SHANGHAI YAOHUA PILKINGTON GLASS GROUP CO., LTD. …

SHANGHAI YAOHUA PILKINGTON GLASS

GROUP CO., LTD.

600819

ANNUAL REPORT 2015

Important Prompt

I. The Board, the Supervisory Committee and all directors, supervisors and senior

officers of the Company commit that there is no false record or misleading

statement or omission of material importance in the content of this annual report,

and will bear individual and joint responsibility to the authenticity, accuracy and

integrity of this report.

II. Absent Director

Title Name Reason Authorized People

Director Paul Ravenscroft Work Zhao Jian

III. Zhonghua Certified Public Accountants LLP issued standard unqualified audit

opinion report.

IV. Mr. Zhao Jian, Chairman of the Company, Mr. Chu Yuejiang, who is in charge

of accounting function and Mr. Bian Shijun, who is in charge of accounting

department jointly claim that the financial report in this annual report is true,

accurate and complete.

V. Profit distribution plan or use capital surplus to enlarge share capital approved

by the board of directors

Profit distribution plan for 2015: As audited by Shanghai Zhonghua Certified

Public Accountants LLP, operating revenue in the consolidated statement of

2015 amounted to RMB 2,747,743,271.77, net profit attributable to shareholders

of the parent company in the consolidated statement of 2015 amounted to RMB

-364,267,244.39. The Company suffered a loss for 2015, net profit attributable

to shareholders of the parent company was negative, it is not suggested for profit

distribution for 2015 and there is no intention to use capital surplus to enlarge

share capital for 2015 based on the Articles of Association and the actual

situation of the Company. The plan will be carried out upon the approval of the

Annual Shareholders’ General Meeting for 2015.

VI. Risk Pre-caution Statement to the description of future development plan

As there are uncertainties in the description of the Company’s future

development plan in the annual report, the Company takes no material

commitment to investors who need to be cautious of possible risks.

VII. Is there any non-operating fund occupied by controlled shareholder and other

related parties?

No.

VIII. Is there any outward guarantee provided in violation of the regulated decision

making procedures?

No.

IX. Major risk prompt

The Company states the industry and market risks in the report, please refer to

the discussion and analysis of the Company’s future development in “IV.

Discussion and Analysis of the Management” which mentions the possible risks

and resolutions.

CONTENTS

I. ABBREVIATION II. CORPORATE PROFILE AND MAJOR FINANCIAL

INDICES III. BUSINESS OUTLINE IV. MANAGEMENT DISCUSSION AND ANALYSIS V. IMPORTANT EVENTS VI. ORDINARY SHARE CHANGES AND SHAREHOLDERS

VII. RELEVANT SITUATION OF PREFERED STOCK VIII. DIRECTORS, SUPERVISORS, SENIOR OFFICERS AND

EMPLOYEES IX. CORPORATE GOVERNANCE X. RELEVANT SITUATION OF CORPORATE BONDS XI. FINANCIAL STATEMENT XII. BACK-UP DOCUMENTS

I. Abbreviation

Unless otherwise clearly indicated by the context, terms used in this Report shall

have the following meanings:

Abbreviation

CSRC means China Securities Regulatory

Commission

SSE means Shanghai Stock Exchange

The Company or

SYP means

Shanghai Yaohua Pilkington Glass

Group Co., Ltd.

SBM means Shanghai Building Materials (Group)

Co., Ltd.

RMB means Chinese Yuan, currency unit in China

II. Corporate Profile and Major Financial Index

1. Company Information

Chinese Name of the Company 上海耀皮玻璃集团股份有限公司

Chinese Name Abbreviation 耀皮玻璃

English Name of the Company Shanghai Yaohua Pilkington Glass Group Co., Ltd.

English Name Abbreviation SYP

Legal Representative Zhao Jian

2. Contact Person and Information

Secretary to the Board Stock Representative

Name Jin Minli Huang Bing

Address Building 4-5, 1388 Zhangdong

Road, Pudong New Area,

Shanghai

Building 4-5, 1388 Zhangdong

Road, Pudong New Area,

Shanghai

Telephone

Number 0086-21-61633599 0086-21-61633522

Fax Number 0086-21-58801554 0086-21-58801554

E-mail address [email protected] [email protected]

3. Basic Information

Registered address Building 4-5, 1388 Zhangdong Road, China (Shanghai)

Pilot Free Trade Zone

Zip code 201203

Office address Building 4-5, 1388 Zhangdong Road, Pudong New

Area, Shanghai

Zip code 201203

Website www.sypglass.com

E-mail address [email protected]

mailto:[email protected]


http://www.sypglass.com/


4. Information Disclosure

Newspapers for information

disclosure

Shanghai Securities News

Hong Kong Ta Kung Pao

Website for publishing Annual

Report designated by CSRC http://www.sse.com.cn

Place for Annual Report inspection Office of Board of Directors

5. Stock Information

Brief Information of the Stock

Type Place of listing

Stock

abbreviation Stock code

A Share Shanghai Stock Exchange SYP Glass 600819

B Share Shanghai Stock Exchange SYP B share 900918

6. Other relevant information

Name of the Public

Accountants employed by

the Company (domestic)

Name Zhong Hua Certified Public

Accountants LLP

Address 6/F the Bund Square, 100 South

Zhongshan Road, Shanghai

Signed

Accountants

Rong Kaiyu, Yang Ming

Name of the sponsor

performed supervision

duty for the Company in

the reporting period

Name Haitong Securities Co., Ltd.

