RoboSense Technology Co., Ltd - Annual Report 2016

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

==> picture [373 x 149] intentionally omitted <==

＊

SUMMARY OF 2015 ANNUAL REPORT

I. IMPORTANT NOTICE

1.1 In order to fully understand the Company’s operating results, financial position and future development plans, investors should carefully read the full text of the Annual Report at the website of Shanghai Stock Exchange (SSE) and the websites designated by China Securities Regulatory Commission (CSRC).
1.2 The Board of Directors, the Board of Supervisors, the directors, the supervisors and senior management of the Company confirm that the information contained in the Annual Report is true, accurate and complete without any false and misleading statements or material omissions, and bear joint and several legal responsibilities.
1.3 All directors of the Company attended the Board meeting.
1.4 PKF Daxin (special general partnership) Certified Public Accountants LLP has issued an auditor’s report with standard unqualified opinions for the Company.

– 1 –

1.5 Company’s Profile

Stock Abbreviation	Luoyang Glass	Stock Code 600876	Stock Code 600876
Stock Listing Exchange	Shanghai Stock Exchange (SSE)
Stock Abbreviation	Luoyang Glass LTD	Stock Code 01108
Stock Listing	The Stock Exchange of Hong Kong Limited
Exchange
Contact Persons and	Secretary to the Board		Representative of
Contact Methods			Securities Affairs
Name	Wu Zhixin		Zhao Zhiming
Tel.	86-379-63908588、63908637		86-379-63908833
Fax	86-379-63251984		86-379-63251984
E-mail	[email protected]		[email protected]

II. BRIEF INTRODUCTION TO MAIN SERVICES OR PRODUCTS DURING THE REPORTING PERIOD

The Company is the birthplace of “Luoyang float glass technology”, one of three float technologies in the world, and mainly engages in manufacturing and sales of float glass. The Company has core production techniques and a number of independent intellectual property rights for float glass, and has stronger product R&D technical teams and experiences in terms of ultrathin and ultrawhite-ultrathin float glass production techniques. The Company is one of very few of manufacturers for mass production of ultrathin float glass products of 0.2mm-1.3mm series in China at present. During the reporting period, the Company has implemented significant asset restructuring, and has realized main business transformation from ordinary float glass to optical electronic and information display ultrathin glass.

Now ultrathin glass substrate is the main product of the Company, and is in the upstream of the electronic industry chain. Based on the specific processing method and application occasions, ultrathin glass substrate is mainly of displaying, touching, window protection and other core functions in the panel display devices and touch equipment, and has at large extent decided the function and property of the equipment. Thus, ultrathin glass substrate is non-substitutable, and has favorable growth prospect with development of the whole electronic product market.

– 2 –

III. SUMMARY OF ACCOUNTING DATA AND FINANCIAL INDICATORS

Unit: Yuan Currency: RMB

			Increase/decrease
	2015	2014	over the last year	2013
			(%)
Total assets	1,314,035,081.52	1,772,733,209.67	-25.88	1,303,779,336.86
Operating income	662,156,635.13	660,058,269.97	0.32	375,735,014.43
Net profit attributable to
shareholders of the Company	144,482,993.72	21,159,211.92	582.84	-98,973,162.61
Net assets attributable to
shareholders of the Company	278,344,996.00	717,077,784.06	-61.18	103,313,890.92
Net cash flow from
operating activities	-131,037,564.70	-40,574,860.63	Not applicable	11,240,065.93
Closing total share capital	515,018,242	500,018,242	3.00	500,018,242
Basic earnings per share
(RMB/share)	0.28	0.04	600.00	-0.19
Diluted earnings per share	0.28	0.04	600.00	-0.19
(RMB/share)
Weighted average return	18.30	18.58	Decreased by 0.28	-119.77
on net assets_(%)_			percentage points

Notes to the Company’s significant accounting data and financial indicators over the first three years at the end of the reporting period:

During the reporting period, the Company has completed the significant asset restructuring, brought Bengbu CNMB Information Display Material Co., Ltd. into the scope of merge, merged the tables according to the business merge compiling system under the common control, and has traced back the comparison tables.

All the following financial data herein that involves beginning of the reporting period and the same period of the last year is subject to the adjusted data.

– 3 –

IV. MAJOR QUARTERLY FINANCIAL INDICATORS IN 2015

Unit: Yuan Currency: RMB

Q1 (JanuaryQ2 (AprilQ3 (JulyQ4 (OctoberMarch) June) September) December)
Operating income 154,221,286.83 211,853,104.15 126,054,171.89 170,028,072.26 Net profit attributable to shareholders of the Company -25,345,398.93 -84,084,116.49 -36,355,886.85 290,268,395.99 Net cash flow from operating activities -71,064,912.37 -31,485,638.43 -7,922,663.10 -20,564,350.80

The Company has completed the significant asset restructuring in December 2015, brought CNMB Information Display Material Co., Ltd., into the scope of merge, merged the tables according to the business merge compiling system under the common control, and traced back the tables of the first three quarters. Therefore the data of the first three quarters was different from the data of the published report.

V. INFORMATION OF SHAREHOLDERS

5.1 Number of ordinary shareholders and preferred shareholders whose voting rights is restored and shareholdings of top 10 shareholders

Number of ordinary shareholders at 68,000, including the end of the reporting period 67,949 A shares and 51 H shares Total number of ordinary shareholders at 71,846, including the end of one month prior to publishing 71,797 A shares, date of the Annual Report and 49 H shares

– 4 –

Unit: Share

Shareholdings of top 10 Shareholders

	Increase/			Number of
	Decrease			Shares
	during			subject to
	Reporting	Closing		trading	Pledged	or Frozen	Nature of
Name of Shareholder (Full Name)	Period	Shareholding	Proportion	moratorium	Status	Number	Shareholder
			(%)
HKSCC Nominees Limited	+401,700	248,262,698	48.20	0	Unknown		Overseas legal
							person
China Luoyang Float Glass (Group)	+15,000,000	174,018,242	33.79	15,000,000	Pledged	159,018,242	State-owned
Company Limited							legal person
Liu Bibo	+1,361,600	1,361,600	0.26	0	Unknown		Domestic
							natural
							person
Agricultural Bank of China Ltd. –	+1,220,700	1,220,700	0.24	0	Unknown		Domestic non-
Fullgoal CS State-owned Enterprise							state-owned
Reform Grading Securities							legal person
Investment Fund
Zhang Lixin	-1,760,000	1,000,000	0.19		Unknown		Domestic
							natural
							person
HKSCC Nominees Limited	+485,621	485,621	0.09	0	Unknown		Overseas legal
							person
CHUK YEE MEN LIZA	+374,000	374,000	0.07	0	Unknown		Unknown
Jin Ruiming	+315,394	315,394	0.06	0	Unknown		Domestic
							natural
							person
Li Jinsong	+306,700	306,700	0.06	0	Unknown		Domestic
							natural
							person
WONG SING TO	+300,000	300,000	0.06	0	Unknown		Overseas
							natural
							person

– 5 –

Shareholdings of top 10 holders of shares not subject to trading moratorium

	Number of
	circulating
	shares held
	not subject		Type and
	to trading		number of shares
Name of Shareholder	moratorium	Type		Number
HKSCC Nominees Limited	248,262,698	Overseas	listed	248,262,698
		foreign	shares
China Luoyang Float Glass (Group)	159,018,242	Ordinary	shares	159,018,242
Company Limited		denominated in
		RMB
Liu Bibo	1,361,600	Ordinary	shares	1,361,600
		denominated in
		RMB
Agricultural Bank of China Ltd.	1,220,700	Ordinary	shares	1,220,700
– Fullgoal CS State-owned		denominated in
Enterprise Reform Grading		RMB
Securities Investment Fund
Zhang Lixin	1,000,000	Ordinary	shares	1,000,000
		denominated in
		RMB
HKSCC Nominees Limited	485,621	Ordinary	shares	485,621
		denominated in
		RMB
CHUK YEE MEN LIZA	374,000	Overseas	listed	374,000
		foreign	shares
Jin Ruiming	315,394	Ordinary	shares	315,394
		denominated in
		RMB
Li Jinsong	306,700	Ordinary	shares	306,700
		denominated in
		RMB
WONG SING TO	300,000	Overseas	listed	300,000
		foreign	shares

– 6 –

Explanation on connected relationship or action acting in concert among the aforesaid shareholders

There are no connected parties or persons acting in concert as defined by the Regulations for Disclosure of Changes in Shareholding of Listed Companies among the top 10 shareholders of the Company, including China Luoyang Float Glass (Group) Company Limited and other shareholders of circulating shares. The Company is not aware of any parties acting in concert or any connected relationship among other shareholders of circulating shares; HKSCC Nominees Limited held shares on behalf of its clients.

Explanation on preferred shareholders whose voting rights is restored and number of shares held

Nil

Note: By the end of the reporting period, among top 10 shareholders, HKSCC Nominees Limited holds 248,748,319 shares in total, including 248,262,698 H shares accounting for 99.30% of the Company’s total H shares; 485,621 A shares accounting for 0.18% of the Company’s total A shares.

– 7 –

5.2 Block Diagram on Equity and Control Relationship among the Company and Controlling Shareholders, and Actual Controllers

==> picture [427 x 398] intentionally omitted <==

----- Start of picture text -----

State-owned Assets Supervision and
Administration Commission of the State Council
100%
China National Building Material
Group Corporation
100%
100%
Triumph Technology
Group Company
Bengbu Glass Industry
53.64%
Design & Research Institute
China Luoyang Float Glass (Group) 19.0%
Company Limited
33.79%
Luoyang Glass Company Limited
----- End of picture text -----

VI. DISCUSSION AND ANALYSIS OF THE MANAGEMENT

6.1 Discussion and analysis on the Company’s operations during the reporting period

In 2015, due to the influence of downturn domestic macro-economy, depressed real estate market and other factors, the declining tendency of the glass market continues, and the ordinary glass cost and selling price are upside-down seriously, resulting in aggressive contradiction of demand over supply in terms of ultrathin glass, and dramatic drop in selling price. Facing with the severe situation, the Company puts forth effort to boost transformation and updating, implement asset restructuring, promote technology innovation, and carry out the work of “intensifying energy saving and consumption reduction” so as to guarantee stable production and operation.

– 8 –

During the reporting period, the Company recorded an operating revenue of RMB662,156,600, representing an increasing of RMB2,098,400 as compared to that of last year; recorded an operating income of RMB144,844,000, representing an increasing of RMB201,838,700 as compared to that of last year; recorded a net profit attributable to shareholders of the Company of RMB144,483,000, representing an increasing of RMB123,323,800 as compared to that of last year.

Main works in 2015

1. Significant asset restructuring has been successfully implemented, and transformation and updating takes initially effect

During the reporting period, the Company has successfully implemented the significant asset restructuring, and the restructuring programs have been reviewed and approved by the State-owned Assets Supervision and Administration Commission (SASAC) under the State Council, the stock exchanges in China and Hong Kong, the Company’s General Meeting and CSRC in succession. With approval of China Securities Regulatory Commission (CSRC) dated December 3, the Company has completed asset delivery on 21 December 2015. Successful significant asset restructuring has effectively improved the Company’s asset quality and financial position. The main business has been transformed and updated, which has significantly improved the profitability, and laid an important and solid foundation for the subsequent sound development. Meanwhile, asset restructuring has also improved the Company’s image in the asset market, and has been highly recognized by the asset market.

