RoboSense Technology Co., Ltd — Interim / Quarterly Report 2018

Aug 29, 2018

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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2018 INTERIM RESULTS ANNOUNCEMENT

1 IMPORTANT NOTICE

• 1.1 This interim results announcement is extracted from the full text of the interim report. For details, investor are advised to read carefully the full text of the interim report which will be published simultaneously on the website of the Shanghai Stock Exchange and other websites designated by China Securities Regulatory Commission.

• 1.2 This interim results of the Company for the six months ended 30 June 2018 are unaudited but have been reviewed and approved by the audit committee under the board of directors (the “ Board ”) of the Company.

– 1 –

1.3 Company Profile

Stock Abbreviation Luoyang Glass (A Share(s)) Luoyang Glass (H Share(s)) Stock Code 600876 01108 Listing Exchange Shanghai Stock Exchange The Stock Exchange of Hong Kong Limited Secretary to the Board Securities Affairs Representative Name Wu Zhixin Zhao Zhiming Contact address Secretary Office of the Board Secretary Office of the Board of Luoyang Glass Company of Luoyang Glass Company Limited, No. 9 Tanggong Limited, No. 9 Tanggong Middle Road, Xigong District, Middle Road, Xigong District, Luoyang City, Henan Province, Luoyang City, 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

2. MAJOR FINANCIAL DATA AND INFORMATION OF SHAREHOLDERS

2.1 Major financial data

Unit: Yuan Currency: RMB

				Increase/decrease
	Reporting period	Same period last year		over the same
Major accounting data	(January to June)	After adjustment	Before adjustment	period last year
				(%)
Operating income	702,362,390.74	704,459,882.70	154,969,277.04	-0.30
Net profit attributable
to shareholders of the
Company	21,977,671.03	19,733,938.23	1,177,959.02	11.37
Net profit attributable
to shareholders of the
Company after deducting
non-recurring profit or loss	3,027,972.41	-18,229,205.65	-18,229,205.65	N/A
Net cash flow from operating
activities	-75,340,564.25	-253,446,524.14	-22,220,380.57	N/A

– 2 –

	At the end of			Increase/decrease
	the reporting	At the end of the previous year		from the end of
	period	After adjustment	Before adjustment	the previous year
				(%)
Net assets attributable
to shareholders of the
Company	1,262,704,496.44	1,131,687,647.58	559,139,146.36	11.58
Total assets	3,886,034,474.06	3,998,223,959.03	1,373,132,245.83	-2.81

The Company completed a significant asset restructuring during the reporting period, it incorporated CNBM (Hefei) New Energy Co., Ltd., CNBM(Tongcheng) New Energy Materials Co., Ltd. and CNBM (Yixing) New Energy Resources Co., Ltd. into its consolidated statements as business combinations under common control and restated its comparative figures retrospectively. All the financial figures for the beginning of the reporting period and the same period of last year were represented by the adjusted ones.

2.2 Number and shareholdings of shareholders

2.2.1 Number of shareholders

Total number of shareholders as at the end of the reporting period

54,813, including 54,767 holders of A shares and 46 holders of H shares

Total number of holders of preferred shares with restored voting rights as at the end of the reporting period

0

– 3 –

2.2.2 Shareholdings of top ten shareholders

Unit: shares

		Shareholdings of top ten	Shareholdings of top ten	shareholders
	Increase/	Number of		Number
	decrease	shares at		of shares
	during the	the end of		held subject
Name of shareholder	reporting	reporting		to trading	Pledged	or frozen	Nature of
(Full name)	period	period	Proportion	moratorium	Status	Number	shareholder
			(%)
HKSCC NOMINEES	0	248,680,699	44.42	0	Unknown	0	Overseas legal
LIMITED							person
China Luoyang Float Glass	+10,097,588	115,115,830	20.56	25,097,588	Pledged	41,000,000	State-owned
(Group) Co., Ltd.							legal person
CNBM Bengbu Design &	+2,365,976	71,365,976	12.75	2,365,976	Nil	0	State-owned
Research Institute for Glass							legal person
Industry Co., Ltd.
Triumph Technology Group	+7,508,991	7,508,991	1.34	7,508,991	Nil	0	State-owned
Co., Ltd.							legal person
Anhui Huaguang	+6,377,490	6,377,490	1.14	6,377,490	Nil	0	State-owned
Photoelectricity Materials							legal person
Technology Group Co.,
Ltd.
Hefei Gaoxin Development	+3,029,276	3,029,276	0.54	3,029,276	Nil	0	State-owned
and Investment Group							legal person
Company*
Yixing Environmental	+1,877,247	1,877,247	0.34	1,877,247	Nil	0	State-owned
Technology Innovation							legal person
Venture Investment Co.,
Ltd.*
GCL System Integration	+1,065,338	1,065,338	0.19	1,065,338	Nil	0	Domestic non-
Technology Co., Ltd.							state-owned
							legal person
China Triumph International	+708,610	708,610	0.13	708,610	Nil	0	Domestic non-
Engineering Co., Ltd.							state-owned
							legal person
Hong Kong Securities	-157,715	442,575	0.08	0	Unknown	0	Overseas legal
Clearing Co., Ltd.							person

– 4 –

Shareholdings of top 10 shareholders not subject to trading moratorium	Shareholdings of top 10 shareholders not subject to trading moratorium	Shareholdings of top 10 shareholders not subject to trading moratorium	Shareholdings of top 10 shareholders not subject to trading moratorium
	Number of	Type and number	of shares
	circulating shares
	not subject to
Name of shareholder	trading moratorium	Type	Number
HKSCC NOMINEES	248,680,699	Overseas listed	248,680,699
LIMITED		foreign shares
China Luoyang Float Glass	90,018,242	Ordinary shares	90,018,242
(Group) Co., Ltd.		denominated in RMB
CNBM Bengbu Design &	69,000,000	Ordinary shares	69,000,000
Research Institute for Glass		denominated in RMB
Industry Co., Ltd.
Hong Kong Securities	442,575	Ordinary shares	442,575
Clearing Co., Ltd.		denominated in RMB
CHUK YEE MEN LIZA U/D	374,000	Overseas listed	374,000
		foreign shares
Liu Bibo	300,000	Ordinary shares	300,000
		denominated in RMB
Yin Tierong	286,000	Ordinary shares	286,000
		denominated in RMB
Zhao Shengqi	284,100	Ordinary shares	284,100
		denominated in RMB
Jin Ruiming	280,294	Ordinary shares	280,294
		denominated in RMB
Zhao Yueling	278,800	Ordinary shares	278,800
		denominated in RMB

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

Among the top 10 shareholders of the Company, China Luoyang Float Glass (Group) Co., Ltd. and CNBM Bengbu Design & Research Institute for Glass Industry Co., Ltd., Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd., Triumph Technology Group Co., Ltd. and China Triumph International Engineering Co., Ltd. are related parties or persons acting in concert as defined under the Regulations for Disclosure of Changes in Shareholding of Listed Companies (《上市公司股 東持股變動信息披露管理辦法》). The Company is not aware of any parties acting in concert or any related relationship among other holders of circulating shares.

Notes:

1. Shares held by HKSCC NOMINEES LIMITED are held on behalf of various customers.

2. The ordinary shares dominated in Renminbi held by Hong Kong Securities Clearing Co., Ltd. are held on behalf of overseas investors who held these shares via Northbound Trading in the Shanghai-Hong Kong Stock Connect.