Address No. 689 Guangdong Road, Shanghai

Signed

Sponsor

Representative

Yang Huan, Fan Changping

Supervision

Period

2015

7. The major accounting and financial indicators for the last three years at the end

of the reporting period

(1) Main accounting data

Unit: RMB

Major Accounting Data 2015 2014 +/-

(%) 2013

Operating Revenue 2,747,743,271.77 2,864,912,952.36 -4.09 2,848,793,161.64

Net Profit attributable

to shareholders of the

parent company

-364,267,244.39 53,354,016.90 Not

applicable 115,443,763.79

Net profit attributable


parent

company deducting

-492,840,610.29 -31,756,298.96 Not

applicable 59,431,935.95

http://www.sse.com.cn/

extraordinary gains

&losses

Net cash flow from

operating activities 530,970,177.25 228,414,832.31 132.46 291,831,498.65

31 Dec 2015 31 Dec 2014

+/-

(%) 31 Dec 2013

Net assets attributable


parent company

2,876,389,464.98 3,178,515,147.68 -9.51 3,272,393,611.45

Total Assets 8,202,652,242.14 7,959,314,888.66 3.06 7,945,459,333.78

General Capital stock 934,916,069.00 934,916,069.00 - 934,916,069.00

(2) Major Financial Data

Major Accounting Data 2015 2014 +/-

(%) 2013

Basic earnings per share

(RMB/share) -0.39 0.06 Not applicable 0.16

Diluted earnings per share

(RMB/share) -0.39 0.06 Not applicable 0.16

Basic earnings per share

excluding extraordinary

gains/losses (RMB/share)

-0.53 -0.03 Not applicable 0.08

Weighted average ROE（%） -12.19 1.63 Not applicable 5.14

Weighted average ROE

excluding extraordinary

gains/losses（%）

-16.50 -0.97

Decreased

15.53

percentage

points

2.64

8. Accounting data differences due to different accounting standard overseas and

domestically.

(1) Differences of net profit and net assets attributable to the parent company when

applying International Accounting Standard and China Accounting Standard.

□Applicable √ Not Applicable

(2) Differences of net profit and net assets attributable to the parent company when

applying International Accounting Standard and China Accounting Standard.


(3) Difference of overseas and domestic accounting standard

Not Applicable

9. Major financial data for 2015 by quarter

Unit: RMB

Q1 (Jan-Mar) Q2 (Apr-Jun) Q3 (Jul-Sep) Q4 (Oct-Dec)

Operating Revenue 571,721,286.62 673,499,387.15 734,314,107.66 768,208,490.34

Net Profit attributable to -42,413,691.30 -37,124,555.33 -9,850,885.46 -274,878,112.30

shareholders of the parent

company

Net profit attributable to

shareholders of the parent

company deducting

extraordinary gains &losses

-53,676,393.53 -57,110,368.11 -42,895,025.28 -339,158,823.37

Net cash flow from

operating activities 34,601,015.01 147,794,170.38 57,146,148.88 291,428,842.98

Difference between quarter data and periodic report data


10. Items and amount of extraordinary gains & losses

√Applicable □Not Applicable

Unit: RMB

Items of extraordinary gains and losses 2015 2014 2013

Gains or losses from disposal of non-current

assets 13,405,402.91 9,425,589.22 -370,645.77

Government subsidies recorded in the gains

and losses of this reporting period (except for

those closely related to company businesses

and enjoyed according to the state uniform

standard quota or ration)

21,836,731.93 18,723,623.85 22,694,182.44

Gains and losses of entrusting other

institution for investment and capital

management

63,877,771.70 49,513,019.37

Net profit or loss of subsidiaries under the

same control consolidated from 1 Jan 2015 to

the date of consolidation

-5,811,135.31 -8,482,337.71

Fair value change gains and losses from

tradable financial assets and tradable financial

liabilities except for the effective hedging

businesses related to the normal operation

businesses of the Company, as well as

investment returns from the disposal of

tradable financial assets, tradable financial

liabilities and available-for-sale financial

assets

30,163,016.76 289,947.72 4,076,935.19

The gains and losses of external entrusted

loans 15,507,177.79

Other non-operating income and expenses

besides above items 661,322.80 19,332,641.34 24,731,228.21

Minority shareholders’ interests affected -846,940.04 -5,299,351.73 -1,491,946.19

Income tax affected -523,940.16 -1,064,018.60 -652,766.12

Total 128,573,365.90 85,110,315.86 56,011,827.84

11. The fair value measurement items

Unit: RMB

Item Beginning

Balance

Ending

Balance +/-

Impact on Profit

2015

Tradable

Financial Assets - 342,234,132.92 342,234,132.92 -

In Total - 342,234,132.92 342,234,132.92 -

12. Others

III. Business Outline

1. Main business, operation model and industry situation in the reporting period

(1) Main Business

The main business of the Company is production and sale of float glass, processing

glass and auto glass.