2. New breakthrough in technology and continuous improvement of core competitiveness

During the reporting period, 0.28mm, 0.25m and 0.2mm ultrathin new products of float glass have been put into mass production in Longhai Company and Bengbu Company in succession, which continues setting a new record in respect of domestic ultrathin float glass, and makes the Company be the only one manufacturer having ultrathin glass products of 14 series from 0.2mm to 1.3mm in China. Longbo Company has successfully produced the thinnest 0.55mm ultrathin and ultrawhite glass in China at present, and has made new breakthrough in terms of capacity, quality, percentage of pass, category and specification and production cycle, etc.

– 9 –

Technology innovation leads to innumerable great achievements. Technical Research and Application of 0.45 mm Electronic Glass, R&D and Industrialization of 0.33 Ultrathin High-end Electronic Glass, Application of Cleanness Management in Ultrathin Electronic Glass of Longhai Company, and R&D and Application of Technology in Reducing Natural Gas with Ultrathin Glass Production Line of Longbo Company have been awarded Science & Technology Progress Award (First Prize) by China National Building Materials Group Corporation; Development of Key Technology for Industrial Preparation of Ultrathin Float Electronic Glass for Touch Display of Bengbu Company has won Science & Technology Progress Award (First Prize) of Anhui Province, and Ultrathin Float Electronic Glass has won the title of “Industrial Quality Product of Anhui”, and has applied for 10 utility model patents.

3. The Company makes great effort to promote energy saving and emission reduction, and actively fulfills the social responsibility

The Company actively explores new energy saving technology, continues optimizing the technology parameters, reduces natural gas usage, having realized the energy saving targets. During the reporting period, Longhai Company, Bengbu Company and Longbo Company have saved an accumulative total of natural gas of 646,000m[3] , 693,000m[3] and 144,400 m[3] respectively.

Fuel gas dust removal and denitrification and environmental-protection projects of each production line have been completed and put into operation. The special programs of environmental-protection have passed the field acceptance by Luoyang Environmental Protection Bureau. Emission concentration of exhaust gas, sulfur dioxide and nitrogen oxide of the production lines meets the requirements of the Emission Standard of Air Pollutants in Electronic Glass Industry (GB29495-2013).

4. The Company effectively promote cost reduction and efficiency improvement based on the principle of “intensifying energy, saving and consumption reduction”

By sticking to CNBM’s operation principles of “four grasps, four controls, four increases and four reductions” and focusing on the points of “cost, benefit and risk”, the Company firmly intensifies the energy saving and consumption reduction, learns to promote “eight methods”, and vigorously implements the measures so that the cost reduction takes effect obviously.

– 10 –

Longhai Company has innovated regenerative chamber grid to intensify heat preservation of key kiln portion by implementing new technology of “combustion supporting and heat taking air engineering of glass furnace”, and guarantees safe operation of the kiln, effectively increase heat utilization efficiency and greatly reduces energy consumption through oxygen-enriched combustion technology, reducing the cost of more than RMB2 million; and the cost has been saved more than RMB230,000 by means of plate cutting transformation and recycling of stock papers.

Bengbu Company has reduced the natural gas amount and power consumption as well as the cost of more than RMB2 million by optimizing the technology. With the reduction of unit gram weight of anti-fungicide paper, procurement cost has been cut down more than RMB300,000 annually; the daily capacity has increased by about 2,000 square meters by improving cutting tools and intensifying management; and procurement cost of the raw materials has been reduced through purchasing by price.

Longbo Company actively promotes the daily cost accounting to reduce the unit manufacturing cost; and reduce natural gas consumption and cost of RMB441,900 through improvement of kiln technology.

5. The Company optimizes the product structure and follows closely the market demand

During the reporting period, the Company grasps the market opportunity with rapid demand growth, intensifies technological breakthrough and increases production and sales of 0.33mm and 0.4mm series of products of high added value. The sale volume has been increased by twice over the same period of 2014.

Longhao Company has increased technological break through investment in 2mm series of products, and makes effort to improve the percentage of pass and product quality. 2mm, 5mm and 6mm high-quality float glass has been greatly used in high-end glass deep processing filed, resulting in increasing product margin.

– 11 –

6. The Company promotes the brand image based on the quality improvement

A number of measures have been taken to intensify the quality awareness, improve the product quality and boost the brand competitiveness. The Company has strengthened quality control throughout the whole process from incoming of raw materials and production process control to production inspection and inventory management. The Company conducted the exchange and communication on the product quality inspection standards, product quality control systems and the like by inviting the downstream customers to visit the factory, and make improvements in consideration of the customers’ requirements; by increasing the frequency and times of sample inspection and random inspection, the Company further improves the product quality and the percentage of pass.

7. The Company strengthens price coordination and stabilizes the selling price of product

The Company pays close attention to the trend of domestic ultrathin glass market, and adjusts the marketing strategies as appropriate. While striving to retain the regular customers, the Company also actively develops new customers to ensure the market shares rise stably. Furthermore, the Company strengthens the coordination with the manufacturers, stabilizes the market price, and takes the initiative to coordinate price with the manufacturers and strengthen industry self-discipline.

8. The Company consolidates the management foundation and improves the comprehensive performance

The Company implements performance management, assesses the performance on a monthly basis, gives play to the incentive and constraint mechanism, and promotes in-place implementation of the indicators. Persisting in benchmarking management, subsidiaries find out the gap based on the comparison with the advanced, seek for improvement, tackle key problems against the weakness, and make synergistic progress, having realized the share of mutual production technology and experience, and promoted production control level continuously.

– 12 –

6.2 Analysis of Principal Businesses

6.2.1 Analytical Statement of Changes in Relevant Items in the Income Statement and Cash Flow Statement

Unit: Yuan Currency: RMB

Item	2015	2014	Change
			(%)
Operating income	662,156,635.13	660,058,269.97	0.32
Operating costs	633,653,570.97	603,925,932.11	4.92
Selling expenses	29,168,969.27	26,585,283.85	9.72
Administration expenses	122,170,107.57	118,800,470.76	2.84
Finance expenses	8,666,023.10	6,392,611.01	35.56
Net cash flow from
operating activities	-131,037,564.70	-40,574,860.63	N/A
Net cash flow from
investment activities	69,739,321.13	64,880,764.08	7.49
Net cash flow from
financing activities	65,855,869.80	-58,905,626.26	N/A
R&D expenditures	14,218,171.78	15,201,351.58	-6.47

6.2.2 Revenue

(1) Analysis of the factors driving the changes in business revenue

The income from business operations of the Company is mainly from sales of physical products (glass and silicon sand). During the Reporting Period, the Company recorded an operating revenue of RMB662,516,600, representing an increase of 0.32% as compared to that of last year.

(2) Analysis of the factors affecting the income mainly from sales of physical products of the Company

During the report period, because Bengbu CNMB Information Display Material Co., Ltd., has been incorporated to the consolidation scope of the Company, the income of glass products increased.

– 13 –

(3) Impact analysis of new products and new services

In 2015, the Company successfully researched and developed 0.20mm ultra-thin glass products, which is the thinnest glass in the PRC. Accordingly, we achieved continuous and stable production. The successful and stable production of 0.20mm ultra-thin glass products further enriched the categories of high added value products of the Company.

(4) Major sales to customers

The total sales to the top five customers amounted to RMB232,457,852.31, representing 35.11% of the Company’s total annual operating income. Among the top five customers, Anhui Fangxing Science & Technology Co., Ltd., represents 3.07% of the Company’s total annual operating income. Anhui Fangxing Science & Technology Co., Ltd., is the subsidiary controlled by China National Building Materials Group, the de facto controller of our Company.

6.2.3 Costs

(1) Analytical Statement of Costs

Unit: Yuan Currency: RMB

By industry

					Percentage	Percentage
			Percentage		over total	of changes in
			over total		cost for	amount over
			cost for		the same	the same
	Component		the current		period	period last
By industry	of cost	2015	period	2014	last year	year	Explanation
			(%)		(%)	(%)
Float glass	Direct materials	432,707,685.36	74.86	470,518,013.62	80.61	-8.04	Due to the change
	Direct labour	36,125,194.94	6.25	31,259,902.28	5.35	15.56	in the product
	Manufacturing	109,212,571.07	18.89	81,988,721.44	14.04	33.20	structure during
	expenses						the reporting
							period
Silica sand	Direct materials	14,378,888.10	77.00	10,489,190.17	78.92	37.08	Due to increase in
	Direct labour	2,400,506.49	12.86	1,457,039.47	10.96	64.75	production and
	Manufacturing	1,894,051.21	10.14	1,344,719.63	10.12	40.85	sales over the
	expenses						same period

– 14 –

By products

					Percentage	Percentage
			Percentage		over total	of changes in
			over total		cost for	amount over
			cost for		the same	the same
	Component		the current		period	period last
By products	of cost	2015	period	2014	last year	year	Explanation
			(%)		(%)	(%)
Common glass	Direct materials	191,414,090.53	82.13	269,524,417.75	84.97	-28.98	Due to decrease in
	Direct labour	7,409,461.95	3.18	9,846,110.69	3.11	-24.75	production and
	Ma nufacturing	34,227,138.34	14.69	37,818,292.45	11.92	-9.50	sales over the
	expenses						same period
Ultra-thin glass	Direct materials	241,293,594.83	69.94	200,993,595.87	75.40	20.05	Due to increase in
	Direct labour	28,715,732.99	8.32	21,413,791.59	8.03	34.10	production and
	Manufacturing	74,985,432.73	21.74	44,170,428.99	16.57	69.76	sales over the
	expenses						same period
Silica sand	Direct materials	14,378,888.10	77.00	10,489,190.17	78.92	37.08	Due to increase in
	Direct labour	2,400,506.49	12.86	1,457,039.47	10.96	64.75	production and
	Manufacturing	1,894,051.21	10.14	1,344,719.63	10.12	40.85	sales over the
	expenses						same period

(2) Major Suppliers

The purchase amount of top five suppliers is RMB4,801,973,140,900, representing 57.20% of total purchase amount of which the biggest supplier is Luoyang Luobo Group Yuantong Limited Company (the purchase amount represents 18.84% of the total purchase amount), and Directors of it are the ones of the Company.

The company’s directors, supervisors and their contacts and any shareholders who own more than 5% share capital of the company as far as directors know shall not have any equity in the aforementioned suppliers and customers.

– 15 –

6.2.4 Expenses

Item		2015	2014	Changes	Reasons of
					Changes
				(%)
Selling		29,168,969.27	26,585,283.85	9.72	Mainly due to
expenses					increase in port
					expenses due to
					changes made by
					subsidiaries to
					settlement method
					for sale of silicon
					sand during the
					reporting period
Administration		122,170,107.57	118,800,470.76	2.84
expenses
Finance		8,666,023.10	6,392,611.01	35.56	Mainly due to
expenses					increase in interest
					expenditure
					and discount
					charge during the
					reporting period
Income tax		9,896,015.25	10,232,864.68	-3.29	Mainly due to
expenses					decrease in
					profits of Longhai
					Company, a
					subsidiary of the
					Company.
*R&D expenditures*
(1)	R&D expenditures
	Expensed R&D expenditure in current period				14,218,171.78
	Capitalized R&D expenditure in current period
	Total of R&D expenditure				14,218,171.78
	Percentage of total R&D expenditure
	to operating revenue_(%)_				2.15
	Number of the Company’s R&D staff				95
	Percentage of R&D staff number to the
	Company’s total number of employees_(%)_				8.62
	Percentage of capitalized R&D expenditure_(%)_				0

6.2.5 R&D expenditures

– 16 –

6.2.6 Cash flow

(1) The net cash flow from operating activities amounted to RMB-131,037,600, representing an increase in net expenditure of RMB90,462,700 over RMB-40,574,900 for the same period last year, mainly due to the decrease in cash from sale of commodities during the period.
(2) The net cash flow from investing activities amounted to RMB69,739,300, representing an increase of net inflow of RMB4,858,500 over RMB64,880,800 for the same period last year, mainly due to significant cash received from disposal of creditor’s rights arising out of restructuring.
(3) The net cash flow from financing activities amounted to RMB65,855,900, representing an increase of net outflow of RMB124,761,500 over RMB-58,905,600 for the same period last year, mainly due to the increase in the borrowings received and borrowings repaid during the period.

