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 <==

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ANNOUNCEMENT IN RESPECT OF THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE REORGANISATION

Luoyang Glass Company Limited (the “ Company ”) and all members of the board (the “ Board ”) of directors (the “ Directors* ”) of the Company hereby warrant the truthfulness, accuracy and completeness of the contents of this announcement, and accept several and joint responsibilities for any false information, misleading statements or material omissions in this announcement.

This announcement is made pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Reference is made to the circular of the Company dated 11 October 2017 in relation to, among other things, its (a) very substantial acquisitions and connected transactions; (b) the proposed A share placing; and (c) application for whitewash waiver (the “ Circular ”). Unless otherwise specified, capitalised terms used herein shall have the same meaning as those defined in the Circular.

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Since the Reorganisation of the Company constitutes a significant asset restructuring of listed companies according to the relevant PRC laws and regulations, the Company is required to prepare the pro forma consolidated financial statements of the Company for the Reorganisation according to the relevant requirements of the “Administrative Measures for Significant Asset Restructuring of Listed Companies (《上市公司重大資產重組管理辦法》)” and the “Standards concerning the Content and Format of Information Disclosure by Companies Offering Securities to the Public No. 26 – Significant Asset Restructuring of Listed Companies (《公開發行證券的公司信息披露內容與格式準則第 26 號 – 上市公司重大資產重組》)” (Revised in 2017) of the CSRC.

The Appendix I to this announcement is the “Auditors’ Report ( 審計報告 )” (WUYIGE Shen Zi [2018] No. 2-00006) dated 17 January 2018 issued by WUYIGE CERTIFIED PUBLIC ACCOUNTANTS LLP., which contains the pro forma consolidated financial statements of the Company and its subsidiaries for the eleven months ended 30 November 2017 and for the year ended 31 December 2016, prepared in accordance with the PRC Accounting Standards for Business Enterprises, for the purpose of submission by the Company to the CSRC in connection with the significant asset restructuring documents. Such report is prepared in Chinese and the English translation is provided for reference only.

(Unless otherwise stated, the figures contained in this announcement are denominated in Renminbi.)

By order of the Board Luoyang Glass Company Limited* Zhang Chong Chairman

Luoyang, the PRC 18 January 2018

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; one non-executive Director: Mr. Xie Jun; and four independent non-executive Directors: Mr. Jin Zhanping, Mr. Liu Tianni, Mr. Ye Shuhua and Mr. He Baofeng.

For identification purposes only

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APPENDIX I

**Luoyang Glass Company Limited* Auditors’ Report WUYIGE Shen Zi [2018] No. 2-00006**

大信會計師事務所（特殊普通合夥） WUYIGE CERTIFIED PUBLIC ACCOUNTANTS LLP.

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AUDITORS’ REPORT

WUYIGE Shen Zi [2018] No. 2-00006

To the Shareholders of Luoyang Glass Company Limited*

I. AUDIT OPINION

We have audited the accompanying pro forma financial statements of Luoyang Glass Company Limited (the “ Company* ”) prepared in accordance with the basis of preparation set out in note 3 thereto, which comprise the pro forma consolidated balance sheets of the Company as at 30 November 2017 and 31 December 2016, the pro forma consolidated income statements of the Company from January to November 2017 and for the year 2016 and the notes to the pro forma financial statements.

In our opinion, the pro forma financial statements of the Company have been prepared, in all material aspects, in accordance with the requirements of the Accounting Standard for Business Enterprises and the basis of preparation as set out in the note 3 to the accompanying pro forma financial statements, which give a fair view of the pro forma financial position of the Company as at 30 November 2017 and 31 December 2016 and the pro forma operating results of the Company from January to November 2017 and for the year 2016.

II. BASIS OF AUDIT OPINION

We conducted our audit in accordance with the provisions of the Chinese Certified Public Accountants Auditing Standards. The section headed “Certified Public Accountants’ Responsibility for Audit of Pro Forma Financial Statements” in the auditors’ report further elaborated on our responsibilities under these standards. In accordance with the China Code of Ethics for Certified Public Accountants, we are independent of the Company and perform other ethical responsibilities.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide the basis for our audit opinion.

III. MANAGEMENT’S AND GOVERNING BODIES’ RESPONSIBILITY FOR THE PRO FORMA FINANCIAL STATEMENTS

The management of the Company (hereinafter referred to as the “ Management ”) is responsible for preparing and fairly presenting the pro forma financial statements in accordance with the Accounting Standards for Business Enterprises and designing, implementing and maintaining necessary internal controls so that there are not material misstatement in the pro forma financial statements due to fraud or error.

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In preparing the pro forma financial statements, the Management is responsible for assessing the ability of the Company to continue as a going concern, disclosing relevant matters and applying the going concern assumption, unless the Management plans to liquidate the Company, cease operation or have no other realistic alternatives.

The governing bodies are responsible for monitoring the financial reporting process of the Company.

IV. CERTIFIED PUBLIC ACCOUNTANTS’ RESPONSIBILITY FOR AUDIT OF PRO FORMA FINANCIAL STATEMENTS

Our objective is to obtain reasonable assurance as to whether the overall pro forma financial statements are free from material misstatement due to fraud or error, and to provide an auditors’ report which contains our audit opinion. Reasonable assurance is a high level of assurance, but there is not a guarantee that an audit performed in accordance with the auditing standards will always detect a material misstatement when it exists. Misstatements can be caused by fraud or error, and are generally considered to be material if, individually or in the aggregate, they could reasonably be expected to influence the economic decision made by the users of the pro forma financial statements on the basis of the financial statements.

In carrying out the audit in accordance with the auditing standards, we exercise professional judgement and maintain professional scepticism. At the same time, we also perform the following tasks:

(I) Identify and assess the risk of material misstatement of financial statements whether due to fraud or error, design and implement audit procedures to address these risks, and obtain adequate and appropriate audit evidence to provide a basis for the audit opinion. As fraud may involve collusion, forgery, intentional omission, misrepresentation or override of internal control, the risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error.
(II) Understand the internal controls related to the audit to design appropriate audit procedures, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
(III) Evaluate the appropriateness of the accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.

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(IV) Conclude on the Management’s appropriateness of using the going concern assumption. At the same time, based on the audit evidence obtained, conclusions are drawn as to whether a material uncertainty exists related to events or conditions that may cast significant doubts on the ability of the Company to continue as a going concern. If we conclude that there exists a material uncertainty, we are required to draw the attention of the users of the statements in the auditors’ report to the relevant disclosures in the pro forma financial statements. If the disclosures are not sufficient, we shall issue an unqualified opinion. Our conclusion is based on the information available up to the date of the auditors’ report. However, future events or circumstances may cause the Group to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content, including disclosures, of the pro forma financial statements and whether the pro forma financial statements have been fairly reflected the relevant transactions and events.
(VI) Obtain adequate and appropriate audit evidence regarding the financial information of entities or business activities in the Group in order to express an audit opinion on the pro forma financial statements. We are responsible for directing, supervising and implementing the Group’s audit and assume full responsibility for the audit opinion.

We communicate with the governing bodies on the issues such as the planned scope of the audit, the time schedule and significant audit findings, including any significant deficiencies in internal control that they identify during the audit.

V. OTHER EXPLANATIONS

This report is to be used solely by the Company for submissions to the China Securities Regulatory Commission in connection with its significant assets restructuring, and shall not be used for any other purpose. We and our certified public accountants who performed this engagement take no responsibility for any consequences arising from inappropriate use of this report.

WUYIGE Certified Public Accountants LLP. Chinese Certified Public Accountant: Qiao Guanfang

Chinese Certified Public Accountant: Wang Haizhou

Beijing, the PRC 17 January 2018

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PRO FORMA CONSOLIDATED BALANCE SHEET

Prepared by: Luoyang Glass Company Limited*

Unit: RMB Yuan

		30 November	31 December
Items	Notes	2017	2016
Current Assets:
Cash and cash equivalents	VII (1)	135,569,904.79	248,020,020.85
Financial assets at fair value through
profit or loss
Derivative financial assets
Bills receivable	VII (2)	434,506,619.09	104,356,977.54
Accounts receivable	VII (3)	561,809,983.47	356,764,683.62
Advances to suppliers	VII (4)	17,992,822.73	9,150,661.72
Interests receivable
Dividends receivable
Other receivables	VII (5)	60,407,226.42	109,961,482.90
Inventories	VII (6)	196,023,656.75	225,066,290.40
Classified as assets held for sale
Non-current assets due within one year
Other current assets	VII (7)	38,615,555.55	66,898,919.96
Total current assets		1,444,925,768.80	1,120,219,036.99

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Items Notes Non-current assets: Available-for-sale financial assets VII (8) Held-to-maturity investments Long-term receivables VII (9) Long-term equity investments Investment properties Fixed assets VII (10) Construction in progress VII (11) Construction materials Disposal of fixed assets Productive biological assets Gas assets Intangible assets VII (12) Development expenditure Goodwill Long-term deferred expenses VII (13) Deferred tax assets VII (14) Other non-current assets VII (15) Total non-current assets Total assets	30 November 2017 55,000,000.00 1,778,400,760.70 239,258,201.21 13,980.58 317,142,561.22 5,774,976.67 3,230,434.47 2,198,370.00 2,401,019,284.85 3,845,945,053.65	31 December 2016 55,000,000.00 1,885,812,876.39 95,120,361.81 268,594,635.93 3,515,290.90 5,074,137.91 5,838,860.00 2,318,956,162.94 3,439,175,199.93

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30 November 31 December Items Notes 2017 2016

Current liabilities:
Short-term borrowings	VII (16)	832,690,250.00	376,100,000.00
Financial liabilities at fair value through
profit or loss
Derivative financial liabilities
Bills payable	VII (17)	163,979,031.25	172,586,473.44
Accounts payables	VII (18)	526,919,760.86	513,315,481.35
Receipts in advance	VII (19)	22,779,667.76	14,665,222.41
Employee compensation payable	VII (20)	18,562,786.57	36,128,119.69
Tax payables	VII (21)	29,768,529.26	22,497,684.36
Interests payables	VII (22)	6,244,875.00	1,769,060.99
Dividends payables
Other payables	VII (23)	406,213,476.17	228,094,542.29
Classified as liabilities held for sale
Non-current liabilities due within one year	VII (24)	161,947,948.30	521,207,062.91
Other current liabilities
Total current liabilities		2,169,106,325.17	1,886,363,647.44

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		30 November	31 December
Items	Notes	2017	2016
Non-current liabilities:
Long-term borrowings	VII (25)	393,334,134.45	307,721,374.23
Debentures payable
Long-term payables
Long-term employee compensation payable
Special payables
Estimated liability
Deferred income	VII (26)	8,336,926.64	19,290,781.82
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities		401,671,061.09	327,012,156.05

Total Liabilities		2,570,777,386.26	2,213,375,803.49

Owners’ equity:
Total owners’ equity attributable to parent
company		1,178,118,866.37	1,132,672,674.95
Minority interests		97,048,801.02	93,126,721.49
Total owners’ equity		1,275,167,667.39	1,225,799,396.44

Total liabilities and owners’ equity		3,845,945,053.65	3,439,175,199.93

	Person in charge of	Person in charge of
Legal representative:	accounting:	accounting department:
Zhang Chong	Ma Yan	Chen Jing

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PRO FORMA CONSOLIDATED INCOME STATEMENT

Prepared by: Luoyang Glass Company Limited*

Unit: RMB Yuan

			January to
			November
Items		Notes	2017	2016
I.	Operating revenue	VII (27)	1,348,295,733.22	1,167,664,709.74
	Less: Operating cost	VII (27)	1,015,669,967.05	943,672,429.92
	Tax and surcharges	VII (28)	18,655,845.40	11,904,922.43
	Selling expenses	VII (29)	49,483,368.75	36,984,647.94
	Administrative expenses	VII (30)	155,455,859.09	138,823,047.83
	Financial expenses	VII (31)	70,939,812.55	41,291,378.06
	Impairment losses of assets	VII (32)	18,523,812.33	22,716,501.72
	Add: Gains from changes in fair value
	Investment income
	Including: Gains from investment
	in associates and
	joint ventures
	Other gains	VII (33)	49,090,026.52
II.	Operating profit (loss is represented
	by “-”)		68,657,094.57	-27,728,218.16
	Add: Non-operating income	VII (34)	4,544,134.81	108,295,260.83
	Including: Gains on disposal of
	non-current assets	VII (34)	83,418.35	282,222.82
	Less: Non-operating expense	VII (35)	265,942.12	4,459,894.98
	Including: Loss on disposal of
	non-current assets	VII (35)		15,875.60
III.	Total profit (total loss is represented
	by “-”)		72,935,287.26	76,107,147.69
	Less: Income tax expenses	VII (36)	23,567,016.31	16,290,022.67
IV.	Net profit (net loss is represented
	by “-”)		49,368,270.95	59,817,125.02
	Including: Net profit attributable to the
	owners of the parent
	company		45,446,191.42	59,660,718.95
	Minority interests		3,922,079.53	156,406.07

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		January to
		November
Items	Notes	2017	2016

V. Other comprehensive income, net of tax

Other comprehensive income attributable to owners of the parent company, net of tax Other comprehensive income attributable to minority interests, net of tax

VI. Total comprehensive income 49,368,270.95 59,817,125.02 Total comprehensive income attributable to owners of the parent company 45,446,191.42 59,660,718.95 Total comprehensive income attributable to minority interests 3,922,079.53 156,406.07 VII. Earnings per share (I) Basic earnings per share 0.08 0.11 (II) Diluted earnings per share Person in charge of Person in charge of Legal representative: accounting: accounting department: Zhang Chong Ma Yan Chen Jing

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NOTES TO THE PRO FORMA FINANCIAL STATEMENTS

(All monetary amounts in these notes are expressed in RMB unless otherwise stated)

I. COMPANY PROFILE

Luoyang Glass Company Limited (the “ Company ”) was incorporated in the People’s Republic of China (the “ PRC* ”) as a joint stock limited company.

The Company was established as part of the restructuring plan of China Luoyang Float Glass Group Company Limited (“ CLFG* ”), a state-owned enterprise. Pursuant to approvals from relevant PRC authorities including the State Commission for Economic Restructuring and the National Administration Bureau of State-owned Assets, CLFG, as the sole promoter, established the Company on 6 April 1994. At the time of its establishment, the Company had a registered capital of RMB400,000,000 divided into 400,000,000 state-owned legal person shares of RMB1.00 each, which was paid up in full by CLFG by way of transfer of its principal business undertakings and subsidiaries together with the relevant assets and liabilities.

On 29 June 1994, the Company issued 250,000,000 H shares at the issue price of HK$3.65 per share, which were listed on The Stock Exchange of Hong Kong Limited on 8 July 1994.

Pursuant to the plan disclosed in the H shares prospectus and with the approval from the Securities Commission of the State Council, the Company issued 40,000,000 A shares to the public in the PRC and 10,000,000 A shares to the employees of the Company on 29 September 1995 at RMB5.03 each, which were listed on the Shanghai Stock Exchange on 30 October 1995 and 10 May 1996, respectively.

In June 2006, pursuant to Administrative Measures for Equity Division Reform of Listed Companies ( 上市公司股權分置改革管理辦法 ) issued by the China Securities Regulatory Commission (“ CSRC ”) and Operational Guideline for Equity Division Reform of Listed Companies ( 上市公司股權分置改革業務操作指引 ) issued by the Shanghai Stock Exchange, CLFG took its 21,000,000 shares in the Company as consideration to compensate holders of tradable A-shares of the Company for the purpose of getting the circulation right to the Company’s shares after the proposal was agreed by shareholders at a general meeting of the Company and approved by the Ministry of Commerce of the PRC with the document Shang Zi Pi [2006] No. 1232. Upon completion of the equity division reform, CLFG held 379,000,000 shares of the Company.

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On 30 November 2006, the Intermediate People’s Court of Luoyang, Henan Province made an adjudication Luo Zhi Zi [2007] No. 18–32 ((2007) 洛執字第 18–32 號 ) ordering CLFG to pay off its debts of RMB629,942,543 owning to the Company with the 199,981,758 A shares held by it in the Company. Upon change of registration for such shares at China Securities Depository & Clearing Corp. Ltd. Shanghai Branch on 6 December 2006, the number of shares of the Company held by CLFG was changed to 179,018,242 and the total share capital of the Company was changed to 500,018,242 shares.

On 3 September 2010, CLFG sold down 20,000,000 unrestricted tradable shares of the Company through the block trading system of Shanghai Stock Exchange, accounting for approximately 4% of the Company’s total share capital. After the sell-down, CLFG held 159,018,242 unrestricted tradable shares of the Company, accounting for 31.8% of the Company’s total share capital.

Pursuant to the resolution of 2015 first extraordinary general meeting of the Company held on 25 August 2015, and the Approval for Issuance of Shares by Luoyang Glass Company Limited to China Luoyang Float Glass (Group) Company Limited for Assets Acquisition and Raising of Supporting Funds (Zheng Jian Xu Ke [2015] No. 2813) issued by the CSRC on 4 December 2015, the Company issued 15,000,000 new shares to CLFG for the purpose of purchasing relevant assets in December 2015. On 26 January 2016, the Company issued 11,748,633 RMB-denominated ordinary shares of RMB1.00 each to specific investors at a fixed price. After this issuance, the total share capital of Company comprised 526,766,875 shares.

On 17 October 2016, CLFG transferred its 69,000,000 shares in the Company to Bengbu Institute by way of agreement. Upon completion of the transfer, the de facto controller of the Company remained unchanged. CLFG held 105,018,242 shares of the Company, accounting for 19.94% of the Company’s total share capital. Bengbu Institute held 69,000,000 shares of the Company, accounting for 13.10% of the Company’s total share capital.