Float glass: Two sites in Tianjin and Changshu mainly produce raw materials for

high-end auto glass, EA on line coating low radiation glass, ultra-clear glass, solar

cell panel glass and special energy-saving glass.

Processing glass: The Company has four plants in Shanghai, Tianjin, Jiangmen and

Chongqing, which produce offline Low-E coated, energy-saving insulated, laminated

and glazed colored building glass with high performance, environmental friendly and

energy saving characters. The product quality and service was highly recognized by

customers, and was applied to many landmark energy-saving architectures like

Shanghai Expo Center, Shanghai World Financial Center, Shanghai Center, Hong

Kong International Commerce Centre, Tokyo Sky Tree, Germany Frankfurt Airport

and Kuwait Al-Hamar Luxury Centre.

Auto glass: There are three sites in Shanghai, Wuhan and Yizheng which engage in

OEM glass, glass assembly R&D, manufactory and sale. The main products include

windshield, rear window, door and side window glass. The Company has become the

excellent supplier of Shanghai GM, Shanghai VW and Ford.

(2) Main operation pattern

The Company insisted on differentiation and integration of downstream and

upstream strategy, completed management centralization, established information

management platform and implemented business integration.

(3) Industry Situation

It was a tough year for glass industry, affected by the domestic macroeconomic

downturn, real estate industry policy kept changing, new construction area decreased,

growth rate of domestic automobile industry slowed down, and over-capacity still

existed. Imbalance between supply and demand, market competition was fierce,

glass price kept plunging and industry profit shrunk.

2. Major assets changes in the reporting period

Under the background of eliminating superfluous industrial capacity, the Company

carried out complete check for inventory, receivables and fixed assets at the end of

2015 prudentially and appointed evaluation company to assess part of the production

lines on purpose of reflecting assets and finance status by 31 Dec 2015 authentically.

The Company analyzed and evaluated the present value of inventory and fixed assets

as well as receivables recovery possibility and made the decision for provision of

assets impairment of RMB 316.4299 million. Please refer to the Public

Announcement on Provisions of Assets Impairment for 2015 for detail which was

published in Shanghai Securities News, Ta Kung Pao and on SSE website on 23 Jan

2016.

3. Core competitiveness

(1) Professional management and R&D team. The Company put emphasis on elite

cultivation and has a positive, creative, experienced management and R&D team.

(2) Strong R&D and technical innovation ability. In the 30 years, the Company kept

studying Pilkington’s advanced technology, continued technical upgrade and

innovation, self developed series of new products owned more than 20 patents

which were applied to the market popularly and were favorable to the Company’s

sustainable development.

(3) Excellent corporate culture. The Company insisted on the corporate concept of

“Never Stop for New Aspiration”, operation concept of “customer-oriented,

management optimization, differentiation strategy and EVA improvement” as

well as the values of “Customer satisfaction, employee self-fulfillment, corporate

development and social progress are the most valuable things to realize”. And the

Company has already owned the stable and outstanding employees.

(4) Advanced facilities. The main facilities used by all sites of the Company are all

imported in order to ensure the high quality of the products.

(5) Good relationship with customers and creative service. The Company paid

attention to customer relationship and customer demand and gave professional

solutions.

(6) Completed governance structure. Based on completed governance structure and

standard management system, the Company continued to innovating operation

system, strictly control operational risk and laid foundation for the Company’s

long-term development.

There was no change for core competitiveness in the reporting period.

IV. Management Discussion and analysis

1. Discussion and analysis of the Management

In the reporting period, business performance of the Company went down in the

fierce market competition and tough industry trend. However, in the leadership of

the board of directors, the Management and all staff strived for internal management,

market development, industrial structure optimization and innovation, realized

standard operation, scientific management and ensure the steady development of the

Company.

Review of year 2015

(1) Promoted business development of auto glass, realized sound profit

Based on the successful integration of auto glass business, on the one hand, the

Company strengthened cost management, increased R&D investment, deepened the

strategic cooperation with OEM and achieved breakthrough in sunroof assembly; on

the other hand, the Company speeded up projects in construction in order to acquire

competitive advantage. Operation revenue of auto glass increased rapidly in 2015,

gross profit rose and achieved sound business performance.

(2) Implemented procurement centralization, decreased cost and increased benefit

The Company strengthened procurement management, took advantage of group

negotiation strength, adopted strategy of “separate the purchase and utilization

system, supervise each other and significant procurement issues depends on group’s

decision”, established e-procurement platform to decrease cost and increase benefit

and saved the procurement cost greatly.

(3) Implemented financing and investment, enhanced capital efficiency

In the depressed market environment, the Company realized capital centralization

management by cash pool, developed financing channel, optimized financing pattern,

successfully issued SCP and decreased financing cost. Meantime, authorized by the

board of directors, the Company used idle capital for financing investment, which

obtained good return.

