RoboSense Technology Co., Ltd — Interim / Quarterly Report 2015

Aug 27, 2015

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.

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2015 INTERIM REPORT ANNOUNCEMENT

The board of directors (the “Board”) of Luoyang Glass Company Limited (the “ Company ”) announces the unaudited interim results of the Company and its subsidiaries (the “ Group* ”) for the six months ended 30 June 2015. The Board of the Company and the Audit Committee of the Board have reviewed and confirmed the unaudited interim results.

I. BASIC INFORMATION ABOUT THE COMPANY

Stock abbreviation	Luoyang Glass (A Share(s))	Luoyang Glass (H Share(s))
Stock code	600876	01108
Listing Exchange	the Shanghai Stock Exchange	The Stock Exchange of
		Hong Kong Limited
	Board Secretary	Securities Affairs
		Representative
Name	Wu Zhixin	Zhao Zhiming
Correspondence	Secretary Office of the Board	Secretary Office of the Board
address	of Luoyang Glass Company	of Luoyang Glass Company
	Limited, No. 9, Tang Gong	Limited, No. 9, Tang Gong
	Zhong Lu, Xigong District,	Zhong Lu, Xigong District,
	Luoyang, Henan Province,	Luoyang, Henan Province,
	the PRC	the PRC
Telephone	86-379-63908588 63908637	86-379-63908833
Facsimile	86-379-63251984	86-379-63251984
E-mail	lywzhx@126.com	lybl600876@163.com

– 1 –

II. MAJOR FINANCIAL DATA AND SHAREHOLDERS’ CHANGES

2.1 Accounting Data and Financial Indicators of the Company

Unit: Yuan Currency: RMB

			Increase/decrease
			at the end of the
			Reporting Period
	As at the end of	As at the end of	from the end of
	reporting period	the previous year	last year
			(%)
Net assets attributable to
shareholders of the Company	-64,656,645.20	49,399,018.40	-230.89
Total assets	1,190,257,751.62	1,057,067,719.83	12.60
			Changing from
		Corresponding	corresponding
		period of	period of
	Reporting period	previous year	previous year
			(%)
Net cash flow from
operating activities	-64,243,850.47	6,794,700.09	-1,045.50
Operating Income	307,311,207.69	265,633,853.92	15.69
Net profits attributable to
shareholders of the Company	-114,083,893.59	32,267,809.50	-453.55
Net profits attributable to
shareholders of the Company
after extraordinary items	-112,707,736.82	-61,870,608.82	N/A
Basic earnings per share
(RMB/share)	-0.2282	0.0645	-453.80
Diluted earnings per share
(RMB/share)	-0.2282	0.0645	-453.80
Weighted average return
on net assets	N/A	65.27	N/A

– 2 –

0

2.2 List of Holdings of the top ten shareholders

Total number of shareholders There were 26,766 shareholders of as at the end of the the Company in total, including Reporting Period 26,717 holders of A shares and (shareholder) 49 holders of H shares

Total number of recovery of voting rights of preferential shareholders as at the end of the reporting period (shareholder)

Shareholdings of top ten shareholders

	Increase/
	decrease				Number	of shares
	during the	Total of		Number of	pledged	or frozen
Name of shareholder	reporting	shares at the		restricted	Status of		Nature of
(Full name)	period	ending period	Percentage	shares held	shares	Quantity	shareholder
			(%)
HKSCC (Nominees) Limited	-393,900	248,254,898	49.65	0	Unknown		Overseas legal
							person
China Luoyang Float Glass	0	159,018,242	31.80	0	Pledged	159,018,242	State-owned
(Group) Company Limited							legal person
Zhang lixin	0	2,760,000	0.55	0	Unknown		Domestic
							natural person
Industrial and Commercial	+2,497,991	2,497,991	0.50	0	Unknown		Unknown
Bank of China – Zhaoshang
Core Value-Hybrid Securities
Investment Fund
Shanghai Li Yuan Equity	+1,700,645	1,700,645	0.34	0	Unknown		Unknown
Investment Management
Co., Ltd.
Industrial Bank Corporation	+1,250,756	1,250,756	0.25	0	Unknown		Unknown
Limited- CGB, CSI and
Baidu Baifa Strategy 100
Index Investment Fund
Chen Heyu	+1,072,471	1,072,471	0.21	0	Unknown		Domestic
							natural person
Tian Zhi Fund – Industrial	+1,000,000	1,000,000	0.20	0	Unknown		Unknown
Bank – Tian Zhi Kai Rong
Sheng Da 2nd Rating Assets
Management Programme
Tian Zhi Fund – China	+867,001	867,001	0.17	0	Unknown		Unknown
Everbright Bank – Tian Zhi
Kai Rong Sheng Da 1st
Rating Assets Management
Programme +1,000,000
Postal Savings Bank of China	+829,318	829,318	0.17	0	Unknown		Unknown
Corporation Limited – Yi
Fang Da Reforming
Dividend-Hybrid Securities
Investment Fund

– 3 –

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

	Number of
	shares held
	not subject
	to trading
Name of shareholder	moratorium	Type and number	of shares
		Category	Quantity
HKSCC (Nominees) Limited	248,254,898	Foreign capital stocks	248,254,898
		listed abroad
China Luoyang Float Glass (Group)	159,018,242	RMB common stock	159,018,242
Company Limited
Zhang lixin	2,760,000	RMB common stock	2,760,000
Industrial and Commercial Bank of China	2,497,991	RMB common stock	2,497,991
– Zhaoshang Core Value-Hybrid
Securities Investment Fund
Shanghai Li Yuan Equity Investment	1,700,645	RMB common stock	1,700,645
Management Co., Ltd.
Industrial Bank Corporation Limited- CGB,	1,250,756	RMB common stock	1,250,756
CSI and Baidu Baifa Strategy 100 Index
Investment Fund
Chen Heyu	1,072,471	RMB common stock	1,072,471
Tian Zhi Fund – Industrial Bank – Tian Zhi	1,000,000	RMB common stock	1,000,000
Kai Rong Sheng Da 2nd Rating Assets
Management Programme
Tian Zhi Fund – China Everbright Bank
– Tian Zhi Kai Rong Sheng Da 1st Rating
Assets Management Programme +1,000,000	867,001	RMB common stock	867,001
Postal Savings Bank of China Corporation
Limited – Yi Fang Da Reforming
Dividend-Hybrid Securities Investment Fund	829,318	RMB common stock	829,318

Description of the connected relationship or party acting in concert among the aforesaid shareholders:

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

– 4 –

Note:

1. HKSCC Nominees Limited held shares on behalf of its clients and the Company has not been notified by HKSCC Nominees Limited that there was any single holder of H shares who held 10% or above of the Company’s total share capital.

2. Save as disclosed above, as at 30 June 2015, there were no other persons who have any interests or short position in the shares or underlying shares in the equity derivatives of the Company as recorded in the register of interest kept under section 336 of the Securities and Futures Ordinance of Hong Kong.

