantParametersforConsistentandInconsistentFairValueMeasurementItemsatLevel2 Naught 4.ValuationTechniqueAdoptedandNatureandAmountDeterminationofImportantParametersforConsistentandInconsistentFairValueMeasurementItemsatLevel3 Naught 5.SensitivenessAnalysisonUnobservableParametersandAdjustmentInformationbetweenBeginningandEndingCarryingValueofConsistentFairValueMeasurementItemsatLevel3 Naught 6.ExplaintheReasonforConversionandtheGoverningPolicywhentheConversionHappensifConversionHappensamongConsistentFairValueMeasurementItemsatDifferentLevels Naught 7.ChangesintheValuationTechniqueintheCurrentPeriodandtheReasonforSuchChanges Naught 8.FairValueofFinancialAssetsandLiabilitiesNotMeasuredatFairValue Naught 9.Other Naught XII.ConnectedPartyandConnectedTransaction 1.InformationRelatedtotheCompanyastheParentoftheCompany ProportionofshareProportionofvoting heldbythe rightsownedbythe Name Registrationplace Natureofbusiness Registeredcapital Companyasthe Companyasthe parentagainstthe parentagainstthe Company(%) Company(%) HongKongWah ShingHolding HongKong Investment HKD110,000 13.47% 13.47% CompanyLimited ShenzhenRising Investment Shenzhen Investment RMB120million 5.12% 5.12% DevelopmentCo., Ltd. Guangdong Electronics Guangzhou Sales&Production RMB462million 4.74% 4.74% InformationIndustry GroupLtd. RisingInvestment DevelopmentCo., HongKong Investment HKD1million 1.82% 1.82% Ltd. GuangdongRising FinanceHolding Zhuhai Investment RMB1393million 0.54% 0.54% Co.,Ltd. Total 25.70% 25.70% Notes:InformationontheCompanyastheparentoftheCompany: ThelargestshareholderoftheCompany,HongKongWahShingHoldingCo.,Ltd.,wasthewholly-ownedsubsidiaryofElectronicsGroup,andElectronicsGroup,ShenzhenRisingInvestmentDevelopmentCo.,Ltd.(Hereinafterreferredtoas"ShenzhenRising"),GuangdongRisingFinanceHoldingCo.,Ltd.(HereinafterreferredtoasGDRisingFinance)andRisingInvestmentDevelopmentCo.,Ltd.(Hereinafterreferredtoas"RisingInvestment")werethewholly-ownedsubsidiariesofGuangdongRisingAssetsManagementCo.,Ltd.(Hereinafterreferredtoas“RisingCompany”).InlinewiththerelevantstipulationofCorporationLawandRulesonListedCompaniesAcquisition,ElectronicsGroup,ShenzhenRisingandRisingInvestmentwerepersonsactinginconcert,andtheRisingCompanywastheactualcontrolleroftheCompany.Asof30June2018,theaforesaidpersonsactinginconcertholdingtotalA,BshareoftheCompany359,632,344shares,25.70%oftotalshareequityoftheCompany.GuangdongRisingAssetsManagementCo.,Ltd.becametheactualcontrolleroftheCompany. ThefinalcontrolleroftheCompanywasGuangdongRisingAssetsManagementCo.,Ltd. 2.SubsidiariesoftheCompany RefertoNoteIXEquityinOtherEntities-1.EquityinSubsidiaryfordetails. 3.InformationontheJointVenturesandAssociatedEnterprisesoftheCompany RefertoNoteIXEquityinOtherEntities-1.EquityinJointVenturesorAssociatedEnterprisesfordetailsofsignificantjointventuresorassociatedenterprisesoftheCompany. 4.InformationonOtherConnectedParties Name RelationshipwiththeCompany PROSPERITYLAMPS&COMPONENTSLTD Shareholderowningover5%shares FoshanNationStarOptoelectronicsCo.Ltd. Undersameactualcontroller GuangdongFenghuaAdvancedTechnologyHoldingCo.,Ltd. Undersameactualcontroller GuangdongRisingOptoelectronicsCo.,Ltd. Undersameactualcontroller GuangdongRisingDataSolidStateDiskCo.,Ltd. Undersameactualcontroller GuangdongHuayuebaoNewEnergyCo.,Ltd. Undersameactualcontroller GuangdongRisingFinanceLimited Undersameactualcontroller GuangdongZhongkeHongweiSemiconductorEquipmentCo., Undersameactualcontroller Ltd. HangzhouTimesLightingandElectricalCo.,Ltd. Companycontrolledbyrelatednaturalperson HenanRisingTechnologyInvestmentCo.,Ltd. Undersameactualcontroller Prosperity(Hangzhou)LightingandElectricalCo.,Ltd. Companycontrolledbyrelatednaturalperson