– 5 –

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

Unit: share

			Shares subject	to trading
			moratorium available for
			listing and	trading
				Number of
		Number		additional
		of shares		shares
		held subject		available for
	Name of holders of shares	to trading	Time available for	listing and	Trading
No.	subject to trading moratorium	moratorium	listing and trading	trading	moratorium
1	China Luoyang Float Glass	25,097,588	29 December 2018	15,000,000	Non-transferable
	(Group) Co., Ltd.		17 April 2021	10,097,588	within 36
					months from the
					completion date
					of the issuance
2	Triumph Technology Group Co.,	7,508,991	17 April 2021	7,508,991	Non-transferable
	Ltd.				within 36
					months from the
					completion date
					of the issuance
3	Anhui Huaguang Photoelectricity	6,377,490	17 April 2021	6,377,490	Non-transferable
	Materials Technology Group				within 36
	Co., Ltd.				months from the
					completion date
					of the issuance
4	Hefei Gaoxin Development and	3,029,276	17 April 2019	3,029,276	Non-transferable
	Investment Group Company*				within 12
					months from the
					completion date
					of the issuance
5	CNBM Bengbu Design &	2,365,976	17 April 2021	2,365,976	Non-transferable
	Research Institute for Glass				within 36
	Industry Co., Ltd.				months from the
					completion date
					of the issuance

– 6 –

			Shares subject	to trading
			moratorium available for
			listing and	trading
				Number of
		Number		additional
		of shares		shares
		held subject		available for
	Name of holders of shares	to trading	Time available for	listing and	Trading
No.	subject to trading moratorium	moratorium	listing and trading	trading	moratorium
6	Yixing Environmental	1,877,247	17 April 2021	1,877,247	Non-transferable
	Technology Innovation Venture				within 36
	Investment Co., Ltd.*				months from the
					completion date
					of the issuance
7	GCL System Integration	1,065,338	17 April 2021	1,065,338	Non-transferable
	Technology Co., Ltd.				within 36
					months from the
					completion date
					of the issuance
8	China Triumph International	708,610	17 April 2021	708,610	Non-transferable
	Engineering Co., Ltd.				within 36
					months from the
					completion date
					of the issuance

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

China Luoyang Float Glass (Group) Co., Ltd. and CNBM Bengbu Design & Research Institute for Glass Industry Co., Ltd., Anhui Huaguang Photoelectricity Materials Technology Group Co., Ltd., Triumph Technology Group Co., Ltd. and China Triumph International Engineering Co., Ltd. are related parties or persons acting in concert as defined under the Regulations for Disclosure of Changes in Shareholding of Listed Companies (《 上市公司股東持股變動信息披露管理辦法》).

– 7 –

3. MANAGEMENT DISCUSSION AND ANALYSIS

3.1 Discussion and analysis of operations of the Company during reporting period

During the reporting period, the Company continued following the management principles of “integration and optimization, quality improvement and benefit increase” and insisted on operation policies of “price stabilization, quantity assurance, cost reduction, receivables collection, inventory control, adjustment”. On this basis, the Company maintained stable production and operation with progresses so as to achieve the goals and tasks of the year.

The Company successfully completed assets acquisition by issuance of shares, which diversified the product structure and broadened the scope of business. On 15 March 2018, the assets acquisition by issuance of shares and supporting funds raising (related party transaction) by the Company were approved by the CSRC. The Company completed the delivery of the assets in the assets acquisition by issuance of shares and the issuance of new shares in April 2018. Through this restructuring, the Company increased photovoltaic glass business on the basis of its existing information display glass business. The successful implementation of the restructuring broadened the scope of application of the Company’s new glass products, diversified product categories and customer base. With the expansion of the size of and the improvement of the quality of the assets of the Company, it is expected to further enhance the stability and sustainability of future business development, and enhance profitability and overall competitiveness.

The Company proactively coped with competitions in the ultrathin glass market, improved weak links, and carried out production line transformation and technological upgrading project. During the reporting period, the Company stably implemented the technological transformation and upgrading of the ultra-thin electronic glass production line of Longhai Electronic Glass, a subsidiary of the Company. The completion of a new generation of information display ultra-thin glass substrate production line will further optimize and improve production technology and core equipment of the Company. It is expected that the project will be completed and put into production within the year.

– 8 –

The Company expanded new energy materials business and sped up in the construction of the ultra-white solar thermal materials project. At present, domestic glass manufacturers haven’t engaged in the production of ultra-white solar thermal materials. In order to closely follow the development trend of the solar thermal industry and expand the product line, the Company focused on advancing the Ultra-White Solar Thermal Material Project in Puyang County. The project has obtained a subsidy of RMB100 million from the central government on special technology transformation programs of the NDRC and great support from the government of Puyang County. The construction of the project is expected to complete within the year.

Through new product R&D and quality improvement projects, the Company consistently carried out “improving efficiency, cutting expenditures and reducing costs” and the production and operation remained stable with progresses. The Company’s operating revenue amounted to RMB702,362,390.74, representing year-on-year decrease of 0.30%; operating profit amounted to RMB37,815,921.75, representing a year-onyear increase of 19.72%; net profit attributable to the shareholders of the Company amounted to RMB21,977,671.03, representing a year-on-year increase of 11.37%; and basic earnings per share attributable to shareholders of the Company amounted to RMB0.0395. Gearing ratio was 64.93%, representing a decrease of 1.40 percentage points from the beginning of the reporting period.

– 9 –

3.2 Analysis of principal operating activities

3.2.1 Analysis of changes in relevant items in the financial statements

Unit: Yuan Currency: RMB

		Amount for
	Amount for	corresponding
Item	the period	period last year	Change
			(%)
Operating revenue	702,362,390.74	704,459,882.70	-0.30
Operating costs	518,623,907.37	548,925,924.41	-5.52
Cost of sales	21,923,965.83	28,053,678.63	-21.85
Administrative expenses	46,521,293.38	45,271,254.41	2.76
Financial expenses	39,740,414.80	34,959,536.18	13.68
Net cash flow from operating
activities	-75,340,564.25	-253,446,524.14	N/A
Net cash flow from
investment activities	-100,402,554.79	-748,185.99	N/A
Net cash flow from financing
activities	54,547,568.00	150,365,351.63	-63.72
R&D expenses	38,443,281.67	28,683,561.88	34.03
Other income	7,120,982.47	22,925,533.47	-68.94
Credit impairment losses	-4,173,671.55	–	-100.00

Reasons for change in operating revenue: basically the same as compared with that of the corresponding period last year.

Reasons for change in operating costs: a decrease in operating costs as a result of the enhancement of cost management and optimisation of product mix in the reporting period.

Reasons for change in cost of sales: a decrease in transportation costs in the reporting period.

Reasons for change in administrative expenses: an increase in staff remuneration in the reporting period.

Reasons for change in financial expenses: an increase in interests of discounted bills in the reporting period.

– 10 –

Reasons for change in net cash flow from operating activities: an increase in cash received from sales of goods or rendering of services in the reporting period.

Reasons for change in net cash flow from investment activities: an increase in project investments in the reporting period.

Reasons for change in net cash flow from financing activities: a yearon-year decrease in net proceeds from financing activities in the reporting period.

Reasons for change in R&D expenses: more investment in research and development in the reporting period.

Reasons for change in other income: a year-on-year decrease in government subsidies received in the reporting period.

Reasons for change in credit impairment losses: a reversal of provision for expected credit losses in the reporting period.

– 11 –

3.2.2 Others

• (1) Explanations for other substantial changes in the composition of profits or source of profits of the Company

Inapplicable

• (2) Analysis of principal operations by business or product

Unit: Yuan Currency: RMB

		Principal	operations by industry	operations by industry
				Year-on-year	Year-on-year	Year-
				increase/	increase/	on-year
				decrease in	decrease	increase/
	Revenue from	Costs of	Gross	revenue from	in costs of	decrease in
	principal	principal	profit	principal	principal	gross profit
By industry	operations	operations	margin	operations	operations	margin
			(%)	(%)	(%)	(%)
New	677,653,373.40	494,773,813.82	26.99	0.09	-5.66	Increased
materials						by 4.45
						percentage
						points

		Principal	operations by product	operations by product
				Year-on-year	Year-on-year	Year-
				increase/	increase/	on-year
				decrease in	decrease	increase/
	Revenue from	Costs of	Gross	revenue from	in costs of	decrease in
	principal	principal	profit	principal	principal	gross profit
By product	operations	operations	margin	operations	operations	margin
			(%)	(%)	(%)	(%)
Information	163,048,829.34	117,783,730.61	27.76	6.67	5.99	Increased
display						by 0.46
glass						percentage
						point
New energy	514,604,544.06	376,990,083.21	26.74	-1.83	-8.80	Increased
glass						by 5.60
						percentage
						points

– 12 –

3.3 Analysis of investments

3.3.1 Overall analysis of external equity investment

• (1) Significant equity investment

During the reporting period, the Company completed a significant asset restructuring. It acquired 100% equity interest in CNBM (Hefei) New Energy Co., Ltd., 100% equity interest in CNBM (Tongcheng) New Energy Materials Co., Ltd. and 70.99% equity interest in CNBM (Yixing) New Energy Resources Co., Ltd. held by eight counterparties including CLFG by means of issuance of shares to develop photovoltaic glass business on the basis of the ultra-thin glass substrate business.