6.2.7 Others

(1) Explanation for major changes in the composition of profits or source of profits of the Company
Asset impairment loss: during the reporting period, the asset impairment loss is increased by 502.73% to RMB323,017,700 over the same period of last year, mainly due to charge-off and disposal of the Company’s creditor’s rights arising from significant asset restructuring;
Investment income: during the reporting period, the investment income is increased by 510.52% to RMB603,457,900 over the same period of last year, mainly due to large income generated from significant asset restructuring;
Non-operating income: during the reporting period, the nonoperating income is decreased by 93.36% to RMB5,490,100 over the same period of last year, mainly due to large amount of government subsidy received during the last period.

– 17 –

6.3 Analysis of operations by industry, products or regions

6.3.1 Statement of the principal operations by industry and products

Unit: Yuan Currency: RMB

Principal operations by industry

				Increase/	Increase/
				decrease of	decrease of	Increase/
				operating	operating	decrease of
				income as	costs as	gross profit
				compared	compared	margin as
	Operating	Operating	Gross profit	with	with	compared with
By industry	income	costs	margin	last year	last year	last year
			(%)	(%)	(%)	(%)
Float glass	573,382,921.04	578,045,451.37	-0.81	-8.21	-0.98	Decreased by
						7.36 percentage
						points
Silica sand	38,223,371.29	18,673,445.80	51.15	60.19	40.50	Increased by
						6.85 percentage
						points

Principal operations by products

				Increase/	Increase/
				decrease of	decrease of	Increase/
				operating	operating	decrease of
				income as	costs as	gross profit
				compared	compared	margin as
	Operating	Operating	Gross profit	with	with	compared with
By industry	income	costs	margin	last year	last year	last year
			(%)	(%)	(%)	(%)
Float glass	573,382,921.04	578,045,451.37	-0.81	-8.21	-0.98	Decreased by
						7.36 percentage
						points
Including:
Ultra-thin glass	417,426,983.26	344,994,760.55	17.35	10.45	29.42	Decreased by
						12.11 percentage
						Points
Common glass	155,955,937.78	233,050,690.82	-49.43	-36.79	-26.53	Decreased by
						20.87 percentage
						Points
Silica sand	38,223,371.29	18,673,445.80	51.15	60.19	40.50	Increased by
						6.85 percentage
						Points

Explanation of principal operations Nil by industry and products

– 18 –

6.3.2 Principal operations by regions

Unit: Yuan Currency: RMB

		Increase/
		decrease of
		revenue from
		principal
	Revenue	operations as
	from principal	compared
Regions	operations	with last year
	(RMB)	(%)
PRC	611,606,292.33	-5.69
Explanation of principal	There was no export	business during the
operations by regions	Reporting Period.

6.4 Analysis of assets and liabilities

6.4.1 Analytical statement of assets and liabilities

Unit: Yuan Currency: RMB

					Increase/
		Percentage			decrease
		of closing			of closing
		balance		Percentage	balance
		of current		of closing	of current
		period		balance of	period over
	Closing	over the		last period	closing
	balance of	total assets	Closing balance	over the	balance of
Item	current period		of last period	total assets	last period	Explanation
		(%)		(%)	(%)
Notes receivable	25,230,005.90	1.92	900,000.00	0.05	2703.33	Mainly due to increase
						in notes deposits
Accounts	71,678,942.58	5.45	26,050,995.86	1.47	175.15	Mainly due to increase
receivable						in trade accounts
						receivable
Fixed assets	691,522,403.10	52.63	1,113,933,571.51	62.84	-37.92	Mainly due to decrease
						in assets arising
						from disposal of
						subsidiaries
Intangible assets	64,517,450.10	4.91	91,960,903.88	5.19	-29.84	Mainly due to decrease
						in assets arising
						from disposal of
						subsidiaries
Short-term loans	67,930,000.00	5.17	20,000,000.00	1.13	239.65	Mainly due to increase
						in loans

– 19 –

					Increase/
		Percentage			decrease
		of closing			of closing
		balance		Percentage	balance
		of current		of closing	of current
		period		balance of	period over
	Closing	over the		last period	closing
	balance of	total assets	Closing balance	over the	balance of
Item	current period		of last period	total assets	last period	Explanation
		(%)		(%)	(%)
Accounts payable	80,295,143.32	6.11	273,108,258.05	15.41	-70.60	Mainly due to decrease
						in debts arising
						from disposal of
						subsidiaries
Advance	20,132,927.79	1.53	58,115,698.49	3.28	-65.36	Mainly due to decrease
collections						in trade accounts
						collected in advance
Payroll payable	26,291,242.89	2.00	49,545,901.94	2.79	-46.94	Mainly due to
						decrease in social
						insurance payable to
						employees
Tax payables	14,961,097.35	1.14	30,964,871.99	1.75	-51.68	Mainly due to decrease
						in payable VAT, and
						property and land
						taxes
Other payables	166,587,026.05	12.68	86,573,580.21	4.88	92.42	Mainly due to non-
						payment of
						consideration for
						purchasing 100%
						of equity in Bengbu
						Zhongxian from the
						Group
Non-current	81,097,651.66	6.17	46,293,636.87	2.61	75.18	Mainly due to the
liabilities due						subsidiaries’
within one year						financing loans to
						be repaid in the next
						year
Capital reserve	922,207,200.86	70.18	1,519,966,824.90	85.74	-39.33	Mainly due to
						adjustment and
						offset of share
						capital premium
						arising from business
						merger under
						common control

6.4.2 Explanation for changes in assets measured by fair value and measure nature of major assets

There is no changes in assets measured by fair value and measure nature of major assets.

– 20 –

6.5 Analysis of core competitiveness

The Company is the place of origin for one of three major float glass manufacturing methods in the world – “Luoyang Float Glass Technology”. The Company has successively won “National Quality Award for Float Glass – Silver Award (國家浮法玻璃質量獎 – 銀質獎)”, “Gold Invention Award (金質發明獎)”, “National Consumer Trustworthy Product ( 全國消費者信得過產品 )”,“Well-known Trademark (弛名商標)”, “National Science & Technology Progress Award (first class) (國家科學技術進步一等獎)”, etc. “CLFG” (洛玻) brand still domestically enjoys certain popularity and brand recognition.
Strong capacity in respect of technical development and innovation. The Company possesses core production technology of float glass and a number of proprietary intellectual property rights and holds a leading position in the industry in terms of the production technology of ultra-thin, ultra-thin and ultra-white, and ultra-thick float glass. In addition, it owns teams of and experience in product research and development and tackling key problems in production technology.
Increasingly intensified scale advantages and synergistic effect. After this significant asset restructuring, the Company will have 3 ultrathin glass production lines, and becomes the largest ultrathin glass manufacturer in China at present. The Company will fully combine the technical characteristics and different advantages of these 3 production lines to coordinate and manage the products, technology, marketing channels, funds and personnel on a unified manner, give full play to the overall advantages of the Company in terms of personnel, technology and brand, intensify the scale advantages and synergistic effect, and continue improving the Company’s profitability. Especially, 150t/d production line of Bengbu Company has represented the top technical equipment level in China at present, which will be conductive to improvement of the overall benefits after it is introduced to the listed Company and combined with the abundant practical experience of production and operation of the Company over the years.
The de facto controller, China National Building Materials Group, the de facto controller of the Company, is an enterprise directly under the SASAC, the largest comprehensive building material group corporation in China and an enterprise of Fortune Global 500. It is able to provide support in terms of capital, technology, etc., for the Company.

– 21 –

6.6 Analysis of Investment

6.6.1 Overall Analysis of External Equity Investment

Because of the decrease in the scope of merging, the investment of RMB4,343,500 from exchange-out company – Longfei Company to Zhongyuan Bank Holdings Limited been decreased, and the total external investment decreased 35.79% as compared with that of the beginning of the Reporting Period.

(1) Material Equity Investment

During the Reporting Period, the 100% equity interests in Bengbu CNBM Information Display Material Holdings Limited has been exchanged-in as agreement, increasing the income of the Company RMB170,099,700 and the profit RMB31,866,400.

(2) Material Asset and Disposal of Equity

The Company sold 100% of its equity interests in Longhao Company Limited, 63.98% of its equity interests in Longfei Company, 67% of its equity interests in Dengfeng Silicon, 52% of its equity interests in Yinan Huasheng Mineral Products Company and 40.29% of its equity interests in CLFG Mineral and liabilities (including accounts receivables, other receivables and entrusted loans) of the Company to Longhao Company, Longfei Company, Longxiang Company, Yinan Huasheng Mineral Products Company.

		Impact on the overall production,
		operation and performance
Name of Company	Way of Disposition	of the Company
Longhao Company	exchange-out as	obtained equity earnings RMB379,189,600,
	agreement	liability losses RMB119,038,900, total
		earnings is RMB260,150,700
Longfei Company	exchange-out as	obtained equity earnings RMB181,925,300,
	agreement	liability (including that of the
		wholly-owned subsidiary of Longfei
		Company, Longxiang Company) losses
		RMB155,180,800, total earnings is
		RMB26,744,500
Huasheng Mining	exchange-out as	obtained equity earnings RMB18,017,000
	agreement
Fengdeng Sillica Sand	exchange-out as	obtained equity earnings RMB14,554,400
	agreement
CLFG Mineral	exchange-out as	obtained equity earnings RMB9,771,500
	agreement

– 22 –

6.6.2 Analysis of major subsidiaries and investee companies

(1) Basic information on major subsidiaries and investee companies

Unit: Yuan Currency: RMB

		Major products	Registered	Operating
Company name	Industry	or services	capital	business	Total assets	Net assets	Net profit
CLFG Longmen Glass	Building	Manufacture of float	20,000,000	98,334,475.03	210,021,075.93	-443,719,088.03	-73,679,256.64
Company Limited	materials	sheet glass
	and
	electronic
	information
CLFG Longhai Electronic	Electronic	Manufacture of float	60,000,000	154,487,406.27	303,884,344.78	169,987,172.57	1,121,107.66
Glass Co., Ltd.	information	sheet glass
Bengbu CNBM Information	Electronic	Manufacture of float	632,764,300	170,099,745.97	790,085,931.57	699,545,168.71	31,866,403.05
Display Material Co., Ltd.	information	sheet glass
Luoyang Luobo Furuida	Trading	Sales of glass and	500,000		25,732,941.51	-1,022,746.57	17,959.32
Commerce Co., Ltd.		raw materials

6.7 Continuous connected transactions in 2015

In 2015, the continuous connected transactions of the Group amounted to RMB1,248 million, and the approved annual upper limit amounted to RMB1,607 million. The continuous connected transactions did not exceed the disclosed annual upper limit.