ProsperityElectrical(China)Co.,Ltd. Companycontrolledbyrelatednaturalperson Companycontrolledbyrelatednaturalpersonwithsignificant OSRAM(China)LightingCo.,Ltd. influence GuangdongElectronicTechnologyResearchInstitute Undersameactualcontroller 5.ListofConnectedTransactions (1)InformationonAcquisitionofGoodsandReceptionofLaborService Informationonacquisitionofgoodsandreceptionoflaborservice Unit:RMB Theapprovaltrade Whetherexceedtrade Sameperiodoflast Connectedparty Content ReportingPeriod credit creditornot year ProsperityLamps Purchaseof 3,844,498.14 6,000,000.00No 670,457.93 andComponents materials Ltd. ProsperityElectricalPurchaseof 729,882.89 0.00 -32,104.28 (China)Co.,Ltd. materials Hangzhou Times Purchaseof Lighting and 368,916.04 2,000,000.00No 1,138,676.40 materials ElectricalCo.,Ltd. FoshanNationStar Purchaseof Optoelectronics 43,595,754.55 200,000,000.00No 38,972,909.25 materials Co.,Ltd. Guangdong FenghuaAdvancedPurchaseof 5,172,863.77 11,000,000.00No 4,100,354.77 Technology materials HoldingCo.,Ltd. GuangdongHYB Purchaseof NewEnergyCo., 0.00 933,432.24 materials Ltd. Guangdong Electronic Purchaseof 760,683.76 3,000,000.00No Technology equipment ResearchInstitute MTM Purchaseof Semiconductor 323,282.05 1,000,000.00No 164,400.00 equipment EquipmentCo.,Ltd. GuangdongRising Purchaseof DataSolidState 1,600,000.00 0.00 equipment DiskCo.,Ltd. Total 56,395,881.20 No 45,948,126.31 Informationofsalesofgoodsandprovisionoflaborservice Unit:RMB Connectedparty Content ReportingPeriod Sameperiodoflastyear ProsperityLampsand Saleofproducts 18,871,809.73 14,820,551.42 ComponentsLtd. Prosperity(Hangzhou)Lighting Saleofproducts 46,299.15 38,649.58 andElectricalCo.,Ltd. Prosperity Electrical (China) Saleofproducts 175,397.67 177,652.13 Co.,Ltd. FoshanNationStar Saleofproducts 3,353.85 OptoelectronicsCo.,Ltd. HangzhouTimesLightingand Saleofproducts 25,852.99 ElectricalCo.,Ltd. GuangdongRising Saleofproducts 568.97 OptoelectronicsCo.,Ltd. Total 19,094,075.52 15,066,059.97 (2)InformationonConnectedTrusteeship/Contract Naught (3)InformationonConnectedLease TheCompanywaslessor: Naught TheCompanywaslessee: Unit:RMB Theleasefeeconfirmedinthe Theleasefeeconfirmedinthe Nameoflessor Categoryofleasedassets ReportingPeriod sameperiodoflastyear GuangdongElectronics InformationIndustryGroup Vehicles 8,333.31 Ltd. (4)InformationonConnectedGuarantee Naught (5)InformationonInter-bankLendingofCapitalofRelatedParties Naught (6)InformationonAssetsTransferandDebtRestructuringbyConnectedParty Naught (7)InformationonRemunerationforKeyManagementPersonnel Unit:RMB Item Reportingperiod Sameperiodoflastyear ChairmanoftheBoard 0.00 0.00 Director&GM 700,000.00 700,000.00 ChairmanoftheSupervisor 0.00 0.00 SecretaryoftheBoard 400,000.00 400,000.00 CFO 400,000.00 400,000.00 Other 2,695,000.00 2,671,500.00 Total 4,195,000.00 4,171,500.00 (8)OtherConnectedTransactions Naught 6.AccountsReceivableandPayableofConnectedParty (1)AccountsReceivable Unit:RMB Endingbalance Beginningbalance Item Connectedparty Carryingamount Baddebtprovision Carryingamount Baddebtprovision GuangdongRising Interestreceivable 1,622,133.34 FinanceCo.,Ltd. Prosperity (Hangzhou)Lighting Accountsreceivable 86,367.27 68,983.64 86,367.27 43,183.64 andElectricalCo., Ltd. Guangzhou DianshengProperty Accountsreceivable 660.00 19.80 ManagementCo., Ltd. ProsperityLamps AccountsreceivableandComponents 8,037,364.18 241,120.93 4,487,199.01 134,615.97 Ltd. OSRAM(China) Accountsreceivable 117,554.16 19,740.45 117,554.16 11,755.42 LightingCo.,Ltd. HenanRising Otheraccounts High-tech 117,000.00 117,000.00 receivable InvestmentCo.,Ltd. Guangdong