RoboSense Technology Co., Ltd — Interim / Quarterly Report 2016

Aug 29, 2016

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

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2016 INTERIM REPORT ANNOUNCEMENT

I. IMPORTANT NOTICE

• 1.1 The board of directors (the “ Board ”), the supervisory committee, the directors (the “ Directors ”), supervisors and senior management members of the Company shall warrant that the information contained in this interim report is true, accurate, and complete without any false and misleading statements or material omissions, and severally and jointly accept legal responsibility for the above.

• 1.2 All Directors attended the Board meeting to consider this interim report of the Company.

• 1.3 This interim results of the Company for the six months ended 30 June 2016 are unaudited but have been reviewed and approved by the Audit Committee of the Board.

• 1.4 Zhang Chong, legal representative, Ma Yan, person in charge of accounting, and Chen Jing, person in charge of accounting department, of the Company warrant that the financial statements in this interim report are true, accurate and complete.

– 1 –

II. BASIC INFORMATION ABOUT THE COMPANY

2.1 Basic information

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 address Secretary Office of the Board of Secretary Office of the Board of Luoyang Glass Company Limited, Luoyang Glass Company Limited, No. 9, Tang Gong Zhong Lu, No. 9, Tang Gong Zhong Lu, Xigong District, Luoyang, Henan Xigong District, Luoyang, Henan Province, the PRC Province, 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

2.2 Major financial data and information of shareholders

2.2.1 Accounting Data and Financial Indicators of the Company

Unit: Yuan Currency: RMB

			Increase/decrease
			at the end of
		As at the	the Reporting
	As at the end of	end of the	Period from the
	reporting period	previous year	end of last year
			(%)
Net assets attributable to	462,224,386.07	278,344,996.00	66.06
shareholders of the Company
Total assets	1,275,869,476.60	1,314,035,081.52	-2.90

– 2 –

		Corresponding period	of previous year	Changing from
		After	Before	corresponding
	Reporting period	adjustment	adjustment	period of previous
				(%)
Net cash flow from operating activities	-75,836,368.92	-78,149,042.13	-64,243,850.47	N/A
Operating income	137,239,714.63	366,074,390.98	307,311,207.69	-62.51
Net profits attributable to shareholders	-25,745,594.23	-109,429,515.42	-114,083,893.59	N/A
of the Company
Net profits attributable to shareholders	-29,066,503.40	-112,707,736.82	-112,707,736.82	N/A
of the Company after
extraordinary items
Basic earnings per share_(RMB/share)_	-0.0491	-0.2125	-0.2282	N/A
Diluted earnings per share	-0.0491	-0.2125	-0.2282	N/A
(RMB/share)
Weighted average return on net assets	-5.85	-16.52	N/A	Increased by 10.67
				percentage points

Explanation on major accounting data and financial indicators of the Company:

Retrospective adjustments were made to Bengbu CNBM Information Display Material Co., Ltd. (蚌埠中建材信息顯示材料有限公司) in respect of business combination under common control for the same period last year.

2.2.2 Number and shareholdings of shareholders

Total number of shareholders as There were 68,000 shareholders of the at the end of the Reporting Company in total, including 67,949 Period (shareholder) holders of A shares and 51 holders of H shares

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

0

– 3 –

Unit: share

Shareholdings of top ten shareholders

	Increase/ decrease	Number of			Pledged	or frozen
	during the	shares at		Number of
Name of shareholder	reporting	the ending		restricted	Status of		Nature of
(Full name)	period	period	Percentage	shares held	shares	Quantity	shareholder
			(%)
HKSCC (Nominees)	+86,001	248,348,699	47.15	0	Unknown		Overseas
Limited							legal person
China Luoyang Float	0	174,018,242	33.04	15,000,000	Pledged	159,018,242	State-owned
Glass (Group)							legal person
Company Limited
Caitong Fund–Ping	+1,962,130	1,962,130	0.37	1,962,130	Unknown		Unknown
An Bank–Tianrun
Capital Management
(Beijing)	Co., Ltd.
Agricultural Bank of	+51900	1,272,600	0.24	0	Unknown		Unknown
China Limited–
Fullgoal CSI State–
owned Enterprises
Reform Index
Classified Fund
First Capital Securities	+1,202,185	1,202,185	0.23	1,202,185	Unknown		Unknown
Co., Ltd.–Guosen
Securities–Gongying
Dayan Quantified
Private Placement
Assembled Asset
Management Plan
Ji Wanchao	+1,044,050	1,044,050	0.20	0	Unknown		Domestic
							natural
							person
Liu Bibo	-361,600	1,000,000	0.19	0	Unknown		Domestic
							natural
							person
Caitong Fund–ICBC–	+981,065	981,065	0.19	981,065	Unknown		Unknown
Qiaogeli Blue Chip
Selection No. 2
Assets Management
Plan
Zhang Lixin	-20,000	800,000	0.15	0	Unknown		Domestic
							natural
							person
Caitong Fund–Ping	+735,799	735,799	0.14	735,799	Unknown		Unknown
An Bank –Shanghai
Goldstate Brilliance
Asset Management
Co., Ltd.

– 4 –

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

		Number of	Type and number of shares	Type and number of shares	Type and number of shares	Type and number of shares
	circulating shares
		not subject to
Name of shareholders	trading moratorium		Category		Quantity
HKSCC (Nominees) Limited		248,348,699	Foreign capital	248,348,699
			stocks listed
			abroad
China Luoyang Float Glass (Group) Company Limited		159,018,242	RMB	159,018,242
			common stock
Agricultural Bank of China Limited–Fullgoal CSI		1,272,600	RMB		1,272,600
State–owned Enterprises Reform Index Classified			common stock
Fund
Ji Wanchao		1,044,050	RMB		1,044,050
			common stock
Liu Bibo		1,000,000	RMB		1,000,000
			common stock
Zhang Lixin		800,000	RMB			800,000
			common stock
CHUK YEE MEN LIZA		374,000	Foreign capital			374,000
			stocks listed
			abroad
HKSCC (Nominees) Limited		327,568	RMB			327,568
			common stock
Jin Ruiming		315,394	RMB			315,394
			common stock
Zhang Liushen		304,519	RMB			304,519
			common stock
Description of the connected relationship or party	There	a r e no connected parties or persons acting in concert
acting in concert among the aforesaid shareholders:	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. Shares were held by					HKSCC
	(Nominees) Limited, representing its various customers.
Explanations on preference shareholders with voting	N/A