(4) Promoted product mix transformation, strengthened scientific innovation and

utilization

The Company promoted R&D of high value-added products with new technology,

strengthened differentiation products R&D, emphasized the usage of scientific

innovation, promoted the new products to market and improved profitability. The

Company began the production and sale of high-tech products including ultra-clear

TCO glass, raw materials of high-end auto glass, curved tempered glass, tempered

triple low-e glass, edge-cladding glass and car sunroof glass.

(5) Stuck to high-end market, achieved breakthrough in significant projects

In the reporting period, the Company received some orders of skyscrapers, which are

more than 200 meters high.

(6) Optimized industrial layout, adjusted regional structure

On the one hand, the Company accelerated the development of profitable segment,

continued to advanced auto glass business to gain competitive advantage; on the

other side, analyzed market layout, completed regional structure, changed raised

projects timely, speeded up CSYPE II construction and laid good foundation for

southwest market.

(7) Strengthened talent cultivation, completed appraisal and incentive system

Talent is essential for corporate development. In the reporting period, the Company

optimized the Management structure, established talent management mechanism,

emphasized on talent reform of senior officers and further motivated corporate

vigorousness and innovation.

2. Main business of the Company

Main business of the Company includes producing and selling float glass, building

glass and auto glass.

In the reporting period, operating revenue of the Company was RMB 2747.7433

million, decreasing by 4.09% of RMB 117.1697 million year-on-year; net profit

attributable to shareholders of parent company was RMB -364.2672 million; cash

flow from operating activities was RMB 530.9702 million, increasing RMB

302.5553 million year-on-year.

Operating revenue analysis in reporting period: float glass achieved RMB 648.6824

million, declining by 20.09%, the main reasons were price slumped and internal

utilization volume rose; building glass segment achieved RMB 1429.2051 million,

decreasing by 7.61%, the price plunged due to fierce market competition; auto glass

achieved RMB 616.2375 million, rising by 36.72%, mainly because the deep

regional cooperation with OEM.

(1) Analysis of main business

Analysis of the changes in the statements of profit and cash flow

Unit: RMB

Item 2015(Jan-Dec) 2014 (Jan-Dec) +/- (%)

Operating Revenue 2,747,743,271.77 2,864,912,952.36 -4.09

Operating Expense 2,267,328,348.68 2,264,696,579.53 0.12

Sales Expense 222,620,352.77 188,131,684.13 18.33

Management Expense 360,769,891.39 334,631,559.84 7.81

Financial Expense 158,693,862.25 122,545,200.01 29.50

Net cash flow from

operating activities 530,970,177.25 228,414,832.31 132.46

Net cash flow from

investing activities -534,360,134.31 -1,463,655,724.58 -

Net cash flow from

financing activities 160,605,004.21 -21,481,439.98 -

R&D cost 61,167,165.96 72,360,852.73 -15.47

1) Revenue and cost analysis

a. Main business situation according to industry, products and regions

Unit: RMB

According to industry

Industry Operating

Revenue Operating Cost

Gross

Profit

Rate

(%)

Operating

Revenue

+/- (%)

Operating

Cost +/-

(%)

Gross Profit Rate

+/- (%)

Glass 2,694,124,940.86 2,235,197,157.57 17.03 -4.10 0.79 Decreased 4.03

percentage point

According to products

product Operating


Gross

Profit

Operating

Revenue

Operating

Cost +/-

Gross Profit Rate

+/- (%)

Rate

(%)

+/- (%) (%)

Float

Glass

648,682,376.08 567,863,377.66 12.46 -20.09 -17.45 Declined 2.80

percentage points

Processing

Glass

1,429,205,063.71 1,191,543,782.46 16.63 -7.61 0.79 Dropped 6.95

percentage points

Auto

Glass

616,237,501.07 475,789,997.45 22.79 36.72 36.87 Decreased 0.08

percentage points

According to Regions

Region Operating


Gross

Profit

Rate

(%)

Operating

Revenue

+/- (%)

Operating

Cost +/-

(%)

Gross Profit Rate

+/- (%)

Northeast

China 240,152,200.39 212,946,511.93 11.33 -37.49 -33.11

Dropped 5.81

percentage points

North

China 201,499,518.64 178,146,687.09 11.59 -47.25 -45.47

Dropped 2.88

percentage point

East China 1,330,994,221.00 1,068,012,712.31 19.76 -5.86 0.26

Dropped 4.90

percentage points

South

China 292,477,734.55 261,546,918.35 10.58 25.83 32.18

Dropped 4.29

percentage point

Central

China 180,650,321.42 154,714,832.37 14.36 100.95 113.62

Dropped 5.08

percentage points

Northwest

China 19,140,616.44 19,020,007.63 0.63 51.10 60.48

Dropped 5.80

percentage points

Southwest

China 196,575,860.07 163,271,455.11 16.94 32.39 33.54

Dropped

0.71percentage

points

Overseas 232,634,468.35 177,538,032.78 23.68 59.43 72.24

Dropped 5.68

percentage points

b. Production and sales volume

Main

Products

Production

Volume

Sales

Volume Inventory

Production

Volume +/-

(%)

Sales

Volume

+/- (%)

Inventory

+/- (%)