3. On 31 December 2014, China Luoyang Float Glass (Group) Company Limited entered into the Equity Transfer Agreement with Bengbu Design & Research Institute for Glass Industry. Pursuant to the agreement, CLFG intended to transfer its 6.9 million shares of the Company (accounting for 13.8% of the total share capital of the Company) to Bengbu Design & Research Institute for Glass Industry. The equity transfer was approved by the SASAC on 18 May 2015, but the formalities for the share transfer had yet to be completed.

4. 2.3 Changes in Controlling Shareholder or De Facto Controller of the Company

During the Reporting Period, there was no change in the controlling shareholder and the de facto controller of the Company.

III. MANAGEMENT DISCUSSION AND ANALYSIS

3.1 Discussion and Analysis of Company Operations during Reporting Period

In the first half of 2015, the downturn in the glass market continues; there is prominent supply-demand contradictions, resulting in the cost of most manufacturing companies dropping away from the prices and the profit sliding downward to a large extent.

During the Reporting Period, the Company has realized an operating revenue of RMB307,311,200, for the same period of last year: RMB265,633,900, representing a year-on-year increase of 15.69%; it has realized an operating profit of RMB-115,364,900, for the same period of last year: RMB29,359,200, representing a year-on-year decrease of 492.94%; the net profit attributable to shareholders of the Company is RMB-114,083,900, for the same period of last year: RMB32,267,800, representing a year-on-year decrease of RMB146,351,700; the basic earnings per share attributable to shareholders of the Company are RMB-0.2282.

– 5 –

3.2 Analysis of principal operating activities

3.2.1 Analysis of changes of relevant accounts in financial statements

Unit: Yuan Currency: RMB

		Amount in
		corresponding
Subject	In the Period	period last year	Rate of change
			(%)
Operating Income	307,311,207.69	265,633,853.92	15.69
Operating Costs	332,403,424.62	250,301,099.35	32.80
Cost of sales	15,253,736.30	12,629,073.36	20.78
Administrative expenses	47,562,073.94	51,687,832.01	-7.98
Financial expenses	3,404,853.83	5,685,689.96	-40.12
Net cash flow from
operating activities	-64,243,850.47	6,794,700.09	-1,045.50
Net cash flow from
investment activities	-19,349,901.17	36,718,940.00	-152.70
Net cash flow from
financing activities	63,428,938.03	-23,799,531.17	N/A
R&D expenses	3,754,353.30	7,132,893.57	-47.37

Reasons for the changes:

• (1) Operating revenue for the period increased by 15.69% year-on-year, mainly due to the increase in sales volume as a result of the increase in production capacity in the reporting period;

• (2) Operating costs for the period increased by 32.80% year-on-year, mainly due to the increase in sales volume as a result of the increase in production capacity in the reporting period;

• (3) Selling expenses for the period increased by 20.78% year-on-year, mainly due to the growth in port charges of the subsidiaries as the method of sales and settlement of silica sand has been changed in the reporting period;

• (4) Administrative expenses for the period decreased by 7.98% year-onyear, mainly due to the decrease in technology development input for the period;

• (5) Financial expenses for the period decreased by 40.12% year-onyear, mainly due to the decrease in interests of discounted charges year-on-year in the reporting period;

– 6 –

• (6) Net cash outflow from operating activities increased by RMB71,038,600 year-on-year, mainly due to the increase in the cash payment of raw material purchase in the reporting period;

• (7) Net cash outflow from investment activities increased by RMB56,068,800 year-on-year, mainly due to the increase of fixed assets expenses for development and transformation of the subsidiaries’ assembly line in the reporting period;

• (8) Net cash inflow from financing activities increased by RMB87,228,500, mainly due to the increase in the financial aid provided by Kai Sheng Technology Group and its subsidiaries and the new collateral loans in the reporting period.

• 3.2.2 Explanations for other substantial changes in the composition of profits or source of profits of the Company (1) Impairment loss on assets for the period showed a year-on-year increase of 328.79%, mainly due to the increased provision for depreciation of inventories with the signs of impairment;

• (2) Investment income for the period presented a decrease of 100% on a year-on year basis, which was mainly due to the revenue from disposal of the equity interest in Luobo Industrial Co., Ltd. in the reporting period.

• (3) Financial expenses for the period decreased by 38.55% year-onyear, mainly due to the decrease in the revenue of subsidiaries in the reporting period.

– 7 –

• 3.3 Analysis of principal operations by business, product or geographical region

3.3.1 Principal operations by business or product

Principal operations by industry

				Year-on-year	Year-on-year
				increase/	increase/
			Gross	decrease in	decrease in	Year-on-year
	Operating	Operating	profit	operating	operating	increase/decrease in
By industry	Income	Costs	margin	revenue	costs	gross profit margin
			(%)	(%)	(%)	(%)
Float glass	254,011,326.91	297,079,222.72	-16.96	2.35	23.27	Decreased by 19.85
						percentage points
Silica sand	17,809,596.59	8,823,196.15	50.46	43.92	26.37	Increased by 6.88
						percentage points

Principal operations by product

				Increase/	Increase/
				decrease in	decrease in
			Gross	operating	operating	Increase/decrease
	Operating	Operating	profit	income from	cost from	in gross profit
By product	Income	Costs	margin	last year	last year	from last year
			(%)	(%)	(%)	(%)
Float glass	254,011,326.91	297,079,222.72	-16.96	2.35	23.27	Decreased by 19.85
						percentage points
Including: ultra-	139,176,166.21	119,836,792.73	13.90	-11.50	-1.50	Decreased by 8.73
thin glass						percentage points
Common glass	114,835,160.70	177,242,429.99	-54.35	26.31	48.54	Decreased by 23.11
						percentage points
Silica sand	17,809,596.59	8,823,196.15	50.46	43.92	26.37	Increased by 6.88
						percentage points

– 8 –

3.3.2 Principal operations by region

Region Domestic Overseas Total	Operating Income 271,820,923.50 0 271,820,923.50	Year-on-year increase/decrease in operating revenue (%) 4.33 0 4.33

3.4 Analysis of core competitiveness

During the reporting period, the Company developed the ultra-thin glass with 0.25mm, which was the thinnest in the PRC and realized commercial production, which further increased the varieties of high added-value products of the Company. This has further enhanced its variety advantage, thus strengthened the competitiveness of the Company’s products.

There was no significant change in other aspects of the Company’s competitiveness during the reporting period.

– 9 –

3.5 Analysis of investment

3.5.1 Overall analysis of equity investment

During the reporting period, there was no increase or decrease in external investment of the Company.

Shareholdings in financial enterprises are as follows:

		Percentage of				Change
		shareholding	Percentage of		Profit or loss	in owner’s
		at the	shareholding		during the	equity during
	Initial amount	beginning of	at the end of	Closing	reporting	the reporting	Accounting	Source of
Name of investee	of investment	the period	the period	book value	period	period	subject	shares
	(RMB)	(%)	(%)	(RMB)	(RMB)	(RMB)
Bank of Zhongyuan	7,000,000.00	0.0457	0.0457	4,343,500.00			Available-for-sale	Purchase
Co., Ltd.							financial assets
Total	7,000,000.00	0.0457	0.0457	4,343,500.00

Explanation on equity interests held in financial enterprises: The Company has not received any dividend during the reporting period.