• (2) Analysis of major controlled and investee companies

		Major
		products or	Registered
Company name	Industry	services	capital	Total assets	Net assets	Net profit
CLFG Longhai	New	Information	100,000,000.00	187,208,051.04	160,014,204.27	-5,833,580.15
Electronic Glass	materials	display
Limited		glass
CLFG Longmen	New	Information	20,000,000.00	133,754,145.57	-546,026,862.11	1,011,935.41
Glass Co. Ltd.	materials	display
		glass
Bengbu China	New	Information	632,764,300.00	975,007,900.73	773,920,935.72	11,422,871.99
National Building	materials	display
Materials		glass
Information
Display Materials
Co., Ltd.
CNBMG (Puyang)	New	New energy	240,000,000.00	292,429,254.49	181,859,410.66	667,625.00
Photoelectric	materials	glass
Material Co., Ltd.
CNBM (Hefei) New	New	New energy	130,000,000.00	1,173,917,787.63	224,546,355.23	17,178,910.39
Energy Co., Ltd.	materials	glass
CNBM (Tongcheng)	New	New energy	133,388,980.00	498,885,342.49	245,000,532.44	11,067,925.69
New Energy	materials	glass
Materials Co.,
Ltd.
CNBM (Yixing)	New	New energy	313,700,000.00	949,331,661.97	345,138,666.28	10,582,092.83
New Energy	materials	glass
Resources Co.,
Ltd

– 13 –

3.3.2 Others

• (1) Bank borrowings and other loans

Short-term loans: as at the end of this reporting period, the balance of short-term loans was RMB813,234,000.00, including secured loans of RMB38,500,000.00 and guaranteed loans of RMB774,734,000.00.

Long-term loans: the balance of long-term loans was RMB511,427,821.76 (including the balance of long-term loans due within one year amounting to RMB197,080,091.76), of which: the balance of bank loans of RMB350,743,175.76 and the balance of secured loans from non-bank financial institutions of RMB160,684,646.00.

• (2) Liquidity and capital resources

As at 30 June 2018, the Group had cash and cash equivalents of RMB77,602,290.74, including US dollar deposits of RMB2,245,942.33 (31 December 2017: RMB7,638,541.49), HK dollar deposits of RMB6,041.02 (31 December 2017: RMB5,989.20) and Euro deposits of RMB0.38 (31 December 2017: RMB111,635.78), representing a decrease of RMB121,195,497.34 compared with the total amount of RMB198,797,788.08 as at 31 December 2017.

Cash inflows of the Group in the reporting period mainly came from sales revenue and financial borrowings, which were mainly used for production and operation and for repayment of bank loans.

– 14 –

(3) Gearing ratio

Gearing ratio is calculated based on the total liabilities at the end of the reporting 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 under this formula was 193.68% as at 30 June 2018, compared to 216.78% as at 31 December 2017.

(4) Contingent liabilities

As at 30 June 2018, the Group has no material contingent liabilities.

• (5) Risk of exchange rate fluctuations

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

(6) Employees of the Company

As at 30 June 2018, the number of employees listed on the payroll register of the Group was 2,227, of which 1,561 were production staff, 405 were sales, finance and technical staff, and 261 were administrative staff.40.64% of the Group’s staff were college graduates or above.

4. MATTERS RELATING TO FINANCIAL REPORT

4.1 Change in the accounting policies during the reporting period

Since March 2017, the Ministry of Finance successively made amendments to Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments (Cai Kuai [2017] No. 7), Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets (Cai Kuai [2017] No. 8) and Accounting Standards for Business Enterprises No. 24 – Hedge Accounting (Cai Kuai [2017] No. 9) since 31 March 2017, and released the revised Accounting Standards for Business Enterprises No. 37 – Presentation of Financial Instruments (Cai Kuai [2017] No. 14) on 2 May 2017 (the four standards above are collectively referred to as “New FI Standards”), and on 5 July 2017 released the revised Accounting Standard for Business Enterprises No. 14 – Revenue (Cai Kuai [2017] No. 22) (hereafter referred to as “New Revenue Standard”).

– 15 –

In 2018, the Ministry of Finance newly issued the Notice on Revising and Issuing the Format of Financial Statements of General Enterprises for the year 2018 (Cai Kuai [2018] No. 15) (hereinafter referred to as the “Presentation Adjustments”).

The Company has applied the above-mentioned new revenue standards and four new financial standards since 1 January 2018 and made amendments to accounting policies relating to revenue and financial instruments. It also prepared its financial statements in accordance with the required format of financial statements under Cai Kuai [2018] No. 15.

(1) New Revenue Standard

The New Revenue Standard replaces Accounting Standards for Business Enterprises No. 14 – Revenue and Accounting Standards for Business Enterprises No. 15 – Construction Contracts issued by the Ministry of Finance in 2006 (collectively referred to as the “old revenue standards”).

Under the old revenue standards, the Company recognised revenue when the risks and rewards had passed to the customers. The Company’s revenue from sales of goods was recognised when the following conditions were met: the significant risks and rewards of ownership of the goods had been transferred to the customer, the amount of revenue and related costs could be reliably measured, the relevant economic benefits would probably flow to the Company and the Company retained neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. Revenue from rendering of services and revenue from construction contracts were recognised by reference to the stage of completion of the transaction at the balance sheet date.

– 16 –

Under the New Revenue Standard, revenue is recognised when the Company transfers the control over goods or services to the customers: Revenue is recognised when the Company satisfies the performance obligation in the contract by transferring the control over relevant goods or services to the customers. The Company determines a performance obligation as to be satisfied over time if certain criteria is met; or otherwise, a performance obligation is satisfied at a point in time. Where a contract has two or more performance obligations, the Company determines the stand-alone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocates the transaction price in proportion to those stand-alone selling prices. The Company recognises as revenue the amount of the transaction price that is allocated to each performance obligation. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties. The transaction price recognised by the Group does not exceed the amount in the accumulated revenue is likely not to be significantly reversed when the relevant uncertainty is eliminated. Where there are significant financing components in the contract, the Group determines the transaction price based on the amount payable assumed to be paid by the client in cash the moment the latter takes control of the goods or services. The difference between the amount of promised consideration and the cash selling price is amortised using an effective interest method over the contract term.

The Company adjusted relevant accounting policies pursuant to the requirements regarding special events or transactions as specified under the New Revenue Standard. In accordance with the requirements of the New Revenue Standard, the Company presents contract assets or contract liabilities in the balance sheet based on the relationship between the performance of obligations and the payment by customers.

The Company assessed the impact of the New Revenue Standard on its financial statements based on a review of its revenue sources and performance process of contracts with customers. Since the Company derives its revenue mainly from sales of products under sales contracts entered into with customers, revenue is recognized when the control of the products is transferred to relevant customer. The adoption of the New Revenue Standard has no material impact on the financial statements of the Company.

– 17 –

(2) New FI Standards

The New FI Standards classify financial assets into three basic categories: (1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive income; and (3) financial assets at fair value through profit or loss. Under the New FI Standards, the classification of financial assets is determined based on the business model of the Company’s management of financial assets and the contractual cash flow characteristics of the assets. The New FI Standards remove the three categories of held-to-maturity investments, loans and accounts receivables and available-for-sale financial assets as defined in the original financial instruments standards. The adoption of the New FI Standards has no significant impact on the accounting policies of the Company regarding the financial liabilities.

The New FI Standards replace the “loss incurred” model in the original financial instrument standard with the “expected credit loss” model. The “expected credit loss” model requires continuous assessment of the credit risk involved in financial assets. Therefore, under the New FI Standards, the credit loss of the Company is recognized earlier than that under the original financial instrument standard.

In accordance with the New FI Standards, the Company made retrospective adjustments to the classification and measurement of financial instruments (including impairment) besides certain specific circumstances, thereby the difference between the original book value of financial instruments and the new book value as at the implementation date of the New FI Standards (i.e. 1 January 2018) is included in the retained earnings as at the beginning of 2018. At the same time, the Company did not adjust the data in the comparative financial statement.

– 18 –

(3) Impact of amendments to the accounting standards and Cai Kuai [2018] No. 15 on the presentation of financial statements

Impact on items of the consolidated balance sheet and the balance sheet of the Company is summarized as follows:

Unit: Yuan Currency: RMB

	Balance as at 31				Balance as
	December 2017				at 1 January
	prior to the				2018 following
Items of the	changes in	Impact of the	Impact of the	Impact of	the changes
consolidated	accounting	New Revenue	New FI	the Presentation	in accounting
balance sheet	policies	Standard	Standards	Adjustments	policies
Assets:
Notes receivable	490,712,129.45			-490,712,129.45	–
Accounts receivable	531,850,536.95			-531,850,536.95	–
Notes and accounts
receivable			-15,394,947.77	1,022,562,666.40	1,007,167,718.63
Other receivables	90,685,860.01		-1,802,629.38		88,883,230.63
Available-for-sale
financial assets	0.00				–
Other investments in
equity instruments			0.00		0.00
Deferred income tax
assets	2,504,761.54		2,782,426.31		5,287,187.85
Construction in
progress	282,004,319.33			13,980.58	282,018,299.91
Engineering materials	13,980.58			-13,980.58
Liabilities:
Notes payable	139,568,673.34			-139,568,673.34
Accounts payable	572,025,989.83			-572,025,989.83
Notes and accounts
payable				711,594,663.17	711,594,663.17
Payments received in
advance	21,475,187.43	-21,475,187.43
Contract liabilities		21,475,187.43			21,475,187.43
Interest payable	3,418,456.33			-3,418,456.33
Other payables	373,590,908.16			3,418,456.33	377,009,364.49
Shareholders’ equity
Retained earnings	-1,338,290,605.36		-11,706,971.58		-1,349,997,576.94
Minority interest	214,501,306.52		-2,708,179.26		211,793,127.26