Otheraccounts Electronics 5,000.00 150.00 5,000.00 500.00 receivable InformationIndustry GroupLtd. Prepayment MTM 221,368.00 141,840.00 Semiconductor EquipmentCo.,Ltd. ProsperityElectrical Prepayment 7,521.37 7,521.37 (China)Co.,Ltd. Total 8,475,834.98 330,014.82 6,584,615.15 307,055.03 (2)AccountsPayable Unit:RMB Item Connectedparty Endingcarryingamount Beginningcarryingamount Prosperity Lamps and Accountspayable 3,359,930.74 529,296.77 ComponentsLtd. ProsperityElectrical(China) Accountspayable 1,026,400.70 204,381.06 Co.,Ltd. Foshan Nation Star Accountspayable 22,430,878.36 27,606,272.62 OptoelectronicsCo.,Ltd. HangzhouTimesLightingand Accountspayable 138,597.54 467,927.45 ElectricalCo.,Ltd. GuangdongFenghuaAdvanced Accountspayable 2,035,725.44 1,806,876.22 TechnologyHoldingCo.,Ltd. ProsperityLampsand Otheraccountspayable 463,625.16 438,666.14 ComponentsLtd. ProsperityElectrical(China) Otheraccountspayable 100,000.00 100,000.00 Co.,Ltd. MTMSemiconductor Otheraccountspayable 54,624.00 102,484.00 EquipmentCo.,Ltd. GuangdongElectronic Otheraccountspayable 89,000.00 TechnologyResearchInstitute GuangdongElectronics Otheraccountspayable InformationIndustryGroup 2,777.76 11,111.12 Ltd. ProsperityElectrical(China) Advancesfromcustomers 40,279.46 45,694.74 Co.,Ltd. Total 29,741,839.16 31,312,710.12 7.CommitmentsofConnectedParty (1) Commitment:commitmentsmadeinacquisitiondocumentsorshareholdingalterationdocuments Commitmentmaker:Controllingshareholder Typeofcommitment:Aboutavoidanceofhorizontalcompetition Contents:ElectronicsGroupanditsacting-in-concertpartiesShenzhenRisingInvestmentandHongKongRisingInvestmenthavemadeacommitmentthattheeliminationofthehorizontalcompetitionbetweenFoshanNationStarOptoelectronicsCo.,Ltd.andtheCompanythroughbusinessintegrationorotherwaysorarrangementsshallbecompletedbeforeDecember4,2019. Dateofcommitmentmaking:4December2017 Termofcommitment:24months Fulfillment:Inexecution (2) Commitment:commitmentsmadeinacquisitiondocumentsorshareholdingalterationdocuments Commitmentmaker:Controllingshareholder Typeofcommitment:Aboutavoidanceofhorizontalcompetition ElectronicsGroupanditsacting-in-concertpartiesShenzhenRisingInvestmentandHongKongRisingInvestmenthavemademorecommitmentsasfollowstoavoidhorizontalcompetitionwiththeCompany:1.TheyshallconductsupervisionandrestraintontheproductionandoperationactivitiesofthemselvesandtheirrelevantenterprisessothatbesidestheenterpriseabovethatisinhorizontalcompetitionwiththeCompanyfornow,iftheproductsorbusinessofthemortheirrelevantenterprisesbecomethesamewithorsimilartothoseoftheCompanyoritssubsidiariesinthefuture,theyshalltakethefollowingmeasures:(1)IftheCompanythinksnecessary,theyandtheirrelevantenterprisesshallreduceandwhollytransfertheirrelevantassetsandbusiness;and(2)IftheCompanythinksnecessary,itisgiventheprioritytoacquirefirst,bypropermeans,therelevantassetsandbusinessofthemandtheirrelevantenterprises.2.AllthecommitmentsmadebythemtoeliminateoravoidhorizontalcompetitionwiththeCompanyarealsoapplicabletotheirdirectlyorindirectlycontrolledsubsidiaries.Theyareobligedtourgeandmakesurethatothersubsidiariesexecutewhat’sprescribedintherelevantdocumentandfaithfullyhonoralltherelevantcommitments.3.IftheyortheirdirectlyorindirectlycontrolledsubsidiariesbreaktheaforesaidcommitmentsandthuscausealossfortheCompany,theyshallcompensatetheCompanyonarationalbasis. Dateofcommitmentmaking:4December2015 Termofcommitment:Long-standing Fulfillment:Inexecution (3) Commitment:commitmentsmadeinacquisitiondocumentsorshareholdingalterationdocuments Commitmentmaker:Controllingshareholder Typeofcommitment:Aboutreductionandregulationofrelated-partytransactions