The principal activities of the Company and its subsidiaries (the “ Group ”) are manufacturing and sale of ultra-thin glass substrates. The scope of business includes manufacturing of glass and relevant sophisticated processed goods, integrated mechanical equipment, electric appliances and accessories, sale of selfproduced products, provision of technical consultancy and technical services.

– 14 –

Registration Number/Unified Social Credit Code: 914103006148088992

Legal representative: Zhang Chong

Registered address and address of head office: No. 9, Tang Gong Zhong Lu, Xigong District, Luoyang

As of 30 November 2017, the total share capital of the Company comprised 526,766,875 shares.

These financial statements were approved for disclosure by the board of directors of the Company.

II. SIGNIFICANT ASSETS RESTRUCTURING

(I) Plan for significant assets restructuring

Pursuant to the plan for assets restructuring, the Company proposed to acquire an aggregate of 100% equity interest in CNBM (Hefei) New Energy Company Limited (“ Hefei New Energy ”) held by China Luoyang Float Glass (Group) Company Limited (“ CLFG ”) and Hefei HighTech Construction Investment Group Company (“ Hefei High-Tech ”), an aggregate of 100% equity interest in CNBM (Tongcheng) New Energy Materials Company Limited (“ Tongcheng New Energy ”) held by Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd. (“ Huaguang Group ”), CNBM Bengbu Design & Research Institute for Glass Industry (“ Bengbu Institute ”) and China Triumph International Engineering Co., Ltd. (“ International Engineering ”), and an aggregate of 70.99% equity interest in CNBM (Yixing) New Energy Company Limited (“ Yixing New Energy ”) held by Triumph Technology Group Company (“ Triumph Group ”), Yixing Environmental Technology Innovation Venture Investment Company Limited (“ Yixing Environmental Technology ”) and GCL System Integration Technology Co., Ltd. (“ GCL System Integration ”), and to issue shares to no more than 10 specific investors including Triumph Group to raise supporting funds of up to RMB511,865,700 (“ Restructuring ” or “ Transaction* ”).

The considerations for these underlying assets were determined by reference to the valuation results set out in the Asset Valuation Reports issued by Beijing Pan-China Assets Appraisal Co., Ltd. (“ Beijing Pan-China ”) taking 31 October 2016 as valuation base date and filed with competent stateowned assets supervision and administration authorities.

– 15 –

As at 31 October 2016, i.e. the valuation base date for the underlying assets of the Transaction, the appraised values of 100% equity interest in Hefei New Energy, 100% equity interest in Tongcheng New Energy and 100% equity interest in Yixing New Energy were RMB307,824,981.58, RMB221,651,108.68 and RMB345,238,266.81, respectively. By reference to the appraised values and upon negotiations among the parties concerned, the considerations for 100% equity interest in Hefei New Energy, 100% equity interest in Tongcheng New Energy and 70.99% equity interest in Yixing New Energy were determined at RMB307,825,000, RMB221,651,200, and RMB245,089,500, respectively. The issue price of the shares to be issued for acquisition of the assets is RMB23.45 per share, which is not less than 90% of the average trading price of A shares of the Company over the 20 trading days preceding the price determination date (i.e. 8 February 2017, being the announcement date of the board resolution in respect of the Transaction). The final issue price is subject to approval by the CSRC.

Based on the consideration for 100% equity interest in Hefei New Energy and the issue price, the number of shares to be issued to each of CLFG and Hefei High-Tech is 10,097,588 and 3,029,276, respectively, totaling 13,126,864 shares.

Based on the consideration for 100% equity interest in Tongcheng New Energy and the issue price, the number of shares to be issued to each of Huaguang Group, Bengbu Institute and International Engineering is 6,377,490, 2,365,976 and 708,610, respectively, totaling 9,452,076 shares.

Based on the consideration for 70.99% equity interest in Yixing New Energy and the issue price, the number of shares to be issued to each of Triumph Group, Yixing Environmental Technology and GCL System Integration is 7,508,991, 1,877,247 and 1,065,338, respectively, totaling 10,451,576 shares.

– 16 –

(II) Basic information on assets to be acquired

1. Hefei New Energy

Hefei New Energy was invested and established by China Triumph International Engineering Co., Ltd. ( 中國建材國際工程集團有限公司 ) and Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd. ( 安徽華光光電材料科技集團有限公司 ) on 4 March 2011, and it had obtained the Enterprise Business License with an operating period commencing on 4 March 2011 and expiring on 4 March 2061 issued by Hefei Administration for Industry & Commerce.

At its inception, Hefei New Energy had a registered capital of RMB100,000,000.00, and as verified by the Capital Verification Report (Wan Zhong An Yan Zi [2011] No. 071) issued by Anhui Zhongan Certified Public Accountants Co., Ltd. ( 安徽中安會計師事務所有限公司 ) on 2 March 2011, it had received an initial contribution amounting to RMB20,000,000.00. On 14 November 2011, pursuant to the resolutions passed at its general meeting, Hefei New Energy increased its registered capital from RMB100,000,000.00 to RMB130,000,000.00, and the increase in paid-in capital of RMB110,000,000.00 had been verified by the Capital Verification Report (Anhui Yong He Yan Zi [2011] No. 093) issued by Anhui Yong He Certified Public Accountants Ltd. ( 安徽永合會計師事務所有限公司 ) on 29 November 2011. Upon such change in registered capital, Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd. ( 安徽華光光電材料科技集團有限公司 ), China Triumph International Engineering Co., Ltd. ( 中國建材國際工程集團有限公司 ) and Hefei High-Tech Construction Investment Group Company ( 合肥高新建設投資集團公司 ) had contributed RMB70,000,000.00, RMB30,000,000.00 and RMB30,000,000.00, respectively, representing 53.84%, 23.08% and 23.08% of the registered capital, respectively. On 12 July 2014, pursuant to the resolutions passed at the general meeting of Hefei New Energy, Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd. ( 安徽華光光電材料科技集團有限公司 ) transferred its 53.84% equity interests in Hefei New Energy to China Luoyang Float Glass (Group) Company Limited ( 中國洛陽浮法玻璃集團有限責任公司 ), and such equity transfer had been registered with the administration for industry & commerce on 20 August 2014. On 20 October 2014, pursuant to the resolutions passed at the general meeting of Hefei New Energy, China Triumph International Engineering Co., Ltd. ( 中國建材國際工程集團有限公司 ) transferred its 23.08% equity interests in Hefei New Energy to China Luoyang Float Glass (Group) Company Limited* ( 中國洛陽浮法玻璃集團有限責任公司 ), and such equity transfer had been registered with the administration for industry & commerce on 30 October 2014.

– 17 –

Legal representative: Zhang Chong

Corporate domicile: 601 Changning Avenue, High-tech Zone, Hefei

Unified social credit code: 91340100570418775Y

The registered capital is RMB130,000,000.00, among which, CLFG and Hefei High-Tech Construction Investment Group Company ( 合肥高新建設投資集團公司 ) had contributed RMB100,000,000.00 and RMB30,000,000.00, respectively, representing 76.92% and 23.08% of the registered capital, respectively. The controlling shareholder is China Luoyang Float Glass (Group) Company Limited ( 中國洛陽浮法玻璃集團有限責任公司 ).

Its scope of business mainly includes research, development, production and sales of solar photovoltaic glass and further processed glass; import and export of technologies; and investment in solar photovoltaic industry related enterprises.

2. Tongcheng New Energy

Tongcheng New Energy is a company with limited liability established with joint contributions made by Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd. ( 安徽華光光電材料科技集團有限公司 ), Anhui Hengchang Group Co., Ltd. ( 安徽恒昌集團有限公司 ) and China Triumph International Engineering Co., Ltd. ( 中國建材國際工程集團有限公司 ). On 24 December 2010, it was issued the Enterprise Business License with the registration number of 340881000046390(1-1) by Tongcheng Administration for Industry & Commerce. At its inception, Tongcheng New Energy had a registered capital of RMB100 million, among which, Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd. ( 安徽華光光電材料科技集團有限公司 ), Anhui Hengchang Group Co., Ltd. ( 安徽恒昌集團有限公司 ) and China Triumph International Engineering Co., Ltd. ( 中國建材國際工程集團有限公司 ) had contributed RMB50 million, RMB40 million and RMB10 million, respectively, representing 50%, 40% and 10% of the registered capital, respectively.

On 4 September 2013, it was resolved at the general meeting of Tongcheng New Energy that Anhui Hengchang Group Co., Ltd. ( 安徽恒昌集團有限公司 ) was approved to transfer all its 40% equity interests in Tongcheng New Energy to Tongcheng Construction Investment and Development Co., Ltd. ( 桐城市建設投資發展有限責任公司 ).

– 18 –

On 28 August 2016, it was resolved at the general meeting of Tongcheng New Energy that Tongcheng Construction Investment and Development Co., Ltd. ( 桐城市建設投資發展有限責任公司 ) was approved to transfer all its 40% equity interests in Tongcheng New Energy to Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd. ( 安徽華光光電材料科技集團有限公司 ).

On 21 October 2016, it was resolved at the general meeting of Tongcheng New Energy that the registered capital was approved to increase from RMB100 million to RMB133.38898 million. This increase in registered capital of RMB33.38898 million had been fully subscribed for by a new shareholder CNBM Bengbu Glass Industry Design & Research Institute Co., Ltd. ( 中建材蚌埠玻璃工業設計研究院有限公司 ). Upon such change in equity interests, Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd. ( 安徽華光光電材料科技集團有限公司 ), China Triumph International Engineering Co., Ltd. ( 中國建材國際工程集團有限公司 ) and CNBM Bengbu Glass Industry Design & Research Institute Co., Ltd. had contributed RMB90 million,RMB10 million and RMB33.38898 million, respectively, representing 67.47%, 7.5% and 25.03% of the registered capital, respectively.

Unified social credit code: 91340881567507232G

Corporate domicile: North Third Road of Tongcheng Economic Development Zone, Anqing, Anhui

Legal representative: Mao Lingwen

Registered capital: RMB133.38898 million

Scope of business: research, development, production and sales of solar photovoltaic, photothermal materials, components and ancillary products; and self-operated and commissioned import and export business for products and technologies (other than products and technologies whose dealing, import or export is restricted or prohibited to operate by the State).

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3. Yixing New Energy

Yixing New Energy is a company with limited liability established with joint contributions made by Triumph Technology Group Company, Far East Optoelectronics Company Limited ( 遠東光電股份有限公司 ), Yixing Environmental Technology Innovation Venture Investment Company Limited ( 宜興環保科技創新創業投資有限公司 ) and GCL System Integration Technology Co., Ltd. ( 協鑫集成科技股份有限公司 ). On 28 October 2016, it was issued a business license with the unified social credit code of 91320282MA1MXWBJ1H by Yixing Market Supervision and Administration Bureau. At its inception, Yixing New Energy had a registered capital of RMB313.7 million, among which, Triumph Technology Group Company, Far East Optoelectronics Company Limited, Yixing Environmental Technology Innovation Venture Investment Company Limited and GCL System Integration Technology Co., Ltd. had contributed RMB160,000,000.00, RMB91,000,000.00, RMB40,000,000.00 and RMB22,700,000.00, respectively, representing 51.00%, 29.01%, 12.75% and 7.24% of the registered capital, respectively.

Corporate domicile: No. 1 Xinyunlai Road, Taoyuan Development Zone, Gaocheng Town, Yixing

Legal representative: Zhang Chong

Registered capital: RMB313.7 million

Scope of business: development, research, production and sales of photovoltaic glass. (Businesses that require approval under laws shall only be carried out with the approval from the relevant authorities)

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III. BASIS OF PREPARATION OF PRO FORMA FINANCIAL STATEMENTS

As the Reorganisation constitutes a significant assets restructuring of the listed companies, the pro forma consolidated financial statements are required to be prepared with regard to the financial statements of the business of the Company after Reorganization pursuant to requirements under Administrative Measures on Significant Assets Restructuring of Listed Companies ( 上市公司重大資產重組管理辦法 ) and the Standards Concerning the Contents and Formats of Information Disclosure by Companies Offering Securities to the Public No. 26 – Significant Asset Restructuring of Listed Companies (revised in 2017) ( 公開發行證券的公司信息披露內容與格式準則第 26 號 – 上市公司重大資產重組 ) of China Securities Regulatory Commission.

Assuming that the purchase of the respective 100% equity interest in Hefei New Energy and Tongcheng New Energy by issuance of shares was completed on 1 January 2016 and the purchase of 70.99% equity interest in Yixing New Energy (incorporated in October 2016) by issuance of shares was completed on 31 October 2016, under the circumstances where the Company maintains sustained operation as a prerequisite, based on the shareholding structure after the Reorganisation, the pro forma financial statements are prepared on the following assumptions:

That the relevant resolutions contained in Note 2 to the pro forma financial statements be approved by China Securities Regulatory Commission.
Assuming that as at 1 January 2016, the Company completed the issuance of 22,578,940 A Shares of par value of RMB1 at the issue price of RMB23.45 per share for purchase of the respective 100% equity interest in Hefei New Energy and Tongcheng New Energy, and went through all procedures in relation to the asset purchase on 1 January 2016; assuming that as at 31 October 2016 the Company completed the issuance of 10,451,576 A Shares of par value of RMB1 at the issue price of RMB23.45 per share for purchase of 70.99% equity interest in Yixing New Energy, and went through all procedures in relation to the assets purchase on 31 October 2016;
The pro forma financial statements are based on the 2016 Annual Financial Statements and the financial statements from January to November 2017 of the Company having been audited by WUYIGE Certified Public Accountants LLP., and the respective financial statements for the assets to be purchased for the year 2016 and from January to November 2017 having been audited by WUYIGE Certified Public Accountants LLP., and prepared using important accounting policies and estimates as well as preparation method of consolidated financial statements as described in the Notes.

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The abovementioned financial statements for the assets to be purchased refer to the financial statements of Yixing New Energy from 28 October 2016 (the “ Incorporation Date ”) to 31 December 2016 and from January to November 2017 and the respective financial statements of Hefei New Energy and Tongcheng New Energy for the year 2016 and from January to November 2017.

Given that the Company, Hefei New Energy, Tongcheng New Energy and Yixing New Energy are all controlled by Triumph Technology Group Company ( 凱盛科技集團有限公司 ) before and after the transactions, the pro forma consolidated financial statements have therefore followed relevant requirements of accounting treatments concerning business combination under common control.
The pro forma financial statements take no account of fund raising for the Reorganisation by way of non-public share issue.
The pro forma financial statements take no account of relevant taxes and charges that might incur during the Reorganisation.
As the preparation of the pro forma financial statements is in consideration of the assumption that the transactions have been completed during the relevant periods, and for the abovementioned specific purposes, the pro forma financial statements do not include the pro forma statement of cash flows and the pro forma statement of changes in equity. In preparing the pro forma consolidated balance sheet, only total equity attributable to shareholders of the parent company and total minority interests are presented instead of any detailed breakdown in the segment of shareholders’ equity.

As the Reorganization plan is subject to ratification of the CSRC, the final approved reorganization plan may be deviant from the abovementioned assumptions used in the pro forma financial statements in respect of the actual share issue and the consideration thereof as well as the issuance costs of the Company, etc. Therefore, adjustments will be made to relevant assets and liabilities accordingly when finally recorded in the accounts after the completion of the Reorganisation.

IV. STATEMENT ON COMPLIANCE WITH ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES

The pro forma financial statements of the Company were prepared in accordance with Accounting Standards for Business Enterprises and the basis of preparation contained in Note 3, reflecting the Company’s pro forma financial positions, operating results and other relevant information on a true and complete basis.

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V. IMPORTANT ACCOUNTING POLICIES AND ESTIMATES

(I) Accounting period

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

(II) Operating cycle

The normal operating cycle of the Company is 12 months in a year, and the operating cycle is determined as the classification criterion of the liquidity of assets and liabilities.

(III) Functional currency

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

(IV) Business combination

1. Enterprise merger under common control

In case the consideration for the long-term equity investments formed in the enterprise merger under common control is paid by way of cash, transfer of non-cash assets or assumption of debts, the Company will regard the share of carrying amount of the net assets of the merged party in the ultimate controller’s consolidated financial statements obtained as the initial investment cost of long-term equity investments as at the date of combination. In case the consideration for the combination is paid by issuance of equity instruments, the aggregate nominal value of shares issued will be deemed as the share capital. The difference between the initial investment cost of long-term equity investments and the carrying amount of consideration (or aggregate nominal value of shares issued) for the combination shall be adjusted against capital reserve. If the capital reserve is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.

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2. Enterprise merger not under common control

For this kind of enterprise merger, the acquisition cost is the aggregate fair value of assets paid, liabilities incurred or assumed and equity instruments issued by the acquirer in exchange for the control of the acquiree on the date of acquisition. The recognizable and identifiable assets, liabilities and contingent liabilities acquired or assumed, through enterprise merger not under common control shall be measured at fair values on the date of acquisition. When the cost of the enterprise merger exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets obtained, the difference shall be recognized as goodwill value. Where the cost of the enterprise merger is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall be included in non-operating income for the current period if it remains true after reassessment.

(V) Preparation method of consolidated financial statements

1. Scope of consolidated financial statements

The Company incorporated all of its subsidiaries (including the separate entities controlled by the Company) into the scope of consolidated financial statements, including the enterprises under the Company’s control, divisible part in the investees and structured entities.

2. To unify the accounting policies, date of balance sheets and accounting periods of the parent company and subsidiaries

When preparing consolidated financial statements, adjustments are made if the subsidiaries’ accounting policies and accounting periods are different from that of the Company, in accordance with the Company’s accounting policies and accounting periods.