Explanations on preference shareholders with voting rights restored and the number of shares held

– 5 –

Number of shares held by top 10 holders of shares subject to trading moratorium and trading moratorium

Unit: share

			Shares subject to trading	Shares subject to trading
			moratorium available for
			listing and trading
				Number of
		Number of		additional
		shares held		shares
		subject to	Time available	available
	Name of holders of shares	trading	for listing and	for listing	Trading
No.	subject to trading moratorium	moratorium	trading	and trading	moratorium
1.	China Luoyang Float Glass	15,000,000	2018–12–30	0	Non-transferable
	(Group) Company Limited				within 36 months
					from the completion
					date of the issuance
2.	Caitong Fund Management	10,546,448	2017–02–03	0	Non-transferable
	Co., Ltd.				within 12 months
					from the completion
					date of the issuance
3.	First Capital Securities Co., Ltd.	1,202,185	2017–02–03	0	Non-transferable
					within 12 months
					from the completion
					date of the issuance

• 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 aforesaid shareholders, including China Luoyang Float Glass (Group) Company Limited and other holders of shares subject to trading moratorium. The Company is not aware of any parties acting in concert or any connected relationship among other holders of shares subject to trading moratorium.

Notes:

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 2016, 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, CLFG entered into the Equity Transfer Agreement with Bengbu Institute. Pursuant to the agreement, CLFG intended to transfer its 69 million shares of the Company (accounting for 13.10% of the total share capital of the Company) to Bengbu Institute. The equity transfer was approved by the SASAC, but the formalities for the share transfer had yet to be completed.

– 6 –

• 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 Operations of the Company during Reporting Period

In the first half of 2016, China implemented the macroeconomic policy of making progress while maintaining stability, with a focus on promotion of supply-side structural reform. Meanwhile, it resolutely prioritized the major tasks including de-capacity, de-stocking, de-leveraging, cutting costs and shoring up weak growth areas.

Following the implementation of supply-side structural reform, the concentrated actions were carried out to address the overcapacity of the five major industries including steel, coal, cement, float sheet glass and coke in different regions. Under such backdrop, certain traditional float sheet glass enterprises started to change their operation direction or increase investment in ultra-thin electronic glass, resulting in fiercer market competition. In face of the harsh conditions, the Company, adhering to the operation target of “quality improvement and benefit increase, transformation and upgrading” and being market-oriented, the Company endeavored to enhance its competitiveness through adjusting product structure, improving product quality, reducing consumption and lowering cost.

During the Reporting Period, the daily capacity, total rate of finished products, yield of conforming products used by customers and other indicators of ultra-thin glass were all improved as compared with the same period last year;

The indicators in respect of cost, consumption, energy saving and product quality improvement will be quantified and implemented effectively through lean and refined production and management links, and daily accounting and monthly checking will be carried out to guarantee that the unit manufacturing cost is under the target value.

By adopting furnace insulation, oxygen-enriched combustion, air compressor variable frequency technology and other energy-saving measures, the comprehensive energy consumption was reduced to 39.02 kilograms of standard coal per weighted case.

The Company actively promoted the development of new products. In April 2016, it successfully produced the 0.15mm ultra-thin electronic glass, the thinnest electronic glass in China.

– 7 –

Besides, the Company continued to push ahead with “hierarchy reduction and redundancy streamlining” with a view to boost management integration and optimization.

During the Reporting Period, the Company recorded an operating revenue of RMB137,239,700, representing a decrease of 62.51% as compared with the same period of the preceding year; recorded an operating profit of RMB-26,771,200, representing a decrease of RMB83,880,400 in loss as compared with the same period of the preceding year; recorded a net profit attributable to the shareholders of the Company of RMB-25,745,600, representing a decrease of RMB83,683,900 in loss as compared with the same period of the preceding year; and recorded basic earnings per share attributable to shareholders of the Company of RMB-0.0491. Gearing ratio was 63.77%, representing a decrease of 15.05 percentage points from the beginning of the period.

3.2 Analysis of principal operating activities

3.2.1 Analysis of changes in relevant items in financial statements

Unit: Yuan Currency: RMB

		Amount for
	Amount for	corresponding	Percentage
Item	the Period	period last year	change
			(%)
Operating revenue	137,239,714.63	366,074,390.98	-62.51
Operating costs	128,487,520.70	378,530,163.62	-66.06
Cost of sales	3,541,156.15	15,563,322.54	-77.25
Administrative expenses	27,468,430.63	54,140,987.06	-49.26
Financial expenses	3,217,323.22	4,439,535.09	-27.53
Net cash flow from	-75,836,368.92	-78,149,042.13	N/A
operating activities
Net cash flow from	-90,877,849.51	-19,823,209.87	N/A
investment activities
Net cash flow from financing	160,745,006.27	65,477,373.24	145.50
activities
R&D expenses	7,580,645.82	5,188,731.97	46.10

– 8 –

Reasons for the changes:

Reasons for change in operating revenue: mainly due to the change in consolidation scope during the Reporting Period, which did not include operating revenue from former common glass segment and silica sand segment exchanged out.

Reasons for change in operating costs: mainly due to the change in consolidation scope during the Reporting Period, which did not include operating income from former common glass segment and silica sand segment exchanged out.

Reasons for change in cost of sales: mainly due to the exclusion of costs of the companies exchanged out for the Reporting Period.

Reasons for change in administrative expenses: mainly due to exclusion of expenses of the companies exchanged out for the Reporting Period.

Reasons for change in financial expenses: mainly due to the decrease in discount interest as compared with the same period last year.

Reasons for change in net cash flow from operating activities: basically remained the same as compared with the same period last year.

Reasons for change in net cash flow from investment activities: mainly due to the consideration paid to CLFG for asset restructuring during the Reporting Period.

Reasons for change in net cash flow from financing activities: mainly due to the proceeds received from non-public issuance of shares during the Reporting Period.

Reasons for change in R&D expenses: mainly due to increased investment in development of new products as a result of the Company’s efforts to improve sustainable competitiveness.