Content:ElectronicsGroupanditsacting-in-concertpartiesShenzhenRisingInvestmentandHongKongRisingInvestmenthavemadeacommitmentthatduringtheirdirectorindirectholdingoftheCompany’sshares,theyshall1.StrictlyabidebytheregulatorydocumentsoftheCSRCandtheSZSE,theCompany’sArticlesofAssociation,etc.andnotharmtheinterestsoftheCompanyorothershareholdersoftheCompanyintheirproductionandoperationactivitiesbytakingadvantageoftheirpositionasthecontrollingshareholderandactualcontroller;2.makesurethattheyortheirothercontrolledsubsidiaries,branchoffices,jointly-runorassociatedcompanies(the“RelevantEnterprises”forshort)willtrytheirbesttoavoidorreducerelated-partytransactionswiththeCompanyortheCompany’ssubsidiaries;3.strictlyfollowthemarketprincipleofjustness,fairnessandequalvalueexchangefornecessaryandunavoidablerelated-partytransactionsbetweenthemandtheirRelevantEnterprisesandtheCompany,andwithdrawfromvotingwhenarelated-partytransactionwiththemortheirRelevantEnterprisesisbeingvotedonatageneralmeetingoraboardmeeting,andexecutetherelevantapprovalprocedureandinformationdisclosuredutiespursuanttotheapplicablelaws,regulationsandregulatorydocuments. WheretheaforesaidcommitmentsarebrokenandalossisthuscausedfortheCompany,itssubsidiariesortheCompany’sothershareholders,theyshallbeobligedtocompensate. Dateofcommitmentmaking:4December2015 Termofcommitment:Long-standing Fulfillment:Inexecution (4) Commitment:commitmentsmadeinacquisitiondocumentsorshareholdingalterationdocuments Commitmentmaker:Controllingshareholder Typeofcommitment:Aboutindependence InordertoensuretheindependenceoftheCompanyinbusiness,personnel,asset,organizationandfinance,ElectronicsGroupanditsacting-in-concertpartiesShenzhenRisingInvestmentandHongKongRisingInvestmenthavemadethefollowingcommitments:1.TheywillensuretheindependenceoftheCompanyinbusiness:(1)TheypromisethattheCompanywillhavetheassets,personnel,qualificationsandcapabilitiesforittooperateindependentlyaswellastheabilityofindependent,sustainableoperationinthemarket.(2)TheypromisenottointerveneintheCompany’sbusinessactivitiesotherthantheexecutionoftheirrightsastheCompany’sshareholders.(3)TheypromisethattheyandtheirrelatedpartieswillnotbeengagedinbusinessthatissubstantiallyincompetitionwiththeCompany’sbusiness.And(4)Theypromisethattheyandtheirrelatedpartieswilltrytheirbesttoreducerelated-partytransactionsbetweenthemandtheCompany;fornecessaryandunavoidablerelated-partytransactions,theypromisetooperatefairlyfollowingthemarket-orientedprincipleandatfairprices,andexecutethetransactionprocedureandthedutyofinformationdisclosurepursuanttotheapplicablelaws,regulationsandregulatorydocuments.2.TheywillensuretheindependenceoftheCompanyinpersonnel:(1)TheypromisethattheCompany’sGM,deputyGMs,CFO,CompanySecretaryandotherseniormanagementpersonnelwillworkonlyforandreceiveremunerationfromtheCompany,notholdinganypositionsinthemortheirothercontrolledsubsidiariesotherthandirectorandsupervisor.(2)TheypromisetheCompany’sabsoluteindependencefromtheirrelatedpartiesinlabor,humanresourceandsalarymanagement.And(3)Theypromisetofollowthelegalprocedureintheirrecommendationofdirectors,supervisorsandseniormanagementpersonneltotheCompanyandnottohireordismissemployeesbeyondtheCompany’sBoardofDirectorsandGeneralMeeting.3.TheywillensuretheindependenceandcompletenessoftheCompanyinasset:(1)TheypromisethattheCompanywillhaveaproductionsystem,anauxiliaryproductionsystemandsupportingfacilitiesforitsoperation;legallyhavetheownershiporuserightsoftheland,plants,machines,trademarks,patentsandnon-patentedtechnologyinrelationtoitsproductionandoperation;andhaveindependentsystemsfortheprocurementofrawmaterialsandthesaleofitsproducts.