All continuous connected transactions of the Group are inseparable from the Group’s daily operations, and are subject to the general commercial terms and conditions, or the transaction clauses are not inferior to the terms and conditions available to or provided by the manufacturer partners. The transaction price is fair and reasonable, and is to the overall benefit of the Company’s shareholders.

The Company’s continuous connected transaction projects in 2015 have passed the corresponding review and approval procedures according to the relevant listing regulations of Stock Exchange of Hong Kong Limited and SSE, and the actual total transaction volumes have not exceeded the approved upper limit. The Company’s independent auditor has reviewed the relevant continuous connected transactions and has issued the audit report of the projects. The Company’s independent directors have also reviewed and confirmed the continuous connected transactions in 2015.

– 23 –

6.8 Industry competition pattern and development trend

The year of 2016 will be a year for in-deep adjustment and increasing downturn pressure. In the context with decline in profits of traditional glass for building materials and glass and survival difficulty, some enterprises have made transformation or increased investments in ultrathin glass, resulting in increase in domestic ultrathin glass capacity expansion. Introduction of foreign new capacity to Chinese markets in succession will further expand the market supply, as a result of which, price competition becomes even more violent.

However, the Central Government adheres to seek improvement in stability, and determines GDP targeted at 6.5% to 7%. The market demands will remain stable, and supply side reform will boost the transformation development of the enterprises under control of the Central Government. CNBM will adhere to the strategic planning to develop new glass, new materials and new energy, which conforms to the national development policy and industry development orientation. Successful asset restructuring has basically realized transformation and updating of the Company from a traditional glass manufacturer to a strategic emerging enterprise focusing on production of optical information display glass. To this regard, the Company has to grasp the historical opportunity driven by structural reform and innovation at a new starting point, to improve the core competitiveness, develop new profit growth point, create new development motivation for Luoyang Glass, speed up transformation and updating and create a better operation performance through technical progress and management optimization.

6.9 Future development strategies of the Company

The Company will fully improve and boost the technology level and equipment level for Luoyang float glass with the support of technical innovation. With float glass used for electronic substrate as the leader, the Company targets high-tech development and implements innovation in respect of technology, production and market, so that the Company is able to maintain the leading technological advantages, competitive product advantages and market advantages all the time. Under the leadership of CNBM’s industry strategic development of “new glass, new materials and new energy”, the Company continues research, development and industrial incubation for ultrathin glass and ultrathin and ultra-while glass new technologies, to become the continuous leader of Luoyang float glass technology, and special glass manufacturer with stronger market radiation capability and resolutions.

– 24 –

6.10 Operation plans and measures

In 2016, the Company’s main operation targets are to realize capacity of 36 million square meters, sales volume of 33.80 million square meters, and operating income of RMB660 million; percentage of costs and expenses over operating income: 88%

Based on the aforesaid targets, the Company takes the following measures:

1. To strengthen market value management, and simultaneously implement physical operation and capital operation

Persisting in the operation ideas led by market value, supported by performance, and developed by industry and physical securitization, the Company strengthens market value management, and works on “improvement” to boost the Company’s competitiveness and strength, improve the Company’s governance level and capital market image, and enhance the investor’s confidence. In combination of the Company’s strategic positioning, industry development trend and asset position, the Company explores a new capital operation path, and seeks for the new span in respect of transformation and updating so as to realize win-win situation for both the Company and the investors.

2. To work on income increasing, energy saving and consumption reduction, cost reduction and efficiency improvement, as well as foundation consolidating

The Company will continue working on “income increasing, energy saving and consumption reduction”, and promote the methods of it so as to improve the awareness of “increasing income, saving expenditures and reducing energy consumption”, and implement the related methods and measures. Lean production ideas shall be introduced to increase income and reduce consumption in the production line so as to consolidate the production and operation foundation. The Company continues improving, optimizing and perfecting the process and technology to promote stable production, improve quality and reduce consumption, so as to further improve the ultrathin glass quality and shorten the gap with the imported products; intensify process cost control, reduce null and void working hours; optimize quota management, further improve utilization efficiency of raw and auxiliary materials, reduce manufacturing costs; promote use of energy-saving new technology and new equipment, reduce consumption of electricity, water and oil; enhance storage management, strictly impalement

– 25 –

warehousing, delivery and receiving formalities for in-stock materials, and strictly execute regular stocktaking system and control the inventory losses. Production lines will quantify and effectively implement the indicators in respect of cost, consumption, energy saving and product quality improvement through lean and refined production and management links, and implements daily accounting and monthly checking to guarantee that the unit manufacturing cost is under the target value.

Functional departments shall strengthen lean management to realize cost reduction and efficiency improvement, and shall continue making use of unique management means such as grip control and eight methods to enhance dedicated and practical management pattern, improve management intensification and lean level, and benefit from management.

Operation departments shall increase the sale income, reduce appropriation of stock capital, improve the capital turnover rate by raising the product selling price and increasing the sales volume, and shall reduce the procurement costs by declining the procurement price, improving the procurement quality and implementing centralized procurement.

3. To enhance technology management and innovation, and build up new brand image

The Company will work on product structure adjustment, product quality improvement, consumption reduction and cost reduction on “quality improvement, transformation and updating”, and market demand oriented basis. In order to continue improving the technology, addressing the core problems affecting the product quality and continue innovation, the Company will increase capital investments to support technical improvement of the production lines. Quality will be improved through technological innovation, so as to significantly improve the capacity, quality and percentage of pass indicators over 2015. Improvement in respect of daily capacity of main products, natural gas single consumption reduction, and electricity consumption reduction is not less than 5%, 10% and 5% respectively, and reduction in controllable costs of these three items is not less than 5%. The yield of conforming products used by customers is up to 85%.

Ideas of “green building materials and responsibility sky” are promoted. The Company makes effort to promote the new technology for energy saving and consumption reduction, develop and utilize new kiln energy saving technology, continue promoting the oxygen-enriched combustion technology, and realize overall reduction in energy (gas and electricity consumption).

– 26 –

4. To innovate marketing mode, expand channels, increase selling price and increase benefit

The marketing shall give priority to benefit and make profits from price and principal through accurate judgment, measure implementation, innovative marketing and stable price rising. Overall planning of product program for three production lines will better meet multiple-layer and diversifying market demands in respect of category structure, regional position and delivery date, and continue improving the Company’s voice, pricing right, overall competitiveness in the market, and anti-risk capability to give play to the scale advantages.

On one hand, the Company’s business personnel shall get really involved in the front market, to figure out the detailed demands of different users, implement the targeted marketing, explore demand potential and expand sales volume continuously. On the other hand, the Company will continue regard 0.33mm and 0.4mm ultrathin glass as the marketing emphasis, pay close attention to the market trend, enhance cooperation with manufacturers and stably increase the selling price. Third, the Company will increase investment in promotion and marketing of the 0.2mm new series products and ultrathin-ultra-white products, discover new product development orientation, expand new product market demands and form a new profit growth driving force. Forth, the Company attaches great importance to maintenance of markets for traditional ultrathin glass such as 1.1mm, 0.7mm and 0.55mm, gives play to the existing channel advantages, and stabilizes the market shares based on the stable selling price. Fifth, the Company will enhance training for the marketing staff, to create a high-quality marketing team and give play to the role of the manpower making profits.

5. To deeply improve management and lay a solid foundation

Firstly, the Company will continue deepening “four reductions” to promote corporate integration and optimization, determine “four reductions” targets and schedule, and formulate sound integration plans and risk control measures in the principles of “refined organization, capable personnel and first efficiency”. Secondly, the Company will proceed the activities of “three targets and one goal” to improve the comprehensive benefits of the Company through unified targets, coordinated procedure control, synchronic performance monitoring and comprehensive continuous improvement, so as to really regulate actions through systems, improve benefits on a scientific management basis, and promote healthy and sustainable development of the Company.

– 27 –

Thirdly, the Company will improve the performance assessment and payroll rules. The performance assessment gets closely to the target assignment of each unit, to quantify the performance and really realize combination of income with personal contribution; Fourthly, the Company will further raise the risk control awareness, improve the Company’s governance structure, enhance internal control system construction, standardize the Company’s operation behaviors and improve the protection mechanism for the electronic glass intellectual property rights, so as to guarantee effective implementation of the Company’s internal control measures.

6.11 Potential Risks

1. Risks arising from policies and the industry

“De-capacity” is the priority of five structure reform tasks determined by the Central Government in 2016. Introduction of supply reform policy, increase in ultrathin glass substrate capacity, low-cost price war of the industry and other factors bring about both impact on the Company’s profitability and development chances to the Company.

At the end of asset restructuring, the Company’s development strategy adjustment conforms to the development orientation and updating path of the industries encouraged and supported by the state. The Company will pay close attention to the reform trend of the relevant industries, give play to the advantages of the product innovation and technical equipment, and actively participate in market competition. By further integrating the Company’s internal resources, the Company will expand the business scale and the main operations, and improve the Company’s operation level and core competitiveness.

2. Risks arising from product price

The productivity of the ultra-glass market is enlarged continuously, which will affect the selling price and sales volume of products. The fluctuation in prices will result in the great difficulties in realization of overdue inventories, therefore, the Company will confront with risks arising from inventory impairment.

Countermeasures: the Company will accelerate the reactions and closely follow up the mainstream prices in the market. We will also develop new products in a due course and increase our market shares. In addition, the Company will stabilize and broaden the marketing channels to cultivate new clients and large clients.

– 28 –

3. Risks arising from price of raw materials

The major raw materials of the Company’s products include fuel, sodium carbonate and silica sands, the procurement costs represent a significant percentage of the product cost. Price fluctuation of raw and fuel materials might bring in certain risks in respect of increase in costs.

Countermeasures: the Company will accurately follow the fluctuations of prices to purchase in due course, in order to reduce the purchasing cost. In addition, the Company will expand the supply channel to ensure the stability and efficiency of the supply channel.

4. Financial Risks

Credit risk: The Company’s credit risk is mainly from accounts receivable; most clients of the Company have been implemented delivery on cash while a few clients with sound reputation have been entitled the credit extension. So the Company faces small credit risks.

Liquidity risk: the Company has sufficient cash and cash equivalents to basically meet its operational needs. At the same time, it has obtained financial assistance commitment from the controlling shareholder and de facto controller that can satisfy our long- and short-term capital demand.

Interest rate risk: The Company’s interest rate risk is mainly from the loan from bank and others as well as bank deposit. Because there is no significant connection between both of most expenses of the Company and operating cash flows and the changes in market interest rates, interest rate risk has little effect on the Company.

5. Technological risks

All of the core techniques of the Company are self-researched and self-developed, with proprietary intellectual property rights. Of which, the production of ultra-thin and ultra-white glass uses advanced techniques with abundant experience in product research and development. Therefore, the Company does not confront with technical risks regarding the above.

– 29 –

6.12 Profit distribution or proposal for conversion of capital reserve

Pursuant to the Chinese accounting standards, the Company’s net profits attributable to owners of the parent company in 2015 amounted to RMB144,483,000, plus the year-beginning undistributed profits of RMB-1,354,728,900, the total undistributed profits were RMB-1,210,245,900. Thus, the Company will not distribute profits in 2015, nor convert capital reserve into share capital.

6.13 Repurchase, Sale and Redemption of Shares

During the reporting period, the Company and its subsidiaries did not repurchase, sell and redeem any securities of the Company.