Float Glass 443.9

thousand

tons

429.6

thousand

tons

127.6

thousand

tons

-6.51 -5.52 12.61

Building

Glass

9867.3

thousand

sqm

9850.1

thousand

sqm

378.2

thousand

sqm

32.11 28.26 4.74

Auto Glass 5850.5

thousand

sqm

5257.9

thousand

sqm

1463.3

thousand

sqm

31.76 38.65 68.06

c. Cost Analysis

Unit: Millions of RMB

According to industry

Industry Cost item 2015

(Jan-Dec)

The

ratio to

total

cost of

2015

(%)

2014

(Jan-Dec)

The ratio

to total

cost of

2014 (%)

-/+ (%)

Glass

Main

business

cost

2,235,197,157.57 100.00 2,217,731,250.71 100.00 0.79

According to products

Product Cost item 2015

(Jan-Dec)

The

ratio to

total

cost of

2015

(%)

2014

(Jan-Dec)

The ratio

to total

cost of

2014 (%)

-/+ (%)

Float Glass

Main

business

cost

567,863,377.66 25.40 687,901,114.66 31.02 -17.45

Processing

Glass

Main

business

cost

1,191,543,782.46 53.31 1,182,201,791.91 53.31 0.79

Auto

Processing

Glass

Main

business

cost

475,789,997.45 21.29 347,628,344.14 15.67 36.87

Other statement regarding cost analysis:

Auto processing glass cost rose by 36.87% year-on-year as operating revenue

increased.

2) Expenses

Item 2015 (Jan-Dec) 2014 (Jan-Dec) +/- (%) Reason of the change

Administration

Expense 360,769,891.39 334,631,559.84 7.81

Product mix adjustment caused

shutdown loss, project putting into

production increased administration

expense, redundancy compensation.

Sales Expense 222,620,352.77 188,131,684.13 18.33 Expenses of transportation, storage and

marking rose.

Financial

Expenses 158,693,862.25 122,545,200.01 29.50

Exchange loss and interests payment

increased.

3) R&D expense

Unit: RMB

Capital invested in R&D 61,167,165.96

Assets invested in R&D -

R&D expense in total 61,167,165.96

The ratio of R&D expense to operating revenue (%) 2.23

No. of R&D people 127

The ratio of R&D people number to the total number

of employee of the Company (%) 4.19

The ratio of R&D expenses invested by assets -

4) Cash flow

Item 2015 (Jan-Dec) 2014 (Jan-Dec) -/+ (%)） Reason of the

change

Refund of taxes

and surcharge 2,171,922.05 1,573,422.75 38.04%

Tax return for

export increased.

Cash received

relating to other

operating

activities

153,278,273.13 58,393,663.70 162.49%

Cash deposit

released at

maturity.

Net cash flows

from operating

activities

530,970,177.25 228,414,832.31 132.46%

Reinforce capital

management

centralization,

notes payment

proportion

increased,

enhanced credit

control and

accelerated

recovery of

account

receivables

Cash received

from recovery

of investment

1,196,000,000.00 2,306,703,055.27 -48.15%

Financing

products

matured.

Cash received

from returns on

investment

99,210,333.03 27,733,896.73 257.72% Financing return

increased

Cash received

relating to other

operating

activities

53,073,105.69 32,100,000.00 65.34%

Cash deposit for

engineering

project released

at maturity.

Sub-total of

cash inflows 1,368,676,875.77 2,386,214,672.35 -42.64%

Financing

products

matured.

Cash paid to

acquire

investments

1,488,358,869.52 3,302,930,137.86 -54.94%

Financing

investment and

engineering

project

investment

decreased

Cash paid

relating to other

operating

activities

- 25,522,000.00 -100.00%

Cash deposit for

engineering

project

decreased

Sub-total of

cash outflows 1,903,037,010.08 3,849,870,396.93 -50.57%

Financing

investment and

engineering

project

investment

decreased

Net cash flow

from investing

activities

-534,360,134.31 -1,463,655,724.58 Not applicable

Financing

investment and

engineering

project

investment

decreased

Cash paid

relating to other

financing

activities

87,481,150.57 173,119,188.82 -49.47%

Finance lease

payment

declined

Net cash flow

from financing

activities

160,605,004.21 -21,481,439.98 Not applicable

Borrowings

from financing

institution

increased

Effect of foreign

exchange on

cash and cash

equivalents

-6,776,263.09 -1,015,749.18 Not applicable Net exchange

loss increased

(2) Major profit change caused by non-core business


The Company analyzed current industry and market trend, held cash and enhanced

capital efficiency prudentially and achieved income of RMB 94.0408 million

through positive and steady financing investment.