3.5.2 Entrusted wealth management and derivative investment with nonfinancial corporations

• (1) Entrusted wealth management

N/A

• (2) Entrusted loans

The Company was not involved in any external entrusted loans and was only involved in entrusted loans for subsidiaries. As of June 30, 2015, the balance of the entrusted loans provided by the Company through banks to its subsidiaries amounted to RMB412,089,000.00.

• (3) Other wealth management and derivative investment

N/A

– 10 –

3.5.3 Use of proceeds from fundraisings

N/A

3.5.4 Analysis to a major subsidiary and a joint stock company

			Registered
Company name	Industry	Major products or services	Capital:	Total assets	Net assets	Net Profit
CLFG Longhai Electronic	Building materials	float glass and electronic glass	60,000,000	274,709,924.03	173,699,749.47	4,833,684.56
Glass Co., Ltd.
CLFG Longmen Glass	Building materials	float glass	20,000,000	225,181,342.42	-394,069,469.42	-24,029,638.03
Company Limited
CLFG Longhao Glass	Building materials	float glass	50,000,000	382,382,589.84	-352,048,365.59	-87,641,931.05
Co., Ltd.
CLFG Longfei Glass	Building materials	float glass	74,080,000	74,011,598.94	-217,733,054.81	-8,680,961.07
Company Limited
CLFG Longxiang Glass	Building materials	float glass	50,000,000	62,505,217.51	-53,389,616.86	-4,416,902.28
Co., Ltd.
Yinan Hua Sheng Mineral	Building materials	quartz sand	28,000,000	43,322,673.90	3,694,987.32	-131,970.94
Business Co., Ltd.
Dengfeng Luobo silica	Building materials	silica sand	13,000,000	10,739,472.04	9,590,267.54	-306,837.27
sand Co., Ltd.
Dengfeng Hong Zhai	Building materials	silica sand	2,050,000	14,701,647.64	-770,713.75	52,225.54
silica sand Co., Ltd.
Luoyang Luobo Furuida	Trade	Sales of glass and raw materials	500,000	1,131,164.85	-1,782,522.05	-741,816.16
Commerce Co., Ltd.

3.5.5 Projects financed by non-raised capital

N/A

3.5.6 Others

• (1) Bank and other loans

• a. Short-term loans: The closing balance in the reporting period is RMB10 million, which is the entrusted loans provided by the Group.

• b. Long-term loans: The closing balance in the reporting period is RMB532,529,427.12, including: bank loans: RMB482,529,427.12 and non-bank financial institution loans: RMB50,000,000.00. RMB54,421,653.68 shall be repaid within a year.

– 11 –

• (2) Liquidity and capital resources

As of June 30, 2015, the cash and cash equivalents of the Group is RMB3,272,778.69. Including: US dollar deposits of RMB114,154.55 (US dollar deposits of RMB114,175.13 on December 31, 2014), HK dollar deposits of RMB5,648.84 (HK dollar deposits of RMB5,650.43 on December 31, 2014); Euro deposits of RMB4.13 (Euro deposits of RMB4.48 on December 31, 2014). Compared with the total amount of RMB23,437,695.65 on December 31, 2014, the deposits has been decreased by RMB20,164,916.96. Cash inflows of the Group in the current period mainly came from sales revenue, financial aids, which were mainly used as working capital and for repayment of bank loans.

• (3) Gearing ratio

The gearing ratio was calculated based on the total liabilities at the end of the period less the balance of cash and cash equivalents and divided by net assets attributable to the parent. The gearing ratio of the Group calculated using this formula was -2,081% as at 30 June 2015 and 1,869% as at 30 June 2014.

• (4) Contingent liabilities

Nil.

• (5) Risk of exchange rate fluctuations

The Company’s assets, liabilities and transactions are denominated in Renminbi. Therefore, fluctuations in foreign exchange rates do not have material impacts on the Group.

3.6 Business prospects in the second half of the Company

From the perspective of unfavorable factors in the industry, the production and operation difficulties suffered by float sheet glass enterprises still cannot be changed under the conflicting pressures of continued oversupply for more than two years. The real estate market is still in a weak state with limited increments; car sales are lower than expected so the contribution to float sheet glass sales is insufficient against the background where the demand is not materially improved, the glass industry will face tremendous pressure in the second half of the year. With the improved domestic production capacity, the imbalance arising from the oversupply of the mid-to-low end ultrathin glass will become even more evident and the market competition will become increasingly intense.

– 12 –

From the perspective of favorable factors in the industry, as the effects of the national policies and measures on steady growth gradually spread, the positive factors in economic operation will be gradually released and the market environment will be improved, showing moderate but stable and sound momentum of development. The market growth point is mainly about the update of the structure of traditional market needs and the continuous emergence of the potential of emerging markets like electronics and solar energy. The development of glass new technology will provide the market with enormous vitality.

In the second half, the Company will follow the overall plan of “integration and optimization, efficiency increase and debt reduction,” and “price stabilization, cost reduction, payment collection and inventory increase,” actively respond to the grim situation and challenges, make determined efforts to promote asset reorganization, promote the transformation and upgrading, and speed up product structural adjustment and optimization; relying on accumulation of innovative ultra-thin glass products and technical support, achieve the shift from traditional to emerging markets and the high degree of integration, improve profitability, ensure the completion of the annual production plan and business objectives.

3.7 Other Disclosures

3.7.1 Repurchase, Sale and Redemption

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

3.7.2 Audit Committee

The audit committee under the Board of the Company has reviewed the interim report.

3.7.3 Compliance with the Corporate Governance Code

During the reporting period, the Company complied with all the code provisions under the Corporate Governance Code as set out in Appendix 14 to the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (the “Listing Rules”).

– 13 –

3.7.4 Compliance with the Model Code

Having made specific enquires to all Directors, the Company confirmed all Directors have complied with the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) set out in Appendix 10 to the Listing Rules during the reporting period. In respect of the securities transactions by the Directors, the code of conduct adopted by the Company is no less exacting than the Model Code.

IV. MATTERS RELATING TO FINANCIAL REPORT

• 4.1 There is no changes in accounting policies, accounting estimates and accounting method.

• 4.2 There is no major accounting error with the report period that need further explanation.

• 4.3 Compared to the latest annual report, there is no changes in the consolidated scope.