– 9 –

3.2.2 Explanations for other substantial changes in the composition of profits or source of profits of the Company

• (1) Business tax and surcharges for the period decreased by 91.33% year-on-year, mainly due to the decrease in relevant taxes resulting from a year-on-year decrease in revenue during the period;

• (2) Impairment loss on assets for the period showed a year-on-year decrease of 94.94%, mainly due to the inclusion of the provision for depreciation of inventories for the exchange-out common glass segment in the impairment loss on assets for the same period of last year;

• (3) Non-operating income for the period presented an increase of 167.21% on a year-on year basis, mainly due to subsidy for supporting enterprises and stabilizing employment issued by Social Security Funds Collecting Center of Bengbu to Bengbu Company.

• 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	Year-on-year
				increase/	increase/	increase/
				decrease in	decrease in	decrease in
			Gross profit	operating	operating	gross profit
By industry	Operating Income	Operating Costs	margin	revenue	costs	margin
			(%)	(%)	(%)	(%)
New materials	135,466,204.64	127,477,857.21	5.90	-31.14	-22.64	Decreased by 10.34
						percentage points
Principal operations by product
				Increase/	Increase/
				decrease in	decrease in	Increase/
				operating	operating	decrease in
	Operating	Operating	Gross Profit	income from	cost from	gross profit
By product	Income	Costs	margin	last year	last year	from last year
			(%)	(%)	(%)	(%)
Photoelectric glass	135,466,204.64	127,477,857.21	5.90	-31.14	-22.64	Decreased by
						10.34 percentage
						points

– 10 –

As the products manufactured for the main customers were panel display products upon completion of asset restructuring of the Company in 2015, the Company made adjustments to the names of industries and products during the Reporting Period. No comparative analysis was made on the common glass and silica sand segments during the Reporting Period as both segments were exchanged out in 2015.

3.3.2 Principal operations by region

Region Operating Income Domestic 135,466,204.64 Total 135,466,204.64	Year-on-year increase/ decrease in operating revenue (%) -56.52 -56.52

3.4. Analysis of core competitiveness

During the reporting period, the Company produced the thinnest 0.15mm ultra-thin glass in China, which was the thinnest in the PRC, 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.

3.5. Analysis of investment

3.5.1 Overall analysis of equity investment

During the Reporting Period, the Company had no external equity investment.

– 11 –

3.5.2 Entrusted wealth management and derivative investment with non-financial 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, 2016, the balance of the entrusted loans provided by the Company through banks to its subsidiaries amounted to RMB205,000,000.00.

• (3) Other wealth management and derivative investment

N/A

3.5.3 Use of proceeds from fundraisings

Unit: Yuan Currency: RMB

	Amount
	Total amount used on an Total Use of the
Year of	Fundraising used in accumulative unutilized unutilized
fundraising	method Total proceeds this year basis amount proceeds
2016	Non-public 214,999,983.90 214,999,983.90 214,999,983.90 0
	issuance
Total	/ 214,999,983.90 214,999,983.90 214,999,983.90 0 /
Ex planation of the	The Group has raised RMB214,999,983.90 by way of non-public issuance in January 2016.
overall status of	After deducting the underwriting fee of RMB5,374,999.60, the net proceeds actually received
use of proceeds	amounted to RMB209,624,984.30. The proceeds were used for the following purposes: 1. To pay
from the fund	the remaining consideration of RMB90,729,715.31 to CLFG for the exchange-in assets; 2. To
raised	pay the service fee of RMB14,260,302.36 to domestic and overseas intermediaries arising from
	restructuring; 3. To replenish working capital with RMB104,634,966.63. All the proceeds have
	been fully utilised as at the end of the Reporting Period.

– 12 –

3.5.4 Analysis to a major subsidiary and a joint stock company

		Major products	Registered
Company name	Industry	or services	Capital	Total assets	Net assets	Net Profit
CL FG Longhai	New	Ph otoelectric glass	60,000,000.00	293,187,229.29	159,418,941.83	-10,568,230.74
Electronic Glass	materials
Limited
CL FG Longmen	New	Ph otoelectric glass	20,000,000.00	213,558,719.01	-462,681,417.63	-18,962,329.60
Glass Co. Ltd.	materials
Be ngbu CNBM	New	Ph otoelectric glass	632,764,300.00	790,857,286.57	705,567,379.00	6,022,210.29
Information	materials
Display Materials
co., Ltd.
Lu oyang Luobo	Trade	Sa les of glass and	500,000.00	24,584,064.24	-1,376,365.15	-353,618.58
Furuida		glass materials
Commerce
Company Limited

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 RMB65 million, including mortgage loan of RMB50 million and guaranty loan of RMB15 million.

• b. Long-term loans: The closing balance in the reporting period is RMB500,059,270.15, including: bank loans of RMB422,732,232.42, non-bank financial institution loans of RMB77,327,037.73 and RMB457,833,651.66 which shall be repaid within a year.

– 13 –

• (2) Liquidity and capital resources

As of June 30, 2016, the cash and cash equivalents of the Group is RMB36,373,776.90. Including: US dollar deposits of RMB334.74 (US dollar deposits of RMB327.79 on December 31, 2015), HK dollar deposits of RMB6,122.69 (HK dollar deposits of RMB6,001.36 on December 31, 2015); Euro deposits of RMB4.43 (Euro deposits of RMB4.26 on December 31, 2015). Compared with the total amount of RMB42,342,860.91 on December 31, 2015, the deposits has been decreased by RMB5,969,084.01.

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 168.16% as at 30 June 2016 and 356.88% as at 31 December 2015.

• (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.

– 14 –

3.6. Business Outlook for the Second Half of 2016

With significantly increased contribution of domestic consumption to economic growth in recent years, the structural changes in the consumption upgrading will certainly give strong impetus to the industrial upgrading. As for the new glass industry chain: first, the demand kept a growing momentum in terms of quantity. Second, the demands for downstream products are becoming differentiated. With the ongoing development of various consumer electronics and communication products and the growing personalized needs of users for such products, the requirements on integrated touch modules, touch screens, miniature camera modules and other devices are increasingly stringent, so are the requirements on the quality of ultra-thin electronic substrate glass. Third, the products are in a trend of getting thinner. The market price of ultra-thin electronic substrate glass in China has bottomed out and is expected to show a rising trend in the second half of the year.