3. Offset matters in the consolidated financial statements

The consolidated financial statements shall be prepared on the basis of the balance sheets of the parent company and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and within subsidiaries. The owners’ equity of the subsidiaries not attributable to the parent company shall be presented as “minority interests” under the owners’ equity item in the consolidated balance sheet. The long-term equity investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group as well as the reduction of owners’ equity, shall be presented as “Less: Treasury stock” under the owners’ equity item in the consolidated balance sheet.

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4. Accounting treatment of subsidiaries acquired from merger

For subsidiaries acquired under enterprise merger involving enterprises under common control, mergers were deemed to have taken place when the ultimate controller began to exercise control over them, the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial statements from the beginning of the financial year in which the combination took place. When preparing the consolidated financial statements, for the subsidiaries acquired from business combination not involving entities under common control, the identifiable net assets of the subsidiaries are adjusted on the basis of their fair values on the date of acquisition.

(VI) Classification of joint arrangements and accounting for joint operations

1. Classification of joint arrangements

Joint arrangements are divided into joint operations and joint ventures. Joint arrangements achieved not through separate entities are classified as joint operations. Separate entities refer to the entities with separate identifiable financial architecture including separate legal entities and legally recognized entities without the qualification of legal entity. Joint arrangements achieved through separate entities are generally classified as joint ventures. In case of changes in rights entitled to and obligations undertaken by the parties of joint venture under a joint arrangement due to the changes in relevant facts and circumstances, the parties of joint venture will re-assess the classification of joint arrangements.

2. Accounting treatment for joint operations

The parties of joint operation should recognize the following items in relation to their share of interest in joint operation, and proceed with accounting in accordance with the relevant provisions under the Accounting Standards for Business Enterprises: to recognize their separate assets or liabilities held, and recognize the assets or liabilities jointly held according to their respective shares; to recognize the income from the disposal of their output share under joint operation; to recognize the income from the disposal of output under joint operation according to their respective shares; to recognize the expenses incurred separately, and recognize the expenses incurred under joint operation according to their respective shares.

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For the parties of a joint operation not under common control, if they are entitled to relevant assets and undertake relevant liabilities of the joint operation, accounting will be carried out with reference to the provisions of the parties of joint operation; otherwise, it should be subject to relevant provisions under the Accounting Standards for Business Enterprises.

3. Accounting treatment for joint ventures

The parties of a joint venture should perform accounting for investments in the joint venture in accordance with the Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investments. The parties do not share the control of the joint venture should carry out accounting depending on their influence on the joint venture.

(VII) Recognition standard for cash and cash equivalents

Cash presented in the cash flow statements represents the cash on hand and deposits available for payment at any time. Cash equivalents presented in the cash flow statements refer to short-term, highly liquid investments held that are readily convertible to known amounts of cash and which are subject to an insignificant risk on change in value.

(VIII) Translation of foreign currency transactions and financial statements denominated in foreign currency

1. Translation of foreign currency transactions

Foreign currency transactions of the Company are recorded in the functional currency translated at the spot exchange rates on the transaction date. At the balance sheet date, foreign currency monetary items are translated to RMB using the spot exchange rate at that date. Exchange differences arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rate used in initial recognition or on the last balance sheet date shall be recorded into the profit or loss for the current period, except for those arising from borrowings denominated in foreign currencies and used for financing the construction of qualifying assets, which are capitalized as cost of the related assets. Foreign currency non-monetary items measured at historical cost shall continue to be translated using the spot exchange rate at the date of transaction. Foreign currency non-monetary items measured at fair value shall be translated at the spot exchange rate on the date when the fair value is determined. The exchange difference arising therefrom shall be treated as the change in fair value (including the change in exchange rate), and included in profit or loss for the current period or recognized as other comprehensive income.

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2. Translation of financial statements denominated in foreign currency

If the functional currencies used as the bookkeeping base currency by the subsidiaries, joint ventures and associates under the control of the Company are different from that of the Company, their financial statements denominated in foreign currencies shall be translated to perform accounting and prepare the consolidated financial statements. The assets and liabilities in the balance sheet are translated into functional currency at the spot exchange rates at the balance sheet date. Except the item “Retained earnings”, the owner’s equity items are translated into functional currency at the spot exchange rates. The income and expenses items in the income statement are translated into functional currency at the spot exchange rates at the transaction dates. The resulting exchange differences of the financial statements denominated in foreign currencies are presented under other comprehensive income of owner’s equity item in the balance sheet. The cash flow of foreign currency which can be determined by the systematic and reasonable system shall be translated at the spot exchange rate at the transaction date. The effect of exchange movement on the cash shall be included separately in the cash flow statement. On disposal of foreign operations, exchange differences arising from the translation of financial statements denominated in foreign currencies related to the foreign operation shall be transferred to profit or loss for the current period either entirely or at the proportion of disposal of foreign operations.

(IX) Financial instruments

1. Classification and recognition of financial instruments

Financial instruments are classified as financial assets or financial liabilities and equity instruments. A financial asset, a financial liability or an equity instrument is recognized when the Company becomes a contractual party of a financial instrument.

At initial recognition, financial assets are classified into financial assets at fair value through profit or loss, held-to-maturity investments, receivables and available-for-sale financial assets. Except for receivables, the classification of financial assets is based on the purpose and capability of holding the financial assets of the Company and its subsidiaries. At initial recognition, financial liabilities are classified into financial liabilities at fair value through profit or loss and other financial liabilities.

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Financial assets at fair value through profit or loss include held-fortrading financial assets held for the purpose of selling in the short term and financial assets designated at fair value through profit or loss at initial recognition; receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market; available-for-sale financial assets include non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition; held-to-maturity investments are non-derivative financial assets with fixed maturity and fixed or determinable payments that Management has the positive intention and ability to hold to maturity.

2. Measurement of financial instruments

Financial instruments of the Company are initially recognized and measured at fair values. Subsequent measurement is dealt with based on different categories: financial assets at fair value through profit or loss, financial assets available for sale and financial liabilities at fair value through profit or loss are measured at fair values; held-to-maturity investments, loans and receivables and other financial liabilities are measured at amortized costs; derivative financial assets or liabilities linked to and which must be settled by delivery of an equity instrument (without a quoted price in an active market) whose fair value cannot be measured reliably are measured at cost. Except for financial instruments held for hedging purposes, the gains or losses arising from the changes in fair values in subsequent measurements of the Company’s financial assets or financial liabilities are accounted for as follows: ① the gains or losses resulting from the changes in fair values of the financial assets or financial liabilities which are measured at fair values through profit and loss for the current period are recorded as change in fair value in profit or loss. ② Changes in fair values of available-for-sale financial assets are recorded in other comprehensive income.

3. Recognition of the fair value of financial instruments by the Company

As for the financial instruments for which there is an active market, the quoted prices in the active market shall be used to determine the fair values thereof. Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques to determine its fair value. The value appraisal techniques mainly include market approach, income approach and cost approach.

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4. Basis of recognition and measurement of transfer of financial assets and liabilities

When the Company has transferred nearly all of the risks and rewards related to the ownership of a financial asset to the transferee, or neither transferred nor retained nearly all of the risks and rewards related to the ownership of the financial asset but given up the control of the financial asset, the financial asset shall be derecognized. When the criteria for derecognition of a financial asset are met, the difference between the carrying amount of the transferred financial asset and the sum of the consideration received from the transfer and the accumulated fair value changes previously recorded in other comprehensive income are recorded in profit or loss for the current period. If the partial transfer satisfies the criteria for derecognition, the entire carrying amount of the transferred financial asset shall proportionally allocated between the derecognized portion and the retained portion according to their respective relative fair value.

When all or part of the current obligation to a financial liability has been terminated, the entire or part of such financial liability shall be derecognized.

5. Impairment of financial assets

When an impairment loss on a financial asset carried at amortized cost has occurred, the amount of loss is provided for at the difference between the asset’s carrying amount and the present value of its estimated future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and the amount of reversal is recognized in profit or loss for the current period.

When an impairment loss on a financial asset measured at cost has occurred, the amount of loss is provided for at the difference between the asset’s carrying amount and the present value of its estimated future cash flows. The impairment loss on such financial asset will not be reversed once it is recognized.

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Where there is objective evidence that an impairment loss on availablefor-sale financial assets occurs, the cumulative loss arising from the decline in fair value that had been recognized directly in shareholders equity is removed from equity and recognized in impairment loss. For an investment in debt instrument classified as available-for-sale on which impairment losses have been recognized, if, in a subsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed and recognized in profit or loss for the current period. For an investment in an equity instrument classified as available-for-sale on which impairment losses have been recognized, the increase in its fair value in a subsequent period is recognized directly in shareholders equity.

For investments in equity instruments, the specific quantitative criteria for the Company to determine “serious” or “not temporary” decrease in their fair value, cost computing method, method for determining closing fair value, and basis for determining the continuous decrease period are set out below:

Specific quantitative Decrease in closing fair value relative to the criterion on cost has reached or exceeded 50%. “serious” decrease in fair value

Specific quantitative Fall for 12 consecutive months. criterion on “not temporary” decrease in fair value

Cost computing Consideration of payment at acquisition (net method of cash dividends declared but not yet paid or due but unpaid interest on bonds) and the relevant transaction cost are recognized as the investment cost.

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Method for As for a financial instrument for which there determining fair is an active market, the quoted prices in the value at period end active market shall be used to recognize the fair values thereof. Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques to determine its fair value. Basis for determining The rebound in the continuous fall or the the continuous period with the continuous trend of fall is decrease period less than 20%. Rebound duration not more than six months is treated as continuous decrease period.

(X) Receivables

The receivables of the Company mainly included account receivables, longterm receivables and other receivables. If there is objective evidence that receivables have been impaired at the balance sheet date, impairment loss shall be recognized base on the differences between the carrying amount and the present value of estimated future cash flows.

1. Individually significant receivables and with provision for bad debts on an individual basis

Basis and criteria Receivables with the book balance of over for determining RMB5 million. whether a receivable is individually significant Methods for making To recognize according to the difference bad debt provision between the carrying amount and the for individually present value of estimated future cash significant flows. receivables

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2. Receivables for which bad debt provision is made on group basis

Basis for group Nature of receivables and risk determination characteristics The group with Except for receivables for which no bad provision for bad debt provision is made, receivables which debts based on aging are unimpaired through separate test analysis methods of impairment are divided into certain portfolios of credit risk in accordance with the aging analysis methods, and then the provision for bad debts is made in proportion to the balance of these receivable portfolios.

The group without (1) Various guarantee and security deposits provision for bad related to the production and operations debts that are fully recoverable upon maturity;
(2) Receivables due from related parties with good financial position;
(3) Other balances that have positive evidence indicating they are fully recoverable.

Methods for making provision for bad debts on group basis

The group with Aging analysis methods. provision for bad debts based on aging analysis methods

The group without No provision for bad debts will be made. provision for bad debts

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In the groups, the provision for bad debts based on aging analysis methods set out as follows:

	Provision
	rate for	Provision
	accounts	rate for other
Age	receivable	receivables
	(%)	(%)
Within 1 year (including 1 year)	0	0
1–2 years	30	30
2–3 years	50	50
3–4 years	100	100
4–5 years	100	100
Over 5 years	100	100

3. Individually insignificant receivables with provision for bad debts on an individual basis

Basis for individual	Concrete evidence indicates that there is
provision	obvious difference in recoverability.
Provision method	Bad-debt provision is made on individual
	basis, and full provisions are made for
	receivables due from related parties that are
	estimated to be fully unrecoverable.

(XI) Inventories

1. Classification for inventories

Inventories means finished goods or merchandise held for sale in the ordinary course of business, unfinished products in the process of production, materials or supplies used in the process of production or rendering of services. Inventories mainly include raw materials, revolving materials, work in progress and goods in stock.

2. Measurement for delivered inventories

Upon delivery of inventories, the actual cost of such inventories will be determined by using weighted average method.

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3. Provision for impairment of inventories

At the end of the period, after a thorough inspection of the inventories, provision for decline in value of inventories will be made and adjusted at the lower of the cost and the net realizable value. Net realizable value of held-for-sale commodity stocks, such as finished goods, goods in stock, and held-for-sale raw materials, during the normal course of production and operation, shall be determined by their estimated selling prices less the related selling expenses and taxes; the net realizable value of material inventories, which need to be processed, during the normal course of production and operation, shall be determined by the amount after deducting the estimated cost of completion, estimated selling expenses and relevant taxes from the estimated selling price of finished goods; the net realizable value of inventories held for execution of sales contracts or labour contracts shall be calculated on the ground of the contracted price. If an enterprise holds more inventories than the quantity stipulated in the sales contract, the net realizable value of the exceeding part shall be calculated on the ground of general selling price.

Provision for decline in value of inventories is made on an item-by-item basis at the end of the period. For large quantity and low value items of inventories, provision may be made based on categories of inventories; for items of inventories relating to a product line that is produced and marketed in the same geographical area and with the same or similar end uses or purposes, which cannot be measured separately from other items in that product line, provision for decline in value of inventories may be determined on an aggregate basis.

Should the factors causing any write-down of the inventories do not exist, the amount of write-down will be recovered and be reversed from the provision for diminution in value of inventories that has been made. The reversed amount will be included in the current profits and losses.

4. Inventory system

The Company adopts perpetual inventory system.

5. Amortization of low-value consumables and packaging materials

Low-value consumables are amortized using one-off write-off method. Packaging materials and other revolving materials are amortized using equal-split amortization method.

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(XII) Recognition of assets held for sale

The Company classifies non-current assets or disposal groups that meet the following conditions as held for sale: First, they are immediately sold under current conditions based on the practice of selling such assets or disposal groups in similar transactions; second, the sold is very likely to occur that the enterprise has already made a resolution on a sales plan and has obtained a definite purchase promise, and the sale is expected to be completed within one year. According to the relevant regulations, the Company’s assets can be sold unless it is approved by the relevant authorities of the enterprise and government regulators. It must have been approved.

For the initial measurement or remeasurement of the non-current assets held for sale or the disposal group on the balance sheet date, if the book value is higher than the net amount after the fair value less the selling expenses, the book value shall be reduced to the fair value less the net amount after selling expenses is recognized as the impairment loss of assets is recorded in the profits and losses of the current period and the provision for impairment of assets held for sale is made.

The assets held for sale in the balance sheet or the assets in the disposal group held for sale are classified as assets classified as held for sale and the liabilities in the disposal group held for sale are classified as Liabilities held for sale.

(XIII) Long-term equity investments

1. Determination of initial investment cost

For a long-term equity investment obtained from business combination under common control, the initial cost is measured at the share of the carrying amount of the equity of the combined party; for a longterm equity investment obtained from business combination not under common control, the initial cost is the combination cost at the date of acquisition. For a long-term equity investment acquired by cash, the initial investment cost shall be the total purchase price. For a longterm equity investment acquired by the issue of equity securities, the initial investment cost shall be the fair value of the securities issued. For a long-term equity investment acquired by debt restructuring, the initial investment cost is recognized according to relevant requirements of Accounting Standards for Business Enterprises No.12 – Debt Restructuring. For a long-term equity investment acquired by exchange of non-monetary assets, the initial investment cost is recognized according to relevant standards and regulations.

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2. Method for subsequent measurement and profit or loss recognition

Where the investor has a control over the investee, long-term equity investments are measured using cost method. Long-term equity investments in associates and joint ventures are measured using equity method. Where part of the equity investments of an investor in its associates are held indirectly through venture investment institutions, common fund, trust companies or other similar entities including investment linked insurance funds, such part of equity investments indirectly held by the investor shall be measured at fair value through profit or loss according to relevant requirements of Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments regardless whether the above entities have significant influence on such part of equity investments, while the remaining part shall be measured using equity method.

3. Basis of determination of joint control and significant influence over the investee

Joint control over an investee refers to where the activities which have a significant influence on return on certain arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes the sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets, research and development activities and financing activities, etc. Significant influence on the investee refers to that: significant influence over the investee exists when holding more than 20% but less than 50% of the shares with voting rights or even if the holding is below 20%, there is still significant influence if any of the following conditions is met: there is representative in the board of directors or similar governing body of the investee; participation in the investee’s policy setting process; assigning key management to the investee; the investee relies on the technology or technical information of the investing company; or major transactions with the investee.

(XIV) Fixed assets

1. Recognition conditions of fixed assets

Fixed assets are tangible assets that are held for production of goods, provision of labour services, leasing or operational management, with useful life of more than one financial year. A fixed asset is recognized when both of the following conditions are met: economic benefits associated with the fixed asset are very likely to flow into the enterprise; and the cost of the fixed asset can be measured reliably.

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2. Classification and depreciation methods of fixed assets

The fixed assets of the Company are mainly classified as buildings and structures, machinery and equipment, electronic equipment, transportation equipment, etc. Depreciation is provided based upon the straight-line method. The Company determines the useful life and estimated net residual value of a fixed asset according to the nature and use pattern of the fixed asset. The Company, at the end of each year, conducts review on the useful life, estimated net residual value and the depreciation method of the fixed assets. If it differs from its previous estimate, adjustment will be made accordingly. The Company provides depreciation for all its fixed assets other than fully depreciated fixed assets that are still in use and land individually accounted for.