6.14 Compliance with the Corporate Governance Code

The Group has complied with all the code provisions of the Code on Corporate Governance Practices set out in Appendix 14 to the Listing Rule of the Hong Kong Stock Exchange.

6.15 Audit Committee

The Audit (or Auditing) Committee under the Company’s Board of Directors have reviewed the Annual Report.

7 MATTERS RELATED TO FINANCIAL REPORT

7.1 Compared with the financial report of the last year, the Company’s accounting policies, accounting estimates and accounting methods have not been changed.
7.2 During the reporting period, there is no significant accounting error correction in the Company.
7.3 Compared with the financial report of the last year, if the consolidation scope of the financial report is changed, the Company shall make specific explanation.

During the reporting period, the consolidation scope of the Company is changed significantly due to business merger under common control. The Company has established Bengbu CNMB Information Display Material Co., Ltd., and disposed 4 companies including Luoyang Glass Group Longfei Glass Co., Ltd., Yinan Huasheng Mining Industrial Co., Ltd., Luoyang Glass Group Luoyang Longhao Glass Co., Ltd. and Dengfeng Luoyang Glass Silicasand Co., Ltd. due to asset swap.

– 30 –

Consolidated Balance Sheet

December 31, 2015 Unit: Yuan Currency: RMB

Prepared by: Luoyang Glass Company Limited

Item Current assets: Bank balance and cash Notes receivable Accounts receivable Prepayments Other receivables Inventory Other current assets Total current assets Non-current assets: Available-for-sale financial assets Long-term receivables Fixed assets Construction in progress Construction materials Intangible assets Long-term deferred expenses Deferred income tax assets Other non-current assets Total non-current assets Total assets	Closing Balance 102,342,860.91 25,230,005.90 71,678,942.58 4,329,899.13 28,928,810.44 195,863,112.95 58,978,537.93 487,352,169.84 51,727,535.57 691,522,403.10 9,828,822.54 64,517,450.10 4,995,326.04 4,091,374.33 826,682,911.68 1,314,035,081.52	Opening Balance 92,747,084.60 900,000.00 26,050,995.86 7,788,589.17 37,884,591.35 249,259,177.59 87,973,847.70
		502,604,286.27

		4,343,500.00 48,649,780.65 1,113,933,571.51 698,734.75 428,213.56 91,960,903.88 486,000.00 4,493,731.26 5,134,487.79
		1,270,128,923.40

		1,772,733,209.67

– 31 –

Closing Balance Opening Balance

Item

Current liabilities:
Short-term loans	67,930,000.00	20,000,000.00
Notes payable	110,200,000.00	109,657,336.88
Accounts payable	80,295,143.32	273,108,258.05
Payments received in advance 20,132,927.79		58,115,698.49
Staff remuneration payables 26,291,242.89		49,545,901.94
Taxes payable	14,961,097.35	30,964,871.99
Other payables	166,587,026.05	86,573,580.21
Non-current liabilities due
within one year	81,097,651.66	46,293,636.87
Total current liabilities	567,495,089.06	674,259,284.43

Non-current liabilities:
Long-term loans	459,170,134.47	459,535,761.38
Deferred income	9,024,861.99	10,648,914.15
Total non-current liabilities	468,194,996.46	470,184,675.53

Total liabilities	1,035,690,085.52	1,144,443,959.96

Owners’ equity:
Share capital	515,018,242.00	500,018,242.00
Capital reserve	922,207,200.86	1,519,966,824.90
Special reserve		456,157.74
Surplus reserve	51,365,509.04	51,365,509.04
Retained earnings	-1,210,245,955.90	-1,354,728,949.62
Equity attributable to
owners of the Company	278,344,996.00	717,077,784.06

Minority interest		-88,788,534.35
Total owners’ equity	278,344,996.00	628,289,249.71

Total liabilities and
owners’ equity	1,314,035,081.52	1,772,733,209.67

	Person in charge of
Legal representative:	Chief accountant: accounting department:
Zhang Chong	Sun Lei	Chen Jing

– 32 –

Balance Sheet of the Company

December 31, 2015 Unit: Yuan Currency: RMB

Prepared by: Luoyang Glass Company Limited

Item Current assets: Bank balance and cash Notes receivable Accounts receivable Prepayments Other receivables Total current assets non-current assets Long-term receivables Long-term equity investments Fixed assets Construction materials Intangible assets Long-term deferred expenses Total non-current assets Total assets Current liabilities: Short-term loans Notes payable Accounts payable Payments received in advance Staff remuneration payables Taxes payable Other payables Non-current liabilities due within one year Total current liabilities	Closing Balance 60,422,236.77 12,298,525.67 209,998,506.36 204,646.95 92,782,775.21 375,706,690.96 51,727,535.57 748,986,593.99 3,274,034.44 7,043,817.21 378,000.00 811,409,981.21 1,187,116,672.17 112,100,000.00 52,825,849.20 19,236,279.29 8,574,407.48 1,170,093.28 319,420,971.97 43,393,347.08 556,720,948.30	Opening Balance 45,193,116.50 556,257,598.52 1,485,067.67 179,069,893.00
		782,005,675.69

		48,649,780.65 52,597,961.54 3,813,540.76 428,213.56 6,856,321.12 486,000.00
		112,831,817.63

		894,837,493.32

		10,000,000.00 90,000,000.00 75,935,633.93 50,176,727.50 13,822,236.57 7,262,758.60 50,643,969.60 43,413,636.87
		341,254,963.07

– 33 –

Item	Closing Balance	Opening Balance
Non-current liabilities:
Long-term loans	387,331,110.45	430,815,761.38
Total non-current liabilities	387,331,110.45	430,815,761.38

Total liabilities	944,052,058.75	772,070,724.45

Owners’ equity
Share capital	515,018,242.00	500,018,242.00
Capital reserve	992,916,834.90	891,129,782.23
Surplus reserve	51,365,509.04	51,365,509.04
Retained earnings	-1,316,235,972.52	-1,319,746,764.40
Total owners’ equity	243,064,613.42	122,766,768.87

Total liabilities and
owners’ equity	1,187,116,672.17	894,837,493.32

	Person in charge of
Legal representative:	Chief accountant: accounting department:
Zhang Chong	Sun Lei	Chen Jing

– 34 –

Consolidated Income Statement

2015 Unit: Yuan Currency: RMB

Prepared by: Luoyang Glass Company Limited

Item		Current Period	Last Period
I.	Operating revenue	662,156,635.13	660,058,269.97
	Less: Operating costs	633,653,570.97	603,925,932.11
	Business taxes and surcharges	4,094,122.28	6,598,685.62
	Selling expenses	29,168,969.27	26,585,283.85
	Administration expenses	122,170,107.57	118,800,470.76
	Finance expenses	8,666,023.10	6,392,611.01
	Impairment loss on assets	323,017,726.85	53,592,503.48
	Add: Gains from changes
	in fair value
	Investment income	603,457,879.81	98,842,537.14
	Including: Gains from investment
	in associates and
	joint ventures
II.	Operating profit
	(loss is represented by “-”)	144,843,994.90	-56,994,679.72
	Add: Non-operating income	5,490,124.60	82,654,516.83
	Including: Gain on disposal of
	non-current assets	459,490.08	2,294,067.72
	Less: Non-operating expenses	6,027,096.65	9,929,613.25
	Including: Loss from disposal of
	non-current assets	14,470.37	1,628,535.23
III.	Total profit
	(total loss is represented by “-”)	144,307,022.85	15,730,223.86
	Less: Income tax expenses	9,896,015.25	10,232,864.68
IV.	Net profit
	(net loss is represented by “-”)	134,411,007.60	5,497,359.18
	Including: Net profit attributable to
	the owners of the Company	144,482,993.72	21,159,211.92
	Minority interests	-10,071,986.12	-15,661,852.74

– 35 –

Current Period

Last Period

Item

V.	Other comprehensive income net of tax
VI.	Total comprehensive income	134,411,007.60	5,497,359.18
	Total comprehensive income attributable
	to owners of the parent company	144,482,993.72	21,159,211.92
	Total comprehensive income
	attributable to minority interests	-10,071,986.12	-15,661,852.74
VII.	Earnings per share
	(I) Basic earnings per share	0.28	0.04
	(II) Diluted earnings per share	0.28	0.04

In case of business merger under common control in current period, the net profits realized by the acquiree before merger are RMB31,866,403.05, and the net profits realized by the acquiree during the last period are RMB5,154,515.43.

Person in charge of Legal representative: Chief accountant: accounting department: Zhang Chong Sun Lei Chen Jing

– 36 –

Income Statement of the Company Prepared by: Luoyang Glass Company Limited 2015 Unit: Yuan Currency: RMB

Item	Item			Current Period	Last Period
I.		Operating revenue		321,744,003.73	715,403,789.93
		Less: Operating costs		315,947,775.40	702,105,154.31
		Business taxes and surcharges		411,069.51	2,544,953.25
		Selling expenses		2,693,060.71	2,457,715.83
		Administration expenses		34,158,163.91	23,386,907.28
		Finance expenses		-4,689,479.77	-6,287,017.61
		Impairment loss on assets		30,442,830.93	321,657,803.07
		Add: Gains from changes
		in fair value
		Investment income		60,434,846.18	270,997,339.33
		Including: Gains from investment
		in associates and
		joint ventures
II.		Operating profit		3,215,429.22	-59,464,386.87
		Add: Non-operating income		863,660.94	72,550,822.52
		Including: Gain on disposal	of
		non-current assets		110,298.94	1,889,196.38
		Less: Non-operating expenses		568,298.28	3,044,730.20
		Including: Loss from disposal
		of non-current	assets	14,470.37	298,792.54
III.		Total profit		3,510,791.88	10,041,705.45
		Less: Income tax expenses
IV.		Net profit		3,510,791.88	10,041,705.45
V.		Other comprehensive income net of tax
VI.		Total comprehensive income		3,510,791.88	10,041,705.45
				Person in charge of
	Legal representative:		Chief accountant: accounting department:
		Zhang Chong		Sun Lei	Chen Jing

– 37 –

Consolidated Cash Flow Statement
Prepared by: Luoyang Glass Company Limited	2015
	Unit: Yuan Currency: RMB

Item	Item	Current Period	Last Period
I.	Cash flows from operating activities:
	Cash received from sale of goods
	or rendering of services	290,013,349.20	367,061,618.93
	Other cash received from activities
	related to operation	19,647,073.22	19,225,646.50
	Sub-total of cash inflow from
	operating activities	309,660,422.42	386,287,265.43
	Cash paid for goods purchased
	and services rendered	262,162,002.68	234,139,687.30
	Cash paid to and on behalf of employees	103,920,662.94	111,106,417.17
	Tax payments	44,025,043.10	51,991,304.07
	Other cash paid for activities related
	to operation	30,590,278.40	29,624,717.52
	Sub-total of cash outflow from
	operating activities	440,697,987.12	426,862,126.06
	Net cash flow from operating activities	-131,037,564.70	-40,574,860.63
II.	Cash flow from investment activities:
	Cash received from return of investments		1,224,570.83
	Net cash received from disposal of
	fixed assets, intangible assets and
	other long term assets	6,232.00	38,441,655.62
	Net cash received from disposal of
	subsidiaries and other operating entities		4,000,000.00
	Other cash received from activities
	related to investment	96,430,259.30	60,012,700.00
	Sub-total of cash inflow from
	investment activities	96,436,491.30	103,678,926.45
	Cash paid for purchase and construction
	of fixed assets, intangible assets and
	other long-term assets	26,034,865.12	33,798,162.37
	Other cash paid for activities related
	to investment	662,305.05	5,000,000.00
	Sub-total of cash outflow from
	investment activities	26,697,170.17	38,798,162.37
	Net cash flow from investment activities	69,739,321.13	64,880,764.08