In the second half of the year, the Company will firmly stick to the development direction of “quality improvement and benefit increase, transformation and upgrading” and the working policy of “price stabilization, cost reduction, receivables collection and inventory control” to actively tackle the severe situation and challenges. First, it will continue to promote the adjustments of product mix and increase the proportion of production of profitable products based on the market positioning of its three product lines. Meanwhile, the Company will strengthen communication with downstream customers, unleash potential market demands, and organize production of new marketable products. Second, it will step up market development and actively expand into the high-end ultra-thin glass market and special glass market. Third, it will continuously optimize and innovate in processes and technologies and strengthen the effort in making technological breakthroughs in product quality to constantly improve product quality. Fourth, it will continue to carry out activities on “increasing income, cutting expenditure, and reducing consumption” to constantly reduce production costs and enhance the market competitiveness of its products. Fifth, it will proactively carry out training on technical management to improve the quality and capability as well as work efficiency of staff.

3.7. Other Disclosures

3.7.1 Repurchase, sale and redemption of shares

During the Reporting Period, the Company or its subsidiaries had not repurchased, sold and redeemed any securities of the Company.

3.7.2 Audit Committee

The Audit Committee of the Board of the Company has reviewed the Interim Report.

– 15 –

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”).

3.7.4 Compliance with the Model Code

Having made specific enquires to all Directors, the Company confirmed that 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 THE FINANCIAL REPORT

4.1 Changes in Accounting Policies, Accounting Estimates and Accounting Methods of the Company during the Reporting Period

In order to reflect the financial conditions and operating results of Bengbu Company more fairly and appropriately, pursuant to the relevant requirements of Accounting Standards for Business Enterprises No.4 – Fixed Assets, Bengbu Company made adjustments to the depreciation terms of its fixed assets with effect from 1 April 2016 based on the actual usage of such fixed assets, which resulted in a reduction of RMB2,983,849.98 in its accumulated depreciation for the Reporting Period. For more details, please refer to the Announcement on Changes in Accounting Estimates of a Wholly-owned Subsidiary dated 24 June 2016.

4.2 Retrospective Restatement Due to Correction of Material Accounting Errors during the Reporting Period

In order to reflect the principles of Accounting Standards for Business Enterprises No. 20 – Business Mergers more accurately, the Company corrected the accounting errors in relevant accounting treatment of the business merger resulting from the significant asset restructuring in 2015. The accounting treatment for the significant asset restructuring of the Company in 2015 was performed in accordance with the Accounting Standards for Business Enterprises No. 20 – Business Mergers. No gain or loss was recognised for the assets disposed. The difference between the book value of net assets obtained and the book value of the consideration paid was credited to the capital reserve. The effects of such correction of accounting error on the net profit and capital reserve for 2015 are RMB-329,238,114.46 and RMB329,238,114.46, respectively while there is no impact on total assets and net assets. Accordingly, the Company made necessary corrections and adjustments to the 2015 annual report and the first quarterly report 2016 of the Company.

• 4.3 The consolidated scope did not change as compared with the latest annual report.

– 16 –

4.4 Financial Statements

Consolidated Balance Sheet

Prepared by: Luoyang Glass Company Limited June 30, 2016 Unit: RMB Item Closing Balance Current Assets: Cash and cash equivalents 36,373,776.90 Bills receivables 4,774,688.10 Accounts receivables 102,108,742.05 Prepayments 2,616,253.01 Other receivables 29,373,502.38 Inventories 241,817,681.16 Other current assets 55,446,001.42 Total current assets 472,510,645.02 Non-current assets: Long-term receivables 53,338,676.94 Fixed assets 667,956,058.27 Construction in progress 6,516,696.14 Intangible assets 63,546,973.16 Development expenditure 5,316,118.50 Long-term deferred expenses 4,027,775.64 Deferred income tax assets 2,656,532.93 Total non-current assets 803,358,831.58 Total assets 1,275,869,476.60	Opening balance 102,342,860.91 25,230,005.90 71,678,942.58 4,329,899.13 28,928,810.44 195,863,112.95 58,978,537.93
	487,352,169.84
	51,727,535.57 691,522,403.10 9,828,822.54 64,517,450.10 – 4,995,326.04 4,091,374.33
	826,682,911.68
	1,314,035,081.52

– 17 –

Item 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 Non-current liabilities: Long-term borrowings Deferred income Total non-current liabilities Total Liabilities	Closing Balance 65,000,000.00 – 77,589,623.32 18,164,335.84 21,337,375.73 5,587,148.69 116,025,893.76 457,833,651.66 761,538,029.00 42,225,618.49 9,881,443.04 52,107,061.53 813,645,090.53	Opening balance 67,930,000.00 110,200,000.00 80,295,143.32 20,132,927.79 26,291,242.89 14,961,097.35 166,587,026.05 81,097,651.66
		567,495,089.06
		459,170,134.47 9,024,861.99
		468,194,996.46
		1,035,690,085.52

– 18 –

Item		Closing Balance		Opening balance
Owners’ equity
Share capital		526,766,875.00		515,018,242.00
Capital reserve		1,449,321,666.62		1,251,445,315.32
Surplus reserve		51,365,509.04		51,365,509.04
Undistributed profit	-1,565,229,664.59		-1,539,484,070.36
To tal owners’ equity attributable to
parent company		462,224,386.07		278,344,996.00
Total owners’ equity		462,224,386.07		278,344,996.00
Total liabilities and owners’ equity		1,275,869,476.60		1,314,035,081.52
	Person in charge of Person in charge of
Legal representative:	accounting: accounting department:
Zhang Chong	Ma Yan	Chen Jing

– 19 –

Balance Sheet of the Parent Company Prepared by: Luoyang Glass Company Limited June 30, 2016 Unit: RMB

Item Current Assets: Cash and cash equivalents Bills receivables Accounts receivables Prepayments Other receivables Other current assets Total current assets Non-current assets: Long-term receivables Long-term equity investments Fixed assets Intangible assets Long-term deferred expenses Total non-current assets Total assets	Closing Balance 43,541.63 – 225,975,506.56 312,287.81 97,510,999.11 50,465.51 323,892,800.62 53,338,676.94 748,986,593.99 3,081,037.43 6,859,075.23 324,000.00 812,589,383.59 1,136,482,184.21	Opening balance 60,422,236.77 12,298,525.67 209,998,506.36 204,646.95 92,782,775.21 –
		375,706,690.96
		51,727,535.57 748,986,593.99 3,274,034.44 7,043,817.21 378,000.00
		811,409,981.21
		1,187,116,672.17