		Estimated	Annual
	Estimated	net residual	depreciation
Category of assets	useful life	value rate	rate
	(Year)	(%)	(%)
Buildings and structures	30–50	3–5	1.90–3.23
Machinery and equipment	4–28	3–5	3.39–24.25
Electronic equipment	10	3	9.70
Transportation equipment	6–12	3–5	7.92–16.17
Other equipment	4–28	3–5	3.39–24.25

(XV) Construction in progress

There are two types of construction in progress for the Company: selfconstruction and sub-contracting construction. Construction in progress is transferred to fixed assets when the project is completed and ready for its intended use. A fixed asset is ready for intended use if any of the following criteria is met: the construction of the fixed asset (including installation) has been completed or substantially completed; the fixed asset has been put into trial production or trial operation and it is evidenced that the asset can operate normally or produce steadily qualified products; or the result of trial operation proves that it can run or operate normally; little or no further expenditure will be incurred for construction of the fixed asset; or the fixed asset constructed has achieved or basically achieved the requirement of design or contract.

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(XVI) Borrowing costs

1. Recognition principle for capitalization of borrowing costs

The Company’s borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized and included in the cost of the related asset. Other borrowing costs are recognized as expenses when incurred through profit or loss account. Qualifying assets refer to fixed assets, investment properties and inventories that necessarily take a substantial period of time for acquisition, construction or production to get ready for their intended use or sale.

2. Calculation method of amount to be capitalized

The capitalization period refers to the period beginning from the commencement of capitalizing borrowing costs to the date of ceasing capitalization, excluding the period of suspension of capitalization. Where the acquisition and construction or production of a qualifying asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended.

For designated borrowings, the capitalized amount shall be the actual interest expense incurred for the designated borrowings, less the interest income from the unused funds of the designated borrowings or investment income from the temporary investments; and for general borrowings, the capitalized amount shall be the weighted average of the accumulated expenditure exceeding the capital expenditure from designated borrowings times the capitalization rate of the general borrowings occupied (i.e. the weighted average rate of the general borrowings); and for borrowings with discount or premium, the discount or premium is amortized over the term of the borrowings to adjust the interest in every period using effective interest rate method.

Effective interest rate method is a method that amortized discount or premium or interest expense is calculated according to the actual rate of borrowings. Among which, the effective interest rate is the rate used to discount the future cash flow of borrowings during its expected duration to the present carrying amount of the borrowings.

– 38 –

(XVII) Intangible assets

1. Measurement of intangible assets

Intangible assets of the Company are initially measured at costs. The actual costs of purchased intangible assets include the considerations and relevant expenses paid. The actual costs of intangible assets contributed by investors are the prices contained in the investment contracts or mutually agreed. If the price contained in the investment contracts or agreements is not a fair value, the actual cost shall be determined based on the fair value. The cost of a self-developed intangible asset is the total expenditure incurred for bringing the asset to its intended use.

Subsequent measurement of the Company’s intangible assets: Intangible assets with finite useful lives are amortized on a straight-line basis; at the end of each year, the useful lives and amortization policy are reviewed, and adjusted accordingly if there are differences from original estimates. Intangible assets with indefinite useful lives are not amortized and the useful lives are reviewed at the end of each year. If there is objective evidence that the useful life of an intangible asset is finite, the intangible asset is amortized using the straight line method according to the estimated useful life.

2. Determination basis of infinite useful life

An intangible asset is regarded as having an indefinite useful life when there is no foreseeable limit to the period over which the asset is expected to generate economic benefits for the Company or it has no definite useful life. The determination basis of intangible assets with infinite useful lives: derived from contractual rights or other legal rights and there are no explicit years of use stipulated in the contract or laws and regulations; the period over which the asset is expected to generate economic benefits for the Company still could not be estimated after considering the industrial practices or relevant expert opinion.

At the end of each year, the useful lives of the intangible assets with indefinite useful lives are reviewed. The review is performed by the departments that use the intangible assets, using the down-to-top approach, to determine if there are changes to the indefinite useful lives.

– 39 –

3. Specific standards for research and development phases for internal research and development project and specific standards for capitalization requirements met by expenditure incurred in development stage

As for an internal research and development project, expenditure incurred in the research phase is recognized in profit or loss in the period as incurred. Expenses incurred in the development stage are recognized as intangible assets if all of the following conditions are met: (1) the technical feasibility of completing the intangible asset so that it will be available for use or for sale; (2) the intention to complete the intangible asset for use or for sale; (3) the way the intangible asset generate economic benefits, including there is evidence that the products produced using the intangible asset has a market or the intangible asset itself has a market; if the intangible asset is for internal use, there is evidence that there exists usage for the intangible asset; (4) the availability of adequate techniques, financial resources and other resources to complete the development of the intangible asset and the ability to use or sell the intangible asset; (5) the expenditures attributable to the development of the intangible asset could be reliably measured.

Basis for distinguishing research phase and development phase of an internal research and development project: research stage is the activities carried out for the planned investigation and search for new technology and knowledge, which has the characteristics of planning and exploration; before commercial production or other uses, the application of new technologies or other knowledge obtained from the research phase to produce new or improved materials, equipment and products is regarded as development phase, which has the characteristics of pinpointing and greater likelihood of achieving results.

(XVIII) Impairment of long-term assets

Long-term assets such as long-term equity investments, fixed assets, construction in progress and intangible assets are tested for impairment if there is any indication that these assets may be impaired at the balance sheet date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount.

– 40 –

The recoverable amount is the higher of an asset’s fair value disposal less costs and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is calculated and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate cash inflows independently.

Once the impairment loss of such assets is recognized, it will not be reversed in any subsequent period.

(XIX) Long-term deferred expenses

Long-term deferred expenses of the Company are expenses which have been paid but the benefit period is over one year (excluding one year). Longterm deferred expenses are amortized over the benefit period. If a longterm deferred expense cannot benefit the future accounting period, the unamortized balance shall be transferred to the profit or loss in the current period.

(XX) Staff remuneration

Staff remuneration refers to compensation or indemnification in various forms given to employees by a company for services rendered by such employees or for termination of employment relationship with such employees. Staff remuneration mainly includes short-term remuneration, post-employment benefits, termination benefits and other long-term employee benefits.

1. Short-term remuneration

During the accounting period in which an employee provides service, short-term remuneration incurred is recognized as liabilities and charged to profit or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for the current period. At the time of actual occurrence, the Company’s employee benefits are recorded into the profits and losses of the current year or assets associated costs according to the actual amount. The nonmonetary employee benefits are measured at fair value. Regarding to the medical insurance, work-related injury insurance, maternity insurance and other social insurances, housing provident fund and labour union expenditure and personnel education that the Company paid for employees, the Company should recognize corresponding staff remuneration payables according to the appropriation basis and proportion as stipulated by relevant requirements and recognize the corresponding liabilities and include these expenses in the profit or loss of the current period or recognized as respective assets costs

– 41 –

2. Post-employment benefits

During the accounting period for which employees provide their service, the Company shall recognize the amounts payable as liabilities calculated based on the defined contribution plans, and shall recognize it in current profit or loss or the relevant asset cost. According to the formula determined by the expected accumulated welfare unit method, the welfare obligations generated in defined benefit plans shall be attributable to the period for which employees provide their service and shall be recognized in current profit or loss or the relevant asset cost.

3. Termination benefits

When the Company provides employees with termination benefits, the staff remuneration liabilities arising from termination benefits are recognized and recorded in current profit or loss whichever of the following is earlier: when the Company cannot unilaterally revoke such termination benefits provided due to dissolution of labour relationship plan or layoff proposal; when the Company recognizes such cost or expenses associated with the restructuring involving the payment of termination benefits.

4. Other long-term employee benefits

Such other long-term employee benefits provided to employees by the Company is in compliance with the conditions for the defined contribution plans and shall be processed pursuant to the provisions of the defined contribution plans. In addition, net liabilities or net assets of other long-term employee benefits shall be recognized and measured pursuant to the relevant provisions of the defined benefits plan.

(XXI) Estimated liability

If an obligation in relation to contingency is the present obligation of the Company and the performance of such obligation are likely to lead to the outflow of economic benefits and its amount can be reliably measured, such obligation shall be recognized as estimated liability. Initial measurement should be made by the Company in accordance with the best appraisable amount of expenses to fulfill relevant current obligation. The best appraisable amount should be a middle value if the expense occurred in a continuous period in which kinds of results occurred at the same possibility. If there are lots of projects, the best appraisable amount should be calculated and determined based on all kinds of results and relevant possibility.

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At the balance sheet date, the Company shall review the carrying amount of estimated liability and an adjustment is necessary according to the current best appraisable amount if there is obvious evidence that carrying amount cannot fairly represent the best appraisable amount.

(XXII) Revenue

1. Sales of goods

Revenue from the sale of goods shall be recognized at the amount received or receivable from buyers based on contractual or agreed prices, only when all of the following conditions are satisfied: (i) the significant risks and rewards of ownership of the goods have been passed to the buyer; (ii) the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (iii) the amount of revenue can be measured reliably; (iv) it is probable that the associated economic benefits will flow to the enterprise; and (v) the associated costs incurred or to be incurred can be measured reliably.

Specific recognition method for revenue: Upon delivery of goods, receipt by customers upon acceptance, and invoice or bill of lading or other relevant documents being delivered to customers who purchase goods, the sales revenue is realized.

If the selling income according to the contract or agreement is deferred and is of financial nature, the revenue from sale of goods should be the fair value of receivable amount of contract or agreement.

2. Provision of labour services

At the balance sheet date, when the outcome of a transaction involving the rendering of labour services can be estimated reliably, revenue from provision of labour services shall be recognized using the percentage of completion method. The progress of completion of the transaction is recognized by the Company by reference to ratio of the actual cost with respect to the estimated total cost. At the balance sheet date, when the outcome of the transaction involving the rendering of labour services cannot be estimated reliably, it shall be dealt with in the following ways: (i) if the cost of labour services incurred is expected to be compensated, the revenue from the rendering of labour services is recognized to the extent of actual cost incurred to date, and the relevant cost is transferred to cost of labour service in the same amount; or (ii) if the cost of labour services incurred is not expected to be compensated, the cost incurred should be included in current profit or loss, and no revenue from the rendering of labour services may be recognized.

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3. Abalienating the right to use an asset

When the inflow of economic benefits from the abalienation of the use right of assets is probable and the income can be measured reliably, the income from abalienating the right to use an asset is recognized.

(XXIII) Government grants

1. Types of government grants

Government grants refer to the monetary assets or non-monetary assets (excluding the capital invested by the government as the owner) free obtained by the Company from the government and are mainly classified into two types: government grants related to assets and that related to income.

2. Accounting treatment of government grants

The government grants related to assets, which is related to the daily activities of the Company, are included in other gains, otherwise, they are included in non-operating income.

Government grants measured at the nominal amount shall be directly included in the current profit or loss.

The government grants related to income are respectively treated as follows: the relevant expenses or losses used for compensating the enterprise in the future period shall be recognized as deferred income, and included in the current profit or loss during the period when the related expenses are recognized. When used to compensate for the related expenses or losses already incurred in the enterprise, they shall be directly included in the current profit or loss. When included in the current profit or loss, government grants related to the daily activities of the Company are included in other income; government grants unrelated to the Company’s daily activities are included in nonoperating income.

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3. Specific standards for differentiating government grants related to asset from that related to income

Government grants acquired by the Company for the purpose of purchasing, constructing or otherwise forming long-term assets are recognized as government grants related to assets, otherwise they are recognized as related to income.

Where there is no express regulation on subsidy object in government documents, the criteria for differentiating government grants related to asset from that related to income is as below: (i) government grant subject to a certain project shall be separated according to the relative ratio of the expenditure incurred to form assets to expenditure charged to expenses pursuant to the budget of the designated project, and the proportion shall be reviewed on each balance sheet date and modified if necessary; and (ii) government grants shall be categorized as related to income if its usage is just subject to general statement and not limited to designated specific project in relevant document.

4. Recognition of government grants

Government subsidies measured at the amount of receivables are recognized at the end of the period when there is conclusive evidence of meeting the relevant conditions as required by the financial support policies and expected to receive the financial support funds. Other government grants except the government grants measured by receivable amount are recognized when the grants are actually received.

5. Accounting treatment of policy preferential loan discount

(1) When the finance authority allocates the discount interest fund to the bank which issues loans and the bank which issues loans provides the loan to the Company at the policy-based preferential interest rate, the Company recognizes the value of borrowing the loan amount actually received and calculates the related borrowing costs according to the principal of the borrowing and the policybased preferential interest rate.
(2) If the government directly allocates interest-subsidized funds to the Company, the Company will offset against the borrowings through the corresponding discount.

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(XXIV) Deferred income tax assets and deferred income tax liabilities

Deferred income tax assets or deferred income tax liabilities are recognized based on the difference between the carrying amounts of the assets or liabilities and their tax bases (or, for items not recognized as assets or liabilities but whose tax base can be determined under tax laws, such tax base can be determined as their difference), and are calculated at the tax rates expected to apply to the period in which the assets are recovered or the liabilities are settled.
Deferred income tax assets are recognized to the extent that it is probable that taxable income will be available against which deductible temporary differences can be utilized. At the balance sheet date, deferred income tax assets unrecognized in prior periods are recognized to the extent that there is obvious evidence that it has become probable that sufficient taxable income will be available in subsequent periods against which the deductible temporary differences can be utilized. The carrying amount of a deferred income tax asset is reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow the benefit of the deferred income tax asset to be utilized.
As for taxable temporary difference related to the investments of subsidiaries and associated enterprises, the deferred income tax liabilities are recognized unless the Company can control the timing for the reversal of temporary differences and such differences are much likely not to be reversed in the foreseeable future. As for the deductible temporary difference related to investments of subsidiaries and associated enterprises, the deferred income tax assets shall be recognized when such temporary differences are much likely to be reversed in the foreseeable future and the taxable income are available against which the deductible temporary difference can be utilized.

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(XXV) Leases

Accounting treatment for operating leases: Rental expenses for operating leases shall be recorded into the cost of the relevant asset or the current period’s profit and loss on a straight-line basis during the lease term.
Accounting treatment for financing leases: the lower of the fair value of the leased assets and the present value of the minimum lease payment shall be taken as the book value of the leased assets. The difference of the book value of the assets under lease and the minimum lease payment shall be the unrecognized financing expenses and shall be amortized according to the actual interest rate within the lease term. The balance derived from deducting the unrecognized financing expenses from the minimum lease payment shall be presented as longterm payables.
(XXVI) Explanation on changes in significant accounting policies and accounting estimates

On 10 May 2017, the Ministry of Finance promulgated the revised “Accounting Standards for Business Enterprises No. 16 – Government Grants” (《企業會計準則第 16 號 – 政府補助》), effective from 12 June 2017. At the same time, the “Enterprise Accounting Standards No. 16” issued in 2006 was abolished. The amendment to the standards requires enterprises to treat the existing government grants as of on 1 January 2017 according to prospective application, while the new government grants granted from 1 January 2017 to the implementation date of the standards must be adjusted according to the revised standards. The Group has adopted the revised standard since 12 June 2017.

The main contents of the above changes in accounting policies are as follows: The government grants related to the daily activities of the enterprise shall be included in other income or offset the related costs and expenses according to the substance of the economic business. The enterprise shall, on the item of “operating profit” in the income statement, presents the item of “Other Revenue” alone, and the government grants included in other income are listed. Government grants unrelated to the daily activities of the enterprise shall be included in the non-operating income and expenses.

	Before the	After the
	change in the	change in the
	accounting	accounting
Items	policies	policies
Other revenues		49,090,026.52
Non-operating income	49,090,026.52

– 47 –

VI. TAXES

Category	Tax basis	Tax rate
Value-added tax	Assessable value-added part of sales	13%–17%
	income and labour services income
Urban maintenance and	Value-added tax and business tax paid	5%–7%
construction tax
Educational surcharge	Value-added tax and business tax paid	3%
Enterprise income tax	Enterprise income tax	15%, 25%
		Income
Name of entity paying	taxes	tax rate
The Company		25%
Longhai Company, Bengbu Company, Hefei New Energy and
Tongcheng New Energy		15%
Other subsidiaries		25%

VII. N O T E S T O S I G N I F I C A N T I T E M S O F T H E P R O F O R M A CONSOLIDATED FINANCIAL STATEMENTS

(I) Cash and cash equivalents

Items 30 November 2017 Cash 303,925.86 Deposits at banks 115,880,753.10 Other monetary funds 19,385,225.83 Total 135,569,904.79	31 December 2016 333,549.75 191,242,361.52 56,444,109.58
	248,020,020.85

(II) Notes receivable

Items 30 November 2017 Bank acceptance 218,577,203.89 Trade acceptance 215,929,415.20 Total 434,506,619.09	31 December 2016 76,446,675.70 27,910,301.84
	104,356,977.54

Note: As of 30 November 2017, the outstanding endorsed trade acceptance notes without termination have been recognized as RMB188,399,322.06.