– 38 –

Item		Current Period	Last Period
III. Cash flow from financing activities:
Proceeds from loans		166,645,153.57	20,000,000.00
Other cash received from
financing-related activities		571,928,695.56	510,705,546.54
Sub-total of cash inflow from
financing activities		738,573,849.13	530,705,546.54
Cash paid for repayment of loans		91,639,032.28	46,343,246.66
Cash paid for dividends, profit,
or interest payments		3,952,160.79	517,126.14
Including: Dividend and profit paid by
subsidiaries to minority
shareholders
Other cash paid for financing-related
activities		577,126,786.26	542,750,800.00
Sub-total of cash outflow from
financing activities		672,717,979.33	589,611,172.80
Net cash flow from financing activities		65,855,869.80	-58,905,626.26
IV. Effects of changes in exchange rate
on cash and cash equivalents		7,344.49	430.47
V. Net increase in cash and cash equivalents		4,564,970.72	-34,599,292.34
Add: Opening balance of cash and
cash equivalents		37,777,890.19	72,377,182.53
VI. Closing balance of cash and
cash equivalents		42,342,860.91	37,777,890.19
		Person in charge of
Legal representative:	Chief accountant: accounting department:
Zhang Chong	Sun Lei		Chen Jing

– 39 –

Cash Flow Statement of the Company	Cash Flow Statement of the Company
Prepared by: Luoyang Glass Company Limited				2015
			Unit: Yuan	Currency: RMB
Item		December 31, 2015		December 31, 2014
I.	Cash flows from operating activities:
	Cash received from sale of goods
	or rendering of services	94,103,592.09		274,277,887.70
	Other cash received from activities
	related to operation	3,241,789.24		353,892,935.63
	Sub-total of cash inflow from
	operating activities	97,345,381.33		628,170,823.33
	Cash paid for goods purchased
	and services rendered	6,218,038.59		270,328,215.47
	Cash paid to and on behalf of employees	34,941,828.98		52,915,520.72
	Tax payments	4,802,612.75		6,744,426.47
	Other cash paid for activities
	related to operation	20,342,908.81		26,826,503.99
	Sub-total of cash outflow from
	operating activities	66,305,389.13		356,814,666.65
	Net cash flow from operating activities	31,039,992.20		271,356,156.68
II.	Cash flow from investment activities:
	Cash received from return of investments			38,441,655.62
	Net cash received from disposal of
	fixed assets, intangible assets and
	other long term assets			4,000,000.00
	Net cash received from disposal of
	subsidiaries and other operating entities	96,430,259.30		60,012,700.00
	Other cash received from activities
	related to investment	96,430,259.30		102,454,355.62
	Sub-total of cash inflow from
	investment activities		213,045.15	332,570.00
	Cash paid for purchase and construction
	of fixed assets, intangible assets and
	other long-term assets			5,000,000.00
	Other cash paid for activities
	related to investment		213,045.15	5,332,570.00
	Sub-total of cash outflow from
	investment activities	96,217,214.15		97,121,785.62

– 40 –

Item		December 31, 2015	December 31, 2014
III. Cash flow from financing activities:
Proceeds from loans			10,000,000.00
Other cash received from activities
related to financing		703,786,445.56	113,000,000.00
Sub-total of cash inflow from
financing activities		703,786,445.56	123,000,000.00
Cash paid for repayment of loans		53,403,478.45	43,463,246.66
Cash paid for dividends, profit,
or interest payment		365,410.20	221,001.16
Other cash paid for
financing-related activities		777,052,987.48	448,000,000.00
Sub-total of cash outflow from
financing activities		830,821,876.13	491,684,247.82
Net cash flow from financing activities		-127,035,430.57	-368,684,247.82
IV. Effects of changes in exchange
rate on cash and cash equivalents		7,344.49	430.47
V. Net increase in cash and cash equivalents		229,120.27	-205,875.05
Add: Opening balance of cash and
cash equivalents		193,116.50	398,991.55
VI. Closing balance of cash and
cash equivalents		422,236.77	193,116.50
		Person in charge of
Legal representative:	Chief accountant: accounting department:
Zhang Chong	Sun	Lei	Chen Jing

– 41 –

2015 Unit: Yuan Currency: RMB

Consolidated Statement of Changes in Equity Prepared by: Luoyang Glass Company Limited

								2015
						Equity attributable to owners of the Company
							Other						Total
				Other equity		Less:	comprehensive			Undistributed		Minority	shareholder’s
Item			Share capital	instruments	Capital reserve	Treasury stock	income	Special reserve	Special reserve	profit	Sub-total	interest	equity
I.	Balance at the end of last year		500,018,242.00		857,450,406.90			456,157.74	51,365,509.04	-1,359,891,297.28	49,399,018.40	-88,788,534.35	-39,389,515.95
	Business combination under
	common control				662,516,418.00					5,162,347.66	667,678,765.66		667,678,765.66
II.	Balance at the beginning of the year		500,018,242.00		1,519,966,824.90			456,157.74	51,365,509.04	-1,354,728,949.62	717,077,784.06	-88,788,534.35	628,289,249.71
III.	Increase/decrease in the year
	(decrease is represented by “-”)		15,000,000.00		-597,759,624.04			-456,157.74		144,482,993.72	-438,732,788.06	88,788,534.35	-349,944,253.71
	(I)	Total comprehensive income								144,482,993.72	144,482,993.72	-10,071,986.12	134,411,007.60
	(II)	Shareholders’ contribution
		and decrease in capital	15,000,000.00		-597,759,624.04			-456,157.74			-583,215,781.78	98,860,520.47	-484,355,261.31
		1. Ordinary shares paid
		by shareholders	15,000,000.00		-597,759,624.04						-582,759,624.04		-582,759,624.04
		2. Others						-456,157.74			-456,157.74	98,860,520.47	98,404,362.73
	(III)	Profit distribution
		1. Appropriation to
		surplus reserve
	(IV)	Internal carry-forward of
		shareholders’ equity
	(V)	Special reserve
	(VI)	Others
IV.	Balance at the end of the year		515,018,242.00		922,207,200.86				51,365,509.04	-1,210,245,955.90	278,344,996.00		278,344,996.00
								2014
						Equity attributable to owners of the Company
							Other						Total
				Other equity		Less:	comprehensive			Undistributed		Minority	shareholder’s
Item			Share capital	instruments	Capital reserve	Treasury stock	income	Special reserve	Special reserve	profit	Sub-total	interest	equity
I.	Balance at the end of last year		500,018,242.00		857,450,406.90			367,894.52	51,365,509.04	-1,375,895,993.77	33,306,058.69	-73,208,155.34	-39,902,096.65
	Business combination under
	common control				70,000,000.00					7,832.23	70,007,832.23		70,007,832.23
II.	Balance at the beginning of the year		500,018,242.00		927,450,406.90			367,894.52	51,365,509.04	-1,375,888,161.54	103,313,890.92	-73,208,155.34	30,105,735.58
III.	Increase/decrease in the year
	(decrease is represented by “-”)				592,516,418.00			88,263.22		21,159,211.92	613,763,893.14	-15,580,379.01	598,183,514.13
	(I)	Total comprehensive income								21,159,211.92	21,159,211.92	-15,661,852.74	5,497,359.18
	(II)	Shareholders’ contribution
		and decrease in capital			592,516,418.00						592,516,418.00		592,516,418.00
		1. Ordinary shares paid
		by shareholders			592,516,418.00						592,516,418.00		592,516,418.00
	(III)	Profit distribution
		1. Appropriation to
		surplus reserve
	(IV)	Internal carry-forward of
		shareholders’ equity
	(V)	Special reserve						88,263.22			88,263.22	81,473.73	169,736.95
		1. Amount withdrawn in
		the year						131,116.42			131,116.42	121,030.53	252,146.95
		2. Amount utilized in the year						-42,853.20			-42,853.20	-39,556.80	-82,410.00
IV.	Balance at the end of the year		500,018,242.00		1,519,966,824.90			456,157.74	51,365,509.04	-1,354,728,949.62	717,077,784.06	-88,788,534.35	628,289,249.71

Person in charge of Legal representative: Chief accountant: accounting department: Zhang Chong Sun Lei Chen Jing

– 42 –

2015

Statement of Changes in Equity of the Company Prepared by: Luoyang Glass Company Limited

Unit: Yuan Currency: RMB

							2015
							Other				Total
				Other equity		Less:	comprehensive			Undistributed	shareholder’s
Item			Share capital	instruments	Capital reserve	Treasury stock	income	Special reserve	Surplus reserve	profit	equity
I.	Balance at the end of last year		500,018,242.00		891,129,782.23				51,365,509.04	-1,319,746,764.40	122,766,768.87
II.	Balance at the beginning of the year		500,018,242.00		891,129,782.23				51,365,509.04	-1,319,746,764.40	122,766,768.87
III.	Increase/decrease in the year
	(decrease is represented by “-”)		15,000,000.00		101,787,052.67					3,510,791.88	120,297,844.55
	(I)	Total comprehensive income								3,510,791.88	3,510,791.88
	(II)	Shareholders’ contribution and
		decrease in capital	15,000,000.00		101,787,052.67						116,787,052.67
		1. Ordinary shares paid by shareholders	15,000,000.00		101,787,052.67						116,787,052.67
		2. Others
	(III)	Profit distribution
	(IV)	Internal carry-forward of
		shareholders’ equity
	(V)	Special reserve
	(VI)	Others
IV.	Balance at the end of the year		515,018,242.00		992,916,834.90				51,365,509.04	-1,316,235,972.52	243,064,613.42
							2014
							Other				Total
				Other equity		Less:	comprehensive			Undistributed	shareholder’s
Item			Share capital	instruments	Capital reserve	Treasury stock	income	Special reserve	Surplus reserve	profit	equity
I.	Balance at the end of last year		500,018,242.00		891,129,782.23				51,365,509.04	-1,329,788,469.85	112,725,063.42
II.	Balance at the beginning of the year		500,018,242.00		891,129,782.23				51,365,509.04	-1,329,788,469.85	112,725,063.42
III.	Increase/decrease in the year
	(decrease is represented by “-”)									10,041,705.45	10,041,705.45
	(I)	Total comprehensive income								10,041,705.45	10,041,705.45
	(II)	Shareholders’ contribution and
		decrease in capital
	(III)	Profit distribution
	(IV)	Internal carry-forward of
		shareholders’ equity
	(V)	Special reserve
	(VI)	Others
IV.	Balance at the end of the year		500,018,242.00		891,129,782.23				51,365,509.04	-1,319,746,764.40	122,766,768.87
									Person	in charge of
		Legal	representative:		Chief accountant:			accounting department:
		Zhang Chong				Sun	Lei		Chen Jing

– 43 –

NOTES TO THE FINANCIAL STATEMENTS 2015 (by RMB)

I. COMPANY PROFILE

Luoyang Glass Company Limited (the “Company”) is a company incorporated in the People’s Republic of China (the “PRC”) as a joint stock limited company. The activities of the Company and its subsidiaries (“the Group”) are manufacturing and sale of float sheet glass.