– 20 –

Item		Closing Balance		Opening balance
Current liabilities:
Bills payables		–		112,100,000.00
Accounts payables		44,114,874.54		52,825,849.20
Receipts in advance		16,367,700.31		19,236,279.29
Employee compensation payable		5,485,456.98		8,574,407.48
Tax payables		516,716.36		1,170,093.28
Other payables		210,480,779.34		319,420,971.97
Non-current liabilities due within one year		407,929,347.08		43,393,347.08
Total current liabilities		684,894,874.61		556,720,948.30
Non-current liabilities:
Long-term borrowings		1,162,885.34		387,331,110.45
Total non-current liabilities		1,162,885.34		387,331,110.45
Total Liabilities		686,057,759.95		944,052,058.75
Owners’ equity:
Share capital		526,766,875.00		515,018,242.00
Capital reserve		1,227,992,180.14		1,030,115,828.84
Surplus reserve		51,365,509.04		51,365,509.04
Undistributed profit	-1,355,700,139.92		-1,353,434,966.46
Total owners’ equity		450,424,424.26		243,064,613.42
Total liabilities and owners’ equity		1,136,482,184.21		1,187,116,672.17
	Person in charge of Person in charge of
Legal representative:	accounting: accounting department:
Zhang Chong	Ma Yan	Chen Jing

– 21 –

Consolidated Income Statement Prepared by: Luoyang Glass Company Limited January – June 2016 Unit: RMB

	Incurred in the	Incurred in the
Item	Current Period	Prior Period
I. Operating income	137,239,714.63	366,074,390.98
Less: Operating cost	128,487,520.70	378,530,163.62
Business tax and surcharges	192,141.99	2,215,194.34
Selling expenses	3,541,156.15	15,563,322.54
Administrative expenses	27,468,430.63	54,140,987.06
Financial expenses	3,217,323.22	4,439,535.09
Impairment losses of assets	1,104,320.07	21,836,838.21
II. Operating profit
(loss is represented by “–”)	-26,771,178.13	-110,651,649.88
Plus: Non-operating income	4,328,879.61	1,620,020.72
Including: Gains on disposal of
non-current assets	95.03	58,944.92
Less: Non-operating expense	140,580.22	2,696,368.73
III. Total profit
(total loss is represented by “–”)	-22,582,878.74	-111,727,997.89
Less: Income tax expenses	3,162,715.49	2,551,031.82

IV. Net profit

(net loss is represented by “–”)	-25,745,594.23	-114,279,029.71
Including: Net profit attributable to
the owners of the parent
Company	-25,745,594.23	-109,429,515.42
Minority interests	–	-4,849,514.29

– 22 –

	Incurred in the	Incurred in the	Incurred in the
Item	Current Period		Prior Period
V. After-tax net amount of other
comprehensive income
VI. Total comprehensive income	-25,745,594.23		-114,279,029.71
Total comprehensive income
attributable to parent company
owners	-25,745,594.23		-109,429,515.42
Total comprehensive income
attributable to minority		–	-4,849,514.29
VII. Earnings per share
(I) Basic earnings per share		-0.0491	-0.2125
(II) Diluted earnings per share		-0.0491	-0.2125
Person in charge of		Person in charge of
Legal representative: accounting:		accounting department:
Zhang Chong	Ma Yan	Chen Jing

– 23 –

Income Statement of the Parent Company Prepared by: Luoyang Glass Company Limited January – June 2016 Unit: RMB

	Incurred in the	Incurred in the
Item	Current Period	Prior Period
I. Operating income	90,696,768.06	181,916,385.17
Less: Operating cost	88,703,352.02	178,352,608.39
Business tax and surcharges	15,183.99	275,542.25
Selling expenses	337,516.41	751,982.28
Administrative expenses	10,410,987.82	10,397,585.13
Financial expenses	-905,799.95	-2,130,704.69
Add: Gains from changes in fair value
Investment income	5,533,462.50	8,142,938.44
II. Operating profit	-2,331,009.73	2,412,310.25
Plus: Non-operating income	65,836.27	55,660.38
Including: Gains on disposal of
non-current assets	95.03	–
Less: Non-operating expense	–	337,231.81
III. Total profit	-2,265,173.46	2,130,738.82
IV. Net Profit	-2,265,173.46	2,130,738.82

– 24 –

Incurred in the Incurred in the Current Period Prior Period

Item

V. Other comprehensive after-tax net income VI. Total comprehensive income

• -2,265,173.46 2,130,738.82

VII. Earnings per share

• (I) Basic earnings per share

• (II) Diluted earnings per share

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

– 25 –

Consolidated Cash Flow Statement Prepared by: Luoyang Glass Company Limited January – June 2016 Unit: RMB

	Incurred in the	Incurred in the
Items	Current Period	Prior Period
I. Cash flow from operating activities:
Cash received from sales of goods or rendering
of services	46,357,908.63	185,716,960.01
Other cash received related to operating
activities	5,590,870.37	16,928,981.03
Subtotal of cash inflows from operating
activities	51,948,779.00	202,645,941.04
Cash paid for goods purchased and services
rendered	60,010,928.46	189,183,820.02
Cash paid to and for employees	36,484,249.91	41,255,304.70
Cash paid for various taxes	15,594,521.33	30,088,057.10
Other payments related to operating activities	15,695,448.22	20,267,801.35
Subtotal of cash outflows from operating
activities	127,785,147.92	280,794,983.17
Net cash flow from operating activities	-75,836,368.92	-78,149,042.13
II. Cash flow from investing activities:
Subtotal of cash inflows from investment
activities	–	–
Cash paid for the acquisition and construction
of fixed assets, intangible assets, and other
long-term assets	148,134.20	19,823,209.87
Other cash payments related to investment
activities	90,729,715.31
Subtotal of cash outflows from investment
activities	90,877,849.51	19,823,209.87
Net cash flow from investment activities	-90,877,849.51	-19,823,209.87