– 48 –

(III) Accounts receivable

1. Accounts receivable by category

Category Accounts receivable with significant single amount and individual provision for bad debts Accounts receivable with provision for bad debts made on group basis Including: Gr oups with provision for bad debts based on aging analysis Groups without provision for bad debts Account receivables with insignificant single amount and individual provision for bad debts Total	Carrying Amount 626,086,627.63 521,057,144.13 105,029,483.50 626,086,627.63	30 November 2017 amount Provision for bad debts Ratio Amount Provision ratio (%) (%) 100.00 64,276,644.16 10.27 83.22 64,276,644.16 12.26 16.78 100.00 64,276,644.16 10.27	30 November 2017 amount Provision for bad debts Ratio Amount Provision ratio (%) (%) 100.00 64,276,644.16 10.27 83.22 64,276,644.16 12.26 16.78 100.00 64,276,644.16 10.27
			10.27

– 49 –

Category Account receivables with significant single amount and individual provision for bad debts Accounts receivable with provision for bad debts made on group basis Including: Gr oups with provision for bad debts based on aging analysis Groups without provision for bad debts Account receivables with insignificant single amount and individual provision for bad debts Total	Carrying Amount 414,041,262.09 346,497,720.78 67,543,541.31 414,041,262.09	31 December 2016 amount Provision for bad debts Ratio Amount Provision ratio (%) (%) 100.00 57,276,578.47 13.83 83.69 57,276,578.47 16.53 16.31 100.00 57,276,578.47 13.83

(1) Accounts receivable with provision for bad debts made on group basis
(i) Accounts receivable with provision for bad debts based on aging analysis

Aging Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years Above 5 years Total	30 November 2017 Carrying amount Provision Ratio Provision for bad debts (%) 435,639,998.92 28,367,414.75 30.00 8,510,224.42 2,566,621.44 50.00 1,283,310.72 511,851.41 100.00 511,851.41 605,589.30 100.00 605,589.30 53,365,668.31 100.00 53,365,668.31 521,057,144.13 12.34 64,276,644.16	31 December 2016 Carrying amount Provision Ratio Provision for bad debts (%) 282,895,221.68 8,631,825.88 30.00 2,589,547.76 567,285.02 50.00 283,642.51 1,037,719.89 100.00 1,037,719.89 2,672,254.67 100.00 2,672,254.67 50,693,413.64 100.00 50,693,413.64 346,497,720.78 16.53 57,276,578.47	31 December 2016 Carrying amount Provision Ratio Provision for bad debts (%) 282,895,221.68 8,631,825.88 30.00 2,589,547.76 567,285.02 50.00 283,642.51 1,037,719.89 100.00 1,037,719.89 2,672,254.67 100.00 2,672,254.67 50,693,413.64 100.00 50,693,413.64 346,497,720.78 16.53 57,276,578.47
			57,276,578.47

– 50 –

(ii) In groups, accounts receivable without provision for bad debts are as follows:

	Item	30 November 2017	30 November 2017	31 December 2016
	Group with no
	provision for bad
	debts (related
	parties)	105,029,483.50		67,543,541.31
	Total	105,029,483.50		67,543,541.31

2.	Top five accounts receivable by closing balance collection of the
	borrowers as at 30 November 2017
				Percentage of the
				total accounts
	Company names	Carrying amount		receivable
				(%)
	Risen Energy Co., Ltd.*
	(東方日升新能源股份
	有限公司)		80,448,232.84	12.85
	Jetion Solar (China) Co., Ltd.*
	(中建材浚鑫科技有限
	公司)		72,052,113.09	11.51
	Shenzhen Yongchangsheng
	New Materials Co., Ltd.*
	(深圳市永昌晟新型材料
	有限公司)		45,627,787.98	7.29
	Changshu Canadian Solar
	Power Technology Co., Ltd.
	(常熟阿特斯陽光電力
	科技有限公司)		42,892,873.31	6.85
	Changzhou Trina Solar Limited
	(常州天合光能有限公司)		33,875,899.90	5.41
	Total	274,896,907.12		43.91

– 51 –

(IV) Prepayments

1. Aging analysis of prepayments

Aging 30 November 2017 Amount Ratio (%) Within 1 year 17,595,440.84 97.79 1–2 years 337,787.00 1.88 2–3 years 32,787.65 0.18 Above 3 years 26,807.24 0.15 Total 17,992,822.73 100.00	31 December 2016 Amount Ratio (%) 9,075,366.83 99.18 48,487.65 0.53 5,740.00 0.06 21,067.24 0.23 9,150,661.72 100.00

2. Top five debtors in terms of prepayments as at 30 November 2017

Company name Jiangsu Electric Power Company Yixing Power Supply Company (江蘇省電力公司宜興市供電公司) Hubei Yongcheng Industry Co., Ltd. (湖北永乘實業股份有限公司) State Grid Anhui Electric Power Company Hefei Power Supply Company (國網安徽省電力公司合肥供電公司) Yixing Zhize Marketing Planning Co., Ltd. * (宜興市智澤營銷策劃有限公司) Qingdao Dashunyou Technology Co., Ltd. (青島大順友科技股份有限公司) Total	Carrying amount 4,813,295.69 3,067,830.57 2,348,665.82 1,217,115.00 1,145,200.00 12,592,107.08	As a percentage of the total balance of prepayments (%) 26.75 17.05 13.05 6.76 6.36 69.97

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(V) Other receivables

1. Categories of other receivables

Category Other receivables with significant single amount and individual provision for bad debts Other receivable with provision for bad debts made on group basis Including: Gr oups with provision for bad debts based on aging analysis Groups without provision for bad debts Other receivables with insignificant single amount and individual provision for bad debts Total	Carrying Amount 10,808,704.00 100,252,083.05 66,414,585.36 33,837,497.69 111,060,787.05	30 November 2017 amount Provision for bad debts Ratio Amount Provision ratio (%) (%) 9.73 10,808,704.00 100.00 90.27 39,844,856.63 39.74 59.80 39,844,856.63 59.99 30.47 100.00 50,653,560.63 45.61

– 53 –

Category Other receivables with significant single amount and individual provision for bad debts Other receivable with provision for bad debts made on group basis Including: Gr oups with provision for bad debts based on aging analysis Groups without provision for bad debts Other receivables with insignificant single amount and individual provision for bad debts Total	Carrying Amount 10,808,704.00 149,131,350.76 41,264,516.69 107,866,834.07 159,940,054.76	31 December 2016 amount Provision for bad debts Ratio Amount Provision ratio (%) (%) 6.76 10,808,704.00 100.00 93.24 39,169,867.86 26.27 25.80 39,169,867.86 94.92 67.44 100.00 49,978,571.86 31.25

(1) Other receivables with significant single amount and individual provision for bad debts as at 30 November 2017

Name of the debtor Carrying amount Zhengzhou Xili Sub-branch of China Construction Bank (建行鄭州西里支行) 10,808,704.00 Total* 10,808,704.00	Amount of bad debts Aging Provision Ratio Reason for making provision (%) 10,808,704.00 Above 5 years 100.00 Full provision for bad debts due to failure of recovery 10,808,704.00

– 54 –

(2) Other receivables with provision for bad debts made on group basis
(i) Other receivables with provision for bad debts based on aging analysis

Aging Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years Above 5 years Total	30 November 2017 Carrying amount Provision Ratio (%) 25,995,244.54 131,674.20 30.00 964,624.51 50.00 899,564.00 100.00 278,813.89 100.00 38,144,664.22 100.00 66,414,585.36 59.99	Provision for bad debts 39,502.26 482,312.26 899,564.00 278,813.89 38,144,664.22 39,844,856.63	31 December 2016 Carrying amount Provision Ratio (%) 958,282.07 980,792.51 30.00 899,624.00 50.00 281,153.89 100.00 202,850.27 100.00 37,941,813.95 100.00 41,264,516.69 94.92	Provision for bad debts 294,237.75 449,812.00 281,153.89 202,850.27 37,941,813.95
				39,169,867.86

(ii) In the group, other receivables with no provision for bad debts

Item

30 November 2017 31 December 2016

Group with no provision for bad debts (related party, petty cash, security deposit, etc.) 33,837,497.69 107,866,834.07 Total 33,837,497.69 107,866,834.07

2. Other receivables categorized by nature

Nature 30 November 2017 Guarantee deposits, security deposits, petty cash 17,162,643.38 Compensation for performance commitment Current accounts 93,898,143.67 Total 111,060,787.05	31 December 2016 82,312,284.44 23,783,372.88 53,844,397.44
	159,940,054.76

– 55 –

3. Top five debtors in terms of other receivables as of 30 November 2017

Name of debtor Nature International Far Eastern Leasing Co., Ltd. (遠東國際租賃有限公司) Guarantee deposit Zhengzhou Xili Sub-branch of China Construction Bank (建行鄭州西里支行) Current accounts Taiping & Sinopec Financial Leasing Co., Ltd. (太平石化金融租賃有限責任公司) Guarantee deposit Zhuge Town Government (諸葛鎮政府) Current accounts Compensation for personnel resettlement Current accounts Total	Carrying amount Aging As a percentage of the total carrying amount of other receivables (%) 13,636,363.00 1–2 years 12.28 10,808,704.00 Over 5 years 9.73 10,000,000.00 Within 1 year 9.00 9,856,832.00 Over 5 years 8.88 17,440,000.00 Within 1 year 15.70 61,741,899.00 55.59	Balance of provision for bad debts 10,808,704.00 9,856,832.00
		20,665,536.00

(VI) Inventories

1. Category of inventories

Category 30 November 2017 Carrying amount Provision for depreciation Raw materials 112,781,489.15 1,325,240.88 Work in progress 9,373,138.57 269,863.36 Goods in stock 90,457,031.87 15,532,119.86 Revolving materials 539,221.26 Total 213,150,880.85 17,127,224.10	Book value 111,456,248.27 9,103,275.21 74,924,912.01 539,221.26 196,023,656.75	31 December 2016 Carrying amount Provision for depreciation 79,031,101.49 1,375,019.80 6,930,279.06 172,848,223.97 32,915,410.22 547,115.90 259,356,720.42 34,290,430.02	Book value 77,656,081.69 6,930,279.06 139,932,813.75 547,115.90
			225,066,290.40

– 56 –

2. Change of provision for depreciation of inventories

			Provision for		Decrease for	Decrease for
	31	December	the current		the current period			30 November
Category		2016	period		Reversal	Write-off		2017
Raw materials	1,375,019.80		225,895.73		275,674.65			1,325,240.88
Work in progress		269,863.36			269,863.36
Goods in stock	32,915,410.22		1,512,111.87		714,781.29	18,180,620.94		15,532,119.86
Total	34,290,430.02		2,007,870.96		714,781.29	18,456,295.59		17,127,224.10

Other current assets
Item			30 November 2017 31				December 2016
Tax to be verified and		deducted		37,500,983.48			64,628,416.15
Taxes paid in advance					1,114,572.07		2,270,503.81
Total				38,615,555.55			66,898,919.96

(VII) Other current assets

(VIII) Available-for-sale financial assets

1. Available-for-sale financial assets

Item Available-for-sale equity instruments Including: measured at cost Total	30 November 2017 Carrying amount Provision for impairment 7,791,217.53 7,791,217.53 7,791,217.53 7,791,217.53 7,791,217.53 7,791,217.53	Book value	31 December 2016 Carrying amount Provision for impairment 7,791,217.53 7,791,217.53 7,791,217.53 7,791,217.53 7,791,217.53 7,791,217.53	Book value

– 57 –

2. The investment breakdown in important equity instruments measured at cost at the end of the period

Investee 1. CLFG Luoyang Jingwei Glass Fibre Co., Ltd. (Note) 2. CLFG Luoyang Jingjiu Glass Products Company Limited (Note) 3. CLFG Luoyang New Lighting Company Limited (Note) Total	31 December 2016 4,000,000.00 1,500,000.00 2,291,217.53 7,791,217.53	Carrying Increase for the current period	amount Decrease for the current period	30 November 2017 4,000,000.00 1,500,000.00 2,291,217.53 7,791,217.53	31 December 2016 4,000,000.00 1,500,000.00 2,291,217.53 7,791,217.53	Provision for depreciation Increase for the current period Decrease for the current period	30 November 2017 4,000,000.00 1,500,000.00 2,291,217.53 7,791,217.53	Shareholding ratio in the investee (%) 35.90 31.08 29.45	Cash dividend for the current period

Note: The Company is of the view that, despite the Company’s shareholding in the investees exceeds 20%, since the Company did not assign any Management personnel to the investees, or participate in any formulation of the investees’ financial and operating policies, or engage in any significant transactions with the investees, or provide any key technological information to the investees. Thus, the Company is of the view that it has no significant impact on the investees and was classified as available-for-sale financial assets.

– 58 –

3. Change in the impairment of available-for-sale financial assets during the Reporting Period

	Category of available-for-sale	Available-for-sale	Available-for-sale
	financial assets	Equity	instruments		Total
	Balance of provision for
	impairment as at 31 December
	2016		7,791,217.53		7,791,217.53
	Provision for the period
	Including: transfer from other
	comprehensive
	income
	Decrease for the period
	Including: subsequent reverse
	from increase
	in fair value
	Balance of provision for
	impairment as at
	30 November 2017		7,791,217.53		7,791,217.53
(IX) Long-term receivables
1.	Long-term receivables
					Range of
Item	30 November 2017		31 December 2016		discount rate
	Carrying Provision for		Provision for
	amount bad debts Book value	Carrying amount	bad debts	Book value
Receivables from disposal
of equity interest in the
Industrial Company	55,000,000.00 55,000,000.00	55,000,000.00		55,000,000.00
Total	55,000,000.00 55,000,000.00	55,000,000.00		55,000,000.00

– 59 –

(X) Fixed assets

1. Fixed assets

				Transportation
Item		Buildings	Machinery	equipment	Others	Total
I. Original book value:
1.	Balance as at 31 December 2016	776,304,414.60	1,555,875,079.77	7,078,846.14	5,824,975.25	2,345,083,315.76
2.	Increase for the current period	14,338,821.47	58,560,348.41	582,079.99	561,397.31	74,042,647.18
	(1) Purchase	1,163,944.00	24,144,635.09	582,079.99	491,527.94	26,382,187.02
	(2) Transferred from construction
	in progress	13,174,877.47	34,415,713.32		69,869.37	47,660,460.16
3.	Decrease for the current period	35,937,926.40	137,470,155.34	62,865.00		173,470,946.74
	(1) Disposal or retirement			62,865.00		62,865.00
	(2) Transfer into construction
	in progress	35,937,926.40	121,390,379.02			157,328,305.42
	(3) Decrease in the project
	settlement amount		16,079,776.32			16,079,776.32
4.	Balance as at 30 November 2017	754,705,309.67	1,476,965,272.84	7,598,061.13	6,386,372.56	2,245,655,016.20
II. Accumulated depreciation
1.	Balance as at 31 December 2016	68,560,649.06	376,634,725.45	4,134,651.11	2,393,847.32	451,723,872.94
2.	Increase for the current period	19,558,076.61	85,164,422.89	635,988.61	1,024,901.56	106,383,389.67
	(1) Provision	19,558,076.61	85,164,422.89	635,988.61	1,024,901.56	106,383,389.67
3.	Decrease for the current period	10,636,249.93	97,293,689.14	25,302.67		107,955,241.74
	(1) Disposal or retirement			25,302.67		25,302.67
	(2) Transfer into construction
	in progress	10,636,249.93	97,293,689.14			107,929,939.07
4.	Balance as at 30 November 2017	77,482,475.74	364,505,459.20	4,745,337.05	3,418,748.88	450,152,020.87
III. Provision for impairment
1.	Balance as at 31 December 2016		7,546,566.43			7,546,566.43
2.	Increase for the current period		9,555,668.20			9,555,668.20
3.	Decrease for the current period
4.	Balance as at 30 November 2017		17,102,234.63			17,102,234.63
IV. Book value
1.	Book value as at
	30 November 2017	677,222,833.93	1,095,357,579.01	2,852,724.08	2,967,623.68	1,778,400,760.70
2.	Book value as at 31 December 2016	707,743,765.54	1,171,693,787.89	2,944,195.03	3,431,127.93	1,885,812,876.39

– 60 –

(XI) Construction in progress

1. Construction in progress

Item Longhai – new-generation information display ultra-thin glass substrate production line Ultra-white photothermal materials projects CNBM (Hefei) New Energy Industrial base phase I preparatory engineering Hefei New Energy oxy-combustion new photovoltaic cover material phase II production line project Smart plant Testing center Yixing New Energy 48 million m 2solar coating glass phase II production line project Tongcheng processing glass production lines 4# Total	30 November 2017 Carrying amount Provision for impairment 40,400,469.04 4,862,355.85 28,215,489.57 118,169.81 773,504.30 152,420,871.86 12,467,340.78 239,258,201.21	31 December 2016 Book value Carrying amount Provision for impairment 40,400,469.04 4,862,355.85 28,215,489.57 44,224,322.64 118,169.81 773,504.30 1,728,535.21 152,420,871.86 49,167,503.96 12,467,340.78 239,258,201.21 95,120,361.81	Book value 44,224,322.64 1,728,535.21 49,167,503.96
			95,120,361.81

– 61 –

(XII) Intangible Assets

		Land use		Non-patent	Trademark
Item	Software	rights	Patent right	technology	use rights	Total
I. Original book value
1. Balance as at
31 December 2016	491,453.02	286,739,028.89	94,339.62	12,316,037.70	6,000,000.00	305,640,859.23
2. Increase for the
current period	25,641.03	58,276,296.60				58,301,937.63
(1) External purchase	25,641.03	58,276,296.60				58,301,937.63
3. Decrease for the
current period		2,011,785.37				2,011,785.37
4. Balance as at
30 November 2017	517,094.05	343,003,540.12	94,339.62	12,316,037.70	6,000,000.00	361,931,011.49
II. Accumulated
amortization
1. Balance as at
31 December 2016	192,663.80	24,807,529.56	4,717.08	6,041,312.86	6,000,000.00	37,046,223.30
2. Increase for the current
period	150,593.53	6,579,708.97	8,647.76	1,128,970.04		7,867,920.30
(1) Provision	150,593.53	6,579,708.97	8,647.76	1,128,970.04		7,867,920.30
3. Decrease for the current period		125,693.33				125,693.33
4. Balance as at
30 November 2017	343,257.33	31,261,545.20	13,364.84	7,170,282.90	6,000,000.00	44,788,450.27
III. Provision for impairment
IV. Book value
1. Book value as at
30 November 2017	173,836.72	311,741,994.92	80,974.78	5,145,754.80		317,142,561.22
2. Book value as at
31 December 2016	298,789.22	261,931,499.33	89,622.54	6,274,724.84		268,594,635.93

Note: 1. The land use right certificate for the land located in the development zone in Luoyang with an amount of RMB9,415,764.88, the intangible asset of the Group, was under application as at the end of the period.

