I. Start Business from Scratch and Advocate among Private Enterprises

In 1994, i.e. the fourth year of the 8th Five-Year Plan of China, the national economy maintained developing rapidly and steadily and the storage battery industry was just like fish in water. Under such an economic environment, experts of electrochemistry, whose core was Mr. Song Dianquan, the Vice-Chief engineer of Harbin Storage Battery Factory, resigned from their leader posts to establish their own enterprise--Coslight Power Factory.

On May 17, 1994, Harbin Coslight Power Factory was formally set up. Its legal representative is Song Dianquan and the registered capital was RMB 900,000. At that time, workshops rented and equipment were simple and crude and the enterprise's development was very difficult. Mr. Song Dianquan, the legal representative, deeply felt that the duty was heavy, if the enterprise wanted to survive in furious market competition, and occupy a post among the same enterprises of the industry, it must have its own most competitive products, especially pillar products. Therefore, he carried out a lot of investigation and research, then decided to research and produce Coslight brand fixed sealed valve-regulated lead-acid battery which was suitable for industries like communications, electric power, etc.. Through hard research for a long term, success was realized and the product was put into production rapidly (the main technical indexes of this product has reached or exceeded Japanese Standard JISC8707-92). It has won the unanimous good appraise from users of electric power and communications industries, etc. at home due to its first rate level, steady quality and satisfactory service.

In 1995, 5,398 square meters of workshop was newly built and the domestic sale amount in the same year was up to RMB 41.66 million. The Coslight brand fixed sealed valve-regulated lead-acid battery won the honorary Science & Technology Prize of Technical Achievement Assessment Meeting, which was issued by Harbin Science and Technology Committee.

In order to satisfy the demand of continues expanding market, we have again built 5,302 square meters of new workshops and further expanded our staff team in 1996. In this year, the sale amount increased to RMB 89 million, the registered capital reached RMB 20 million and the domestic market's occupancy among the same products reached over 20%.

II. Infuse Hi-tech and Realize Industrialization

In 1997, Harbin Coslight Power Factory introduced successively the most advanced equipment in the world such as fully automatic plate casting machines, plate coating machines and fully automatic assembly production lines from Germany, Austria and America and 13,522 square meters of new workshops were built with a total investment of over RMB 30 million, and product quality of Coslight Power Factory realized a qualitative forward leap.

In the same year, upon the evaluation of China Certification Committee for Quality Mark (CQM) of the State Bureau of Technical Supervision, Coslight Power Factory passed the accreditation of ISO9002 international quality system standard only in one time. We also have got "Certificate of Quality Accreditation of Communication Equipment for Access to Network" issued by the Ministry of Posts and Telecommunications” and "License of Equipment and Device for Access to National Defense Communication Network " issued by General Staff Department of the CPLA. We also have undertaken and completed the storage battery supply projects of the following works such as: the posts and telecommunication works of Zhongnanhai, the communication engineering of General Staff Department of Communications, optical fiber cable engineering of Heilongjiang Province and the rebuilding engineering of power grid in different provinces etc., and obtained a good appraise and satisfactory effect. In the same year, the domestic sale amount was RMB 120 million.

On June 24, 1998, Harbin Coslight Storage Battery Co. Ltd. was established. At the same time, the whole business and assets managed by Harbin Coslight Power Factory were transferred to Harbin Coslight Storage Battery Co. Ltd.

In 1998, the second generation Coslight valve-regulated sealed lead-acid battery and the third generation Coslight intelligence model valve-regulated sealed lead-acid battery have been successfully developed. The exterior of the batteries was beautiful, each performance index of which all reached to the advanced international level. Among them, the difference of float charging voltage 2.23V/cell°C of GFM (Z) series is less than 20mV and the service life is 13-15 years, reaching to an advanced level in world.