– 26 –

Incurred in the Incurred in the Items Current Period Prior Period

III. Cash flows from financing activities:
Cash received from investments	209,624,984.30		–
Proceeds from loans		15,000,000.00	27,930,000.00
Other cash received related to financing
activities		81,055,772.70	423,568,543.48
Subtotal of cash inflows from financing
activities	305,680,757.00		451,498,543.48
Cash paid for repayments of borrowings		54,238,626.83	32,490,707.67
Cash payment for distribution of dividends and
profits or interest repayment		3,841,626.46	1,154,564.79
Other cash payments related to financing
activities		86,855,497.44	352,375,897.78
Subtotal of cash outflows from financing
activities	144,935,750.73		386,021,170.24
Net cash flow from financing activities	160,745,006.27		65,477,373.24
IV. Effect of exchange rate changes on cash and
cash equivalents		128.15	-103.35
V. Net increase in cash and cash equivalents		-5,969,084.01	-32,494,982.11
Add: Opening balance of cash and
cash equivalents		42,342,860.91	37,777,890.19
VI. Closing balance of cash and cash equivalents		36,373,776.90	5,282,908.08
Person in charge	of	Person in charge of
Legal representative: accounting:		accounting department:
Zhang Chong Ma Yan		Chen Jing

– 27 –

Cash Flow Statement of the Parent Company Prepared by: Luoyang Glass Company Limited January – June 2016 Unit: RMB

		Incurred in the	Incurred in the
Items		Current Period	Prior Period
I.	Cash flow from operating activities:
	Cash received from sales of goods or rendering
	of services	31,355,222.82	219,644,282.60
	Other cash received related to operating
	activities	139,387,525.74	251,843,534.16
	Subtotal of cash inflows from operating
	activities	170,742,748.56	471,487,816.76
	Cash paid for goods purchased and services
	rendered	21,495,623.96	3,837,651.18
	Cash paid to and for employees	12,015,636.74	6,138,589.73
	Cash paid for various taxes	943,550.75	3,829,550.17
	Other payments related to operating activities	165,597,696.70	154,683,616.04
	Subtotal of cash outflows from operating
	activities	200,052,508.15	168,489,407.12
	Net cash flow from operating activities	-29,309,759.59	302,998,409.64
II.	Cash flow from investing activities:
	Subtotal of cash inflows from investment
	activities	–	–
	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	90,729,715.31
	Subtotal of cash outflows from investment
	activities	90,729,715.31	2,370.00
	Net cash flow from investment activities	-90,729,715.31	-2,370.00

– 28 –

		Incurred in the	Incurred in the	Incurred in the
Items		Current Period		Prior Period
III. Cash flow from financing activities:
	Cash received from investments	209,624,984.30		–
	Other cash received related to financing
	activities		34,555,772.70	30,000,000.00
	Subtotal of cash inflows from financing
	activities	244,180,757.00		30,000,000.00
	Cash paid for repayments of borrowings		21,703,058.86	21,050,707.67
	Cash payment for distribution of dividends and
	profits or interest repayment		17,046.53	273,000.00
	Other cash payments related to financing
	activities	102,800,000.00		311,698,397.78
	Subtotal of cash outflows from financing
	activities	124,520,105.39		333,022,105.45
	Net cash flow from financing activities	119,660,651.61 -303,022,105.45
IV. Effect of exchange rate changes on cash and
	cash equivalents		128.15	-103.35
V.	Net increase in cash and cash equivalents		-378,695.14	-26,169.16
	Add: Opening balance of cash and cash
	equivalents		422,236.77	193,116.50
VI. Closing balance of cash and cash equivalents			43,541.63	166,947.34
	Person in charge of		Person in charge of
	Legal representative: accounting:		accounting department:
	Zhang Chong Ma Yan		Chen Jing

– 29 –

Consolidated Statement of Changes in Shareholders’ Equity Prepared by: Luoyang Glass Company Limited January – June 2016 Unit: RMB

							Current period
					Attributable	to owners of the Parent Company
					Less:	Other
			Other equity		Treasury	comprehensive			Undistributed		Minority	Total owners’
Item		Share capital	instruments	Capital reserve	stock	income	Special reserve	Surplus reserve	profit	Sub-total	interests	equity
I. Balance at the end of last year		515,018,242.00		922,207,200.86				51,365,509.04	**-1,210,245,955.90 **	278,344,996.00		278,344,996.00
Add:	Effects of changes in accounting
	policies
	Effects of correction of prior
	year errors			329,238,114.46					-329,238,114.46
II. Opening balance of the year		515,018,242.00		1,251,445,315.32				51,365,509.04	**-1,539,484,070.36 **	278,344,996.00		278,344,996.00
III. Changes for the period
(decrease is indicated by “-”)		11,748,633.00		197,876,351.30					-25,745,594.23	183,879,390.07		183,879,390.07
(I)	Total comprehensive income								-25,745,594.23	-25,745,594.23		-25,745,594.23
(II)	Capital contributed or reduced
	by owners	11,748,633.00		197,876,351.30						209,624,984.30		209,624,984.30
	1. Ordinary shares paid by
	shareholders	11,748,633.00		197,876,351.30						209,624,984.30		209,624,984.30
(III)	Profit distribution
(IV)	Internal transfers of owners’
	equity
(V)	Special reserve
(VI)	Others
IV. Closing balance for the period		526,766,875.00		1,449,321,666.62				51,365,509.04	**-1,565,229,664.59 **	462,224,386.07		462,224,386.07
							Previous period
					Attributable	to owners of the Parent Company
					Less:	Other						Total
			Other equity		Treasury	comprehensive	Special	Surplus	Undistributed		Minority	owners’
Item		Share capital	instruments	Capital reserve	stock	income	reserve	reserve	profit	Sub-total	interests	equity
I. Balance at the end of last year		500,018,242.00		857,450,406.90			456,157.74	51,365,509.04	-1,359,891,297.28	49,399,018.40	-88,788,534.35	-39,389,515.95
Add:	Effects of changes in accounting
	policies
	Business combination under
	common control			662,516,418.00					5,162,347.66	667,678,765.66		667,678,765.66
II. Opening balance of the year		500,018,242.00		1,519,966,824.90			456,157.74	51,365,509.04	-1,354,728,949.62	717,077,784.06	-88,788,534.35	628,289,249.71
III. Changes for the period
(decrease is indicated by “-”)							28,229.99		-109,429,515.42	-109,401,285.43	-4,849,514.29	-144,224,741.26
(I)	Total comprehensive income								-109,429,515.42	-109,429,515.42	-4,849,514.29	-114,279,029.71
(II)	Capital contributed or reduced
	by owners
(III)	Profit distribution
(IV)	Internal transfers of owners’
	equity
(V)	Special reserve						28,229.99			28,229.99	26,058.46	54,288.45
	1. Appropriation for the period						60,985.31			60,985.31	56,294.14	117,279.45
	2. Utilized in the period						-32,755.32			-32,755.32	-30,235.68	-62,991.00
IV. Closing balance for the period		500,018,242.00		1,519,966,824.90			484,387.73	51,365,509.04	-1,464,158,465.04	607,676,498.63	-93,611,990.18	514,064,508.45
				Person		in charge of			Person in charge			of
	Legal representative:				accounting:				accounting department:
	Zhang	Chong			Ma Yan				Chen Jing