II. IMPORTANT ACCOUNTING POLICIES

1. Basis for preparation of financial statements

The financial statements of the Company have been prepared on a going concern basis in respect of the actual transactions and events in accordance with the Accounting Standards for Business Enterprises, the Application Guideline of the Accounting Standards for Business Enterprises, the Interpretation to the Accounting Standards for Business Enterprises and other regulations issued by the Ministry of Finance, and the following significant accounting policies and estimates.

2. Accounting period

Accounting year of the Company is the calendar year from January 1 to December 31.

3. Measurement currency

The Company’s reporting currency is the Renminbi (“RMB”).

4. Preparation method of consolidated financial statements

The Company incorporates the subsidiaries over which the Company owns actual control and the entities for special purpose in the scope of the consolidated financial statements.

The Company’s consolidated financial statements are prepared pursuant to the requirements of the Accounting Standards for Business Enterprises No.33 – Consolidated Financial Statements and the relevant regulations, and offset all significant internal transactions and deals within the consolidation scope at the time of consolidation. Shareholders’ equity of the subsidiaries that are not attributable to the parent company is presented as minority equity in the consolidated financial statements separately.

– 44 –

If the accounting policies or accounting period adopted by the subsidiaries are different from that of the Company, in preparation of the consolidated financial statements, necessary adjustment is made to the financial statements of the subsidiaries according to the Company’s accounting policies or accounting period.

As to the subsidiaries acquired through business merger under non-common control, in preparation of the consolidated financial statements, individual financial statements are adjusted based on the fair value of the net identifiable assets on the date of acquisition; as to the subsidiaries acquired through business merger under common control, such business merger is deemed having been accrued at the beginning of the year for merger, and the assets, liabilities, operating results and cash flows are included in the consolidated financial statements from the beginning of the year for merger.

III. SEGMENT REPORTING

(I) Segment reporting

For management purposes, the Group is organized into two operating divisions. The management of the Group regularly reviews the financial information of these segments to decide resources allocation and assess their performance.

The two business segments are as follows:

I. Float sheet glass business: production and sales of float sheet glass; and sales of raw materials for production of float sheet glass.
II. Silicon sand business: manufacturing, selling and distribution of silicon sand.

The prices for inter-segment movements are determined by reference to the prices offered to a third party. As the Group has fully disposed the ordinary float glass business and silicon business in this year, there are no total assets and total liabilities for silicon business at the end of the reporting period.

– 45 –

1. Segments information for the year ended December 31, 2015:

Item		Float glass	Silicon sand	Elimination	Total
I.	Income from transactions
	with third parties	617,957,815.09	44,198,820.04		662,156,635.13
II.	Income from inter-segment
	transactions		1,750,231.36	-1,750,231.36
III.	Interest income	6,330,173.17	2,936.73	-1,287,000.00	5,046,109.90
VI.	Interest expense	5,986,810.41	1,997,412.04	-1,287,000.00	6,697,222.45
V.	Asset impairment loss	322,970,266.55	47,460.30		323,017,726.85
VI.	Depreciation and
	amortization expenses	104,072,161.96	2,861,769.59		106,933,931.55
VII.	Total profit (“–” for loss)	145,269,737.61	-962,714.76		144,307,022.85
VIII.	Income Tax Expenses	9,983,523.30	-87,508.05		9,896,015.25
IX.	Net profit (“–” for loss)	135,286,214.31	-875,206.71		134,411,007.60
X.	Total assets	1,314,035,081.52			1,314,035,081.52
XI.	Total liabilities	1,035,690,085.52			1,035,690,085.52

2. Segments information for the year ended December 31, 2014:

Item		Float glass	Silicon sand	Elimination	Total
I.	Income from transactions
	with third parties	630,787,807.23	29,270,462.74		660,058,269.97
II.	Income from inter-segment
	transactions		1,821,928.47	-1,821,928.47	–
III.	Interest income	6,887,586.23	4,794.20	-1,287,000.00	5,605,380.43
IV.	Interest expense	723,176.04	1,287,000.00	-1,287,000.00	723,176.04
V.	Asset impairment loss	36,254,244.22	2,338,259.26	15,000,000.00	53,592,503.48
VI.	Depreciation and
	amortization expenses	81,710,112.45	5,940,473.91		87,650,586.36
VII.	Total profit (“–” for loss)	37,592,633.15	-6,935,629.48	-14,926,779.81	15,730,223.86
VIII.	Income Tax Expenses	10,099,785.71	133,078.97		10,232,864.68
IX.	Net profit (“–” for loss)	27,492,847.44	-7,068,708.45	-14,926,779.81	5,497,359.18
X.	Total assets	1,772,733,209.67	54,057,498.95	-38,676,443.79	1,788,114,264.83
XI.	Total liabilities	1,128,464,879.25	42,440,663.62	-26,461,582.91	1,144,443,959.96

– 46 –

3. Geographic information

The following table sets out information about the geographical location of the Groups in this year, there are no total assets and total liabilities for silicon business at the end of the reporting period. The net identifiable assets on of customers is based on the location at which the goods delivered. The geographical location of the fixed assets, construction in progress and lease prepayments under non-current assets is based on the physical location of the assets; in the case of intangible assets and exploration and evaluation assets, the location of operations; in the case of interests in associates and other investments, the location of their respective operations.

Item China Total	Revenues from external customers 2015 2014 662,156,635.13 660,058,269.97 662,156,635.13 660,058,269.97	Non-current assets 31 December 2015 31 December 2014 826,682,911.68 1,270,128,923.40 826,682,911.68 1,270,128,923.40

4. Major customers

The Group has a diverse customer base. In 2015, no customer entered into transactions with amounts surpassing 10% of the Group’s income.

– 47 –

IV. TURNOVER

Turnover is the invoiced value of the goods sold to the customers after deduction of any trade discounts, VAT and added value; and the analyses of turnover are as follows:

(1) Details of operating income

			Accrual of	Accrual of
		Item	current period	last period
		Income from main operating
		activities	611,606,292.33	648,524,906.84
		Income from other operating
		activities	50,550,342.80	11,533,363.13
		Total operating income	662,156,635.13	660,058,269.97

	(2)	Itemized income from main operating activities by product
		Designation of Product	Accrual of	Accrual of
		or Labor Service	current period	last period
		Float glass	573,382,921.04	624,663,312.48
		Silicon sand	38,223,371.29	23,861,594.36
		Total	611,606,292.33	648,524,906.84

V.	NON-OPERATING INCOME
	Item		2015	2014
	Total gains on disposal of
	non-current assets		459,490.08	2,294,067.72
	Including: Gain on disposal of
		fixed assets	459,490.08	2,294,067.72
	Government grant		4,567,408.16	64,601,752.16
	Income from debt restructuring		88,665.10	237,500.00
	Others		374,561.26	15,521,196.95
	Total		5,490,124.60	82,654,516.83

– 48 –

VI. PRE-TAX PROFITS

Pre-tax profits have (deducted)/included:

(1) Financial expenses

Item Interest expense Less: interest income Exchange losses Less: exchange income Commission expenses (Interests of discounted bills) Other finance expenses Total (2) Investment income Item Income from disposal of long-term equity investment_(Note)_ Investment income from holding of available-for-sale financial assets Investment income from disposal of available-for-sale financial assets Total	2015 6,697,222.45 5,046,109.90 119,978.04 246,238.32 5,952,063.36 1,189,107.47 8,666,023.10 2015 603,457,879.81 603,457,879.81	2014 723,176.04 5,605,380.43 59,576.95 348,705.65 11,270,268.55 293,675.55
		6,392,611.01

		2014 93,394,560.90 1,224,570.83 4,223,405.41
		98,842,537.14

Note: Investment income from disposal of long-term equity investments is income from investment in 100%, 63.98%, 67%, 52% and 40.29% of equity respectively in CLFG Longhao Glass Co., Ltd., CLFG Longfei Glass Co., Ltd., Dengfeng CLFG Silicon Co., Ltd., Yinan Huasheng Mineral Products Industry Co., Ltd. and China Luoyang Float Glass (Group) Company Limited held by the Company through asset restructuring and disposal in the period, amounting to RMB603,457,879.81. Thereinto, excess deficit of the subsidiaries RMB542,419,788.45 has been transferred and taken.

– 49 –

(3) Operating costs

Item Principal business costs – Float glass – Silicon sand Other business costs – Raw materials, water and electricity, technological services, etc. Total of operating costs (4) Business tax and surcharges Item Business tax City maintenance tax Education surcharges Resource tax Others Total (5) Selling expenses Item Staff expense Depreciation expenses Transportation costs Loading and unloading expenses Material consumption Other selling expenses Total	2015 596,718,897.17 578,045,451.37 18,673,445.80 36,934,673.80 36,934,673.80 633,653,570.97 2015 187,976.80 1,039,059.56 979,727.01 1,883,220.51 4,138.40 4,094,122.28 2015 8,937,893.09 1,287,186.07 11,420,349.45 746,432.22 1,091,331.99 5,685,776.45 29,168,969.27	2014 597,057,586.61 583,766,637.34 13,290,949.27 6,868,345.50 6,868,345.50
		603,925,932.11

		2014 1,718,865.00 1,756,920.91 1,609,793.01 1,512,881.70 225.00
		6,598,685.62

		2014 12,653,774.05 1,606,222.52 8,447,765.52 479,072.31 1,509,478.15 1,888,971.30
		26,585,283.85

– 50 –

(6) Administrative expenses

Item Staff expense Depreciation of fixed assets Amortization of intangible assets Intermediary engagement fees Including: audit fee Research and development fees Taxes Other administrative expenses Total (7) Asset impairment loss Item Bad debt loss Inventory falling price loss Impairment loss of held-to-maturity investments Impairment loss of fixed assets Impairment loss of construction in process Impairment loss of intangible assets Total	2015 41,578,920.35 17,415,326.30 4,396,166.82 19,774,656.06 2,613,056.61 14,218,171.78 8,848,342.78 15,938,523.48 122,170,107.57 Accrual of current period 93,453,256.04 37,012,050.88 191,038,916.04 1,513,503.89 323,017,726.85	2014 44,682,995.87 18,921,843.59 6,852,745.30 8,477,424.57 2,369,089.54 15,201,351.58 6,637,978.62 18,026,131.23 118,800,470.76 Accrual of last period 3,734,490.01 39,547,527.92 8,164,473.10 957,502.45 1,188,510.00 53,592,503.48

Note: asset impairment losses of current period include losses on receivable creditors’ rights of RMB274,219,765.35 in the asset restructuring process of current period, including bad debt loss of RMB83,180,849.31 and impairment loss of held-to-maturity investments of RMB191,038,916.04.

– 51 –

(8) Non-operating expenses

Item Total loss on disposal of non-current assets Including: Loss on disposal of fixed assets Losses on scrapping of assets Indemnities, liquidated damages and penalties Others Total VII. INCOME TAX EXPENSES Item Current income tax based on tax laws and relevant regulations Income Tax Expenses Total	2015 14,470.37 14,470.37 25,514.21 4,039,106.78 1,948,005.29 6,027,096.65 2015 9,493,658.32 402,356.93 9,896,015.25	2014 1,628,535.23 1,628,535.23 1,589,792.46 6,109,255.13 602,030.43
		9,929,613.25

		2014 12,289,531.33 -2,056,666.65
		10,232,864.68

Note: Longhai Company, a wholly-owned subsidiary of the Company, has approved as a high-tech enterprise on 26 June 2013 by Henan Provincial Department of Science and Technology, Henan Provincial Department of Finance, Henan Provincial Office, SAT and Henan Provincial Local Taxation Bureau, and has been granted the High-tech Enterprise Certificate which remains valid for 3 years. In accordance with Paragraph II of Article 28 of the Law of the People’s Republic of China on Enterprise Income Tax, Article 93 of the Regulation on the Implementation of the Law of the People’s Republic of China on Enterprise Income Tax and the relevant requirements of the Notice of SAT concerning Implementation of Issues related to Income Tax Preferences for High-tech Enterprises (GSH [2009] No. 203), Longhai Company has paid the enterprise income tax at a tax rate of 15% in 2015. The Company and other subsidiaries are subject to income tax rate of 25%.