In 1998, the sale amount in domestic of Coslight Storage Battery Co., Ltd. was RMB 230 million, with foreign exchange-earning of USD 500 thousand. Our products have been sold far to Russia, countries in south-east Asia, etc. At the same year, the Group has been appraised as "The Advanced Contributing Unit for Fighting Flood, Disaster Relief and Contributing Love" by Harbin Municipal Government; the Board Chairman Mr. Song Dianquan has been awarded by Heilongjiang Provincial Government with the title of "The Excellent Director (Manager) of Villages and Towns Enterprises of Heilingjiang Province" and by Harbin Municipal Government with the title of "Model Worker".

III. Develop as a Group and Promote the Internationalization

In April 1999, Coslight International Group was incorporated in Bermuda. On October 26, the shares held by the shareholders of Harbin Coslight Storage Battery Co. Ltd. were fully transferred to Coslight International Group Limited.

“Seeking quality, exceeding uncommon, rooted in China and going global”, during the period from Dec., 1998 to July, 1999, the Group has set up the Alike Company, a wholly-owned subsidiary in Kaliningrad, the largest special economic zone of the Russia Federation, the Lend Industrial Center Co. Ltd. in Habarofsk of the Russia Federation and the Russia Galaxy Co., Ltd. in Bashkortostan of the Russia Federation. The Group mainly utilizes the preferential policies in the special zone to sell batteries for auto starting and fixed sealed valve-regulated batteries and has obtained the certificate for network access of the Ministry of Post, international certificate, hygienic license and fireproofing certificate of Russia, which rapidly raised the reputation of the Coslight Brand in Russia and the former Soviet bloc countries and also accelerated the development of the enterprise.

On July 16, 1999, the Group had united with the Harbin Institute of Technology and established the Electrochemistry and Power, Electronic Institute to enhance its capability of research and development so as to realize the one-stop research and production.

On Nov. 17, 1999, the Harbin Coslight Storage Battery Co. Ltd. had been listed on the Stock Exchange of Hong Kong. The raised funds are used in the product upgrading and R&D of new research project so as to increase the input to the projects for development and scientific research and strengthen the enterprise’s strength in science and technology.

With the total investment of RMB 80 million, the Harbin Coslight Storage Battery Co. Ltd. was established on Nov. 31, 1999 and introduced main equipment from developed countries, such as Japan. The main products of the company include the Li-ion batteries, Ni-MH batteries and Coslight cell phone batteries.

The Harbin Kesilaite Industrial Co. Ltd. was set up on Dec. 28, 1999 and its mainstays include storage battery parts and auxiliary products. Meanwhile, it also undertakes the outward sheet-metal working.

In 1999 the newly-built plant covered an area of 20,098m2 and the domestic sales amount totaled RMB 250 million. The Group also had acquired “Network Access License for Telecommunications Equipment of the Ministry of Information Industry of PRC”, “Network Access License for Storage Battery Equipment of China Unicom”, “Network Access License for Storage Battery Equipment of Large-Scale Power Plant and Transformer Substation”, “certificate for network access of the Ministry of Post”, “Quality Management System Certification of Russia” and “Germany DQS quality system certification”, and has been awarded as “Outstanding Enterprise in 1999” by the Committee for Chinese Rural Work Force, China Foundation for Poverty Alleviation and Agricultural Department of Development Research Center of the State Council. The Coslight Brand was also rated as “Best-Selling Brand in 1999” by the government of Heilongjiang Province and Mr. Song Dianquan, the president was conferred “Model Worker” by the government of Harbin.

In August 2000 the Harbin Coslight Electric Automatic Co., Ltd. was established and is a high-tech enterprise, mainly engaged in the series devices and complete engineering products of integrated automation systems of substations, power stations, hydropower stations and power network dispatching, which takes the automation of electric power as the main research objective and the application field and combines research and development, engineering design, manufacturing, sales and service.

The new plant of the Coslight Group covered an area of 2335m2 in 2000 and the domestic sales amount of the Group reached RMB 420 million and 1 million dollars for foreign exchange. In the same year, the cell phone battery of Coslight brand was listed as one of the top ten brands in the industry by the China Society of Commodity Science and the China Association for Quality; “Coslight” as a trade mark was claimed as the famous trade mark in Harbin; the Harbin Coslight Storage Battery Co. Ltd. was rated as the “Foreign-Funded Enterprise with Economic Results” by the government of Harbin; Mr. Song Dianquan, the president was awarded “Scientific and Technological Personnel with Outstanding Contributions in Harbin” and “Advanced Entrepreneur of Foreign Investment”.