– 30 –

Statement of Changes in Shareholders’ Equity of the Parent Company Prepared by: Luoyang Glass Company Limited January – June 2016 Unit: RMB

							Current period
							Other					Total
				Other equity		Less:	comprehensive			Undistributed		owners’
Item			Share capital	instruments	Capital reserve	Treasury stock	income	Special reserve	Surplus reserve	profit		equity
I.	Balance at the end of last year		515,018,242.00		992,916,834.90				51,365,509.04	-1,316,235,972.52	243,064,613.42
	Add:	Effects of changes in accounting policies
		Effects of correction of prior year errors			37,198,993.94					-37,198,993.94		0.00
II.	Opening balance of the year		515,018,242.00		1,030,115,828.84				51,365,509.04	-1,353,434,966.46	243,064,613.42
III.	Changes for the period
	(decrease is indicated by “-”)		11,748,633.00		197,876,351.30					-2,265,173.46	207,359,810.84
	(I)	Total comprehensive income								-2,265,173.46	-2,265,173.46
	(II)	Capital contributed or reduced by
		owners	11,748,633.00		197,876,351.30						209,624,984.30
		1. Ordinary shares paid by
		shareholders	11,748,633.00		197,876,351.30						209,624,984.30
	(III)	Profit distribution
	(IV)	Internal transfers of owners’ equity
	(V)	Special reserve
	(VI)	Others
IV.	Closing balance for the period		526,766,875.00		1,227,992,180.14				51,365,509.04	-1,355,700,139.92	450,424,424.26
							Previous period
							Other					Total
				Other equity		Less:	comprehensive			Undistributed		owners’
Item			Share capital	instruments	Capital reserve	Treasury stock	income	Special reserve	Surplus reserve	profit		equity
I.	Balance at the end of last year		500,018,242.00		891,129,782.23				51,365,509.04	-1,319,746,764.40	122,766,768.87
II.	Opening balance of the year		500,018,242.00		891,129,782.23				51,365,509.04	-1,319,746,764.40	122,766,768.87
III.	Changes for the period
	(decrease is indicated by “-”)									2,130,738.82		2,130,738.82
	(I)	Total comprehensive income								2,130,738.82		2,130,738.82
	(II)	Capital contributed or reduced by
		owners
	(III)	Profit distribution
	(IV)	Internal transfers of owners’ equity
	(V)	Special reserve
	(VI)	Others
IV.	Closing balance for the period		500,018,242.00		891,129,782.23				51,365,509.04	-1,317,616,025.58	124,897,507.69
					Person in charge of			Person in		charge	of
	Legal representative:				accounting:			accounting department:
		Zhang Chong			Ma Yan				Chen Jing

– 31 –

Notes to Financial Statements

For the six months ended 30 June 2016 (Expressed in Renminbi)

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 manufacturing and selling of photovoltaic 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 the parent company should be presented individually as minority interest in Shareholders’ equity in consolidated financial statements.

– 32 –

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

Income of the Group for this year is mainly from sales of photovoltaic glass, which is deemed as a separate reportable segment. The management of the Group reviews the performance of the Group as a separate segment and regularly reviews the financial information to decide resources allocation and assess performance.

1. 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.

Item Domestic Total	Revenues from external customers January – June 2016 January – June 2015 137,239,714.63 366,074,390.98 137,239,714.63 366,074,390.98	Non-current Assets 30 June 2016 31 December 2015 803,358,831.58 826,682,911.68 803,358,831.58 826,682,911.68

– 33 –

2. 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 2016.

IV. BUSINESS REVENUE

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 follows:

(1) Breakdown of operating income

Items Principal operating income Other operating income Total operating revenue Principal operating income by product Name of product or labor service Float glass Silica sand Total	Incurred in the Current Period 135,466,204.64 1,773,509.99 137,239,714.63 Incurred in the Current Period 135,466,204.64 135,466,204.64	Incurred in the Prior Period 329,363,772.21 36,710,618.77 366,074,390.98 Incurred in the Prior Period 311,554,175.62 17,809,596.59 329,363,772.21

(2) Principal operating income by product

• Note: Due to the inclusion of common glass segment for the same period of last year, the products for the Reporting Period are still represented by previous names.

– 34 –

V. NON-OPERATING INCOME

Items Total gains on disposal of non-current assets Including: Gains on disposal of fixed assets Government grants Gains on debt reorganization Other Total	Incurred in the Current Period 95.03 95.03 4,294,086.69 2,046.24 32,651.65 4,328,879.61	Incurred in the Prior Period 58,944.92 58,944.92 1,199,826.08 96,765.10 264,484.62
		1,620,020.72

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 Handling charges (Interests of discounted charges) Other financial expenses Total	Incurred in the Current Period 4,426,071.99 2,061,988.44 70,867.83 162.23 782,534.07 3,217,323.22	Incurred in the Prior Period 1,741,834.97 1,882,553.73 53,712.76 223,490.21 3,914,990.99 835,040.31 4,439,535.09

– 35 –

(2) Operating cost

Items Principal operating cost – Float glass – Silica sand Other operating cost – Raw materials, water, electricity and technical service, etc. Total operating cost	Incurred in the Current Period 127,477,857.21 127,477,857.21 1,009,663.49 1,009,663.49 128,487,520.70	Incurred in the Prior Period 350,851,751.09 342,028,554.94 8,823,196.15 27,678,412.53 27,678,412.53
		378,530,163.62

Note: Due to the inclusion of common glass segment for the same period of last year, the products for the Reporting Period are still represented by previous names.