(2)TheypromisethattheCompanywillhaveindependentandcompleteassetsallundertheCompany’scontrolandindependentlyownedandoperatedbytheCompany.And(3)TheypromisethattheyandtheirothercontrolledsubsidiarieswillnotillegallyoccupytheCompany’sfundsandassetsinanyway,orusetheCompany’sassetstoprovideguaranteesforthedebtsofthemselvesortheirothercontrolledsubsidiarieswith.4.TheywillensuretheindependenceoftheCompanyinorganization:(1)TheypromisethattheCompanyhasasoundcorporategovernancestructureasajoint-stockcompanywithanindependentandcompleteorganizationstructure.(2)TheypromisethattheoperationalandmanagementorganswithintheCompanywillindependentlyexecutetheirfunctionsaccordingtolaws,regulationsandtheCompany’sArticlesofAssociation.5.TheywillensuretheindependenceoftheCompanyinfinance:(1)TheypromisethattheCompanywillhaveanindependentfinancialdepartmentandfinancialaccountingsystemwithnormative,independentfinancialaccountingrules.(2)TheypromisethattheCompanywillhaveindependentbankaccountsandnotsharebankaccountswithitsrelatedparties.(3)TheypromisethattheCompany’sfinancialpersonneldonotholdconcurrentpositionsinitsrelatedparties.(4)Theypromisethatthe Companywillindependentlypayitstaxaccordingtolaw.And(5)TheypromisethattheCompanycanmakefinancialdecisionsindependentlyandthattheywillnotillegallyinterveneintheCompany’suseofitsfunds. Dateofcommitmentmaking:4December2015 Termofcommitment:Long-standing Fulfillment:Inexecution 8.Other Naught XIII.StockPayment 1.TheOverallSituationofStockPayment □Applicable□Notapplicable 2.TheStockPaymentSettledinEquity □Applicable□Notapplicable 3.TheStockPaymentSettledinCash □Applicable□Notapplicable 4.ModificationandTerminationoftheStockPayment Naught 5.Other Naught XIV.CommitmentsandContingency 1.SignificantCommitments Significantcommitmentsonthebalancesheetdate Naught 2.Contingency (1)SignificantContingencyonBalanceSheetDate Naught (2)InDespiteofnoSignificantContingencytoDisclose,theCompanyShallAlsoMakeRelevantStatements TherewasnosignificantcontingencyintheCompany. 3.Other Naught XV.EventsafterBalanceSheetDate 1.SignificantNon-adjustedEvents Naught 2.ProfitDistribution Naught 3.SalesReturn Naught 4.NotestoOtherEventsafterBalanceSheetDate Naught XVI.OtherSignificantEvents 1.TheAccountingErrorsCorrectioninPreviousPeriod Naught 2.DebtRestructuring Naught 3.AssetsReplacement Naught 4.PensionPlan Naught 5.DiscontinuedOperations Naught 6.SegmentInformation Naught 7.OtherSignificantTransactionsandEventswithInfluenceonInvestors’Decision-making Naught 8.Other Naught XVII.NotesofMainItemsintheFinancialStatementsoftheCompanyastheParent 1.AccountsReceivable (1)AccountsReceivableDisclosedbyCategory Unit:RMB Endingbalance Beginningbalance Carryingamount Baddebtprovision Carryingamount Baddebtprovision Category WithdraCarrying Carrying Proportio wal value Proportio Withdrawal value Amount Amount Amount Amount n proportio n proportion n Accountsreceivable withsignificant singleamountfor 9,975,96 9,975,96 10,061, 10,061,64 0.97% 100.00% 1.26% 100.00% whichbaddebt 8.91 8.91 641.64 1.64 provisionseparately accrued Accountsreceivable withdrawalofbad 1,017,59 45,420,0 972,172,1785,497 38,067,10 747,430,15 debtprovisionofby 99.03% 4.46% 98.74% 4.85% 2,180.55 12.21 68.34,260.78 1.17 9.61 creditrisks characteristics: 1,027,56 55,395,9 972,172,1795,558 48,128,74 747,430,15 Total 100.00% 5.39% 100.00% 6.05% 8,149.46 81.12 68.34,902.42 2.81 9.61 Accountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccruedattheperiod-end: √Applicable□Notapplicable Unit:RMB Accountsreceivable（by Endingbalance unit） Accountsreceivable Baddebtprovision Withdrawalproportion Withdrawalreason Thedebtorisnot qualifiedtocontinuously