(3) Analysis of Balance Sheet

Unit: RMB

Item 2015 Ending

balance

The ratio to

total assets

（%）2015

2014 Ending

balance

The ratio to

total assets

（%）2014

-/+（%）

Rema

rks

Advances to

Suppliers 67,033,690.08 0.82 144,263,719.46 1.81 -53.53 A

Other Current Assets 510,123,314.57 6.22 1,097,417,083.11 13.79 -53.52 B

Available-for-sales

financial assets 1,047,234,132.92 12.77 50,000,000.00 0.63 1,994.47 C

Construction in

process 767,336,286.10 9.35 485,925,455.10 6.11 57.91 D

Goodwill - - 7,643,536.51 0.10 -100.00 E

Notes Payable 298,523,364.64 3.64 213,100,373.78 2.68 40.09 F

Account Payable 562,054,047.72 6.85 401,025,889.45 5.04 40.15 G

Interests Payable 38,089,005.56 0.46 5,739,004.20 0.07 563.69 H

Non-current

liabilities due within

1 year

32,202,374.30 0.39 241,821,834.75 3.04 -86.68 I

Long-term

borrowings 100,777,919.75 1.23 159,718,569.75 2.01 -36.90 J

Long-term payable 85,623,310.88 1.04 31,785,812.50 0.40 169.38 K

Deferred income tax

liabilities 33,958,385.10 0.41 1,486,369.04 0.02 2,184.65 L

A. Advances to suppliers of engineering project were classified to assets.

B. Reclassified to available-for-sales financial assets.

C. Other current assets items were reclassified and industrial investment increased.

D. New engineering project was putting into production and fixed assets were

classified into construction in process due to technical transformation.

E. Caused by provision of assets impairment.

F. Notes clearing increased.

G. Increased the Company’s business credit in suppliers.

H. SCP interests provision.

J. Repay finance lease.

K. Caused by reclassification of non-current liabilities due within 1 year.

L. Caused by fair value income of available-for-sales financial assets.

(4) Investment Analysis

1) The overall analysis of the foreign equity investment

In the reporting period, the foreign equity investment amounted to RMB 233.3589

million, increasing RMB 233.3589 million year-on-year.

a. Significant equity investment

① In the reporting period, the Company established Shanghai SYP – Chengding

Investment Partnership Corporation (limited partnership) with scale of no more

than RMB 500 million. It will mainly serve for development strategy and

strategic acquisition of the Company.

② The Company planned to increase capital to wholly-owned subsidiary HSYP for

float glass production. Investment amount referred to the estimated value by the

benchmark date on 31 Dec 2015. By the end of reporting period, the production

line is in evaluation and the capital increase has not been completed.

③ The Company planned to increase capital of RMB 200 million to wholly-owned

subsidiary CSYPE. The company actually increased capital of RMB 21.09

million by the end of reporting period.

b. Major non-equity investment

No.

c. Financing assets calculated by fair value

Unit: RMB

Stock

Code

Stock

Abbreviation

Initial Investment

Amount Ending Book Value Accounting Item Origin

601186 CRCC 100,000,000.00 168,500,000.00 Available-for-sales

financial assets

Private

Placement

600639 Pudong

Jinqiao 25,009,000.00 39,854,200.00

Available-for-sales

financial assets

Private

Placement

600845 Bao Sight 58,349,997.52 78,606,636.92 Available-for-sales

financial assets

Private

Placement

002004 Huapont

Health 49,999,872.00 55,273,296.00

Available-for-sales

financial assets

Private

Placement

In total 233,358,869.52 342,234,132.92

(5) Major assets and stock sale

No.

(6) Analysis of controlling subsidiaries and shareholding companies

Unit: RMB

Subsidiary Registration

Place

Business

Nature

Registered

Capital Total Assets Net Assets Net Profit

SYPB Shanghai

Produce

and sell

glass

RMB 200

million 677,745,563.31 397,844,590.12 1,432,779.17

SYPE Shanghai

Produce

and sell

glass

USD 24.3

million 722,683,873.38 267,890,799.24 -22,107,675.08

TSYPE Tianjin Produce

and sell

RMB 425

million 860,892,370.30 418,805,790.35 -63,113,084.64

glass

JSYPE Jiangmen

Produce

and sell

glass

RMB 160

million 337,540,130.33 137,935,933.28 -3,626,602.85

CSYPE Chongqing

Produce

and sell

glass

RMB 275

million 350,131,396.37 100,384,025.19 4,481,386.01

TSYP Tianjin

Produce

and sell

glass

USD 40.5

million 1,567,921,967.60 644,655,597.58 37,808,397.84

TSYPP Tianjin

Produce

and sell

glass

RMB 400

million 421,251,873.34 154,804,422.07 -146,008,776.94

JSYP Changshu

Produce

and sell

glass

USD

48.33

million

686,703,669.89 73,574,511.30 -106,187,544.62

HSYP Changshu

Produce

and sell

glass

RMB 50

million 25,957,656.15 -73,872,037.84 -17,045,163.50

CSYP Changshu

Produce

and sell

glass

USD

22.92

million

267,977,720.26 -172,780,425.04 -182,585,118.03

SYPKA Shanghai

Produce

and sell

glass

USD

115.5671

million

1,111,932,673.62 700,757,686.61 5,622,290.97

WSYPA Wuhan

Produce

and sell

glass

RMB 120

million 291,163,226.03 114,151,454.69 -4,516,190.73

YSYPA Yizheng

Produce

and sell

glass

RMB 400

million 377,628,670.85 281,177,892.65 7,532,440.10

SYP Shijin Shanghai

Produce

and sell

glass

USD 1.5

million 11,954,462.70 6,173,124.42 948,897.57

GSYP Shenzhen

Produce

and sell

glass

USD 20

million 7,470,916.60 7,274,864.24 -291,490.12

Glasslink

Limited Hong Kong

Trade and

investment

USD 0.9

million 448,733,294.42 243,586,316.36 -68,925,243.80

SYP

Investment

Co., Ltd.