– 19 –

	Balance as at 31				Balance as
	December 2017				at 1 January
	prior to the	Impact of			2018 following
Item of the	change in the	the New	Impact of	Impact of	the change
balance sheet of	accounting	Revenue	the New FI	the Presentation	in accounting
the Company	policies	Standard	Standards	Adjustments	policies
Assets:
Notes receivable	7,469,611.05			-7,469,611.05	–
Accounts receivable	204,327,727.83			-204,327,727.83	–
Notes and accounts
receivable	–		-156,945.53	211,797,338.88	211,640,393.35
Other receivables	31,131,296.66		-310,594.67		30,820,701.99
Available-for-sale
financial assets	0.00
Other investments in
equity instruments			0.00		0.00
Liabilities:
Accounts payable	5,062,801.26			-5,062,801.26	–
Notes and accounts
payable				5,062,801.26	5,062,801.26
Payments received in
advance	7,813,062.37	-7,813,062.37			–
Contract liabilities		7,813,062.37			7,813,062.37
Interest payable	472,432.69			-472,432.69	–
Other payables	465,380,879.74			472,432.69	465,853,312.43
Shareholders’ equity
Retained earnings	-1,396,267,053.32		-467,540.20		-1,396,734,593.52

Impact of Cai Kuai [2018] No. 15 on the items of the 2017 interim consolidated income statement of the Company is as follows:

Items of the	Amounts		Amounts
consolidated	before	Adjusted	after
income statement	adjustment	amounts	adjustment
Administrative
expenses	73,954,816.29	-28,683,561.88	45,271,254.41
Research and
development
expenses	–	28,683,561.88	28,683,561.88

– 20 –

• 4.2 Retrospective restatement of material accounting errors during the reporting period.

Nil

• 4.3 Change in the scope of consolidation as compared with the latest annual report.

Three subsidiaries were added into the consolidation scope of the Company due to the business combination under common control during the reporting period, namely CNBM (Hefei) New Energy Company Limited ( 中建材 （合肥）新能源有限公司 ), CNBM (Tongcheng) New Energy Materials Company Limited ( 中國建材桐城新能源材料有限公司 ) and CNBM (Yixing) New Energy Company Limited (中建材（宜興）新能源有限公司), among which, CNBM (Hefei) New Energy Company Limited and CNBM (Tongcheng) New Energy Materials Company Limited were held as to 100% by the Company, and CNBM (Yixing) New Energy Company Limited was held as to 70.99% by the Company.

4.4 Financial Statements

Consolidated Balance Sheet

30 June 2018 Prepared by: Luoyang Glass Company Limited*

Item Current assets: Cash and cash equivalents Notes and accounts receivables Prepayments Other receivables Inventories Contract assets Assets held for sale Non-current assets due within one year Other current assets Total current assets	Unit: Yuan Currency: RMB Closing Balance Opening Balance 179,161,146.31 204,245,757.54 772,458,749.92 1,022,562,666.40 26,031,059.93 20,321,794.16 35,319,051.98 90,685,860.01 261,049,375.38 180,924,918.81 38,492,497.72 41,988,762.45 1,312,511,881.24 1,560,729,759.37	Unit: Yuan Currency: RMB Closing Balance Opening Balance 179,161,146.31 204,245,757.54 772,458,749.92 1,022,562,666.40 26,031,059.93 20,321,794.16 35,319,051.98 90,685,860.01 261,049,375.38 180,924,918.81 38,492,497.72 41,988,762.45 1,312,511,881.24 1,560,729,759.37
		1,560,729,759.37

– 21 –

Closing Balance Opening Balance

Item

Non-current assets:

Long-term receivables 55,000,000.00 55,000,000.00 Long-term equity investments Available-for-sale financial assets Other equity instrument investment Other non-current financial assets Investment properties Fixed assets 1,705,333,363.47 1,766,535,573.58 Construction in progress 443,066,812.69 282,018,299.91 Intangible assets 359,130,243.89 317,529,993.66 Long-term deferred expenses 4,176,191.65 5,539,138.34 Deferred income tax assets 4,437,422.74 2,504,761.54 Other non-current assets 2,378,558.38 8,366,432.63 Total non-current assets 2,573,522,592.82 2,437,494,199.66 Total assets 3,886,034,474.06 3,998,223,959.03 Current liabilities: Short-term borrowings 813,234,000.00 812,509,000.00 Held-for-trading financial liabilities Financial liabilities at fair value through profit or loss Derivative financial liabilities Notes and accounts payables 738,300,969.77 711,594,663.17 Receipts in advance 21,475,187.43 Contract liabilities 17,078,230.96 Employee compensation payable 18,046,154.98 21,985,112.19 Taxes payable 24,875,091.43 31,525,000.52 Other payables 292,721,258.65 377,009,364.49 Liabilities held for sale Non-current liabilities due within one year 197,080,091.76 196,946,248.22 Total current liabilities Total current liabilities 2,101,335,797.55 2,173,044,576.02

– 22 –

Closing Balance Opening Balance

Item

Non-current liabilities:
Long-term borrowings	314,347,730.00		370,796,745.65
Deferred income	107,521,722.98		108,193,683.26
Deferred tax liabilities	–		–
Other non-current
liabilities	–		–
Total non-current liabilities 421,869,452.98			478,990,428.91
Total Liabilities	2,523,205,250.53		2,652,035,004.93
Owners’ equity
Share capital	559,797,391.00		526,766,875.00
Capital reserve	1,979,561,502.31		1,891,845,868.90
Special reserve
Surplus reserve	51,365,509.04		51,365,509.04
Undistributed profit	-1,328,019,905.91		-1,338,290,605.36
Total equity attributable
to owners of the parent
company	1,262,704,496.44		1,131,687,647.58
Minority interests	100,124,727.09		214,501,306.52
Total owners’ equity	1,362,829,223.53		1,346,188,954.10
Total liabilities and
owners’ equity	3,886,034,474.06		3,998,223,959.03
	Person in charge of Person in charge of
Legal representative:	accounting: accounting department:
Zhang Chong	Ma Yan		Chen Jing

– 23 –

Balance Sheet of the Company 30 June 2018

Prepared by: Luoyang Glass Company Limited*

Item Current Assets: Cash and cash equivalents Held-for-trading financial assets Derivative financial assets Notes and accounts receivables Prepayments Other receivables Inventories Contract assets Assets held for sale Non-current assets due within one year Other current assets Total current assets	Unit: Yuan Currency: RMB Closing Balance Opening Balance 58,626,381.07 52,744,789.07 208,834,799.30 211,797,338.88 48,970.54 30,238.87 19,440,208.59 31,131,296.66 489,663.39 286,950,359.50 296,193,326.87	Unit: Yuan Currency: RMB Closing Balance Opening Balance 58,626,381.07 52,744,789.07 208,834,799.30 211,797,338.88 48,970.54 30,238.87 19,440,208.59 31,131,296.66 489,663.39 286,950,359.50 296,193,326.87
		296,193,326.87

– 24 –

Closing Balance Opening Balance

Item

Non-current assets: Debt investment Other debt investment Long-term receivables Long-term equity investments Available-for-sale financial assets Other equity instrument investment Other non-current financial assets Investment properties Fixed assets Construction in progress Intangible assets Long-term deferred expenses Deferred income tax assets Other non-current assets Total non-current assets Total assets	55,000,000.00 1,690,841,658.35 2,333,775.55 34,806,717.25 108,000.00 1,783,090,151.15 2,070,040,510.65	55,000,000.00 868,986,593.99 2,508,762.95 63,612,709.86 162,000.00
		990,270,066.80
		1,286,463,393.67

– 25 –

Item Closing Balance Opening Balance

Current liabilities: Short-term loans Held-for-trading financial liabilities Derivative financial liabilities Notes and accounts payables Receipts in advance Contract liabilities Employee compensation payable Taxes payable Other payables Liabilities held for sale Non-current liabilities due within one year Other current liabilities Total current liabilities Non-current liabilities: Long-term borrowings Deferred income Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total Liabilities	240,234,000.00 84,381,266.17 9,190,171.11 4,973,834.12 2,779,353.69 511,849,198.35 793,175.76 854,200,999.20 854,200,999.20	347,509,000.00 5,062,801.26 7,813,062.37 8,089,982.67 566,122.59 465,853,312.43 404,406.94
		835,298,688.26
		606,605.65
		606,605.65
		835,905,293.91