SuzhouMontLighting produceforthetime 9,975,968.91 9,975,968.91 100.00% Co.,Ltd. beingforcontinuing lossescausedbythe scaleandmarket. Total 9,975,968.91 9,975,968.91 -- -- Inthegroups,accountsreceivableadoptedaginganalysismethodtowithdrawbaddebtprovision: √Applicable□Notapplicable Unit:RMB Endingbalance Aging Accountsreceivable Baddebtprovision Withdrawalproportion Subentrywithin1year Within1year 939,833,869.32 28,195,016.08 3.00% Subtotalofwithin1year 939,833,869.32 28,195,016.08 3.00% 1to2years 31,496,786.31 3,149,678.63 10.00% 2to3years 5,826,031.83 1,747,809.55 30.00% 3to4years 795,562.73 397,781.36 50.00% 4to5years 11,179,760.17 8,943,808.14 80.00% Over5years 2,985,918.45 2,985,918.45 100.00% Total 992,117,928.81 45,420,012.21 4.58% Notestothedeterminationbasisforthegroup: Inthegroups,accountsreceivableadoptedbalancepercentagemethodtowithdrawbaddebtprovision: □Applicable√Notapplicable Inthegroups,accountsreceivableadoptedothermethodstowithdrawbaddebtprovision: Unit:RMB Endingbalance Nameofthegroup Withdrawalreason Accountsreceivable Baddebtprovision Internalbusinessgroup 25,474,251.74 0.00 Intercourse fund among subsidiarieswasnotwithdrawn Total 25,474,251.74 0.00 (2)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriod ThewithdrawalamountofthebaddebtprovisionduringtheReportingPeriodwasofRMB7,267,309.90;theamountofthereversed orcollectedpartduringtheReportingPeriodwasofRMB0.00. (3)AccountsReceivablewithActualVerificationduringtheReportingPeriod Unit:RMB Item Amountverified Otherdribletsmallamount 71.59 Total 71.59 (4)Top5AccountsReceivableinEndingBalanceCollectedaccordingtotheArrearsParty Unit:RMB Proportiontothe Endingbalanceof Relationshipwith endingbalanceof baddebtprovision Name Endingbalance Aging accountsreceivable theCompany (%) No.1 Non-connectedparty 191,461,593.37 Within1year 18.63% 5,743,847.80 No.2 Non-connectedparty 20,371,305.32 Within1year 1.98% 611,139.16 No.3 Non-connectedparty 19,409,126.02 Within1year 1.89% 582,273.78 No.4 Non-connectedparty 18,329,030.59 Within2years 1.78% 612,257.46 No.5 Non-connectedparty 15,148,133.08 Within1year 1.47% 454,443.99 Total -- 264,719,188,.38 -- 25.76% 8,003,962.19 (5)AccountsReceivableDerecognizedduetotheTransferofFinancialAssets Naught (6)TheAmountofAssetsandLiabilitiesGeneratedfromtheTransferandtheContinuedInvolvementofAccountsReceivable Naught 2.OtherAccountsReceivable (1)OtherAccountsReceivableDisclosedbyCategory Unit:RMB Endingbalance Beginningbalance Carryingamount Baddebtprovision Carryingamount Baddebtprovision Category Carrying Carrying Proportio Withdra value Proportio Withdrawal value Amount Amount Amount Amount n wal n proportion proportio n Otheraccounts receivablewithdrawn 75,245,8 3,081,28 72,164,5344,939, 2,764,316 42,174,877. baddebtprovision 99.61% 4.09% 99.35% 6.15% 16.55 0.64 5.91194.60 .71 89 accordingtocredit riskscharacteristics Otheraccounts receivablewith insignificantsingle 295,120. 295,120. 295,120 295,120.0 0.39% 100.00% 0.65% 100.00% amountforwhich 00 00 .00 0 baddebtprovision separatelyaccrued 75,540,9 3,376,40 72,164,5345,234, 3,059,436 42,174,877. Total 100.00% 4.47% 100.00% 6.76% 36.55 0.64 5.91314.60 .71 89 Otheraccountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccruedattheperiod-end: □Applicable√notapplicable Inthegroups,otheraccountsreceivableadoptedaginganalysismethodtowithdrawbaddebtprovision: √Applicable□Notapplicable Unit:RMB Endingbalance Aging Otheraccountsreceivable Baddebtprovision Withdrawalproportion Subentrywithin1year Within1year 31,953,716.08 958,611.48 3.00% Subtotalofwithin1year 31,953,716.08 958,611.48 3.00% 1to2years 3,353,071.99 335,307.20 10.00% 2to3years 167,542.81 