Consolidated Balance Sheet

Prepared by: Luoyang Glass Company Limited June 30, 2015

Unit: RMB

Item Current Assets: Cash and cash equivalents Bills receivables Accounts receivables Prepayments Other receivables Inventories Other current assets Total current assets	Closing Balance 128,292,778.69 22,823,996.50 62,939,598.39 29,930,674.15 44,095,298.65 196,161,233.16 28,819,150.75 513,062,730.29	Opening balance 68,478,221.61 400,000.00 23,412,089.50 7,692,326.00 37,020,177.60 211,781,486.51 21,865,034.21
		370,649,335.43

– 14 –

Opening balance

Item

Closing Balance

Non-current assets: Available-for-sale financial assets Long-term receivables Fixed assets Construction in progress Project materials Intangible assets Long-term deferred expenses Deferred income tax assets Other non-current assets Total non-current assets Total assets	4,343,500.00 50,165,060.14 323,527,692.27 234,343,449.65 595,051.16 53,047,516.76 432,000.00 2,600,666.82 8,140,084.53 677,195,021.33 1,190,257,751.62	4,343,500.00 48,649,780.65 568,040,126.38 698,734.75 428,213.56 54,815,729.68 486,000.00 3,821,811.59 5,134,487.79
		686,418,384.40
		1,057,067,719.83

– 15 –

Closing Balance Opening balance

Item

Current liabilities:
Short-term borrowings		10,000,000.00		10,000,000.00
Bills payables		170,000,000.00		90,000,000.00
Accounts payables		286,713,376.52		266,198,092.81
Receipts in advance		39,806,235.41		57,399,049.54
Employee compensation payable		60,840,077.26		48,625,920.94
Tax payables		21,391,465.59		27,800,706.43
Other payables		218,121,417.03		80,705,153.66
Non-current liabilities due within one year		54,421,653.68		46,293,636.87
Total current liabilities		861,294,225.49		627,022,560.25
Non-current liabilities:
Long-term borrowings		478,107,773.44		459,535,761.38
Deferred income		9,124,388.07		9,898,914.15
Total non-current liabilities		487,232,161.51		469,434,675.53
Total Liabilities		1,348,526,387.00		1,096,457,235.78
Owners’ equity
Share capital		500,018,242.00		500,018,242.00
Capital reserve		857,450,406.90		857,450,406.90
Special reserve		484,387.73		456,157.74
Surplus reserve		51,365,509.04		51,365,509.04
Undistributed profit		-1,473,975,190.87		-1,359,891,297.28
Total owners’ equity
attributable to parent company		-64,656,645.20		49,399,018.40
Minority interests		-93,611,990.18		-88,788,534.35
Total owners’ equity		-158,268,635.38		-39,389,515.95
Total liabilities and owners’	equity	1,190,257,751.62		1,057,067,719.83
	Person in charge of Person in charge of
Legal representative:	accounting: accounting department:
Ma Liyun	Sun Lei		Chen Jing

– 16 –

Balance Sheet of the Company Prepared by: Luoyang Glass Company Limited June 30, 2015 Unit: RMB

Item Current Assets: Cash and cash equivalents Bills receivables Accounts receivables Prepayments Other receivables Total current assets Non-current assets: Long-term receivables Long-term equity investments Fixed assets Project materials Intangible assets Long-term deferred expenses Total non-current assets Total assets Current liabilities: Short-term borrowings Bills payables Accounts payables Receipts in advance Employee compensation payable Tax payables Other payables Non-current liabilities due within one year Total current liabilities	Closing Balance 120,166,947.34 693,996.50 640,381,022.30 18,190,267.03 165,795,570.72 945,227,803.89 50,165,060.14 52,597,961.54 3,567,165.55 595,051.16 6,744,228.70 432,000.00 114,101,467.09 1,059,329,270.98 10,000,000.00 165,000,000.00 63,089,664.49 31,929,111.45 21,537,718.69 2,857,429.60 187,648,411.94 43,413,636.87 525,475,973.04	Opening balance 45,193,116.50 – 556,257,598.52 1,485,067.67 179,069,893.00
		782,005,675.69
		48,649,780.65 52,597,961.54 3,813,540.76 428,213.56 6,856,321.12 486,000.00
		112,831,817.63
		894,837,493.32
		10,000,000.00 90,000,000.00 75,935,633.93 50,176,727.50 13,822,236.57 7,262,758.60 50,643,969.60 43,413,636.87
		341,254,963.07

– 17 –

Item		Closing Balance		Opening balance
Non-current liabilities:
Long-term borrowings		408,955,790.25		430,815,761.38
Total non-current liabilities		408,955,790.25		430,815,761.38
Total Liabilities		934,431,763.29		772,070,724.45
Owners’ equity
Share capital		500,018,242.00		500,018,242.00
Capital reserve		891,129,782.23		891,129,782.23
Surplus reserve		51,365,509.04		51,365,509.04
Undistributed profit		-1,317,616,025.58		-1,319,746,764.40
Total owners’ equity		124,897,507.69		122,766,768.87
Total liabilities and
owners’ equity		1,059,329,270.98		894,837,493.32
	Person in charge of Person in charge of
Legal representative:	accounting: accounting department:
Ma Liyun	Sun Lei		Chen Jing

– 18 –

Consolidated Income Statement Prepared by: Luoyang Glass Company Limited January – June 2015 Unit: RMB

Amount of Amount of Item Current Period Prior Period I. Operating income 307,311,207.69 265,633,853.92 Less: Operating cost 332,403,424.62 250,301,099.35 Business tax and surcharges 2,215,194.34 4,272,807.91 Cost of sales 15,253,736.30 12,629,073.36 Administrative expenses 47,562,073.94 51,687,832.01 Financial expenses 3,404,853.83 5,685,689.96 Impairment losses 21,836,838.21 5,092,670.60 of assets Investment income – 93,394,560.90 II. Operating profit -115,364,913.55 29,359,241.63 Plus: Non-operating income 1,280,720.72 2,228,942.66 Including: Gains on 58,944.92 517,234.58 disposal of non-current assets Less: Non-operating expense 2,696,368.73 1,054,742.01 III. Total profit -116,780,561.56 30,533,442.28 Less: Income tax expenses 2,152,846.32 3,503,621.19 IV. Net Profit -118,933,407.88 27,029,821.09 Wherein: Net profit attributable -114,083,893.59 32,267,809.50 to owners of parent company Minority interest income -4,849,514.29 -5,237,988.41 – –

V. Other comprehensive after-tax net income

– 19 –

		Amount of	Amount of
Item	Current Period		Prior Period
VI. Total comprehensive income	-118,933,407.88		27,029,821.09
Total comprehensive income	-114,083,893.59		32,267,809.50
attributable to parent
company owners
Total comprehensive income		-4,849,514.29	-5,237,988.41
attributable to minority
VII. Earnings per share
(I) Basic earnings per share		-0.23	0.06
(RMB/share)
(II) Diluted earnings per share		–	–
(RMB/share)
	Person in charge of	Person in	charge of
Legal representative:	accounting:	accounting department:
Ma Liyun	Sun Lei	Chen Jing

– 20 –

Income Statement of the Company Prepared by: Luoyang Glass Company Limited January – June 2015 Unit: RMB

		Amount of	Amount of
Item	Current Period		Prior Period
I. Operating income	181,916,385.17		294,388,398.98
Less: Operating cost	178,352,608.39		289,429,370.11
Business tax and surcharges		275,542.25	2,111,965.93
Cost of sales		751,982.28	1,271,732.29
Administrative expenses		10,397,585.13	10,708,303.93
Financial expenses		-2,130,704.69	-3,312,173.01
Investment income		8,142,938.44	83,302,931.27
II. Operating profit		2,412,310.25	77,482,131.00
Plus: Non-operating income		55,660.38	278,903.85
Including: Gains on disposal		–	81,403.85
of non-current
assets
Less: Non-operating expense		337,231.81	1,019,995.36
III. Total profit		2,130,738.82	76,741,039.49
Less: Income tax expenses
IV. Net Profit		2,130,738.82	76,741,039.49
V. Other comprehensive		–	–
after-tax net income
VI. Total comprehensive income		2,130,738.82	76,741,039.49
	Person in charge of	Person in charge of
Legal representative:	accounting:	accounting department:
Ma Liyun	Sun Lei	Chen Jing