Shanghai Investment RMB 100

million 245,548,637.07 91,536,147.66 -8,463,852.34

Shanghai

SYP –

Chengding

Investment

Partnership

Corporation

(limited

partnership)

Shanghai Investment -- 342,481,456.32 314,642,298.80 -1,014,148.75

(7) Structural subject controlled by the Company

No

3. The Company discussion and analysis of the Company’s future development

(1) The industry competition and development trend

For the demand side, there are uncertainties of housing inventory elimination in 2016,

automobile industry slowed down the growth rate after the prosperity, lack of

demand for glass and overcapacity will continue. Therefore, the imbalance between

supply and demand still exists in glass market, the glass price is depressed and the

industry tendency should be paid attention to.

Year 2016 is the beginning of the 13th

Five-Year Plan of the country, glass

manufacturers with technology accumulation, innovation, high-tech of energy-saving

and environment-friendly products will be more competitive under the government’s

policy of modestly expanding total demand and strengthening structural revolution

for the supply side.

(2) Development Strategy

The board of directors will stick to strategy of differentiation, upstream and

downstream integration and brand development, and target the high-end glass market

for high performance, high quality and environment-friendly products.

In the guidance of government policies of “eliminating superfluous industrial

capacity, cutting housing inventories, removing leverage, saving cost and

compensating shortage”, the Company will meet market demand by technical

innovation, improve supply quality though product mix adjustment and service

innovation; further optimize industrial and assets structure, enhance supply quality

by extending industrial chain, increasing product value-added and improving

integration of downstream and upstream; complete regional layout, enhance effective

supply capacity, improve capital effectiveness, save cost, strengthen profitability,

advance quality of economic operation, aim to be a comprehensive glass

manufacturer at the cutting edge of the industry.

(3) Working Plan

Facing the tough market environment and industry trend in 2016, the Company will

go on deepening the differentiation strategy, give full play to the technical advantage,

brand premium and innovation spirit, ensure the Company’s steady development and

increase shareholders’ assets value.

Therefore, the Company will carry out following work:

1) Aim at sustainable development, strengthen strategic development research,

consolidate market, development and crisis consciousness.

2) Analyze market dynamics, optimize industry layout, obtain competitive strength

and improve ROIC.

3) Innovate marketing strategy, develop domestic and overseas market.

4) Further reinforce operational management, lay good foundation and enhance

operation efficiency.

5) Complete system, standardize internal control procedure, prevent risk actively

and enhance economic operation quality.

6) Implement investment and financing activities and improve capital efficiency.

7) Emphasize on talent cultivation, deepen system reform of choose and employ

people and effectively motivate employees.

8) Complete information disclosure system to publish public announcement timely

and completely.

(4) Potential Risk

1) Risk of industry uncertainty

Under the background of macro-economy and industry policy, there is glass demand

uncertainty in future affected by slowdown of real estate and automobile industry

growth.

Solutions: Increase R&D investment, develop new products and new market to meet

industrial development planning of the country. Improve the sensitivity and foresight

to the market.

2) Risk of price uncertainty

Overcapacity of glass industry will continue, imbalance between supply and demand

becomes worse, competition is fierce, and there is price uncertainty in future.

Solutions: ① Adjust product mix, improve value-added products; ② strengthen

cost control and management; ③ Accelerate the progress of integration of flat and

processing business to increase the internal use of self produced float glass.

3) Risk of price uncertainty of raw materials and fuel

The price of raw materials including gas, heavy oil, soda ash and silica sand is not

stable which bring the difficulty in cost control of production.

Solutions: On the one hand, control and manage the cost by the methods of

supervising and analyzing the change of raw material and fuel price and

implementing budget management; on the other hand, improve material utilization

through innovation of technology and management; meantime, strength cost control

by enhancing technological level to minimize the risk due to raw material price

uncertainty.

4) Risk of Customer Credit

There is still global economy uncertainty, domestic economy growth slows down,

and competition is fierce in processing glass market, so the Company has challenge

in customer credit.

Solutions: Further discuss the Company’s credit policy to improve the procedure.

Strengthen customer credit review, refine credit control program, supervise and

follow the payment to lower the risk of loan recovery.

(5) Others

No.

4. Information disclosure whether there is any situation or special reason that the

company is not applicable to the regulation.


V. Important Event

1. Profit distribution plan of ordinary shares and plan of capital surplus enlarging

shares

(1) Stipulation, implementation and adjustment of cash dividend allocation policy

1) The Company revised the article concerning profit distribution in the Articles of

Association in accordance with No.3 Guideline for the Supervision of Listed

Companies - Cash Dividend Distribution of Listed Companies issued by CSRC and

the Company’s actual situation, it was approved at the 16th

Meeting of the 7th

Board

and the AGM for 2013. The existing profit distribution policy states that the

Company can distribute profit in forms of cash dividend, stock dividend,

combination of cash and stock dividend and other legal forms; the Company gave

priority to cash dividend allocation and stipulated the regulation for allocation

method (standard and proportion), implementation and decision-making procedure.