– 26 –

Closing Balance Opening Balance

Item

Owners’ equity: Share capital 559,797,391.00 526,766,875.00 Capital reserve 1,958,137,769.14 1,268,692,769.04 Special reserve Surplus reserve 51,365,509.04 51,365,509.04 Undistributed profit -1,353,461,157.73 -1,396,267,053.32 Total owners’ equity 1,215,839,511.45 450,558,099.76 Total liabilities and owners’ equity 2,070,040,510.65 1,286,463,393.67

Total liabilities and owners’ equity

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

– 27 –

Consolidated Income Statement January–June 2018

Unit: Yuan Currency: RMB

			Amount for	Amount for
Item			current period	previous period
I.	Operating revenue		702,362,390.74	704,459,882.70
	Less:	Operating costs	518,623,907.37	548,925,924.41
		Taxes and surcharges	10,712,485.92	9,179,632.20
		Selling expenses	21,923,965.83	28,053,678.63
		Administration expenses	46,521,293.38	45,271,254.41
		Research and development
		expenses	38,443,281.67	28,683,561.88
		Finance expenses	39,740,414.80	34,959,536.18
		Including: Interest
		expenses	32,742,684.84	31,890,768.84
		Interest income	299,301.46	723,069.67
		Impairment losses of assets	6,849.19	807,634.48
		Impairment losses of credit	-4,173,671.55
	Add:	Other income	7,120,982.47	22,925,533.47
		Investment income (loss is
		represented by “-”)
		Gain on disposal of assets
		(loss is represented by
		“-”)	131,075.15	83,418.35
II.	Operating profit (loss is represented
	by “-”)		37,815,921.75	31,587,612.33
	Add:	Non-operating income	1,775,280.73	2,277,775.59
	Less:	Non-operating expense	211,374.72	236,378.61
III.	Total profit (total loss is
	represented by “-”)		39,379,827.76	33,629,009.31
	Less:	Income tax expenses	11,139,879.23	9,351,246.98

– 28 –

			Amount for	Amount for
Item			current period	previous period
IV.	Net	profit (net loss is represented
	by “-”)		28,239,948.53	24,277,762.33
	(I)	Classified on going concern basis
		1. Net profit from continued
		operation (Net loss is
		represented by “-”)	28,239,948.53	24,277,762.33
		2. Net profit from discontinued
		operation (Net loss is
		represented by “-”)
	(II)	Classified by ownership
		1. Net profit attributable to the
		owners of the Company	21,977,671.03	19,733,938.23
		2. Profit or loss attributable
		to minority interests	6,262,277.50	4,543,824.10
V.	Other comprehensive income net of
	tax
VI.	Total comprehensive income		28,239,948.53	24,277,762.33
	Total comprehensive income
	attributable to owners of the
	Company		21,977,671.03	19,733,938.23
	Total comprehensive income
	attributable to minority interests		6,262,277.50	4,543,824.10
VII.	Earnings per share:
	(I)	Basic earnings per share
		(RMB/share)	0.0395	0.0356
	(II)	Diluted earnings per share
		(RMB/share)	0.0395	0.0356

The net profit realized by the the parties being absorbed prior to the business combinations under common control was RMB20,491,900.89 during the period and RMB23,099,803.31 for the previous period.

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

– 29 –

Income Statement of the Company January–June 2018

Unit: Yuan Currency: RMB

		Amount for	Amount for
Item		current period	previous period
I.	Operating revenue	95,220,475.78	72,438,752.95
	Less: Operating costs	93,268,219.61	72,252,825.33
	Taxes and surcharges	1,808,074.05	401,276.30
	Selling expenses	289,822.76	218,657.97
	Administration expenses	7,831,861.37	-1,139,169.58
	Finance expenses	15,262,010.17	11,070,786.45
	Including: interest
	expenses	15,876,387.44	11,624,028.23
	Interest
	income	690,274.80	710,664.50
	Impairment losses of
	assets		600,521.20
	Impairment losses of
	credit	-614,549.07
	Add: Other income
	Investment income (loss
	is represented by “-”)	64,557,772.91	5,515,364.92
	Gain on disposal of
	assets (loss is
	represented by “-”)	1,181,645.71
II.	Operating Profit (losses are
	represented by “-”)	43,114,455.51	-5,450,779.80
	Add: Non-operating income	211,035.14	1,036,395.35
	Less: Non-operating
	expenses	52,054.86	200,506.12
III.	Total profit (total loss is
	represented by “-”)	43,273,435.79	-4,614,890.57
	Less: Income tax expenses

– 30 –

		Amount for	Amount for	Amount for
Item		current	period	previous period
IV.	Net profit (net loss is
	represented by “-”)	43,273,435.79		-4,614,890.57
	1. Net profit from continued
	operation (Net loss is
	represented by “-”)	43,273,435.79		-4,614,890.57
	2. Net profit from discontinued
	operation (Net loss is
	represented by “-”)
V.	Other comprehensive income
	net of tax
VI.	Total comprehensive income	43,273,435.79		-4,614,890.57
VII.	Earnings per share
	(I) Basic earnings per share
	(RMB/share)
	(II) Diluted earnings per share
	(RMB/share)
		Person in charge of	Person in charge of
Legal representative:		accounting:	accounting department:
	Zhang Chong	Ma Yan		Chen Jing

– 31 –

Consolidated Cash Flow Statement January–June 2018

		Unit: Yuan	Currency: RMB
		Amount for	Amount for
Item		current period	previous period
I.	Cash flows from operating
	activities:
	Cash received from sale
	of goods or rendering of
	services	505,851,432.02	182,391,041.41
	Tax refunds received	2,669,017.17
	Other cash received from
	activities related to
	operation	8,641,685.83	15,840,180.22
	Subtotal of cash inflows from
	operating activities	517,162,135.02	198,231,221.63
	Cash paid for purchase
	of goods and services
	rendered	442,219,267.54	305,273,932.19
	Cash paid to and on behalf of
	employees	93,074,618.07	87,503,010.17
	Tax payments	40,094,190.76	32,572,578.33
	Other cash paid for activities
	related to operation	17,114,622.90	26,328,225.08
	Sub-total of cash outflow
	from operating activities	592,502,699.27	451,677,745.77
	Net cash flow from operating
	activities	-75,340,564.25	-253,446,524.14

– 32 –

	Amount for	Amount for
Item	current period	previous period
II. Cash flow from investment
activities:
Cash from recovery of
investment
Cash received from return of
investment
Net cash received from
disposal of fixed assets,
intangible assets and other
long-term assets		2,348,600.00
Net cash received from
disposal of subsidiaries
and other operating units
Other cash received from
investment activities	18,117,140.63	23,798,268.89
Subtotal of cash inflows from
investment activities	18,117,140.63	26,146,868.89
Cash paid for the acquisition
and construction of fixed
assets, intangible assets,
and other long-term assets	118,519,695.42	26,895,054.88
Cash paid for investment
Other cash payments related
to investment activities
Subtotal of cash outflows
from investment activities	118,519,695.42	26,895,054.88
Net cash flow from
investment activities	-100,402,554.79	-748,185.99

– 33 –

		Amount for	Amount for	Amount for
Item	current		period	previous period
III. Cash flows from financing
activities:
Cash received from
investment
Including: cash received
by subsidiaries from
investments of minority
interests
Proceeds from loans	455,500,000.00			736,404,000.00
Cash received from issuing
bonds
Other cash received related
to financing activities	213,210,823.26			326,257,432.90
Subtotal of cash inflows from
financing activities	668,710,823.26			1,062,661,432.90
Cash paid for repayments of
borrowings	495,781,773.73			586,899,266.99
Cash payment for distribution
of dividends and profits or
repayment of interest		32,215,589.37		24,236,814.28
Other cash payments related
to financing activities		86,165,892.16		301,160,000.00
Subtotal of cash outflows
from financing activities	614,163,255.26			912,296,081.27
Net cash flow from financing
activities		54,547,568.00		150,365,351.63
IV. Effect of exchange rate
changes on cash and cash
equivalents			53.70	-195.39
V. Net increase in cash and
cash equivalents	-121,195,497.34			-103,829,553.89
Add: Opening balance of cash
and cash equivalents	198,797,788.08			191,575,911.27
VI. Closing balance of cash and
cash equivalents		77,602,290.74		87,746,357.38
	Person in charge of		Person in charge of
Legal representative:	accounting:		accounting department:
Zhang Chong	Ma Yan			Chen Jing