– 21 –

Consolidated Cash Flow Statement Prepared by: Luoyang Glass Company Limited January – June 2015 Unit: RMB

	Amount of	Amount of
Items	Current Period	Prior Period
I. Cash flow from operating activities:
Cash received from sales of
goods or rendering of services	146,347,170.58	140,636,459.24
Other cash received related
to operating activities	5,456,140.81	8,364,081.92
Subtotal of cash inflows
from operating activities	151,803,311.39	149,000,541.16
Cash paid for sales of goods
or rendering of services	135,423,435.46	80,480,437.92
Cash paid to and for employees	33,401,002.25	32,823,801.55
Cash paid for various taxes	25,881,057.46	18,894,546.89
Other payments related to
operating activities	21,341,666.69	10,007,054.71
Subtotal of cash outflows
from operating activities	216,047,161.86	142,205,841.07
Net cash flow from
operating activities	-64,243,850.47	6,794,700.09
II. Cash flow from investing activities:
Net cash received from disposals
of fixed assets, intangible assets
and other long-term assets	–	38,043,000.00
Net cash received from the disposal
of subsidiaries and other
operating entities	–	4,000,000.00
Subtotal of cash inflows
from investment activities	–	42,043,000.00
Cash paid for the acquisition
and construction of fixed
assets, intangible assets, and
other long-term assets	19,349,901.17	324,060.00
Other cash payments related
to investment activities	–	5,000,000.00
Subtotal of cash outflows from
investment activities	19,349,901.17	5,324,060.00
Net cash flow from investment activities	-19,349,901.17	36,718,940.00

– 22 –

			Amount of	Amount of
Items		Current Period		Prior Period
III. Cash flows from financing
activities:
Other cash received related
to financing activities		438,568,543.48		309,122,187.01
Subtotal of cash inflows
from financing activities		438,568,543.48		309,122,187.01
Cash paid for repayments
of borrowings			22,490,707.67	23,170,918.18
Cash payment for distribution	of dividends
and profits or interest repayment			273,000.00	–
Other cash payments related
to financing activities		352,375,897.78		309,750,800.00
Subtotal of cash outflows
from financing activities		375,139,605.45		332,921,718.18
Net cash flow from
financing activities			63,428,938.03	-23,799,531.17
IV. Effect of exchange rate changes
on cash and cash equivalents			-103.35	2,055.28
V. Net increase in cash and cash
equivalents		-20,164,916.96		19,716,164.20
Add: Opening balance of cash
and cash equivalents			23,437,695.65	28,316,110.10
VI. Closing balance of cash and
cash equivalents			3,272,778.69	48,032,274.30
	Person in charge of		Person in charge of
Legal representative:	accounting:		accounting department:
Ma Liyun		Sun Lei	Chen Jing

– 23 –

Cash Flow Statement of the Parent Prepared by: Luoyang Glass Company Limited January – June 2015 Unit: RMB

	Amount of	Amount of
Items	Current Period	Prior Period
I. Cash flow from operating
activities:
Cash received from sales of
goods or rendering of services	219,644,282.60	128,814,707.88
Other cash received related
to operating activities	251,843,534.16	271,966,344.05
Subtotal of cash inflows
from operating activities	471,487,816.76	400,781,051.93
Cash paid for sales of goods
or rendering of services	3,837,651.18	6,343,824.99
Cash paid to and for employees	6,138,589.73	9,078,028.03
Cash paid for various taxes	3,829,550.17	1,941,394.86
Other payments related to
operating activities	154,683,616.04	158,105,107.64
Subtotal of cash outflows
from operating activities	168,489,407.12	175,468,355.52
Net cash flow from
operating activities	302,998,409.64	225,312,696.41

– 24 –

	Amount of	Amount of
Items	Current Period	Prior Period
II. Cash flow from investing activities:
Net cash receipts from the disposals
of fixed assets, intangible assets
and other long-term assets	–	38,043,000.00
Net cash received from the disposal
of subsidiaries and other
operating entities	–	4,000,000.00
Subtotal of cash inflows
from investment activities	–	42,043,000.00
Cash paid for the acquisition
and construction of fixed assets,
intangible assets, and other
long-term assets	2,370.00	–
Other cash payments related
to investment activities	–	5,000,000.00
Subtotal of cash outflows
from investment activities	2,370.00	5,000,000.00
Net cash flow from
investment activities	-2,370.00	37,043,000.00

– 25 –

		Amount of	Amount of
Items	Current Period		Prior Period
III. Cash flow from financing
activities:
Other cash received related
to financing activities		30,000,000.00	10,000,000.00
Subtotal of cash inflows
from financing activities		30,000,000.00	10,000,000.00
Cash paid for repayments
of borrowings		21,050,707.67	21,730,918.18
Cash payment for distribution
of dividends and profits
or interest repayment		273,000.00	–
Other cash payments related
to financing activities	311,698,397.78		250,000,000.00
Subtotal of cash outflows
from financing activities	333,022,105.45		271,730,918.18
Net cash flow from
financing activities	-303,022,105.45		-261,730,918.18
IV. Effect of exchange rate changes
on cash and cash equivalents		-103.35	2,055.28
V. Net increase in cash and
cash equivalents		-26,169.16	626,833.51
Add: Opening balance of cash
and cash equivalents		193,116.50	398,991.55
VI. Closing balance of cash and
cash equivalents		166,947.34	1,025,825.06
	Person in charge of	Person in charge of
Legal representative:	accounting:	accounting department:
Ma Liyun	Sun Lei	Chen Jing

– 26 –

Consolidated Statement of Changes in Shareholders’ Equity Prepared by: Luoyang Glass Company Limited January – June 2015 Unit: RMB