50,262.84 30.00% 3to4years 3,088,998.23 1,544,499.12 50.00% 4to5years 2,000.00 1,600.00 80.00% Over5years 191,000.00 191,000.00 100.00% Total 38,756,329.11 3,081,280.64 7.95% NotestothedeterminationbasisfortheGroup: Inthegroups,otheraccountsreceivableadoptedbalancepercentagemethodtowithdrawbaddebtprovision □Applicable√Notapplicable Inthegroups,otheraccountsreceivableadoptedothermethodstowithdrawbaddebtprovision: √Applicable□Notapplicable Unit:RMB Nameofthegroup Endingbalance Otheraccountsreceivable Baddebtprovision Withdrawalreason Internalbusinessgroup 36,489,487.44 0.00 Intercourse fund among subsidiarieswasnotwithdrawn Total 36,489,487.44 0.00 (2)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriod ThewithdrawalamountofthebaddebtprovisionduringtheReportingPeriodwasofRMB316,963.93;theamountofthereversedorcollectedpartduringtheReportingPeriodwasofRMB0.00. Naught (3)OtherAccountReceivableClassifiedbyAccountNature Unit:RMB Nature Endingcarryingamount Beginningcarryingamount Internalbusinessgroup 36,784,607.44 21,987,838.89 VATexporttaxrefunds 18,007,536.67 5,712,812.04 Performancebond 4,007,646.20 4,377,639.20 Staffborrowingsandpettycash 8,029,988.61 4,142,205.92 RentalfeesandWater&electricityfees 420,000.59 1,293,281.97 Advancemoneyforstreetlightconstruction 3,777,672.16 3,777,672.16 Other 4,513,484.88 3,942,864.42 Total 75,540,936.55 45,234,314.60 (4)TheTopFiveOtherAccountReceivableClassifiedbyDebtoratPeriod-end Unit:RMB Proportiontototal endingbalanceof Endingbalanceof Nameoftheentity Nature Endingbalance Aging otheraccounts baddebtprovision receivable VATexporttax 18,007,536.67 23.84% 540,226.10 No.1 Within1year refunds Advancemoneyfor 3,777,672.16 5.00% 1,299,397.36 No.2 streetlight Within4years construction No.3 Others 2,122,656.00Within1year 2.81% 63,679.68 No.4 Margin 2,098,341.001to2years 2.78% 209,834.10 No.5 Providentfund 1,270,550.18Within1year 1.68% 38,116.51 Total -- 27,276,756.01 -- 36.11% 2,151,253.75 (5)AccountReceivableInvolvingGovernmentSubsidies Naught (6)OtherAccountsReceivableDerecognizedduetotheTransferofFinancialAssets Naught (7)AmountofAssetsandLiabilitiesGeneratedfromtheTransferandContinuousInvolvementofOtherAccountsReceivable Naught 3.Long-termEquityInvestment Unit:RMB Endingbalance Beginningbalance Item Depreciation Depreciation Carryingamount Carryingvalue Carryingamount Carryingvalue reserve reserve Investmentto 508,153,102.26 24,360,000.00 483,793,102.26 508,153,102.26 24,360,000.00 483,793,102.26 subsidiaries Investmentto jointventuresand 176,473,300.95 176,473,300.95 179,414,105.14 179,414,105.14 associated enterprises Total 684,626,403.21 24,360,000.00 660,266,403.21 687,567,207.40 24,360,000.00 663,207,207.40 (1)InvestmenttotheSubsidiary Unit:RMB Depreciation Endingbalanceof Beginning Investee Increase Decrease Endingbalance reserve depreciation balance withdrawn reserve FoshanChansheng ElectronicBallast 2,744,500.00 2,744,500.00 Co.,Ltd. FSLChanchang Optoelectronics 82,507,350.00 82,507,350.00 Co.,Ltd. FoshanTaimei TimesLampsand 350,000.00 350,000.00 LanternsCo.,Ltd. NanjingFozhao Lighting Components 72,000,000.00 72,000,000.00 Manufacturing Co.,Ltd. FoshanElectrical &Lighting 35,418,439.76 35,418,439.76 (Xinxiang)Co., Ltd. Guangdong FozhaoNewLight Sources 50,077,000.00 50,077,000.00 TechnologyCo., Ltd. Guangdong FozhaoFinancing 200,000,000.00 200,000,000.00 LeasingCo.,Ltd. FoshanLighting Lamps& 15,000,000.00 15,000,000.00 ComponentsCo., Ltd. FSLZhidaElectric TechnologyCo., 25,500,000.00 25,500,000.00 Ltd. FSLLighting 195,812.50 195,812.50 GMBH SuzhouMont 24,360,000.00 24,360,000.00 24,360,000.00 LightingCo.,Ltd. Total 508,153,102.26 508,153,102.26 