– 34 –

Cash Flow Statement of the Company January–June 2018

Unit: Yuan Currency: RMB

		Amount for	Amount for
Item		current period	previous period
I.	Cash flows from operating
	activities:
	Cash received from sale
	of goods or rendering of
	services	53,148,277.00	37,301,455.04
	Tax refunds received
	Other cash received from
	activities related to
	operation	39,883,041.15	37,206,581.02
	Sub-total of cash inflow from
	operating activities	93,031,318.15	74,508,036.06
	Cash paid for goods
	purchased and services
	rendered		86,900.00
	Cash paid to and on behalf of
	employees	8,175,903.64	6,977,169.55
	Tax payments	2,543,491.32	686,886.91
	Other cash paid for activities
	related to operation	36,646,792.98	83,702,867.49
	Sub-total of cash outflow
	from operating activities	47,366,187.94	91,453,823.95
	Net cash flow from operating
	activities	45,665,130.21	-16,945,787.89

– 35 –

	Amount for	Amount for
Item	current period	previous period
II. Cash flow from investment
activities:
Cash from recovery of
investment
Cash received from return of
investment
Net cash received from
disposal of fixed assets,
intangible assets and other
long-term assets		400,000.00
Other cash received from
investment activities	18,117,140.63	43,164,222.88
Subtotal of cash inflows from
investment activities	18,117,140.63	43,564,222.88
Cash paid for the acquisition
and construction of fixed
assets, intangible assets,
and other long-term assets		3,360,200.60
Cash paid for investment	70,000,000.00	80,000,000.00
Other cash payments related
to investment activities
Subtotal of cash outflows
from investment activities	70,000,000.00	83,360,200.60
Net cash flow from
investment activities	-51,882,859.37	-39,795,977.72

– 36 –

		Amount for	Amount for	Amount for
Item	current		period	previous period
III. Cash flows from financing
activities:
Cash received from
investment
Proceeds from loans	235,084,000.00			235,904,000.00
Cash received from issuing
bonds
Other cash received related
to financing activities	469,544,537.84			534,383,680.49
Subtotal of cash inflows from
financing activities	704,628,537.84			770,287,680.49
Cash paid for repayment of
borrowings	342,561,214.41			290,582,396.18
Cash payment for distribution
of dividends and profits or
interest repayment		6,087,032.33		5,815,847.75
Other cash payments related
to financing activities	381,081,023.64			441,240,000.00
Subtotal of cash outflows
from financing activities	729,729,270.38			737,638,243.93
Net cash flow from financing
activities	-25,100,732.54			32,649,436.56
IV. Effects of changes in
exchange rate on cash and
cash equivalents			53.70	-195.39
V. Net increase in cash and
cash equivalents	-31,318,408.00			-24,092,524.44
Add: Opening balance of cash
and cash equivalents		51,344,789.07		64,837,249.29
VI. Closing balance of cash and
cash equivalents		20,026,381.07		40,744,724.85
	Person in charge of		Person in charge of
Legal representative:	accounting:		accounting department:
Zhang Chong	Ma Yan			Chen Jing

– 37 –

Consolidated Statement of Changes in Owners’ Equity January–June 2018

Unit: Yuan Currency: RMB

Item I. Balance at the end of last year Add: Changes in accounting policies Effects of correction of prior period errors Business combination under common control Others II. Balance at the beginning of the year III. Change for the period (decrease is indicated by “-”) (I) Total comprehensive income (II) Owners’ contribution and decrease in capital 1. Ordinary shares paid by shareholders 2. Capital contributed by holders of other equity instruments 3. A mount of share-based payments recognised in owners’ equity 4. Others (III) Profit distribution (IV) Internal carry-forward of owners’ equity (V) Special reserve (VI) Others IV. Balance at the end of the period		Current Period
		Attributable to owners of the Parent Company Minority interests Total owners’ equity Other equity instruments Capital reserve Less: Treasury stock Other comprehensive income Special reserve Surplus reserve General risk provisions Undistributed profit Preferential shares Perpetual bonds Others 1,488,406,708.39 51,365,509.04 -1,507,399,946.07 559,139,146.36 -11,706,971.58 -2,708,179.26 -14,415,150.84 403,439,160.51 169,109,340.71 214,501,306.52 787,049,807.74 1,891,845,868.90 51,365,509.04 -1,349,997,576.94 211,793,127.26 1,331,773,803.26 87,715,633.41 21,977,671.03 -111,668,400.17 31,055,420.27 21,977,671.03 6,262,277.50 28,239,948.53 87,715,633.41 -117,930,677.67 2,815,471.74 84,900,161.67 -117,930,677.67 2,815,471.74 2,815,471.74 1,979,561,502.31 51,365,509.04 -1,328,019,905.91 100,124,727.09 1,362,829,223.53
	Share capital 526,766,875.00 526,766,875.00 33,030,516.00 33,030,516.00 33,030,516.00 559,797,391.00

– 38 –

==> picture [482 x 405] intentionally omitted <==

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

Last Period
Equity attributable to owners of the Parent Company
Other equity instruments Less: Other Total
Preferential Perpetual Capital Treasury comprehensive Special Surplus General risk Undistributed Minority owner’s
Item Share capital shares bonds Others reserve stock income reserve reserve provisions profit interest equity
I. Balance at the end of last
year 526,766,875.00 1,473,105,039.50 51,365,509.04 -1,527,968,006.58 523,269,416.96
Add: Changes in accounting
policies
Effects of correction of
prior period errors
Business combination
under common control 403,439,160.51 102,005,138.39 197,085,680.58 702,529,979.48
Others
II. Balance at the beginning of
the year 526,766,875.00 1,876,544,200.01 51,365,509.04 -1,425,962,868.19 197,085,680.58 1,225,799,396.44
III. Change for the period
(decrease is indicated by “-”) 19,733,938.23 4,543,824.10 24,277,762.33
(I) Total comprehensive
income 19,733,938.23 4,543,824.10 24,277,762.33
(II) Owners’ contribution
and decrease in
capital
(III) Profit distribution
(IV) Internal carry-forward
of owners’ equity
(V) Special reserve
IV. Balance at the end of the
period 526,766,875.00 1,876,544,200.01 51,365,509.04 -1,406,228,929.96 201,629,504.68 1,250,077,158.77
Person in charge of Person in charge of
Legal representative: accounting: accounting department:
Zhang Chong Ma Yan Chen Jing
----- End of picture text -----

– 39 –

Statement of Changes in Owners’ Equity of the Company January – June 2018

Unit: Yuan Currency: RMB

Item I. Balance at the end of last year Add: Changes in accounting policies Effects of correction of prior period errors Others II. Balance at the beginning of the year III. Change for the period (decrease is indicated by “-”) (I) Total comprehensive income (II) Owners’ contribution and decrease in capital 1. Ordinary shares paid by shareholders 2. Capital contributed by holders of other equity instruments 3. A mount of share-based payment recognised in owners’ equity 4. Others (III) Profit distribution (IV) Internal carry-forward of owners’ equity (V) Special reserve IV. Balance at the end of the period		Current Period Other equity instruments Capital reserve Less: Treasury stock Other comprehensive income Special reserve Surplus reserve Undistributed profit Total owner’s equity Preferential shares Perpetual bonds Others 1,268,692,769.04 51,365,509.04 -1,396,267,053.32 450,558,099.76 -467,540.20 -467,540.20 1,268,692,769.04 51,365,509.04 -1,396,734,593.52 450,090,559.56 689,445,000.10 43,273,435.79 765,748,951.89 43,273,435.79 43,273,435.79 689,445,000.10 722,475,516.10 686,629,528.36 719,660,044.36 2,815,471.74 2,815,471.74 1,958,137,769.14 51,365,509.04 -1,353,461,157.73 1,215,839,511.45
	Share capital 526,766,875.00 526,766,875.00 33,030,516.00 33,030,516.00 33,030,516.00 559,797,391.00

– 40 –

==> picture [483 x 326] intentionally omitted <==

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

Last Period
Other equity instruments Less: Other Total
Preferential Perpetual Capital Treasury comprehensive Special Surplus Undistributed owner’s
Item Share capital shares bonds Others reserve stock income reserve reserve profit equity
I. Balance at the end of last year 526,766,875.00 1,253,391,100.15 51,365,509.04 -1,399,150,574.12 432,372,910.07
Add: Changes in accounting policies
Effects of correction of prior
period errors
Others
II. Balance at the beginning of the
year 526,766,875.00 1,253,391,100.15 51,365,509.04 -1,399,150,574.12 432,372,910.07
III. Change for the period (decrease is
indicated by “-”) -4,614,890.57 -4,614,890.57
(I) Total comprehensive income -4,614,890.57 -4,614,890.57
(II) Owners’ contribution and
decrease in capital
(III) Profit distribution
(IV) Internal carry-forward of
owners’ equity
(V) Special reserve
(VI) Others
IV. Balance at the end of the period 526,766,875.00 1,253,391,100.15 51,365,509.04 -1,403,765,464.69 427,758,019.50
Person in charge of Person in charge of
Legal representative: accounting: accounting department:
Zhang Chong Ma Yan Chen Jing
----- End of picture text -----

– 41 –

NOTES TO THE FINANCIAL STATEMENTS

Interim report for the half year ended 30 June 2018 (Expressed in Renminbi)

I. BACKGROUND OF THE COMPANY

Luoyang Glass Company Limited* (the “Company”) was incorporated in the People’s Republic of China (the “PRC”) as a joint stock limited company. The Company and its subsidiaries (collectively the “Group”) are engaged in manufacture and sales of information display glass and new energy glass.

II. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of preparation of financial statements

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

2. Accounting period

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

3. Functional currency

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

4. Preparation method of consolidated financial statements

Subsidiaries and special purpose entities under the de facto control of the Company are incorporated into the consolidated financial statements.

The consolidated financial statements of the Company are prepared in accordance with the “Accounting Standards for Business Enterprises No. 33 – Consolidated Financial Statements” and relevant provisions, and all significant intra-group transactions and balances are eliminated. Interests in subsidiaries that are not attributable to owners of parent company are presented separately as minority interest in the consolidated financial statements.

– 42 –

Adjustments to subsidiaries’ financial statements in accordance with the accounting policies or accounting period of the Company are needed when preparing consolidated financial statements if the subsidiaries’ accounting policies or accounting period are different from those of the Company.

For subsidiaries acquired not under common control combinations, when preparing consolidated financial statements, such subsidiaries’ financial statements should be adjusted on the basis of the fair value of identifiable net assets on the date of acquisition. For subsidiaries acquired under common control combinations, the assets, liabilities, operating results and cash flows of acquired subsidiaries should be included in consolidated financial statements from the beginning of the year of acquisition as if the combination had taken place at the beginning of the year.

III. SEGMENT REPORTING

For management purposes, the Company has two operating segments. The management of the Company regularly reviews the financial information of each segment to make decisions about resources to be allocated to the segment and to assess its performance.

The operating segments of the Company include the information display glass segment and the new energy glass segment.

Segment assets exclude deferred income tax assets, and segment liabilities exclude deferred income tax liabilities.

Inter-segment transfers are measured by reference to sales to third parties.

– 43 –

1. Segment information for the half year ended 30 June 2018 is set out as follows:

	Information	New	Unallocated
Item	display glass	energy glass	items	Offset	Total
1. Revenue from external
customers	163,502,480.94	538,859,909.80			702,362,390.74
2. Revenue from
inter-segment
transactions	2,255,580.86			-2,255,580.86
3. Interest income	43,142.55	196,596.07	690,274.80	-630,711.96	299,301.46
4. Interest expenses	10,660,858.82	21,174,930.08	15,876,387.44	-14,969,491.50	32,742,684.84
5. Impairment losses of
assets and
impairment
losses of credit	-97,691.09	-3,454,582.20	-614,549.07		-4,166,822.36
6. Depreciation expenses
and amortization
expenses	24,077,499.78	39,510,097.13	948,425.72	-1,969.41	64,534,053.22
7. Total profit (loss is
represented by “-”)	11,344,953.95	48,088,300.06	41,321,179.62	-61,374,605.87	39,379,827.76
8. Income tax expenses	2,548,133.08	8,591,746.15			11,139,879.23
9. Net profit (loss is
represented by “-”)	8,796,820.87	39,496,553.91	41,321,179.62	-61,374,605.87	28,239,948.53
10. Total assets	1,502,917,348.81	2,902,448,822.81	1,865,594,163.55	-2,384,925,861.11	3,886,034,474.06
11. Total liabilities	1,001,633,256.74	1,908,404,762.57	760,629,561.92	-1,147,462,330.70	2,523,205,250.53

– 44 –

2. Segment information for the half year ended 30 June 2017 is set out as follows:

	Information	New	Unallocated
Item	display glass	energy glass	items	Offset	Total
1. Revenue from external
customers	154,969,277.04	549,490,605.66			704,459,882.70
2. Revenue from
inter-segment
transactions
3. Interest income	4,761,655.00	303,247.93	710,664.50	-5,052,497.76	723,069.67
4. Interest expenses	10,661,329.83	20,173,273.46	11,624,028.23	-10,567,862.68	31,890,768.84
5. Impairment losses
of assets	-604,842.56	811,955.84	600,521.20		807,634.48
6. Depreciation expenses
and amortization
expenses	24,710,592.22	37,901,028.74	817,678.51		63,429,299.47
7. Total profit (loss is
represented by “-”)	10,908,504.27	27,772,574.56	-4,800,818.19	-251,251.33	33,629,009.31
8. Income tax expenses	4,430,457.12	4,920,789.86			9,351,246.98
9. Net profit (loss is
represented by “-”)	6,478,047.15	22,851,784.70	-4,800,818.19	-251,251.33	24,277,762.33
10. Total assets	1,579,026,709.81	2,620,050,340.65	1,050,121,218.27	-1,485,245,352.04	3,763,952,916.69
11. Total liabilities	1,061,782,116.71	1,737,324,015.42	750,007,574.91	-1,114,127,454.88	2,434,986,252.16

– 45 –

3. Geographic information

The following table sets out information about the geographical location of the Company’s revenue from external customers and the Company’s non-current assets (excluding deferred income tax assets). The geographical location of customers is stated as the location at which goods were delivered to customers. The geographical location of fixed assets, construction in progress and lease prepayments under non-current assets is determined as the physical location of the assets; the geographical location of intangible assets and exploration and evaluation assets is determined as the location of relevant operations; and the geographical location of interests in associates and other investments is determined as the location of their respective operations.

Item China Overseas Total	Revenue from external customers January– June 2018 January– June 2017 677,234,348.38 692,985,336.96 25,128,042.36 11,474,545.74 702,362,390.74 704,459,882.70	Non-current assets 30 June 2018 31 December 2017 2,569,085,170.08 2,434,989,438.12 2,569,085,170.08 2,434,989,438.12	Non-current assets 30 June 2018 31 December 2017 2,569,085,170.08 2,434,989,438.12 2,569,085,170.08 2,434,989,438.12
			2,434,989,438.12

4. Major customers

The Company has a diversified customer base. From January to June 2018, the transaction amount of two customers exceeds 50% of the Company’s revenue.

IV. TURNOVER

Turnover represents revenue from the invoiced value of goods sold to customers, after deduction of any trade discounts and net of value-added tax and surcharges, an analysis of which is as follows:

(1) Details of operating revenue

Item Revenue from principal operations Revenue from other operations Total	Amount for current period 677,653,373.40 24,709,017.34 702,362,390.74	Amount for previous period 677,059,416.85 27,400,465.85 704,459,882.70

– 46 –

(2) Details of income from principal operations by product

Products or services Information display glass New energy glass Total V. OTHER INCOME Item Government subsidies Total VI. GAIN ON DISPOSAL OF ASSETS Item Gain or loss on disposal of fixed assets Gains or loss on disposal of intangible assets Total VII. NON-OPERATING INCOME Item Gains from debt restructuring Government subsidies Other gains Total	Amount for current period 163,048,829.34 514,604,544.06 677,653,373.40 Amount for current period 7,120,982.47 7,120,982.47 Amount for current period 131,075.15 131,075.15 Amount for current period 259,661.53 1,024,500.00 491,119.20 1,775,280.73	Amount for previous period 152,856,356.90 524,203,059.95 677,059,416.85 Amount for previous period 22,925,533.47 22,925,533.47 Amount for previous period 22,266.73 61,151.62 83,418.35 Amount for previous period 1,715,899.47 451,000.00 110,876.12 2,277,775.59

– 47 –

VIII. PROFIT BEFORE INCOME TAX

Profit before income tax is arrived at after (charging)/crediting:

(1) Financial expenses

Item Interest expense Less: Interest income Exchange loss (less: exchange gain) Interests of discounted bill Other expenses Total (2) Operating costs Item Costs of principal operations Costs of other operations Total (3) Taxes and surcharges Item Urban construction and maintenance tax Education surcharges Property tax Land-use tax Others Total	Amount for current period 32,742,684.84 299,301.46 407,753.75 5,530,410.54 1,358,867.13 39,740,414.80 Amount for current period 494,773,813.82 23,850,093.55 518,623,907.37 Amount for current period 1,175,289.39 839,492.44 2,332,894.94 4,609,679.86 1,755,129.29 10,712,485.92	Amount for previous period 31,890,768.84 723,069.67 83,224.66 1,948,914.46 1,759,697.89 34,959,536.18 Amount for previous period 524,481,322.72 24,444,601.69 548,925,924.41 Amount for previous period 229,690.37 100,452.28 3,045,593.32 5,240,465.33 563,430.90 9,179,632.20