Item I. Closing balance of last year II. Opening balance of the year III. Changes for the period (decrease is indicated by “-”) (I) Total comprehensive income (II) Capital contributed or reduced by owners (III)Profit distribution (IV) Internal transfers of owners’ equity (V) Special reserve 1. Appropriation for the period 2. Utilized in the period IV. Closing balance for the period Item I. Closing balance of last year II. Opening balance of the year III. Changes for the period (decrease is indicated by “-”) (I) Total comprehensive income (II) Capital contributed or reduced by owner (III) Profit distribution (IV) Internal transfers of owners’ equity (V) Special reserve 1. Appropriation for the period 2. Utilized in the period IV. Closing balance for the period	Current period amount
	Attributable to owners of the Parent Share capital Capital reserve Special reserve Surplus reserve Undistributed profit Sub-total Minority interests Total owners’ equity 500,018,242.00 857,450,406.90 456,157.74 51,365,509.04 -1,359,891,297.28 49,399,018.40 -88,788,534.35 -39,389,515.95 500,018,242.00 857,450,406.90 456,157.74 51,365,509.04 -1,359,891,297.28 49,399,018.40 -88,788,534.35 -39,389,515.95 – – 28,229.99 – -114,083,893.59 -114,055,663.60 -4,823,455.83 -118,879,119.43 – – – – -114,083,893.59 -114,083,893.59 -4,849,514.29 -118,933,407.88 – – – – – – – – – – – – – – – – – – – – – – – – – – 28,229.99 – – 28,229.99 26,058.46 54,288.45 – – 60,985.31 – – 60,985.31 56,294.14 117,279.45 – – -32,755.32 – – -32,755.32 -30,235.68 -62,991.00 500,018,242.00 857,450,406.90 484,387.73 51,365,509.04 -1,473,975,190.87 -64,656,645.20 -93,611,990.18 -158,268,635.38 Previous period amount
	Attributable to owners of the Parent Share capital Capital reserve Special reserve Surplus reserve Undistributed profit Sub-total Minority interests Total owners’ equity 500,018,242.00 857,450,406.90 367,894.52 51,365,509.04 -1,375,895,993.77 33,306,058.69 -73,208,155.34 -39,902,096.65 500,018,242.00 857,450,406.90 367,894.52 51,365,509.04 -1,375,895,993.77 33,306,058.69 -73,208,155.34 -39,902,096.65 – – 73,738.24 – 32,267,809.50 32,341,547.74 -5,169,922.35 27,171,625.39 – – – – 32,267,809.50 32,267,809.50 -5,237,988.41 27,029,821.09 – – – – – – – – – – – – – – – – – – – – – – – – – – 73,738.24 – – 73,738.24 68,066.06 141,804.30 – – 74,726.24 – – 74,726.24 68,978.06 143,704.30 – – -988.00 – – -988.00 -912.00 -1,900.00 500,018,242.00 857,450,406.90 441,632.76 51,365,509.04 -1,343,628,184.27 65,647,606.43 -78,378,077.69 -12,730,471.26

Person in charge of Person in charge of Legal representative: accounting: accounting department: Ma Liyun Sun Lei Chen Jing

– 27 –

Statement of Changes in Shareholders’ Equity of the Parent Prepared by: Luoyang Glass Company Limited January – June 2015 Unit: RMB

Item I. Closing balance of last year II. Opening balance of the year III. Changes for the period (decrease is indicated by “-”) (I) Total comprehensive income (II) Capital contributed or reduced by owner IV. Closing balance for the period Item I. Closing balance of last year II. Opening balance of the year III. Changes for the period (decrease is indicated by “-”) (I) Total comprehensive income (II) Capital contributed or reduced by owner IV. Closing balance for the period Legal representative: Ma Liyun	Currentperiod amount
	Share capital Capital reserve Surplus reserve Undistributed profit Total owners’ equity 500,018,242.00 891,129,782.23 51,365,509.04 -1,319,746,764.40 122,766,768.87 500,018,242.00 891,129,782.23 51,365,509.04 -1,319,746,764.40 122,766,768.87 – – – 2,130,738.82 2,130,738.82 – – – 2,130,738.82 2,130,738.82 – – – – – 500,018,242.00 891,129,782.23 51,365,509.04 -1,317,616,025.58 124,897,507.69 Previousperiod amount
	Share capital Capital reserve Surplus reserve Undistributed profit Total owners’ equity 500,018,242.00 891,129,782.23 51,365,509.04 -1,329,788,469.85 112,725,063.42 500,018,242.00 891,129,782.23 51,365,509.04 -1,329,788,469.85 112,725,063.42 – – – 76,741,039.49 76,741,039.49 – – – 76,741,039.49 76,741,039.49 – – – – – 500,018,242.00 891,129,782.23 51,365,509.04 -1,253,047,430.36 189,466,102.91 Person in charge of accounting: Person in charge of accounting department: Sun Lei Chen Jing

Person in charge of Person in charge of accounting: accounting department: Sun Lei Chen Jing

– 28 –

Notes to Financial Statements Half year as of 30 June 2015 (RMB)

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 activities of the Company and its subsidiaries (“ the Group ”) are the manufacturing and selling of float sheet glass.

II. MAJOR ACCOUNTING POLICIES

1. Basis of Preparation of Financial Statements

The financial statements of the Company have been prepared on a going concern basis in accordance with the actual transactions and events and in compliance with the requirements of Accounting Standards for Business Enterprises and the application guidelines and interpretations thereof and other relevant regulations promulgated by the Ministry of Finance and based on the following significant accounting policies and estimates.

2. Accounting period

The Group has adopted the Gregorian calendar year, which means from 1 January to 31 December as its accounting year.

3. Standard currency for accounting

The standard currency for accounting is RMB.

4. Preparation method of consolidated financial statements

Subsidiaries with actual control and special-purpose entities will be included in the scope of consolidated financial statements.

The consolidated financial statements are prepared in accordance with “Accounting Standards for Business Enterprises No.33 – Consolidated Financial Statement” and relevant provisions, and all significant internal transactions included in the consolidated scope shall be off-set. Shareholders’ equity of subsidiaries which is not attributable to parent should be presented individually as minority interest in Shareholders’ equity in consolidated financial statements.

– 29 –

In the event that the accounting policies or accounting period adopted by the subsidiaries and the Company are inconsistent, necessary adjustment of financial statements of the subsidiaries shall be performed in accordance with the accounting policies or accounting period of the Company when preparing the consolidated financial statements.

For subsidiaries acquired not under common control, when preparing consolidated financial statements, financial statements of the subsidiaries shall be adjusted on the basis of the fair value of identifiable net assets on the date of acquisition. For subsidiaries acquired under common control, the assets, liabilities, operating results and cash flow of acquired subsidiaries should be included in consolidated financial statements from the beginning of the year of acquisition.

III. DIVISIONAL REPORT

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

The two operating segments are as follows:

1. Float sheet glass business: production and sales of float sheet glass; and sales of raw materials for production of float sheet glass.

2. Silicon sand business: manufacturing, sales and distribution of silicon sand.

The prices for inter-segment transfer is determined with reference to the prices offered to a third party.

– 30 –

(1) Segments information from January to June 2015 and as at 30 June 2015:

Item		Float glass	Silica sand	Elimination	Total
I.	External transaction revenue	286,992,241.85	20,318,965.84	–	307,311,207.69
II.	Divisional transaction revenue	–	1,145,621.27	-1,145,621.27
III.	Interest income	2,351,322.84	1,784.82	-643,500.00	1,709,607.66
IV.	Interest expense	297,258.95	920,629.29	-643,500.00	574,388.24
V.	Asset impairment loss	21,827,177.91	9,660.30	–	21,836,838.21
VI.	Depreciation and
	amortization expenses	33,814,228.99	1,353,798.49	–	35,168,027.48
VII.	Total profit (“-” for loss)	-116,257,181.14	-523,380.42	–	-116,780,561.56
VIII.	Income tax expenses	2,289,644.07	-136,797.75	–	2,152,846.32
IX.	Net profit (“-” for loss)	-118,546,825.21	-386,582.67	–	-118,933,407.88
X.	Total assets	1,167,264,017.24	59,561,951.57	-36,568,217.19	1,190,257,751.62
XI.	Total amount of liability	1,324,602,332.85	48,277,410.46	-24,353,356.31	1,348,526,387.00

(2) Segments information from January to June 2014 and as at 30 June 2014:

Item		Float glass	Silica sand	Elimination	Total
I.	External transaction revenue	249,942,578.78	15,691,275.14	–	265,633,853.92
II.	Divisional transaction revenue	–	856,709.17	-856,709.17	–
III.	Interest income	3,526,092.78	3,111.89	-643,500.00	2,885,704.67
IV.	Interest expense	242,523.11	878,471.16	-643,500.00	477,494.27
V.	Asset impairment loss	5,092,670.60	–	–	5,092,670.60
VI.	Depreciation and
	amortization expenses	37,779,266.20	952,398.98	–	38,731,665.18
VII.	Total profit (“-” for loss)	31,466,961.28	-94,427.90	-839,091.10	30,533,442.28
VIII.	Income tax expenses	3,437,101.49	66,519.70	–	3,503,621.19
IX.	Net profit (“-” for loss)	28,029,859.79	-160,947.60	-839,091.10	27,029,821.09
X.	Total assets	1,236,988,359.95	55,970,526.56	-30,720,329.42	1,262,238,557.09
XI.	Total amount of liability	1,270,088,322.57	37,473,863.03	-32,593,157.25	1,274,969,028.35

– 31 –

(3) Geographic information

The following table sets out information about the geographical location of the Group’s revenue from external customers and the Group’s non-current assets (not including financial assets and deferred income tax assets). The geographical location of customers is based on the location at which the goods delivered. The geographical location of the fixed assets, construction in progress and lease prepayments under non-current assets is based on the physical location of the assets; in the case of intangible assets and exploration and evaluation assets, the location of operations; in the case of interests in associates and other investments, the location of their respective operations.

Revenues from external customers Item January – June 2015 January – June 2014 Domestic 307,311,207.69 265,633,853.92 Total 307,311,207.69 265,633,853.92	Non-current Assets 30 June 2015 31 December 2014 677,195,021.33 686,418,384.40 677,195,021.33 686,418,384.40	Non-current Assets 30 June 2015 31 December 2014 677,195,021.33 686,418,384.40 677,195,021.33 686,418,384.40
		686,418,384.40

(4) Major clients

The Group has a diverse customer base. Only one client entered into transactions with amounts surpassing 10% of the Group’s income from January to June 2015.

IV. BUSINESS VOLUME

Business revenue is the invoiced value of goods sold to customers after the deduction of any trade discounts, value added tax and surcharges. The analysis of it is as follow:

(1) Operating income and operating cost

Items Principal operating income Other operating income Total operating revenue	Incurred in the Current Period 271,820,923.50 35,490,284.19 307,311,207.69	Incurred in the Prior Period 260,543,927.45 5,089,926.47 265,633,853.92

– 32 –

(2) Principal business income by product

Name of product or labor service Float glass Silica sand Total V. NON-OPERATING INCOME Items Total gains on disposal of non-current assets Including: Gains on disposal of fixed assets Gains on debt reorganization Government grants Other Total	Incurred in the Current Period 254,011,326.91 17,809,596.59 271,820,923.50 Incurred in the Current Period 58,944.92 58,944.92 96,765.10 860,526.08 264,484.62 1,280,720.72	Incurred in the Prior Period 248,169,292.49 12,374,634.96 260,543,927.45 Incurred in the Prior Period 517,234.58 517,234.58 187,500.00 774,526.08 749,682.00 2,228,942.66

VI. PRE-TAX PROFIT

Pre-tax profit has been (deducted)/incurred:

(1) Financial expenses

Items Interest expenses Less: interest income Exchange loss Less: exchange income Interests of discounted charges Other finance expenses Total	Incurred in the Current Period 574,388.24 1,709,607.66 53,712.76 223,490.21 3,876,409.14 833,441.56 3,404,853.83	Incurred in the Prior Period 242,556.30 2,885,781.06 57,952.14 32,573.32 8,141,717.65 161,818.25 5,685,689.96

– 33 –

(2) Investment income

Items Investment income generated by the disposal of long-term equity investments Total (3) Operating cost Items Principal operating cost – Float glass – Silica sand Other operating cost – Raw materials, water, electricity, gas and technical service, etc. Total operating cost	Incurred in the Current Period – Incurred in the Current Period 297,079,222.72 8,823,196.15 26,501,005.75 332,403,424.62	Incurred in the Prior Period 93,394,560.90 93,394,560.90 Incurred in the Prior Period 240,989,045.80 6,981,955.80 2,330,097.75 250,301,099.35

– 34 –

(4) Business tax and additional tax

Item Business tax Urban maintenance and construction tax Education surcharge Resources tax Total (5) Cost of sales Items Staff’s salary and welfare Social security Depreciation expenses Transportation costs Material consumption Other selling expenses Total	Incurred in the Current Period 86,966.67 640,111.32 614,152.24 873,964.11 2,215,194.34 Incurred in the Current Period 4,732,504.01 1,015,048.76 780,782.01 5,571,413.65 716,956.13 2,437,031.74 15,253,736.30	Incurred in the Prior Period 1,694,800.00 895,203.22 820,578.89 862,225.80 4,272,807.91 Incurred in the Prior Period 4,939,632.60 1,079,216.37 808,783.29 4,008,610.08 811,420.03 981,410.99 12,629,073.36

– 35 –

(6) Administrative expenses

Items Staff’s salary and welfare Social security contributions Housing funds Depreciation of fixed assets Intangible asset amortization Intermediary engagement fees Research and development fees Taxes Water and electricity charges Other fees Total (7) Impairment losses of assets Items I. Bad debt losses II. Impairment losses of inventories Total (8) Non-operating expense Items Expenditure of donation Indemnities, liquidated damages and penalties Other finance expenses Total	Incurred in the Current Period 12,533,873.64 5,142,352.72 646,266.98 8,312,928.01 1,606,212.92 3,200,254.71 3,754,353.30 3,115,741.00 274,021.38 8,976,069.28 47,562,073.94 Incurred in the Current Period 62,438.00 21,774,400.21 21,836,838.21 Incurred in the Current Period 60,000.00 2,200,325.59 436,043.14 2,696,368.73	Incurred in the Prior Period 13,346,615.19 4,923,107.43 643,350.23 10,405,886.19 1,267,582.96 4,176,579.80 7,132,893.57 3,006,960.88 461,600.19 6,323,255.57 51,687,832.01 Incurred in the Prior Period – 5,092,670.60 5,092,670.60 Incurred in the Prior Period – 1,019,995.36 34,746.65 1,054,742.01

– 36 –

VII. INCOME TAX EXPENSES

Incurred in the Incurred in the Items Current Period Prior Period Current Income tax calculated according to tax laws and relevant requirements 931,701.55 3,503,621.19 Deferred income tax expenses 1,221,144.77 – Total 2,152,846.32 3,503,621.19

• Note: On 26 June 2013, Longhai Company, the Company’s wholly-owned subsidiary, was recognized as high-tech enterprise as verified by Henan Scientific and Technological Department, Henan Finance Department, National Taxation Bureau of Henan Province and Local Taxation Bureau of Henan Province, and awarded “High-tech Enterprise Certificate” with an effective period of three years. In accordance with article 28, paragraph 2 of Enterprise Income Tax Law of the PRC, article 93 of Implement Regulations of Enterprise Income Tax Law of the PRC and Notices of Matters Related to Enterprise Income Tax Discounts for High Technology Enterprises Issued by the State Administration of Taxation (G.S.H. [2009] No. 203), Longhai Company. In accordance with Paragraph 2 of Article 28 of the Enterprise Income Tax Law of the PRC, Article 93 of the Regulation on the Implementation of Enterprise Income Tax Law of PRC and the relevant provisions of the Notice of the State Administration of Taxation concerning Relevant Issues for Implementation of Tax Preferential Treatment for High-Technology Enterprises (Guo Shui Han [2009] No. 203), Longhai Company was taxed at a rate of 15% in 2015. The enterprise income tax rate applicable to the Company and its subsidiaries is 25%.