(3) Business tax and surcharges

Items Business tax Urban maintenance and construction tax Education surcharges Resources tax Total	Incurred in the Current Period 5,741.68 108,800.50 77,599.81 192,141.99	Incurred in the Prior Period 86,966.67 640,111.32 614,152.24 873,964.11 2,215,194.34

– 36 –

(4) Selling expenses

Items Staff’s remuneration Depreciation expenses Transportation costs Loading and unloading charges Material consumption Other selling expenses Total	Incurred in the Current Period 2,485,495.04 118,033.97 81,230.34 228,723.14 119,336.11 508,337.55 3,541,156.15	Incurred in the Prior Period 5,951,790.64 780,782.01 5,659,440.91 410,134.15 716,956.13 2,044,218.70 15,563,322.54

(5) Administrative expenses

Items Staff’s remuneration Depreciation of fixed assets Intangible asset amortization Intermediary engagement fees Research and development fees Taxes Other fees Total	Incurred in the Current Period 12,035,425.21 992,385.23 878,642.62 2,973,674.53 2,264,527.32 3,022,044.94 5,301,730.78 27,468,430.63	Incurred in the Prior Period 20,593,305.11 8,772,964.86 2,044,073.54 3,263,904.26 5,188,731.97 4,387,108.47 9,890,898.85
		54,140,987.06

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(6) Impairment losses of assets

Items Bad debt losses Impairment losses of inventories Total (7) Non-operating expense Items Expenditure of donation Indemnities, liquidated damages and penalties Other expenses Total VII. INCOME TAX EXPENSES Items Current Income tax calculated according to tax laws and relevant requirements Deferred income tax expenses Total	Incurred in the Current Period 153,921.09 950,398.98 1,104,320.07 Incurred in the Current Period 140,580.22 140,580.22 Incurred in the Current Period 1,727,874.09 1,434,841.40 3,162,715.49	Incurred in the Prior Period 62,438.00 21,774,400.21 21,836,838.21 Incurred in the Prior Period 60,000.00 2,200,325.59 436,043.14 2,696,368.73 Incurred in the Prior Period 1,329,887.05 1,221,144.77 2,551,031.82

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. As at 30 June 2016, the High-tech Enterprise Certificate had expired. At present, Longhai Company is applying for reexamination of high-tech certification. The provisional enterprise income tax rate was 15% for the period from January to June 2016.

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VIII. DIVIDEND

The board of directors of the Company does not recommend declaring dividends for the six months ended 30 June 2016.

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	-25,745,594.23	-109,429,515.42
Total shares at the end of period	526,766,875.00	515,018,242.00
Basic earnings per share	-0.0491	-0.2125

Diluted earnings per share doesn’t be calculated because the Company had no potential diluted shares for the six months ended 30 June 2016.

X. ACCOUNTS RECEIVABLES AND BILLS RECEIVABLES

1. Accounts receivables:

Item Accounts receivables Less: provision for bad debts Net amount of accounts receivables	Book balance 155,804,830.22 53,696,088.17 102,108,742.05	Opening balance 125,374,455.66 53,695,513.08
		71,678,942.58

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

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Aged analysis of accounts receivables by date of entry:

	Aging	Closing Balance	Opening Balance
	Within 1 year	99,511,823.66	69,081,449.10
	1 to 2 years	968,887.91	2,318,641.24
	2 to 3 years	1,954,192.44	605,589.30
	3 to 4 years	1,153.11	2,675,362.38
	4 to 5 years	2,675,359.46	2,621,120.50
	Over 5 years	50,693,413.64	48,072,293.14
	Total	155,804,830.22	125,374,455.66
2.	Classification of bills receivable
		Amount at	Amount at
		the end of	the beginning
	Items	the period	of the year
	Bank acceptances	4,774,688.10	25,230,005.90
	Total	4,774,688.10	25,230,005.90

XI. ACCOUNTS PAYABLE AND BILLS PAYABLE

1. Aged analysis of accounts payable

Item Closing Balance Opening Balance Within 1 year (including 1 year) 21,372,818.76 17,619,403.52 Above 1 year 56,216,804.56 62,675,739.80 Total 77,589,623.32 80,295,143.32

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2. Classification of bills payable

Items

Closing Balance Opening Balance

Bank acceptances Total XII. RESERVE 1. Capital reserve		110,200,000.00
		110,200,000.00

Items I. Capital premium II. Other capital reserve Total	Opening balance 1,179,144,842.05 72,300,473.27 1,251,445,315.32	Increased amount for the period 197,876,351.30 197,876,351.30	Decreased amount for the period	Closing Balance 1,377,021,193.35 72,300,473.27
				1,449,321,666.62

Note: The increase in capital premium during the Reporting Period was mainly due to the issuance of 11,748,633 RMB-denominated ordinary shares to specific investors at a pricing premium in January 2016.

2. Surplus reserve

Items Statutory surplus reserve Total	Opening balance 51,365,509.04 51,365,509.04	Increased amount for the period	Decreased amount for the period	Closing Balance 51,365,509.04
				51,365,509.04

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3. Undistributed profit

Items Undistributed profit at the end of the previous year before adjustment Total undistributed profits at the beginning of the adjustment period (increase expressed with +, and decrease expressed with -) Undistributed profit at the beginning of the period after adjustment Add: net profit attributable to owners of parent company during the period Less: Allocation to statutory surplus reserves Allocation to discretionary surplus reserves Dividend on ordinary share payable Dividend on ordinary share converted into share capital Undistributed profit at the end of the period

Closing Balance Amount Appropriation or Distribution Proportion -1,210,245,955.90 -329,238,114.46 -1,539,484,070.36 -25,745,594.23 – -1,565,229,664.59

Breakdown of the undistributed profit at the beginning of the period of adjustment:

• (1) Owing to the correction for the material accounting error, undistributed profit at the beginning of the period under impact was RMB-329,238,114.46.

XIII. FUTURE ITEMS

Nil.

Chairman: Zhang Chong Luoyang Glass Company Limited* 29 August 2016

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

• For identification purposes only

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