Land use rights among the Group’s intangible assets were all for lands located in the PRC with remaining use periods ranging from 28 to 50 years.

– 62 –

(XIII) Long-term deferred expenses

Category Reconstruction of the electrical circuit of the office Refurbishment fees Consultation service charge Total	31 December 2016 270,000.00 3,245,290.90 3,515,290.90	Increase for the current period 757,941.76 3,750,000.00 4,507,941.76	Amortized amount for the current period 99,000.00 126,323.63 2,022,932.36 2,248,255.99	Other decreased amount 30 November 2017 171,000.00 631,618.13 4,972,358.54 5,774,976.67

(XIV) Deferred tax assets and deferred tax liabilities

1. Deferred tax assets and deferred tax liabilities before offsetting

Item Deferred tax assets Provision for impairment of assets Deferred income Total	30 November 2017 Deferred tax assets/ liabilities Deductible/ Taxable temporary differences 2,546,059.47 16,973,729.75 684,375.00 4,562,500.00 3,230,434.47 21,536,229.75	31 December 2016 Deferred tax assets/ liabilities Deductible/ Taxable temporary differences 3,200,642.11 19,383,172.46 1,873,495.80 12,489,972.00 5,074,137.91 31,873,144.46

(XV) Non-current assets

Item 30 November 2017 31 December 2016 Prepayment for engineering and equipment 2,198,370.00 5,838,860.00 Total 2,198,370.00 5,838,860.00

– 63 –

(XVI) Short-term loans

1. Category of short-term loans

Conditions 30 November 2017 31 December 2016 Mortgage loan 23,300,000.00 151,600,000.00 Guaranty loan 809,390,250.00 224,500,000.00 Total 832,690,250.00 376,100,000.00

(XVII) Notes payable

Item 30 November 2017 31 December 2016 Bank’s acceptance bills 111,900,283.80 122,586,473.44 Commercial acceptance bills 52,078,747.45 50,000,000.00 Total 163,979,031.25 172,586,473.44

(XVIII) Accounts payable

Item 30 November 2017 31 December 2016 Within 1 year (including 1 year) 218,299,391.03 161,838,847.96 Over 1 year 308,620,369.83 351,476,633.39 Total 526,919,760.86 513,315,481.35

Significant accounts payables aged over one year as at 30 November 2017

Reason for Name of Creditor Carrying amount non-payment China Triumph International Engineering Co., Ltd. 273,423,781.04 Unsettled China Triumph International Engineering Co., Ltd. Bengbu Branch ( 中國建材國際工程集團有限公司蚌埠分公司 ) 219,348,939.58 Unsettled Total 492,772,720.62*

– 64 –

(XIX) Payments received in advance

Item 30 November 2017 31 December 2016

Within 1 year (including 1 year) Over 1 year Total	18,950,022.86 3,829,644.90 22,779,667.76	5,628,290.37 9,036,932.04
		14,665,222.41

(XX) Staff remuneration payables

1. Staff remuneration payables are shown as follows:

Item 1. Short-term remuneration 2. Post-employment benefits – defined contribution plan 3. Termination benefits Total	31 December 2016 32,204,787.69 3,923,332.00 36,128,119.69	Increase for the period Decrease for the period 143,278,909.71 157,331,083.45 15,159,708.89 18,672,868.27 19,489,238.43 19,489,238.43 177,927,857.03 195,493,190.15	30 November 2017 18,152,613.95 410,172.62 –
			18,562,786.57

2. Short-term staff remuneration

Item 1. Salary, bonus, allowance and subsidy 2. Staff’s welfare 3. Social insurance premium Including: Medical insurance Work-related injury insurance Maternity insurance 4. Housing Provident fund 5. Labour union expenses and employee education expenses 6 Other short-term remuneration Total	31 December 2016 16,439,043.74 1,026,787.39 864,437.80 102,754.01 59,595.58 6,974,821.03 7,764,135.53 32,204,787.69	Increase for the period Decrease for the period 119,140,640.49 126,029,050.59 10,103,785.11 10,064,193.98 7,541,166.44 8,364,286.13 6,114,050.88 6,820,379.22 1,043,160.91 1,109,117.88 383,954.65 434,789.03 4,805,006.23 11,080,764.15 1,321,901.90 1,427,577.53 366,409.54 365,211.07 143,278,909.71 157,331,083.45	30 November 2017 9,550,633.64 39,591.13 203,667.70 158,109.46 36,797.04 8,761.20 699,063.11 7,658,459.90 1,198.47
			18,152,613.95

– 65 –

3. Defined contribution plans

Item 1. Basic pension insurance 2. Unemployment insurance 3. Enterprise annuity Total	31 December 2016 3,729,121.98 194,210.02 3,923,332.00	Increase for the period Decrease for the period 14,564,142.57 17,896,969.54 595,503.04 775,835.45 63.28 63.28 15,159,708.89 18,672,868.27	30 November 2017 396,295.01 13,877.61 – 410,172.62

(XXI) Tax payable

Category
30 November 2017
Value-added tax
2,678,857.35
Business tax
75,649.29
Enterprise income tax
19,103,762.11
City maintenance tax
278,030.25
Property tax
4,323,687.66
Land-use tax
2,728,071.85
Individual income tax
320,450.96
Education surcharges
190,504.16
Other tax and charges
69,515.63
Total
29,768,529.26
Interest payable
Category
30 November 2017
Interest on long-term and
short-term loan
6,244,875.00
Total
6,244,875.00

31 December 2016
2,959,791.08
75,649.29
12,102,375.43
294,379.66
3,377,760.99
3,045,112.59
250,303.14
207,513.66
184,798.52
22,497,684.36
31 December 2016
1,769,060.99
1,769,060.99

(XXII) Interest payable

– 66 –

(XXIII) Other payables

Nature of payment
30 November 2017
Borrowings from related parties
389,208,547.56
Deposits and security deposits
2,370,525.65
Contribution from minority
shareholders in the form of debts
1,432,431.19
Announcement and intermediary fee
3,613,179.34
Other current account
9,588,792.43
Total
406,213,476.17
(XXIV) Non-current liabilities due within one year
Item
30 November 2017
Long-term loans due within one year
161,947,948.30
Total
161,947,948.30
(XXV) Long-term loans
Loan conditions
30 November 2017
Mortgage loan
464,361,981.28
Guaranty loan
90,920,101.47
Credit loan
Total
555,282,082.75
Less: Long-term loans due within
one year
161,947,948.30
Total
393,334,134.45

31 December 2016
199,845,421.83
1,301,963.70
10,000,000.00
5,617,787.84
11,329,368.92
228,094,542.29
31 December 2016
521,207,062.91
521,207,062.91
31 December 2016
222,478,306.53
574,780,130.61
31,670,000.00
828,928,437.14
521,207,062.91
307,721,374.23

Note: As of 30 November 2017, the range of the interest rates for long-term loans was between 2.5% and 6.44%.

– 67 –

(XXVI) Deferred income

1. Deferred income is shown as follows by category:

Item Government grants Total	31 December 2016 19,290,781.82 19,290,781.82	Increase for the period 950,000.00 950,000.00	Decrease for the period 11,903,855.18 11,903,855.18	30 November 2017 Reasons of formation 8,336,926.64 8,336,926.64

2. Government-subsidized projects

Item Fiscal subsidy for ultra-thin and ultrawhite glass production lines Land-use subsidy for ultra-thin and ultra-white glass production lines projects 0.45mm E-glass technology research and application projects Special fund for ultra-thin production line Subsidy for stabilizing employment from the Social Security Bureau Special fund for innovative provincial construction of Anhui province of 2016 Special municipal supporting funds for major provincial technology projects of 2016 Major special fund for science and technology of Anhui Province of 2017 granted by Bengbu Municipal Bureau of Science and Technology and Intellectual Property Technology projects construction funds Total	31 December 2016 New additional subsidy for the current period Amount recorded in non-operating income for the current period Other changes 2,632,500.00 1,113,750.00 2,305,103.82 49,427.18 1,863,206.01 1,863,206.01 600,000.00 37,500.00 70,018.76 70,018.76 1,050,000.00 2,000,000.00 950,000.00 8,769,953.23 8,769,953.23 19,290,781.82 950,000.00 11,903,855.18	30 November 2017 Related to assets/income 1,518,750.00Related to assets 2,255,676.64Related to assets Related to income 562,500.00 Related to assets Related to income 1,050,000.00 Related to income 2,000,000.00 Related to income 950,000.00 Related to income Related to income 8,336,926.64

– 68 –

(XXVII) Operating income and operating cost

Item I. Principal operations Glasses II. Other operations Raw material, utility, and technological services, etc. Total	January to November of 2017 Income Cost 1,295,102,943.40 967,289,726.18 1,295,102,943.40 967,289,726.18 53,192,789.82 48,380,240.87 53,192,789.82 48,380,240.87 1,348,295,733.22 1,015,669,967.05	2016 Income Cost 1,127,693,415.85 910,437,783.96 1,127,693,415.85 910,437,783.96 39,971,293.89 33,234,645.96 39,971,293.89 33,234,645.96 1,167,664,709.74 943,672,429.92

(XXVIII) Tax and surcharges

Item Business tax Property tax Land-use tax City maintenance tax Education surcharges Others Total (XXIX) Selling expenses Item Staff’s remuneration Depreciation expenses Transportation costs Handling charges Material consumption Other selling expenses Total	January to November of 2017 6,121,292.22 9,890,409.06 1,116,058.26 668,864.69 859,221.17 18,655,845.40 January to November of 2017 6,457,394.40 204,102.13 40,161,849.92 395,252.80 212,315.32 2,052,454.18 49,483,368.75	2016 5,741.68 3,361,344.70 6,029,812.87 1,828,424.52 237,057.06 442,541.60 11,904,922.43 2016 6,987,769.25 278,399.29 26,859,610.45 624,331.64 397,595.15 1,836,942.16 36,984,647.94

– 69 –

(XXX) Administrative expenses

Item Staff’s remuneration Depreciation of fixed assets Amortization of intangible assets Intermediary engagement fees Research and development fees Taxes Transportation fees Business travelling fees Repair fees Utility Property management fees Low-value consumables Other expenses Total	January to November of 2017 67,141,333.04 10,560,566.19 7,293,500.63 7,489,300.90 52,569,389.19 82,041.75 771,760.73 2,860,655.58 1,573,309.08 924,845.32 1,544,852.20 738,888.43 1,905,416.05 155,455,859.09	2016 55,948,912.35 7,209,853.67 6,427,460.86 9,145,329.32 24,595,765.11 5,833,468.74 1,667,104.30 2,351,773.84 1,286,172.14 1,283,291.46 2,003,325.12 6,758,245.03 14,312,345.89 138,823,047.83

Note: Pursuant to the “Regulations for the Accounting Treatment of VAT” (Cai Kuai [2016] No. 22) (“《增值稅會計處理規定》（財會[2016]22 號）”), the relevant taxes such as property tax, land use tax, vehicle use tax and stamp duty used for calculation of administrative expenses occurred subsequent to 1 May 2016 were adjusted to be presented as items under the “tax and surcharges”.

(XXXI) Financial expenses

Item Interest expense Less: Interest income Exchange loss Less: Exchange gain Bank charges (interest paid on discounting of bills) Other expenses Total	January to November of 2017 62,478,037.06 935,831.73 1,000,499.26 4,632,671.05 3,764,436.91 70,939,812.55	2016 42,522,305.70 8,558,290.78 148,153.54 34,209.89 4,022,638.91 3,190,780.58 41,291,378.06

– 70 –

(XXXII) Asset impairment losses

Item Loss on bad debts Loss on inventory depreciation Impairment losses on fixed assets Total Other income Item Government grants Total	January to November of 2017 7,675,054.46 1,293,089.67 9,555,668.20 18,523,812.33 January to November of 2017 49,090,026.52 49,090,026.52	2016 -1,953,197.39 22,197,414.53 2,472,284.58 22,716,501.72 2016

(XXXIII) Other income

(XXXIV) Non-operating income

1. Breakdown of non-operating income

Item Total gain on disposal of non- current assets Including: Gain on disposal of fixed assets Gain from disposal of intangible assets Government grants Gain from debt restructuring Other gains Total	January to November of 2017 Amount Amount recognized as non- recurring gain or loss of the current period 83,418.35 83,418.35 22,266.73 22,266.73 61,151.62 61,151.62 1,565,500.00 1,565,500.00 1,904,753.34 1,904,753.34 990,463.12 990,463.12 4,544,134.81 4,544,134.81	2016 Amount Amount recognized as non-recurring gain or loss of the current period 282,222.82 282,222.82 27,348.92 27,348.92 254,873.90 254,873.90 104,840,076.91 104,840,076.91 3,130,969.27 3,130,969.27 41,991.83 41,991.83 108,295,260.83 108,295,260.83	2016 Amount Amount recognized as non-recurring gain or loss of the current period 282,222.82 282,222.82 27,348.92 27,348.92 254,873.90 254,873.90 104,840,076.91 104,840,076.91 3,130,969.27 3,130,969.27 41,991.83 41,991.83 108,295,260.83 108,295,260.83
			108,295,260.83

– 71 –

2. Government grants recognized as gain or loss of the current period

	January to
	November of		Related to assets/
Item	2017	2016	income
Supporting fund granted by the management
committee of industrial cluster zone in
Puyang county		66,474,750.00	Related to income
Special subsidy for new materials granted
by the Bureau of Finance of Longzihu
District of Bengbu		17,000,000.00	Related to income
Subsidy granted by Treasury Payment
Center of Yanshi (incentive funds for
supporting enterprise development)		10,322,700.00	Related to income
Fund for supporting enterprises granted
by the Bureau of Finance of Longzihu
District of Bengbu		2,500,000.00	Related to income
Subsidy for supporting enterprises and
stabilizing employment granted by Social
Security Funds Collecting Center of
Bengbu		2,482,648.98	Related to income
Funds for construction of technology
projects in Comprehensive Experimental
Zone for Independent Innovation of
Bengbu		1,230,046.77	Related to income
Fiscal subsidy for ultra-thin and ultra-white
glass production line		1,215,000.00	Related to assets
Subsidy for stabilizing enterprise
employment allocated by Social Security
Center of Luoyang		540,880.00	Related to income
Special subsidy for “application technology
R&D”		280,131.60	Related to income
Special fund for ultra-thin glass production
line		75,000.00	Related to assets
Land-use subsidy for ultra-thin and
ultra-white glass production line project		53,920.56	Related to assets
Hefei R&D project subsidies		2,254,000.00	Related to income
Others		410,999.00	Related to income
Incentive payments for patents of 2016 of
Yuhui District granted by the Science
and Technology Bureau of Yuhui District
of Bengbu	4,500.00		Related to income

– 72 –

Item Construction funds of 2017 for strong manufacturing province granted by the Commission of Economy and Information Technology of Longzihu District of Bengbu (subsidy for intelligent factory and digital workshop) Special funds for the 2017 construction of innovative provinces in Anhui Province (second batch) – incentive payments for cultivation of high-tech enterprises granted by Bengbu Municipal Science and Technology Bureau Party building funds allocated by the Organization Department of CPC Committee of Bengbu Longzihu District Subsidy of Bengbu Municipal Bureau of Science and Technology and Intellectual Property for high-tech enterprises Incentive payments for revenue increase in principal business Incentive payments for energy saving and consumption reduction Hefei Municipal Innovative Enterprises Incentive payments for economics and trade of the High-Tech Zone of Hefei Incentive payments for intellectual property Incentive payments for being recognized as a “National High – tech Enterprise” Financial treasury transfer of Hefei High- tech Industrial Development Zone (subsidy for qualification identification of 02400101148) Subsidy for the standardization of safety production Total	January to November of 2017 500,000.00 200,000.00 10,000.00 150,000.00 150,000.00 50,000.00 30,000.00 10,000.00 11,000.00 200,000.00 200,000.00 50,000.00 1,565,500.00	2016 Related to assets/ income Related to income Related to income Related to income Related to income Related to income Related to income Related to income Related to income Related to income Related to income Related to income Related to income 104,840,076.91

– 73 –

(XXXV) Non-operating expenses

Item January to November of 2017 Amount Amount recognized as non- recurring gain or loss of the current period Total loss on disposal of non- current assets Including: Loss on disposal of fixed assets Indemnities, liquidated damages and penalties 251,409.49 251,409.49 Other expenses 14,532.63 14,532.63 Total 265,942.12 265,942.12	2016 Amount 15,875.60 15,875.60 4,431,441.73 12,577.65 4,459,894.98	Amount recognized as non-recurring gain or loss of the current period 15,875.60 15,875.60 4,431,441.73 12,577.65 4,459,894.98

(XXXVI) Income tax expenses

1. Breakdown of income tax expense

Item Current income tax expenses under applicable tax laws and regulations Deferred income tax expenses Total	January to November of 2017 21,723,312.87 1,843,703.44 23,567,016.31	2016 17,102,003.10 -811,980.43 16,290,022.67

– 74 –

(XXXVII) Assets under restricted ownership or use right

Book value at Item 30 November 2017 Reasons for restriction Monetary funds 20,785,225.83 Deposits for bills and loan Bills receivable 80,061,981.70 Pledge Fixed assets 491,583,874.24 Mortgage loan Intangible assets 54,190,093.72 Mortgage loan Total 646,621,175.49

VIII. EQUITY INTERESTS IN OTHER ENTITIES

(I) Interests in subsidiaries

1. Companies now comprising the Group

		Place of
	Place of	principal	Nature of	Shareholding	Methods of
Name of subsidiaries	Registration	business	business	percentage(%)	Acquisition
				Direct Indirect
CLFG Longmen Glass Company	Luoyang City	Yanshi City	Production and	100	Investment
Limited* (洛玻集團龍門			sale
玻璃有限責任公司)
CLFG Longhai Electronic Glass	Yanshi City	Yanshi City	Production and	100	Investment
Co., Ltd.* (洛玻集團洛陽			sale
龍海電子玻璃有限公司)
CNBMG (Puyang) Photoelectric	Puyang City	Puyang City	Production and	100	Investment
Material Co., Ltd.* (formerly			sale
known as Luoyang Luobo
Furuida Commerce Co.,
Ltd.*) (中建材（濮陽）光電
材料有限公司（原名：洛
陽洛玻福睿達商貿有限
公司）)
Bengbu CNBM Information	Bengbu City	Bengbu City	Production and	100	Business
Display Material Co., Ltd.*			sale		combination
(蚌埠中建材信息顯示材					under common
料有限公司)					control
CNBM (Hefei) New Energy	Hefei City	Hefei City	Production and	100	Business
Company Limited* (中建材			sale		combination
（合肥）新能源有限公司)					under common
(Note)					control

– 75 –

		Place of
	Place of	principal	Nature of	Shareholding	Methods of
Name of subsidiaries	Registration	business	business	percentage(%)	Acquisition
				Direct Indirect
CNBM (Tongcheng) New	Tongcheng	Tongcheng	Production and	100	Business
Energy Materials Company	City	City	sale		combination
Limited* (中國建材桐城					under common
新能源材料有限公司)					control
(Note)
CNBM (Yixing) New Energy	Yixing City	Yixing City	Production and	70.99	Business
Company Limited* (中建材			sale		combination
（宜興）新能源有限公司)					under common
(Note)					control

Note: Assuming that 100% equity interest in Hefei New Energy and Tongcheng New Energy, and 70.99% equity interest in Yixing New Energy had been acquired, respectively, on 1 January 2016 and 31 October 2016.