IV. Build up Strength of the Group and Create Famous Brand

“To be united, effective, people oriented and innovative for endlessly pursuit and opportunity creation”. In May 2001, a modern workshop with 71 meters in span for producing valve-regulated storage batteries, a new battery cupboard workshop with 24 meters in span and a clapboard workshop with 18 meters in span began to be constructed successively. After completion, the production capacity for valve-regulated lead acid storage batteries will reach 1 million K/Ah, twice higher than the past capacity.

In July, the Harbin Coslight Storage Battery Co. Ltd. was changed as Harbin Coslight Power Co., Ltd. specially engaged in Li-ion batteries, cell phone batteries, UPS power sully, direct current supply systems, etc.

In August 5, the hardware-based project of the management system of enterprise resource planning (ERP) of the Harbin Coslight Storage Battery Co. Ltd. was initiated. On September 1, the network department of the Group was established and is mainly responsible for the overall network engineering in the range of the Group, the office automation and the operation and maintenance of hardware of the ERP management system.

In 2001, in order to build the company into a modern enterprise and a production base at the international level for Li-ion cells and cell phone batteries, the company even imported 21 sets of equipment, reconstructed the plant with 20,000m2 and trained the officers in the company by 50 classes so as to meet the market demands for quantity and quality of the L-ion batteries of Coslight Brand.

In 2001, the Group built a new plant with 21,000m2 and achieved the domestic sales amount of RMB 800 million and 1.38 US dollars and even additionally established three overseas offices. On December 23, upon approval by the National Post-Doctor Regulatory Commission of PRC and the Ministry of Personnel, the Post-Doctoral Research Station of the Coslight Institute was founded.

On September 24 to 26 in 2001 the 2nd session of the fourth Council was held in Harbin by the Industrial Association of Storage Battery and Mr. Song Dianquan, the president gave a welcome speech.

As of December 31, 2001, the sales volume of valve-regulated storage battery ranked first for four consecutive years in the industry in China and the sales income of the Group ranked fourth. The products of Coslight Brand have a high reputation both at home and abroad and have won a series of awards. The lead-acid storage battery of Coslight Brand was recommended as the high-quality product by China Council for the Promotion of International Trade and Technical Quality Supervision Committee in France and even listed as the Key Project of the State Torch Plan and awarded “Famous Brand Product of Heilongjiang Province”. Moreover, the cell phone battery and the auto storage battery of Coslight Brand were also appraised as the best-selling famous brand products on the market in Harbin. Mr. Song Dianquan, the president was rated as “Model of Outstanding Managers of Hi-tech Enterprises” in 2000.

On April 11 to 14 in 2002, the fifth general session of the Industrial Association of Storage Battery was held in Nanjing and Mr. Song Dianquan was elected as the deputy Director-general of the Association.

In the beginning of 2002, the Group has successfully achieved the mass production and stable supply of Li-ion batteries and cell phone batteries of Coslight Brand to domestic famous enterprises in the mobile phone field. In June of the same year, the Harbin Coslight Power Co., Ltd. invested in and established the assembly line of Li-ion cell phone batteries in Shenzhen in order to meet the demand on original batteries of some famous manufacturers of cell phones and cell phone batteries, such as South Hi-tech, ZTE, CECT, UTstartcom, Amoi, etc.

From February 2002, the Human Resources Department and the Business Administration Department of the Group had invited senior consultants, collage professors, experts from foreign-funded enterprises and senior leader in the Group in the purpose of training the middle-level management staff and technical personnel at such aspects as product standard, 6 Sigma Green & Black Belt, project management and quality system. Meanwhile, the Group also invited the management staff and senior engineers in the Group to train the entire staff including shop-floor workers, officers and the workers in special work posts and at the fitting shop for key points in the operation, production technologies, MSA, operation direction, control plans, inspection standards, procedure documentation, six Sigma concepts, etc. Therefore, the quality of the whole staff in each branch company had been comprehensively improved so as to propel the drive of the Group.