VIII. DIVIDEND

Board of directors of the Company does not recommend declaring dividends for half a year as of June 30, 2015.

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IX. BASIC EARNINGS PER SHARE

Basic earnings per share is the result of consolidated net profit attributable to ordinary shareholders of the parent company divided by the weighted average number of the outstanding ordinary shares of the parent company:

	Incurred in the	Incurred in the
Items	Current Period	Prior Period
Net profit attributable to
ordinary shareholders	-114,083,893.59	32,267,809.50
Total shares at the beginning of period	500,018,242.00	500,018,242.00
Basic earnings per share	-0.2282	0.0645

Diluted earnings per share doesn’t be calculated because the Company had no potential diluted shares for half a year as of June 30, 2015.

X. ACCOUNTS RECEIVABLES AND BILLS RECEIVABLES

1. Accounts receivables:

Item Accounts receivables Less: provision for bad debts Net amount of accounts receivables	Book balance Beginning balance 115,503,463.58 75,951,368.06 52,563,865.19 52,539,278.56 62,939,598.39 23,412,089.50	Book balance Beginning balance 115,503,463.58 75,951,368.06 52,563,865.19 52,539,278.56 62,939,598.39 23,412,089.50
		23,412,089.50

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

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Aged analysis of accounts receivables by dates of entry:

Account duration Closing Balance Within 1 year 57,263,488.69 1 to 2 years 3,702,161.48 2 to 3 years 2,675,362.35 3 to 4 years 497,155.71 4 to 5 years 3,526,466.87 Over 5 years 47,838,828.48 Total 115,503,463.58 2. Classification of bills receivable Items Amount at the end of the period Bank acceptances 22,823,996.50 Total 22,823,996.50	Opening Balance 19,048,408.58 2,352,408.18 2,821,542.85 3,890,179.97 1,944,439.71 45,894,388.77 75,951,368.06 Amount at the beginning of the year 400,000.00 400,000.00

XI. ACCOUNTS PAYABLE AND BILLS PAYABLE

1. Aged analysis of accounts payable

Item Within 1 year (including 1 year) 1 to 2 years 2 to 3 years Above 3 years Total	Closing Balance 80,674,613.41 28,845,544.69 88,056,212.61 89,137,005.81 286,713,376.52	Opening Balance 67,875,786.71 94,591,759.50 11,562,657.38 92,167,889.22
		266,198,092.81

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2. Classification of bills payable

Items Bank acceptances Total	Closing Balance 170,000,000.00 170,000,000.00	Opening balance 90,000,000.00
		90,000,000.00

Notes:

1. There were no notes payable to shareholders holding 5% or more of the voting rights of the Company at the end of the period.

1. Notes payable are mainly bank acceptances issued by the Group for purchase of materials, commodities or products with the repayment term of 1-6 months.

XII. Reserve

1. Capital reserve

Items Capital premium Other capital reserve Total Surplus reserve Items Statutory surplus reserve Total	Opening balance Increased amount for the period Decreased amount for the period 787,299,489.41 – – 70,150,917.49 – – 857,450,406.90 – – Opening balance Increased amount for the period Decreased amount for the period 51,365,509.04 – – 51,365,509.04 – –	Closing Balance 787,299,489.41 70,150,917.49
		857,450,406.90
		Closing Balance 51,365,509.04
		51,365,509.04

2. Surplus reserve

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3. Undistributed profit

	Closing	Balance
		Appropriation
		or Distribution
Items	Amount	Proportion
Undistributed profit at the end
of the previous year before
adjustment	-1,359,891,297.28
Undistributed profit at the
beginning of the year after
adjustment	-1,359,891,297.28
Plus: Net profit attributable to
owners of the parent
company for the period	-114,083,893.59	–
Retained earnings at ending
of period	-1,473,975,190.87

XIII. Future items

1. Longhao Company, a wholly-owned subsidiary, entered into the Asset Lease Agreement with CLFG on 17 April 2014. Pursuant to the agreement, Longhao Company leased the 600T/D float glass production line, plants and other assets of CLFG for a term of 3 years at an annual lease fee of RMB31.90 million. On 17 June 2015, the parties agreed through negotiation to terminate the above Asset Lease Agreement and entered into the Asset Lease Termination Agreement after having taken into account their needs for the development of production and operations. On 25 August 2015, the Asset Lease Agreement was terminated upon the consideration and approval at the extraordinary general meeting of the Company.

In August 2015, the Company received the reply from CLFG stating that it agreed to waive the lease fee for the 600t/d production line from Longhao Company for the year 2015. Pursuant to the relevant requirements under the Accounting Standards for Business Enterprises, the amount waived will be charged to the capital reserve of Longhao Company.

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1. According to the asset restructuring plan of the Company, the Company intended to use 100% of its equity interests in CLFG Luoyang Longhao Glass Company Limited, 63.98% of its equity interests in CLFG Longfei Glass Company Limited, 67% of its equity interests in Dengfeng CLFG Silicon Company Limited, 52% of its equity interests in Yinan Huasheng Mineral Products Company Limited and 40.29% of its equity interests in CLFG Mineral Company Limited and liabilities (including accounts receivables, other receivables and entrusted loans) of the Company to CLFG Luoyang Longhao Glass Company Limited, CLFG Longfei Glass Company Limited, CLFG Longxiang Glass Company Limited, Yinan Huasheng Mineral Products Company Limited and CLFG Mineral Company Limited as outgoing assets in this transaction to swap with the 100% equity interests in Bengbu China National Building Materials Information Display Material Company (hereinafter referred to as “ Bengbu Company ”) lawfully held by CLFG (hereinafter referred to as “ Proposed Incoming Assets ”). The difference between the value of the incoming assets and that of the outgoing assets shall be purchased by the Company through the issuance of shares and cash to CLFG.

On 17 August 2015, the above material asset restructuring plan was approved by the SASAC of the State Council. On 25 August 2015, the above asset restructuring plan was considered and approved at the extraordinary general meeting and class meeting of the Company.

Chairman: Ma Liyun Luoyang Glass Company Limited* August 27, 2015

As at the date of this announcement, the Board comprises four executive Directors: Mr. Ma Liyun, Mr. Ni Zhisen, Ms. Sun Lei and Mr. Xie Jun; two non-executive Directors: Mr. Zhang Chengong and Mr. Zhang Chong; and four independent non-executive Directors: Mr. Huang Ping, Mr. Dong Jiachun, Mr. Liu Tianni and Mr. Jin Zhanping.

* for identification purposes only

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