– 48 –

(4) Selling expenses

Item Staff remuneration Depreciation expenses Transportation costs Loading and unloading charges Travel expenses Other selling expenses Total (5) Administrative expenses Item Staff remuneration Depreciation of fixed assets Amortization of intangible asset Intermediary engagement and consulting fees Repairing cost Other expenses Total	Amount for current period 3,963,638.15 107,906.06 16,618,440.70 160,431.82 514,471.46 559,077.64 21,923,965.83 Amount for current period 24,819,974.27 4,082,818.74 4,096,310.54 4,050,874.97 446,535.58 9,024,779.28 46,521,293.38	Amount for previous period 3,719,428.48 111,401.02 22,602,321.77 276,093.80 225,994.19 1,118,439.37 28,053,678.63 Amount for previous period 21,063,210.83 5,987,535.37 3,898,671.08 3,637,267.05 569,311.04 10,115,259.04 45,271,254.41

– 49 –

(6) Research and development expenses

Item Ultra-thin Substrate for Information Display Research on the Production Technology and Key Technology in the Industrialization of 0.15mm Ultra-Thin Float Electronic Glass R&D and Application of Key Technology in ITO Ultra-thin Electronic Glass Research on the Production Technology of Industrialization of 0.2mm High Strength Electronic Glass Research on the Production Technology of 3D Wear-Resistant Glass Substrate Research on Key Technology and Industrialization of Ultra-thin and Anti-reflective Photovoltaic Glass with High Hardness and Wide Spectrum Used in Double-glass Modules Production Technology Development of 650D/T Energy-saving and Ultra-white Rolled Glass in Oxy- fuel Combustion Development of New Ultra-thin Photovoltaic Glass Technology Research on Improving Desulphurization Efficiency of the Operating Desulfurizing Tower Ultra-thin and Anti-reflective Glass Mirrored Single-suede Glass Silk-screen Printing in Double-glass Back Plate Punching R&D of Intelligent Ultra-thin Glass R&D of Solar Photovoltaic Glass Others Total	Amount for current period 1,956,653.43 10,401,109.68 11,658,652.74 4,238,078.15 2,174,420.66 1,020,287.98 1,857,602.55 3,870,789.72 1,265,686.76 38,443,281.67	Amount for previous period 2,424,670.95 1,559,772.85 7,804,867.35 1,517,736.98 1,287,633.02 1,420,263.95 2,551,715.50 1,117,279.61 5,844,118.10 1,463,445.18 1,692,058.39 28,683,561.88

– 50 –

(7) Impairment losses of assets

Item Impairment losses of inventories Bad debt losses Total (8) Impairment losses of credit Item Bad debt losses Total (9) Non-operating expenses Item Indemnities, liquidated damages and penalties Other expenses Total	Amount for current period 6,849.19 – 6,849.19 Amount for current period -4,173,671.55 -4,173,671.55 Amount for current period 201,092.46 10,282.26 211,374.72	Amount for previous period -698,146.41 1,505,780.89 807,634.48 Amount for previous period – – Amount for previous period 226,243.61 10,135.00 236,378.61

– 51 –

IX. INCOME TAX EXPENSES

Item Current income tax expenses calculated according to tax laws and relevant requirements Deferred income tax expenses Total	Amount for current period 10,290,114.12 849,765.11 11,139,879.23	Amount for previous period 7,596,067.12 1,755,179.86 9,351,246.98

• Note: CLFG Longhai Electronic Glass Limited, Bengbu China National Building Materials Information Display Materials Co., Ltd., CNBM (Hefei) New Energy Co., Ltd. and CNBM (Tongcheng) New Energy Materials Co., Ltd., all being wholly-owned subsidiaries of the Company, were recognized as high-tech enterprises in 2016 and 2017, and thus enjoyed a preferential enterprise income tax rate at 15% in 2018.

X. DIVIDEND

The board of directors of the Company does not recommend declaring dividends for the six months ended 30 June 2018.

XI. BASIC EARNINGS PER SHARE

Basic earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the Company by the weighted average number of the outstanding ordinary shares of the Company:

Item Net profit attributable to ordinary shareholders of the Company Weighted average number of the outstanding ordinary shares of the Company Basic earnings per share	Amount for current period 21,977,671.03 556,811,460.50 0.0395	Amount for previous period 19,733,938.23 553,825,530.00 0.0356

There were no diluted earnings per share as the Company had no potential dilutive shares as at 30 June 2018.

– 52 –

XII. ACCOUNTS RECEIVABLES AND NOTES RECEIVABLES

Item Bills receivables Accounts receivables Less: provision for bad debts Total 1. Notes receivables Item Bank acceptances Commercial acceptances Less: provision for bad debts Total 2. Accounts receivables Item Accounts receivables Less: provision for bad debts Accounts receivable, net	Closing balance 260,915,704.64 582,341,935.34 70,798,890.06 772,458,749.92 Closing balance 121,707,012.71 139,208,691.93 2,784,173.83 258,131,530.81 Carrying amount 582,341,935.34 68,014,716.23 514,327,219.11	Opening balance 490,712,129.45 590,089,930.96 58,239,394.01
		1,022,562,666.40
		Opening balance 253,818,723.44 236,893,406.01
		490,712,129.45
		Opening balance 590,089,930.96 58,239,394.01
		531,850,536.95

The Company generally provides credit period of 1–6 month(s) for major customers, and generally sells by receiving advances for new customers and customers with less business volume.

– 53 –

1. Aged analysis of accounts receivables by date of entry:

Aging Within 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years Subtotal Less: provision for bad debts Total	Closing balance 498,579,201.94 7,026,717.31 21,330,384.12 434,958.75 567,285.02 54,403,388.20 582,341,935.34 68,014,716.23 514,327,219.11	Opening balance 488,644,458.85 44,380,200.16 2,094,598.73 567,285.02 1,037,719.89 53,365,668.31 590,089,930.96 58,239,394.01
		531,850,536.95

XIII. NOTES PAYABLE AND ACCOUNTS PAYABLE

Item Closing balance Notes payable 219,211,373.39 Accounts payable 519,089,596.38 Total 738,300,969.77 1. Notes payable Item Closing balance Bank acceptances 84,111,047.78 Commercial acceptances 95,100,325.61 Letter of credit 40,000,000.00 Total 219,211,373.39 2. Aged analysis of accounts payable by date of entry: Item Closing balance Within 1 year (including 1 year) 242,617,597.81 Above 1 year 276,471,998.57 Total 519,089,596.38	Opening balance 139,568,673.34 572,025,989.83
	711,594,663.17
	Opening balance 87,689,925.89 51,878,747.45 –
	139,568,673.34
	Opening balance 242,103,670.03 329,922,319.80
	572,025,989.83

– 54 –

XIV. RESERVES

1. Capital reserve Item Opening Balance I. Capital premium 1,819,545,395.63 II. Other capital reserve 72,300,473.27 Total 1,891,845,868.90 2. Surplus reserve Item Opening Balance Statutory surplus reserve 51,365,509.04 Total 51,365,509.04	Increase for the period 111,958,816.67 2,815,471.74 114,774,288.41 Increase for the period	Decrease for the period Closing Balance 27,058,655.00 1,904,445,557.30 75,115,945.01 27,058,655.00 1,979,561,502.31 Decrease for the period Closing Balance 51,365,509.04 51,365,509.04	Closing Balance 1,904,445,557.30 75,115,945.01
			1,979,561,502.31
			51,365,509.04

– 55 –

3. Undistributed profit

	Closing	Balance
		Appropriation
		or distribution
Item	Amount	proportion
Undistributed profit at the end of the
previous period before adjustment	-1,507,399,946.07
Total effects of adjustments of
undistributed profits at the
beginning of the period (increase
expressed with +, and decrease
expressed with -)	157,402,369.13
Undistributed profit at the beginning
of the period after adjustment	-1,349,997,576.94
Add: net profit attributable to owners
of the Company for the period	21,977,671.03
Less: Appropriation to statutory
surplus reserve
Appropriation to discretionary
surplus reserve
Dividend payable in respect of
ordinary shares
Dividend on ordinary shares as
converted into share capital
Undistributed profit at the end
of the period	-1,328,019,905.91

XV. SUBSEQUENT EVENTS

Nil.

Chairman: Zhang Chong Luoyang Glass Company Limited* 29 August 2018

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

• for identification purposes only

– 56 –