On August 12 of the same year, the Group signed a formal joint venture contract with Shenyang Dongbei Storage Battery Co., Ltd. Both sides agreed to set up the Shenyang Dongbei Storage Battery Co., Ltd., in which the Coslight International Group would hold 66.67% of the shares. After the joint venture was established, the land area was increased by 70,000m2 and the 4,000m2 for the green coverage by transformation. From September 2002 to December 31, 2002, through the adjustment and restoration, each work of the company had developed along the right lines and the sales amount achieved during the four months totaled RMB 51,284,700 and RMB2,570,000 for the profits.

In September 2002, the Harbin Coslight Storage Battery Co. Ltd. was certified to have met the standard of GB/T19001-2000 idt ISO9001:2000 by China Certification Committee for Quality Mark.

In 2002, as a newly developed manufacturer for electric power automatic products, Harbin Coslight Electric Automation Co., Ltd. was becoming well-known and gradually accepted by more and more customers. The company made efforts to optimize the hardware structure of the products, develop compact series installations and better the appearance design of the products, which was highly appreciated by the customers and relevant experts in the industry. In addition, the Coslight Electric Automation Co., Ltd. had completed 188 engineering projects and fulfilled the sales amount of RMB 26 million in 2002.

In 2002, Harbin Coslight Power Co. Ltd. emphasized on product quality and strengthened staff's consciousness in quality by implementing the “System of Personnel Responsibility” which focused on the goal of quality guarantee of “free of maintenance within one year”. The quality guarantee was closely combined with the whole staff post responsibility system to ensure the quality responsibility was borne by each post. Through performance management, process management and work-post management, the quality guarantee goal of “free of maintenance within one year” was distributed to each post, each product, each component, each bolt and each soldering point, based on which the staff value can be evaluated in a scientific manner and the remuneration can also be distributed in a reasonable way. Therefore, with the product quality of the Group steadily enhanced and the market reputation increasingly raised, the sales amount of the products by the “Coslight Power” reached more than RMB 70 million in 2002.

In 2002 the Group obtained the sales amount of RMB 1 billion and 1,980,000 US dollars for the foreign exchange. The sales amount of the valve-regulated lead-acid storage batteries totaled RMB 500 million for the whole year, ranking first in the industry for five consecutive years. The Group had obtained many awards in 2002, such as “Model of Advanced Units in Employment by the National Association of Industry and Commerce”, “Faith-keeping and Law-following Unit in National Township Enterprises”; the storage battery, DC cabinet and high-frequency switching power supply of Coslight Brand were awarded the “Chinese Famous Brand” and the Group had been conferred the “Enterprise to Customers’ Satisfaction in the Province”, “Advanced Enterprise in Quality Management in Heilongjiang Province”, “Contract-Abiding and Trustworthy Enterprise”, “Significant Tax Payer”, and also passed the product security certification of the Germany Rhine TUV. The cell phone battery and the valve-regulated lead-acid storage battery of Coslight Brand were also claimed as the “Famous Brand Product in Harbin” and the Lithium-ion battery and the cell phone battery listed in the projects of transformation of Hi-tech achievements. In addition, Mr. Song Dianquan, the president, was awarded “Outstanding Entrepreneurs of 1st National Mechanical Industry”. In 2002, the leaders at the national, provincial and municipal levels and people from all circles caused great concern to the development of the Group. Officials and relevant people from all social circles such as Liu Yandong, the head of the United Front Work Department, Liu Donghui, the deputy secretary of the Provincial Party Committee and Shi Zhongxin, the mayor, etc., had visited the Group for nearly 20 times.