IX. RELATED PARTY AND RELATED PARTY TRANSACTIONS

(I) Parent company of the Company

				Equity	Voting
	Place of	Nature of	Registered	interest in	shares in
Name of Parent Company	registration	business	capital	the Company	the Company
				(%)	(%)
China Luoyang Float Glass	Luoyang, China	Production of	1,286,740,000.00	19.94	19.94
(Group) Company Limited*		glass, related raw
(中國洛陽浮法玻璃集		materials and
團有限責任公司)		complete sets of
		equipment

The ultimate controller of the Company is China National Building Material Group Co., Ltd.*.

(II) Subsidiaries

For details, please refer to “VIII. Equity Interests in Other Entities”.

– 76 –

(III) Other related parties

Name of other related parties

Relationship with the Company

Triumph Technology Group Company* Controlling shareholder ( 凱盛科技集團有限公司 ) of the parent company
CLFG (Beijing) International Engineering ( 洛 Wholly-owned subsidiary 玻（北京）國際工程有限公司 ) of the parent company
CLFG Luoyang Jingrun Coating Glass Co., Ltd* Controlled subsidiary of ( 洛陽晶潤鍍膜玻璃有限公司 ) the parent company
Luoyang New Jingrun Engineering Glass Co., Controlled subsidiary of Ltd.* ( 洛陽新晶潤工程玻璃有限公司 ) the parent company
CLFG Luoyang Glass Engineering Design and Wholly-owned subsidiary Research Co., Ltd.* ( 洛玻集團洛陽玻璃 of the parent company 工程設計研究有限公司 )
CLFG Warehousing & Logistics Company Wholly-owned subsidiary Limited* ( 洛陽洛玻物流有限公司 ) of the parent company
Luoyang Luobo Glass Fibre Co., Ltd.* ( 洛陽玻 Controlled subsidiary of 纖玻璃纖維有限公司 ) the parent company
CLFG Longhao Glass Co., Ltd.* ( 洛玻集團洛 Wholly-owned subsidiary 陽龍昊玻璃有限公司 ) of the parent company
Yinan Huasheng Mineral Products Industry Co., Controlled subsidiary of Ltd.* ( 沂南華盛礦產實業有限公司沂南華盛礦產實業有限公司 ) the parent company
China Triumph International Engineering Co., Subsidiary of the de facto Ltd.* (中國建材國際工程集團有限公司)中國建材國際工程集團有限公司)) controller
Yinan Huasheng Mineral Products Industry Co., Ltd.* ( 沂南華盛礦產實業有限公司沂南華盛礦產實業有限公司 )
China Triumph International Engineering Co., Ltd.* (中國建材國際工程集團有限公司)中國建材國際工程集團有限公司))
Anhui Bengbu Huayi Conductive Film Glass Co., Ltd.* ( 安徽省蚌埠華益導電膜玻璃有限公司 )
Subsidiary of the de facto controller
Henan Zhonglian Glass Co., Ltd.* ( 河南省中聯玻璃有限責任公司 )
Triumph Science & Technology Co., Ltd.* ( 凱盛科技股份有限公司 )
CTIEC Shenzhen Scieno-tech Engineering Company Limited* ( 深圳市凱盛科技工程有限公司 )
Triumph Bengbu Engineering and Technology Company Limited* ( 蚌埠凱盛工程技術有限公司 )
Subsidiary of the de facto controller
Subsidiary of the de facto controller
Subsidiary of the de facto controller
Subsidiary of the de facto controller
Subsidiary of the de facto controller
Jiangsu CTIEC Environmental Protection Research Institute Co., Ltd.* ( 江蘇中建材環保研究院有限公司 )

– 77 –

Name of other related parties

Relationship with the Company

Sino-Italian CTIEC (Bengbu) Glass Cold-End Machinery Company Limited (中意凱盛（蚌埠）玻璃冷端機械有限公司 ) Anhui Huaguang Photoelectric Materials Technology Group Co., Ltd. ( 安徽華光光電材料科技集團有限公司 ) Bengbu Chemical Engineering Machinery Making Co., Ltd.* ( 蚌埠化工機械製造有限公司 )

CNBM (Bengbu) Photovoltaic Materials

Company Limited ( 中建材（蚌埠）光電材料有限公司 ) Dengfeng Hongzhai Silicon Co., Ltd. ( 登封紅寨硅砂有限公司 ) CNBM Triumph Robotics (Shanghai) Co., Ltd. ( 中建材凱盛機器人（上海）有限公司 ) Anhui Tianzhu Green Energy Technology Co., Ltd. (安徽天柱綠色能源科技有限公司) CNBM (Zhenjiang) Photovoltaic Application Technology Research Institute Company Limited* ( 中建材（鎮江）光電應用技術研究院有限公司 )

Jetion Solar (China) Co., Ltd. ( 中建材浚鑫科技有限公司 ) Shanghai CTIEC Luculent Information Technology Co., Ltd. ( 上海凱盛朗坤信息技術股份有限公司 )

Subsidiary of the de facto controller

Controlled subsidiary of the parent company Subsidiary of the de facto controller Subsidiary of the de facto controller Subsidiary of the de facto controller

Subsidiary of the de facto controller Subsidiary of the de facto controller

CNBM Light Industry Automation Institute (中 Subsidiary of the de facto 建材輕工業自動化研究所有限公司 ) controller Sinoma Science & Technology Co., Ltd. ( 中材 Subsidiary of the de facto 科技股份有限公司 ) controller Triumph Photovaltaic Material Co. Ltd. ( 凱盛 Subsidiary of the de facto 光伏材料有限公司 ) controller Triumph Quartz Materials (Huang Shan) Co., Subsidiary of the de facto Ltd. ( 凱盛石英材料（黄山）有限公司 ) controller CTIEC Shenzhen Scieno-tech Engineering Subsidiary of the de facto Company Limited. Bengbu Branch ( 深圳市 controller 凱盛科技工程有限公司蚌埠分公司 ) China Triumph International Engineering Co., Subsidiary of the de facto Ltd. Bengbu Branch controller

– 78 –

Relationship with the Company

Name of other related parties

China Triumph International Engineering Co., Subsidiary of the de facto Ltd. Hainan Branch ( 中國建材國際工程 controller 集團有限公司海南分公司 ) China Triumph International Engineering Co., Subsidiary of the de facto Ltd. Jiangsu Branch ( 中國建材國際工程 controller 集團有限公司江蘇分公司 ) CNBM (Bengbu) Photovoltaic Materials Subsidiary of the de facto Company Limited controller CNBM Bengbu Glass Industry Design & Subsidiary of the de facto Research Institute Co., Ltd. controller Ruitai Technology Co., Ltd. ( 瑞泰科技股份 Subsidiary of the de facto 有限公司 ) controller AVIC Sanxin Solar Photoelectric Glass Co., Others Ltd.* ( 中航三鑫太陽能光電玻璃有限公司 ) Wonderful Sky Financial Group Limited ( 皓天 Others 財經集團有限公司 )

(IV) Related party transactions

1. Purchase and sales of goods and provision and receiving of services

	Content of	January to
	related party	November
Name of related party	transaction	of 2017	2016
Purchasing of goods/receiving of
services:
Anhui Tianzhu Green Energy	Procurement of	4,370,672.86	4,710,256.39
Technology Co., Ltd.*	Equipment
Luoyang New Jingrun Engineering	Procurement of		1,691,044.73
Glass Co., Ltd.*	raw material
CNBM Bengbu Glass Industry Design	Raw material,	840,017.27	1,460,358.39
& Research Institute Co., Ltd.*	electricity,
	maintenance
CNBM Bengbu Glass Industry Design	Technical	389,056.61	292,452.83
& Research Institute Co., Ltd.*	services
CNBM Bengbu Glass Industry Design	Capital utilization		3,941,834.23
& Research Institute Co., Ltd.*	fee
CNBM Bengbu Glass Industry Design	Service fee	1,391,849.05	1,580,009.43
& Research Institute Co., Ltd.*

– 79 –

	Content of	January to
	related party	November
Name of related party	transaction	of 2017	2016
CNBM Bengbu Glass Industry Design	Purchase of		94,339.62
& Research Institute Co., Ltd.*	Patents
Bengbu Chemical Engineering	Raw material,	6,182,583.63	5,436,619.89
Machinery Making Co., Ltd.*	maintenance
Triumph Bengbu Engineering and	Raw material,	313,318.77	131,940.17
Technology Company Limited*	labour service
Dengfeng Hongzhai Silicon Co., Ltd.*	Raw material	436,014.20	2,992,250.98
Wonderful Sky Financial Group	Bulletin fees	2,780,220.00	2,404,865.49
Limited
Triumph Technology Group Company*	Capital utilization	5,075,485.63	700,627.99
	fee
Triumph Technology Group Company*	Procurement of	108,746,792.84	88,473,037.99
	raw material
Triumph Quartz Materials (Huang	Procurement of	3,055,060.51	544,415.40
Shan) Co., Ltd.*	raw material
CLFG Longhao Glass Co., Ltd.*	Procurement of	51,778.11
	glass sheet
CNBM Light Industry Automation	Procurement of	420,588.82
Institute*	spare parts and
	components
Shanghai CTIEC Luculent Information	Technical	1,476,524.00
Technology Co., Ltd.*	services
CTIEC Shenzhen Scieno-tech	Procurement of	23,247.86
Engineering Company Limited*	raw material
CTIEC Shenzhen Scieno-tech	Raw material,	2,391,453.00	71,466.67
Engineering Company Limited.	equipment
Bengbu Branch*
Sinoma Science & Technology Co.,	Projects in	36,656.41
Ltd.	progress
Yinan Huasheng Mineral Products	Raw material		82,096.24
Industry Co., Ltd.*
China Triumph International	Design fee	4,280,608.80
Engineering Co., Ltd. Bengbu
Branch*
China Triumph International	Procurement of	17,094,017.09
Engineering Co., Ltd. Bengbu	equipment
Branch*
China Triumph International	Procurement of	23,371,480.45	25,038,360.60
Engineering Co., Ltd. Hainan	goods
Branch*

– 80 –

	Content of	January to
	related party	November
Name of related party	transaction	of 2017	2016
China Triumph International	Procurement of	41,772,184.90	13,117,569.20
Engineering Co., Ltd. Jiangsu	equipment
Branch*
China Luoyang Float Glass (Group)	Capital utilization	5,984,585.43	7,119,644.41
Company Limited*	fee
CNBM (Bengbu) Photovoltaic	Capital utilization	1,587,669.27	440,437.50
Materials Company Limited*	fee
CNBM (Zhenjiang) Photovoltaic	Commissioned		2,075,471.64
Application Technology Research	development
Institute Company Limited*	fee
Jetion Solar (China) Co., Ltd.* (中建	Procurement of		9,689.08
材浚鑫科技有限公司)	raw material
CNBM Triumph Robotics (Shanghai)	Procurement of	1,321,709.39	1,997,435.92
Co., Ltd.*	equipment
Sino-Italian CTIEC (Bengbu) Glass	Spare parts and	15,760.69	68,675.21
Cold-End Machinery Company	components/
Limited*	equipment
Sino-Italian CTIEC (Bengbu) Glass	Procurement of	25,555.56	29,017.09
Cold-End Machinery Company	raw material
Limited*
Sales of goods/provision of services:
Anhui Bengbu Huayi Conductive Film	Sales of products	14,418,660.06	85,980,878.54
Glass Co., Ltd.*
Anhui Tianzhu Green Energy	Sales of	2,329,861.51	54,177.78
Technology Co., Ltd.*	photovoltaic
	modules
Triumph Photovaltaic Material Co. Ltd.	Sales of products	12,158.86
CNBM Bengbu Glass Industry Design	Provision of	1,886,792.45
& Research Institute Co., Ltd.*	service
Triumph Science & Technology Co.,	Sales of products	469,923.60	1,469,883.78
Ltd.*
Triumph Technology Group Company*	Capital utilization		5,005,800.80
	fee
CLFG Longhao Glass Co., Ltd.*	Technical service		1,679,245.29
CLFG Longhao Glass Co., Ltd.*	Sales of raw	1,677,777.78	8,107,000.00
	material
China Triumph International	Sales of products	5,209,638.68
Engineering Co., Ltd.*
China Luoyang Float Glass (Group)	Tenant and	210,625.64	164,549.58
Company Limited*	utilities

– 81 –

	Content of	January to
	related party	November
Name of related party	transaction	of 2017	2016
AVIC Sanxin Solar Photoelectric	Sales of products	23,887,050.40	1,381,103.60
Glass Co., Ltd.*
CNBM (Bengbu) Photovoltaic	Technical	2,376,093.12	377,358.48
Materials Company Limited*	services
Jetion Solar (China) Co., Ltd.*	Sales of products	54,742,720.18	42,692,437.86

2. Related party guarantees

					Guarantee
		Guarantee	Start date of	End date of	fulfilled
Guarantor	Guaranteed party	amount	guarantee	guarantee	or not
China National Building	Luoyang Glass	106,860,000.00	25 January	25 January	No
Material Group Co., Ltd.	Company		2017	2018
	Limited*
China National Building	Luoyang Glass	57,600,000.00	26 January	26 January	No
Material Group Co., Ltd.	Company		2017	2018
	Limited*
China National Building	Luoyang Glass	60,624,000.00	10 February	9 February	No
Material Group Co., Ltd.	Company		2017	2018
	Limited*
China National Building	Luoyang Glass	87,306,250.00	16 January	5 January	No
Material Group Co., Ltd.	Company		2017	2018
	Limited*
China Luoyang Float Glass	CLFG Longhai	50,000,000.00	19 June 2015	18 June 2018	No
(Group) Company Limited,	Electronic Glass
Triumph Technology	Limited*
Group Company*, Triumph
Technology Group
Company*
China Luoyang Float Glass	CLFG Longhai	63,636,363.00	23 June 2015	22 June 2018	No
(Group) Company Limited,	Electronic Glass
Triumph Technology	Limited*
Group Company*,
Triumph Technology
Group Company*

– 82 –

					Guarantee
		Guarantee	Start date of	End date of	fulfilled
Guarantor	Guaranteed party	amount	guarantee	guarantee	or not
Triumph Technology Group	Bengbu CNBM	100,000,000.00	8 December	8 December	No
Company*	Information		2016	2019
	Display Material
	Co., Ltd.*
Triumph Technology Group	Bengbu CNBM	100,000,000.00	12 April 2017	22 April	No
Company*	Information			2022
	Display Material
	Co., Ltd.*
Triumph Technology Group	Bengbu CNBM	50,000,000.00	8 November	8 November	No
Company*	Information		2017	2022
	Display Material
	Co., Ltd.*
Triumph Technology Group	CNBM (Hefei)	20,000,000.00	28 November	27 November	No
Company*	New Energy		2018	2020
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	17,000,000.00	5 April 2018	4 April 2020	No
Company*	New Energy
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	15,000,000.00	21 July 2018	20 July 2020	No
Company*	New Energy
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	15,000,000.00	24 July 2018	23 July 2020	No
Company*	New Energy
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	19,000,000.00	8 September	7 September	No
Company*	New Energy		2018	2020
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	30,000,000.00	25 October	24 October	No
Company*	New Energy		2017	2020
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	30,000,000.00	12 October	11 October	No
Company*	New Energy		2018	2020
	Company
	Limited*