24,360,000.00 (2)InvestmenttoJointVenturesandAssociatedEnterprises Unit:RMB Increase/decrease Ending BeginninAdditiona GainsandAdjustme Cash Withdraw Ending balance Investee Reduced Changes of gbalance l losses ntof bonusor alof balance investmen ofother Other depreciati investmen recognize other profits impairme t equity on t dundercomprehe announce nt theequity nsive dtoissueprovision reserve method income I.Jointventures II.Associatedenterprises Shenzhen Primatron ix 179,414,1 179,781.5 3,120,585 176,473,3 (Nanho) 05.14 6 .75 00.95 Electronic sLtd. 179,414,1 179,781.5 3,120,585 176,473,3 Subtotal 05.14 6 .75 00.95 179,414,1 179,781.5 3,120,585 176,473,3 Total 05.14 6 .75 00.95 (3)OtherNotes Naught 4.OperatingRevenueandCostofSales Unit:RMB ReportingPeriod Sameperiodoflastyear Item Operatingrevenue Costofsales Operatingrevenue Costofsales Mainoperations 1,951,987,821.57 1,545,234,231.64 1,932,419,061.23 1,513,940,853.47 Otheroperations 52,300,623.19 42,160,088.89 47,777,343.06 36,016,802.63 Total 2,004,288,444.76 1,587,394,320.53 1,980,196,404.29 1,549,957,656.10 5.InvestmentIncome Unit:RMB Item ReportingPeriod Sameperiodoflastyear Long-termequityinvestmentincome 179,781.56 1,543,965.79 accountedbyequitymethod Investmentincomefromtheholdingof 10,971,417.60 6,560,422.50 available-for-salefinancialassets Incomereceivedfromfinancialproductsand 9,886,641.16 5,299,088.41 structuraldeposits Other -500,000.22 Total 21,037,840.32 12,903,476.48 6.Other Nought XVIII.SupplementaryMaterials 1.ItemsandAmountsofNon-recurringProfitorLoss √Applicable□Notapplicable Unit:RMB Item Amount Note Gains/lossesonthedisposalofnon-current -70,182.97 assets Governmentsubsidiesrecordedintothe currentgainsandlosses(excludingthe governmentsubsidiesthatareclosely 914,699.96 relativetobusinessandenjoyedinnormed wayorquantitativelyinaccordancewiththe nationalstandards) Othernon-operatingincomeandexpense 633,590.02 otherthantheabove Less:Incometaxeffects 228,691.99 Non-controllinginterestseffects 195.91 Total 1,249,219.11 -- ExplainthereasonsiftheCompanyclassifiesanitemasannon-recurringgain/lossaccordingtothedefinitionintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic―Non-recurringGainsandLosses,orclassifiesanyextraordinarygain/lossitemmentionedinthesaidexplanatoryannouncementasarecurrentgain/lossitem□Applicable√Notapplicable 2.ReturnonEquityandEarningsPerShare EPS(Yuan/share) ProfitasofReportingPeriod WeightedaverageROE(%) EPS-basic EPS-diluted Netprofitattributabletoordinary 5.32% 0.1638 0.1638 shareholdersoftheCompany Netprofitattributabletoordinary shareholdersoftheCompanyafter 5.29% 0.1630 0.1630 deductionofnon-recurringprofit andloss 3.DifferencesbetweenAccountingDataunderDomesticandOverseasAccountingStandards (1)DifferencesofNetProfitandNetAssetsDisclosedinFinancialReportsPreparedunderInternationalandChineseAccountingStandards □Applicable√Notapplicable (2)DifferencesofNetprofitandNetassetsDisclosedinFinancialReportsPreparedunderOverseasandChineseAccountingStandards □Applicable√Notapplicable (3)ExplainReasonsfortheDifferencesbetweenAccountingDataunderDomesticandOverseasAccountingStandards;foranyAdjustmentMadetotheDifferenceExistingintheDataAuditedbytheForeignAuditingAgent,SuchForeignAuditingAgent’sNameShallBeClearlyStated Naught 4.Other Naught PartXIDocumentsAvailableforReference 1.ThefinancialstatementssignedandstampedbytheCompany’slegalrepresentative,GeneralManagerandChiefFinancialOfficer. 2.TheoriginalsofalltheCompany’sannouncementsanddocumentsdisclosedtothepublicduringtheReportingPeriodonthemediadesignatedbytheCSRCforinformationdisclosure. TheBoardofDirectors FoshanElectricalandLightingCo.,Ltd. 28August2018