V. Development Based on Talents and Innovation.

The enterprise’s development is based on the talents and the products’ development on the innovation. From 2003 to 2005, the Group had expanded the contingent of technical personnel, which increased to 25% of the total number of the staff from 20% in the past. The enterprise also gave emphasis on the culture of innovation-oriented talents by providing conditions for further education and training for them. Meanwhile, the enterprise also increased the expenditure on scientific research by RMB 5,000,000, which resulted in that the R & D strength and the achievements of scientific research kept ahead in the same industry at home. It also applied for 4 patents of Li-ion batteries and one patent for the valve-regulated lead-acid storage battery. The “third-generation” VRLA battery of Coslight Brand had been awarded the first prize in the field of science and technology by the Ministry of Machinery. The project of High-temperature nickel-hydrogen batteries developed by the Lexel Battery Co., Ltd., was listed as the “State Torch Program” by the Ministry of Science and Technology. To this end, the China Association for Promotion of Non-Governmental Sci-Tech Enterprises awarded the Coslight Group the medal for scientific and technological innovations. Additionally, the Group had achieved the sales amount of RMB4.55 billion and the profit of RMB450 million from 2003 to 2005.

In 2003, the Deutsche Telekom awarded the products of valve-regulated lead-acid storage battery of Coslight Brand the “Network Access Certificate of DeTeImmobilien” and began to try the products. The products such as GFM Coslight valve-regulated lead-acid storage battery had been accepted by the BIS certification of ITS, a certification authority in Britain; in addition, the Coslight cell phone battery had also passed the TüV certification of the Germany Rhine Certification Bureau. In addition, the Siemens also placed an order with the Coslight Brand for Li-ion batteries for the first time and the Group formally began to supply the Lithium-ion battery to Kyocera Wireless Corp. (KWC) in America on a large scale.

In 2003, the newly-built plant of the Harbin Coslight Storage Battery Co. Ltd. completed the installation and debugging of the production lines. At this point, the Coslight Storage Battery Co. Ltd. had completely finished the plant transformation and the establishment of new types of the production lines, achieving the international advanced level in production capacity, production equipment and production environment.

In 2004, the 6-QM-60 fully-sealed maintenance-free automotive batteries of Coslight Brand passed the quality certification of the FAW-Volkswagen Jetta car; the State Administration for Industry and Commerce awarded the Harbin Coslight Storage Battery Co. Ltd. the “Certificate for Abiding by the Contract and Keeping Faith”; the China Machinery Industry Federation conferred it the tablet of “Demonstrate Enterprise for Management”; the Ministry of Science and Technology of PRC granted it the certificate for the “Intelligent Sealed Valve-Regulated Lead-Acid Storage Battery” project on the conference for praising the for distinguished Torch Plans for the fifteenth anniversary of the implementation of the Torch Program; the China Certification Committee for Quality Mark conferred the Coslight Group the award for outstanding management; the All-China National Industry and Commerce Association and the Association of Non-Governmental Sci-Tech Enterprises also cited the Coslight Group as the outstanding non-governmental Sci-Tech enterprise in China; the Heilongjiang Chamber of Commerce claimed the “Valve-Regulated Lead-Acid Storage Battery of Coslight Brand” as the famous brand product in Heilongjiang Province; the Heilongjiang Provincial Department of Science & Technology awarded the Harbin Coslight Storage Battery Co. Ltd. the certificate of “Hi-Tech Enterprises” while the award of “Advanced Unit in Quality Control” by the Heilongjiang Bureau of Quality and Technical Supervision, the certificate for “Abiding by the Contract and Keeping Faith” by the Heilongjiang Administration Bureau for Industry and Commerce and the title of “Model of Civilization Enterprises” by the Harbin Municipal Committee and the people's municipal government in Harbin.

In May, 2005, the Lithium-ion battery products of Coslight Brand were listed in the State Torch Program project by the Ministry of Science and Technology of PRC.

In 2005, the ERP had been applied to 17 department of the Group by the use of 16 sub-systems. On September 14 and October 24 of the same year, the Harbin Science and Technology Bureau and the Harbin Bureau of Information Industry respectively accepted the certification of the information-based management system. The Group also applied for the awards such as “Chinese Famous Brand”, “AAA Credit Rating Enterprise” and had obtained the “Excellent Management Award”, “Model of Advanced Private Enterprises”, etc., which were granted by the IQ Net Association. Meanwhile, the Group also carried out the training of the certification of the Korean Standards Association (KSA) for the technical staff and the staff above the middle level by inviting the experts from the KSA to give lectures to the experts’ satisfaction. Through the above, the public image of the enterprise was greatly enhanced.