– 83 –

					Guarantee
		Guarantee	Start date of	End date of	fulfilled
Guarantor	Guaranteed party	amount	guarantee	guarantee	or not
Triumph Technology Group	CNBM (Hefei)	20,000,000.00	2 June	1 June	No
Company*	New Energy		2017	2019
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	30,000,000.00	4 February	3 February	No
Company*	New Energy		2018	2020
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	45,500,000.00	7 February	6 February	No
Company*	New Energy		2018	2020
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	30,000,000.00	9 March	8 March	No
Company*	New Energy		2018	2020
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	15,000,000.00	24 May	23 May	No
Company*	New Energy		2018	2020
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	30,000,000.00	3 March	2 March	No
Company*	New Energy		2017	2019
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	30,000,000.00	21 February	20 February	No
Company*	New Energy		2017	2019
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	29,500,000.00	22 February	21 February	No
Company*	New Energy		2017	2019
	Company
	Limited*
Triumph Technology Group	CNBM (Hefei)	35,000,000.00	29 October	28 October	No
Company*	New Energy		2017	2019
	Company
	Limited*
CNBM Bengbu Glass	CNBM (Hefei)	100,000,000.00	26 March	25 March	No
Industry Design &	New Energy		2021	2023
Research Institute Co.,	Company
Ltd.*	Limited*

– 84 –

					Guarantee
		Guarantee	Start date of	End date of	fulfilled
Guarantor	Guaranteed party	amount	guarantee	guarantee	or not
CNBM Bengbu Glass	CNBM (Hefei)	4,500,000.00	28 May	27 May	No
Industry Design &	New Energy		2021	2023
Research Institute Co.,	Company
Ltd.*	Limited*
CNBM Bengbu Glass	CNBM (Hefei)	95,500,000.00	9 September	8 September	No
Industry Design &	New Energy		2021	2023
Research Institute Co.,	Company
Ltd.*	Limited*
CNBM Bengbu Glass	CNBM (Hefei)	90,000,000.00	15 December	14 December	No
Industry Design &	New Energy		2021	2023
Research Institute Co.,	Company
Ltd.*	Limited*
Triumph Technology Group	CNBM (Hefei)	49,000,000.00	28 October	27 October	No
Company*	New Energy		2016	2018
	Company
	Limited*
CNBM Bengbu Glass	CNBM (Hefei)	4,500,000.00	2 June	1 June	No
Industry Design &	New Energy		2016	2018
Research Institute Co.,	Company
Ltd.*	Limited*
Triumph Technology Group	CNBM (Yixing)	30,000,000.00	12 April	30 June	No
Company*, Far East	New Energy		2017	2022
Optoelectronics Company	Company
Limited*	Limited*
Triumph Technology Group	CNBM (Yixing)	75,000,000.00	27 March	26 March	No
Company*	New Energy		2017	2018
	Company
	Limited*
Triumph Technology Group	CNBM (Yixing)	50,000,000.00	28 March	27 March	No
Company*	New Energy		2017	2018
	Company
	Limited*
Triumph Technology Group	CNBM (Yixing)	50,000,000.00	26 December	26 December	No
Company*, Far East	New Energy		2016	2018
Optoelectronics Company	Company
Limited*	Limited*
Triumph Technology Group	CNBM (Yixing)	50,000,000.00	12 April	30 April	No
Company*, Far East	New Energy		2017	2020
Optoelectronics Company	Company
Limited*	Limited*

– 85 –

3. Other related party transactions

(1) Tongcheng New Energy paid bills of RMB2,000,000.00 and RMB1,000,000.00 to Bengbu Optoelectronics Technology Co., Ltd. and CNBM Bengbu Glass Industry Design & Research Institute Co., Ltd., respectively, from January to November 2017, obtaining discounted amounts of RMB1,956,000.00 and RMB978,666.67, respectively.
(2) Yixing New Energy paid bills of RMB13,790,710.31, RMB7,871,078.09, RMB4,408,080.76, RMB4,408,080.76 and RMB390,000.00 to Bengbu Optoelectronics Technology Co., Ltd., Anhui Zhongchuang Electronic Information Material Co., Ltd., Bengbu Zhongheng New Material Technology Company Limited and CNBM Bengbu Glass Industry Design & Research Institute Co., Ltd., respectively from January to November 2017, obtaining discounted amounts of RMB13,487,416.92, RMB7,705,049.85, RMB4,294,107.38 and RMB383,495.99, respectively.

(V) Accounts receivable and payable of related parties

1. Items of receivables

		30 November	2017	31 December	2016
			Bad debt		Bad debt
Item	Name of related party	Book balance	provision	Book balance	provision
Bills receivable Jetion Solar (China) Co., Ltd. 3,500,000.00* Accounts Anhui Huaguang Photoelectric 289,079.90
receivable	Materials Technology Group
	Co., Ltd.*

– 86 –

		30 November	2017	31 December	2016
			Bad debt		Bad debt
Item	Name of related party	Book balance	provision	Book balance	provision
Accounts	Anhui Bengbu Huayi Conductive	25,372,807.55	28,621,134.25
receivable	Film Glass Co., Ltd.*
Accounts	Anhui Tianzhu Green Energy		717,356.40
receivable	Technology Co., Ltd.*
Accounts	Triumph Science & Technology	549,810.62	22,038.01
receivable	Co., Ltd.*
Accounts	Luoyang New Jingrun		1,349,753.33
receivable	Engineering Glass Co., Ltd.*
Accounts	China Triumph International	46.64	46.64
receivable	Engineering Co., Ltd.*
Accounts	AVIC Sanxin Solar Photoelectric	4,725,827.55
receivable	Glass Co., Ltd.*
Accounts	Jetion Solar (China) Co., Ltd.*	72,052,113.09	36,514,466.49
receivable
Accounts	CNBM (Bengbu) Photovoltaic	365,878.05
receivable	Materials Company Limited*
Accounts	CLFG Longhao Glass Co., Ltd.*	1,963,000.00
receivable
Prepayments	Triumph Bengbu Engineering	156,240.00	13,500.00
	and Technology Company
	Limited*
Prepayments	CNBM Light Industry		205,000.00
	Automation Institute*
Prepayments	Triumph Technology Group	1,072,855.25	279,436.97
	Company*
Prepayments	CNBM Triumph Robotics		5,600.00
	(Shanghai) Co., Ltd.*
Prepayments	Sino-Italian CTIEC (Bengbu)	1,367.52		3,247.43
	Glass Cold-End Machinery
	Company Limited*
Prepayments	CTIEC Shenzhen Scieno-	2,490.00
	tech Engineering Company
	Limited. Bengbu Branch*
Prepayments	Ruitai Technology Co., Ltd.	137,940.00
Other receivables	CLFG (Beijing) International	22,796.95	82,796.95
	Engineering
Other receivables	Luoyang Luobo Glass Fibre Co.,	150,738.92	150,738.92
	Ltd.*
Other receivables	China Triumph International	1,650,000.00	1,650,000.00
	Engineering Co., Ltd.*

– 87 –

	30 November 2017	31 December 2016	31 December 2016
	Bad debt		Bad debt
Item	Name of related party Book balance provision	Book balance	provision
Other receivables	China Luoyang Float Glass 252,266.47 23,982,714.48
	(Group) Company Limited*
Other non-current	Anhui Tianzhu Green Energy 5,103,700.00
assets	Technology Co., Ltd.*
Other non-current	Shanghai CTIEC Luculent 710,000.00
assets	Information Technology Co.,
	Ltd.*
Other non-current	Triumph Bengbu Engineering 36,000.00
assets	and Technology Company
	Limited*
2.	Items of payables
		30 November	31 December
Item	Name of related party	2017	2016
Bills payable	CNBM Light Industry Automation Institute*	287,089.00	205,000.00
Bills payable	China Triumph International Engineering Co., Ltd. Bengbu Branch*	50,000,000.00	50,000,000.00
Bills payable	Triumph Quartz Materials (Huang Shan) Co., Ltd.*	1,343,224.80
Bills payable	Bengbu Chemical Engineering Machinery Making Co., Ltd.*	501,484.00
Bills payable	Triumph Bengbu Engineering and Technology Company Limited*	264,310.00
Bills payable	China Triumph International Engineering Co., Ltd. Jiangsu Branch*	15,537,732.80
Bills payable	China Triumph International Engineering Co., Ltd. Hainan Branch*	723,408.00
Bills payable	Shanghai CTIEC Luculent Information Technology Co., Ltd.*	671,200.00
Accounts payable	CNBM Bengbu Design & Research Institute for Glass Industry	1,159,893.08	963,003.08
Accounts payable	Bengbu Chemical Engineering Machinery Making Co., Ltd.*	1,516,286.93	2,061,966.37
Accounts payable	Triumph Bengbu Engineering and Technology Company Limited*	13,040.00	125,036.90
Accounts payable	Dengfeng Hongzhai Silicon Co., Ltd.*	81,224.51	517,453.69
Accounts payable	Jiangsu CTIEC Environmental Protection Research Institute Co.,	1,182,499.11	3,544,508.91
	Ltd.*
Accounts payable	Triumph Technology Group Company*	3,813,133.19	14,326,296.59
Accounts payable Triumph Quartz Materials (Huang Shan) Co., Ltd. 2,000,000.00 Accounts payable Shanghai CTIEC Luculent Information Technology Co., Ltd. 140,800.00
Accounts payable	CTIEC Shenzhen Scieno-tech Engineering Company Limited.		3,406.84
	Bengbu Branch*
Accounts payable	Yinan Huasheng Mineral Products Industry Co., Ltd.*	2,714.60	2,714.60
Accounts payable	China Triumph International Engineering Co., Ltd.*	295,218,652.85	282,519,058.29
Accounts payable	China Triumph International Engineering Co., Ltd. Bengbu Branch*	38,554,389.62	38,961,654.50
Accounts payable	China Triumph International Engineering Co., Ltd. Hainan Branch*	10,709,672.28	11,203,545.18
Accounts payable	China Triumph International Engineering Co., Ltd. Jiangsu Branch*	4,000,000.00	13,347,556.00
Accounts payable	Jetion Solar (China) Co., Ltd.*	11,336.22

– 88 –

		30 November	31 December
Item	Name of related party	2017	2016
Accounts payable	CNBM Triumph Robotics (Shanghai) Co., Ltd.*	563,000.00	796,000.00
Accounts payable	Sino-Italian CTIEC (Bengbu) Glass Cold-End Machinery Company	85,400.00	135,400.00
	Limited*
Payments received	Anhui Bengbu Huayi Conductive Film Glass Co., Ltd.*	584,459.71	5,496,513.80
in advance
Payments received	CNBM (Bengbu) Photovoltaic Materials Company Limited*		1,800,000.00
in advance
Payments received	Sino-Italian CTIEC (Bengbu) Glass Cold-End Machinery Company	6,552.00	6,552.00
in advance	Limited*
Other payables	CNBM Bengbu Glass Industry Design & Research Institute Co., Ltd.	7,844,921.83	1,574,125.80
Other payables	Bengbu Chemical Engineering Machinery Making Co., Ltd.*		3,500.00
Other payables	Wonderful Sky Financial Group Limited	3,613,179.34	2,659,797.02
Other payables	Triumph Technology Group Company*	155,070,804.96	29,611,416.67
Other payables	Triumph Quartz Materials (Huang Shan) Co., Ltd.*	5,000.00	5,000.00
Other payables	CNBM Light Industry Automation Institute*		3,000.00
Other payables	China Triumph International Engineering Co., Ltd.*	136,800.00
Other payables	China Triumph International Engineering Co., Ltd. Bengbu Branch*	196,604.80	140,000.00
Other payables	China Triumph International Engineering Co., Ltd. Hainan Branch*	5,000.00
Other payables	China Luoyang Float Glass (Group) Company Limited*	190,360,146.70	169,994,823.96
Other payables	Sino-Italian CTIEC (Bengbu) Glass Cold-End Machinery Company	1,600.00	1,600.00
	Limited*
Other payables	CNBM (Bengbu) Photovoltaic Materials Company Limited*	35,587,669.27

– 89 –

X. COMMITMENTS AND CONTINGENCIES

(I) Capital commitments

As at 30 November 2017, material capital commitments of the Group are set out as follows:

Item 30 November 2017 31 December 2016

Contract has been entered but no

provision has been made – Construction project 102,335,600.00 Total 102,335,600.00

(II) Contingencies

None

XI. EVENTS AFTER THE BALANCE SHEET DATE

None

– 90 –

XII. SUPPLEMENTARY INFORMATION

(I) Breakdown of non-recurring profit and loss for the current period

Item 1. Profit/loss on disposal of non-current assets, including write-off of provision for asset impairment 2. Government subsidies (except for the grants which are closely related to the Company’s business and have the standard amount and quantities in accordance with the national standard) attributable to profits and losses for the period 3. Profit/loss from debt restructuring 4. Costs of corporate reorganization, i.e. expenses for staff settlement, integration costs, etc. 5. Other non-operating income and expenses other than the aforesaid items 6. Effect of income tax Total	January to November of 2017 83,418.35 40,605,400.01 1,904,753.34 -19,360,303.76 724,521.00 -2,001,963.14 21,955,825.80	2016 266,347.22 104,840,076.91 3,130,969.27 -9,171,745.41 -4,402,027.55 -3,899,002.77
		90,764,617.67

(II) Return on net assets and earnings per share

	Weighted	average	Basic earnings	Basic earnings	Basic earnings	Basic earnings
	return on net assets(%) per			share
	January to		January to
	November		November
Profit for the Reporting Period	of 2017	2016	of 2017			2016
Net profit attributable to holders of ordinary
shares of the Company	3.93	8.22	0.0812		0.1066
Net profit attributable to holders of ordinary
shares of the Company after deducting non-
recurring profit and loss	2.03	-4.29	0.0420		-0.0556

	Luoyang Glass Company			Limited*
			17 January			2018

For identification purposes only

– 91 –

AI assistant

RoboSense Technology Co., Ltd — Audit Report / Information 2018

50628_rns_2018-01-18_bb150604-a804-4d1d-bc8c-37a97e4e49f1.pdf

＊

ANNOUNCEMENT IN RESPECT OF THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE REORGANISATION

APPENDIX I

Luoyang Glass Company Limited* Auditors’ Report WUYIGE Shen Zi [2018] No. 2-00006

AUDITORS’ REPORT

I. AUDIT OPINION

II. BASIS OF AUDIT OPINION

III. MANAGEMENT’S AND GOVERNING BODIES’ RESPONSIBILITY FOR THE PRO FORMA FINANCIAL STATEMENTS

IV. CERTIFIED PUBLIC ACCOUNTANTS’ RESPONSIBILITY FOR AUDIT OF PRO FORMA FINANCIAL STATEMENTS

V. OTHER EXPLANATIONS

PRO FORMA CONSOLIDATED BALANCE SHEET

Unit: RMB Yuan

PRO FORMA CONSOLIDATED INCOME STATEMENT

Unit: RMB Yuan

V. Other comprehensive income, net of tax

NOTES TO THE PRO FORMA FINANCIAL STATEMENTS

I. COMPANY PROFILE

II. SIGNIFICANT ASSETS RESTRUCTURING

(I) Plan for significant assets restructuring

(II) Basic information on assets to be acquired

1. Hefei New Energy

2. Tongcheng New Energy

3. Yixing New Energy

III. BASIS OF PREPARATION OF PRO FORMA FINANCIAL STATEMENTS

IV. STATEMENT ON COMPLIANCE WITH ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES

V. IMPORTANT ACCOUNTING POLICIES AND ESTIMATES

(I) Accounting period

(II) Operating cycle

(III) Functional currency

(IV) Business combination

1. Enterprise merger under common control

2. Enterprise merger not under common control

(V) Preparation method of consolidated financial statements

1. Scope of consolidated financial statements

2. To unify the accounting policies, date of balance sheets and accounting periods of the parent company and subsidiaries

3. Offset matters in the consolidated financial statements

4. Accounting treatment of subsidiaries acquired from merger

(VI) Classification of joint arrangements and accounting for joint operations

1. Classification of joint arrangements

2. Accounting treatment for joint operations

3. Accounting treatment for joint ventures

(VII) Recognition standard for cash and cash equivalents

(VIII) Translation of foreign currency transactions and financial statements denominated in foreign currency

1. Translation of foreign currency transactions

2. Translation of financial statements denominated in foreign currency

(IX) Financial instruments

1. Classification and recognition of financial instruments

2. Measurement of financial instruments

3. Recognition of the fair value of financial instruments by the Company

4. Basis of recognition and measurement of transfer of financial assets and liabilities

5. Impairment of financial assets

(X) Receivables

1. Individually significant receivables and with provision for bad debts on an individual basis

2. Receivables for which bad debt provision is made on group basis

3. Individually insignificant receivables with provision for bad debts on an individual basis

(XI) Inventories

1. Classification for inventories

2. Measurement for delivered inventories

3. Provision for impairment of inventories

4. Inventory system

5. Amortization of low-value consumables and packaging materials

(XII) Recognition of assets held for sale

(XIII) Long-term equity investments

1. Determination of initial investment cost

2. Method for subsequent measurement and profit or loss recognition

3. Basis of determination of joint control and significant influence over the investee

(XIV) Fixed assets

1. Recognition conditions of fixed assets

2. Classification and depreciation methods of fixed assets

(XV) Construction in progress

(XVI) Borrowing costs

1. Recognition principle for capitalization of borrowing costs

2. Calculation method of amount to be capitalized

(XVII) Intangible assets

1. Measurement of intangible assets

2. Determination basis of infinite useful life

(XVIII) Impairment of long-term assets

RoboSense Technology Co., Ltd Audit Report / Information 2018

**Luoyang Glass Company Limited* Auditors’ Report WUYIGE Shen Zi [2018] No. 2-00006**