VIII. DIVIDENDS

The Company’s Board of Directors did not recommend distributing dividends for the year as of 31 December 2015.

– 52 –

IX. EARNINGS PER SHARE

The basic earnings per share are calculated by the merging net profits of the holders of ordinary shares in the parent company divided by weighted average of the ordinary shares issued by the parent company:

	Accrual of	Accrual of
Item	current period	last period
Net profits attributable to the ordinary
shareholders of the Company	144,482,993.72	21,159,211.92
Closing total shares	515,018,242.00	500,018,242.00
Basic earnings per share	0.2805	0.0411

Note: Pursuant to the Rules on Information Disclosure and Preparation of Companies Publicly issuing Securities No.9 – Calculation and Disclosure of Return on Equity and Earnings per Share issued by CSRC, if business merger under common control takes place during the reporting period, and the merging party issues new shares as consideration of merger on the date of merger, such shares shall be deemed as ordinary shares issued at the beginning of the merger period when the basic earnings per share are calculated at the end of the reporting period (weighted average subject to weight function of 1). When the basic earnings per share are calculated during the comparison period, such shares shall be deemed as ordinary shares issued at the beginning of the comparison period. The Company’s acquisition of the equity held by CLFG in Bengbu Company by issuing shares constitutes merger under common control, and earnings per share of current period and the comparison period have been presented according to the aforesaid requirements.

As of 31 December 2015, the Company does not have any potential diluted shares, so no diluted earnings per share are calculated.

X. ACCOUNTS RECEIVABLE AND BILLS RECEIVABLE

1. Accounts receivable

Item Account receivable Less: Provision for bad debts Net amount	Carrying amount 125,374,455.66 53,695,513.08 71,678,942.58	Opening balance 78,590,274.42 52,539,278.56
		26,050,995.86

Generally, the Group sells its products by receiving advances from customers while 30 days of credit period are granted to a few customers.

– 53 –

The aging of accounts receivable based on their recording dates is analysed below:

Aging Closing balance Within 1 year 69,081,449.10 1–2 years 2,318,641.24 2–3 years 605,589.30 3–4 years 2,675,362.38 4–5 years 2,621,120.50 Over 5 years 48,072,293.14 Total 125,374,455.66 2. Notes receivable by category Item Closing balance Bank acceptance 25,230,005.90 Total 25,230,005.90 XI. ACCOUNTS PAYABLE AND NOTES PAYABLE 1. Accounts payable by aging Item Closing balance Within 1 year (including 1 year) 17,619,403.52 Over 1 year 62,675,739.80 Total 80,295,143.32 2. Notes payable by aging Item Closing balance Bank acceptance 110,200,000.00 Total 110,200,000.00	Opening balance 21,687,314.94 2,352,408.18 2,821,542.85 3,890,179.97 1,944,439.71 45,894,388.77
	78,590,274.42

	Opening balance 900,000.00
	900,000.00

	Opening balance 74,785,951.95 198,322,306.10
	273,108,258.05

	Opening balance 109,657,336.88
	109,657,336.88

– 54 –

XII. RESERVES

1. Capital reserve

Item I. Share capital premium II. Other capital reserves Total	Opening balance 1,449,815,907.41 70,150,917.49 1,519,966,824.90	Increase in this period 99,635,988.89 2,151,063.78 101,787,052.67	Decrease in this period 699,545,168.71 1,508.00 699,546,676.71	Closing balance 849,906,727.59 72,300,473.27 922,207,200.86

Notes:

Increase in capital stock premium of current period is mainly due to acquisition of 100% of equity in Bengbu Company through asset restructuring delivery in December 2015. Capital stock premium of RMB99,635,988.89 is adjusted based on difference between net assets corresponding to 100% of equity in Bengbu Company at the end of delivery period and the paid consideration; decrease in capital stock premium of current period is mainly due to business merger under common control, and adjusts and offsets capital stock premium of RMB699,545,168.71.
Increase in other capital reserves of current period is mainly compensation of RMB2,151,063.78 paid by CLFG. In November 2015, CLFG undertakes that as to the finished product assets of higher assessment added-value in the Company’s inventory, if the realized sales amount of the finished products that will be incorporated in the Company’s carrying value dated 31 October 2014 on the asset delivery date is lower than the assessed value of the aforesaid finished product assets on 31 October 2014, then, at the same time of significant asset restructuring and asset delivery, the Company is compensated in cash, and the compensation amount is the difference between the assessed value of the aforesaid finished products as of 31 October 2014 and the realized sales amount of the asset as of the delivery date. If the finished products incorporated in the Company’s carrying value as of 31 October 2014 have been fully sold on the asset delivery date, as of 31 December 2015, CLFG has paid compensation of RMB2,151,063.78 to the Company.

2. Surplus reserve

Item Statutory surplus reserve Total	Opening balance Increase in this period Decrease in this period 51,365,509.04 51,365,509.04	Closing balance 51,365,509.04 51,365,509.04

– 55 –

3. Undistributed profits

	Closing balance	Closing balance
		Percentage of
		allocation or
Item	Amount	distribution
Undistributed profit at
the end of the previous
year before adjustment	-1,359,891,297.28
Total of adjustment of
undistributed profit at the
beginning of the year (+/-)	5,162,347.66
Undistributed profit at the
beginning of the year
after adjustment	-1,354,728,949.62
Add: Net profit attributable to
owners of parent company
during the period	144,482,993.72	–
Less: Allocation to Statutory
surplus reserve
Allocation to discretionary
surplus reserve
Dividend on ordinary
shares payable
Dividend on ordinary
shares transferred into
the share capital
Undistributed profit at the end
of the period	-1,210,245,955.90

Details of adjustment to the undistributed profits at the beginning of the period: changes to the business merger under common control affect the undistributed profits at the beginning of the period of RMB5,162,347.66.

– 56 –

XIII. MATTERS AFTER BALANCE SHEET DATE

Based on the resolutions made at the 2015 1st Extraordinary General Meeting held on 25 August 2015, and the Reply of China Securities Regulatory Commission on Approving Issuance of Shares by Luoyang Glass Company Limited to China Luoyang Float Glass (Group) Company Limited to Acquire Assets and Raise Supporting Funds (ZJXK [2015] No. 2813) on 4 December 2015, the Company has issued 32,137,519 new shares to raise the supporting funds to acquire the assets on a non-public manner. On 26 January 2016, the Company has issued 11,748,633 new shares to the First Capital Securities Co., Ltd. (acting for “Management Plan of Common Win on Quantization and Fixed Increase of Collective Assets”) and Caitong Fund Management Co., Ltd. to raise net proceeds of RMB209,624,984.30 in total (total raised funds are RMB214,999,983.90 with deduction of underwriting expenses of RMB5,374,999.60), including capital stock of RMB11,748,633.00; after deduction of issuing expenses, RMB197,876,351.30 is included in the capital reserve. Share registration and custody formalities for the A shares issued this time have been finished with Shanghai Branch of China Securities Depository and Clearing Company Limited on 2 February 2016.

Luoyang Glass Company Limited Chairman: Zhang Chong 17 March 2016

As at the date of this announcement, the Board comprises four executive Directors: Mr. Zhang Chong, Mr. Ni Zhisen, Mr. Wang Guoqiang and Mr. Ma Yan; three non-executive Directors: Mr. Zhang Chengong, Mr. Xie Jun and Mr. Tang Liwei; and four independent non-executive Directors: Mr. Jin Zhanping, Mr. Liu Tianni, Mr. Ye Shuhua and Mr. He Baofeng.

For identification purposes only

– 57 –

AI assistant

RoboSense Technology Co., Ltd — Annual Report 2016

50628_rns_2016-03-18_bee330a4-6127-4bad-9e66-d9d3c2ebee56.pdf

＊

SUMMARY OF 2015 ANNUAL REPORT

I. IMPORTANT NOTICE

1.5 Company’s Profile

II. BRIEF INTRODUCTION TO MAIN SERVICES OR PRODUCTS DURING THE REPORTING PERIOD

III. SUMMARY OF ACCOUNTING DATA AND FINANCIAL INDICATORS

IV. MAJOR QUARTERLY FINANCIAL INDICATORS IN 2015

V. INFORMATION OF SHAREHOLDERS

Shareholdings of top 10 Shareholders

Shareholdings of top 10 holders of shares not subject to trading moratorium

Nil

5.2 Block Diagram on Equity and Control Relationship among the Company and Controlling Shareholders, and Actual Controllers

VI. DISCUSSION AND ANALYSIS OF THE MANAGEMENT

6.1 Discussion and analysis on the Company’s operations during the reporting period

Main works in 2015

6.2 Analysis of Principal Businesses

6.2.2 Revenue

6.2.3 Costs

By industry

By products

(2) Major Suppliers

6.2.4 Expenses

6.2.5 R&D expenditures

6.2.6 Cash flow

6.2.7 Others

6.3 Analysis of operations by industry, products or regions

6.3.1 Statement of the principal operations by industry and products

Principal operations by industry

Principal operations by products

6.3.2 Principal operations by regions

6.4 Analysis of assets and liabilities

6.4.1 Analytical statement of assets and liabilities

6.4.2 Explanation for changes in assets measured by fair value and measure nature of major assets

6.5 Analysis of core competitiveness

6.6 Analysis of Investment

6.6.1 Overall Analysis of External Equity Investment

6.6.2 Analysis of major subsidiaries and investee companies

6.7 Continuous connected transactions in 2015

6.8 Industry competition pattern and development trend

6.9 Future development strategies of the Company

6.10 Operation plans and measures

3. To enhance technology management and innovation, and build up new brand image

4. To innovate marketing mode, expand channels, increase selling price and increase benefit

5. To deeply improve management and lay a solid foundation

6.11 Potential Risks

1. Risks arising from policies and the industry

2. Risks arising from product price

3. Risks arising from price of raw materials

4. Financial Risks

5. Technological risks

6.12 Profit distribution or proposal for conversion of capital reserve

6.13 Repurchase, Sale and Redemption of Shares

6.14 Compliance with the Corporate Governance Code

6.15 Audit Committee

7 MATTERS RELATED TO FINANCIAL REPORT

Item

Consolidated Statement of Changes in Equity Prepared by: Luoyang Glass Company Limited

I. COMPANY PROFILE

II. IMPORTANT ACCOUNTING POLICIES

1. Basis for preparation of financial statements

2. Accounting period

3. Measurement currency

4. Preparation method of consolidated financial statements

III. SEGMENT REPORTING

(I) Segment reporting

1. Segments information for the year ended December 31, 2015:

2. Segments information for the year ended December 31, 2014:

3. Geographic information

4. Major customers

IV. TURNOVER

(1) Details of operating income

VI. PRE-TAX PROFITS

(1) Financial expenses

(3) Operating costs

(6) Administrative expenses

(8) Non-operating expenses

VIII. DIVIDENDS

RoboSense Technology Co., Ltd Annual Report 2016