In October, 2005 the Group invested RMB2,000,000 in building up a garage covering an area of 2100m2 to solve the problem of difficult parking in winter and RMB1,949,000 in expanding the clapboard production line to meet the demands on production and exportation of the Group.

In August, 2006, the Group invested RMB 80 million in purchasing lead-zinc mine in Russia, which is located in Fasoli in sea border areas of Russia, with estimated mining period of 25 years.

In September, 2006, through auctioning, the Group input RMB 100 million to purchase the second lead-zinc mine, which is located in the southwest of Altai border area of Russia, with the estimated mining period of 25 years. It also invested RMB 1,269,000 to set up the 840m2 electrolytic lead workshop to ease the problem that the non-regular supply may influence the production, RMB 4,500,000 to establish the new pole plate workshop to solve the short supply of pole plates and RMB 9,746,700 to build the 1057 m2 glass fiber plant in Daqing so as to eliminate the influence on production due to the short supply of raw materials, which then saved the cost on transportation and guaranteed the product quality.

In 2006, the Group set up a modern new plant located in Shenyang Hi-tech Development Zone covering an area of 56,000m2 with the investment of RMB 65 million since the land of the original plant of the Shenyang Dongbei Storage Battery Co., Ltd. was acquired by the government.

The Coslight development caused great concern to the government at each level and Du Yuxin, the secretary of municipal Party committee came to visit the company and also gave assistance in the land shortage.

The Group also participated in the donation of the new countryside-construction sponsored by the provincial Chamber of Commerce and donated to the Coslight Elementary School.

The Group decided to set up a new plant with 1 million kVAh to expand the production capacity so as to meet the demands for export.

During April 23 to 25 in 2006 the sixth general session of the Industrial Association of Storage Battery was held in Quanzhou and Mr. Song Dianquan was elected as the deputy Director-general of the Association.

In December, 2006 the Group was honored as the “Outstanding Enterprise” and “Advanced Unit for Exports and Imports” by the State Development and Reform Commission.

The Coslight Group has developed into an international diversified enterprise which owns 17 subsidiaries of Harbin Coslight Storage Battery Co. Ltd., Harbin Coslight Power Co., Ltd, Harbin Kesilaite Industry Co., Ltd., Harbin Coslight Electric Automation Co., Ltd, Zhuhai Coslight Electronic Technology Co., Ltd, Beijing Guangyu-Huaxia Sci-Tech Co., Ltd, Shenyang Dongbei Storage Battery Co., Ltd., Lexel Battery (ShenZhen) Co.,Ltd., Guangyu Yanbian Storage Battery Co.,Ltd., Harbin Switch Co., Ltd., etc., and also 13 overseas wholly-owned subsidiaries or offices in Russia, America, Germany, Hongkong, Britain, Japan, etc., including the Russia Alike Company, the Lend Industrial Center Co. Ltd. in Russia, the Russia Galaxy Co., Ltd., the American Branch, the Germany Branch and so on. The headquarters of the Coslight Group is located in the Hi-tech development zone in Nangang Districut in Harbin, China, covering an area of 210,000m2 and the green coverage of 35000m2. With more than 6000 employees including 816 managerial and technical personnel at different levels, the Group is the production base of valve-regulated lead-acid storage batteries with the largest scale and the most advanced equipment in China. In the past few years, the Group has successfully achieved the mass production and stable supply of rechargeable Li-ion batteries and cell phone batteries of Coslight Brand to domestic famous enterprises in the mobile phone field. Meanwhile, the integrated power automation system and the direct-current power supply have also developed rapidly.

Facing the future, the Coslight Group will continue to strive forward the goal of being an international, diversified, and modern hi-tech enterprise by taking the hi-tech power supply products as the mainstay and the talents and scientific and technological innovation as the driving force so as to build itself into one of the world’s largest battery manufacturers.