(Please refer to the relevant public announcement published in Shanghai Securities

News, Tai Kung Pao and on SSE website.)

The Company puts emphasis on returning to investors and insists on cash dividend

allocation in high proportion since been listed.

2) Profit distribution plan for 2014 was approved at the AGM for 2014 convening on

3 June 2015, based on the total share capital of 934,916,069, the cash dividend

allocation was RMB 0.20 (tax inclusive) for every 10 shares to all shareholders, and

the total cash dividend amounted to RMB 18,698,321.38. The plan had been

implemented and completed on 3 Aug 2015 (Please refer to Shanghai Yaohua

Pilkington Glass Group Co., Ltd. Public Announcement on Dividend Appropriation

for 2014 for details which were published in Shanghai Securities News, Tai Kung

Pao and on SSE website on 13 Jul 2015).

3) As audited by Shanghai Zhonghua Certified Public Accountants LLP, operating

revenue in the consolidated statement of 2015 amounted to RMB 2,747,743,271.77,

net profit attributable to shareholders of the parent company in the consolidated

statement of 2015 amounted to RMB -364,267,244.39. The Company faced business

performance loss for 2015, net profit attributable to shareholders of the parent

company was negative, it is not suggested for profit distribution for 2015 and there is

no intention to use capital surplus to enlarge share capital for 2015 based on

provisions of SSE Cash Dividend Guidance of Listed Companies and the Articles of

Association and the actual situation of the Company.

The plan will be carried out upon the approval of the Annual Shareholders’ General

Meeting for 2015.

(2) Plan of profit distribution and capital reserve in the latest three years (including

the reporting period)

Unit: RMB

Year

Bonus for

every 10

shares

（share）

Dividend for

every 10

shares （tax

inclusive）

Capital

reserve for

every 10

shares

（share）

Amount of cash

dividends（tax

inclusive）

Net profit

attributable to

shareholders of

the parent

companies in

consolidated

statement

The ratio to

Net profit

attributable to

shareholders

of the parent

companies in

consolidated

statement (%)

2015 0 0 0 0 -364,267,244.39 -

2014 0 0.20 0 18,698,321.38 53,354,016.90 35.05

2013 0 0.40 0 37,396,642.76 115,443,763.79 32.39

(3) Reason for not allocating cash dividend when the parent company gained profit

in the reporting period and was capable for profit distribution for ordinary shares,

and plan for the undistributed profit.


2. Commitment Fulfillment


(1) Commitments made by the listed companies, shareholders, actual controller,

buyer, directors, supervisors, the Management or other related parties in or cross the

reporting period.

Background Type Promiser Content Commitment

time and

Deadline

Whether

has

deadline

for

fulfillment

Whether

meet the

commitm

ent timely

and

strictly

Refinancing

related

Share

trading

lock-up

SBM The shares held by

controlled shareholder

SBM from this private

placement shall not be

traded within 36 months

since the end of the

placement in accordance

with the Public

Announcement on the

Result of SYP Private

Placement and the

10 Jan 2014

to 9 Jan 2017

Yes Yes

Change of the Share

Capital

Other

Commitment

Other SBM Committed not to reduce

the holding shares within

6 months and increase

shares in proper time.

13 Jul 2015 to

13 Jan 2016

Yes Yes

China

Composi

tes

Group

Co., Ltd.

Committed not to reduce

the holding shares within

6 months

13 Jul 2015 to

13 Jan 2016

Yes Yes

(2) Explain for assets or projects that have not achieved the expected profit when the

reporting period was in the profit forecast term.

Fire resistant glass production line has to be shut down due to low yield, it is in the

process of technical transformation.

3. Capital occupancy and repay debt in the reporting period


4. The Board’s explanations of modified opinion audit report issued by accounting

firm

(1) The description of accounting firm modified opinion audit report from the Board

and the Supervisory Committee


(2) The Board’s explanations of the changes of accounting policy, accounting

estimates and accounting methods


(3) The Board’s description of the reasons of important early correction of errors


5. Employment or Dismissal of accounting firm

Unit: Ten thousand of RMB

Current

Name of domestic public

accountant

Zhonghua Certified Public Accountants LLP

Payment for domestic public

accountant

114

Audit period 4 years

Name Payment

Name of accounting firm for

internal control audit

Zhonghua Certified

Public Accountants LLP

46

Sponsor Haitong Securities 0

Statement of employing or dismissing accounting firm


6. Bankruptcy and reorganization


7. Major lawsuit and arbitration


8. Punishment and reformation of the listed company, directors, supervisors, the

Management, controlling shareholders, actual controller and acquiring firm.


9. Credit status of the listed company, controlling shareholders and actual controller

In the reporting period, there was no activity from the listed company, controlling

shareholders and actual controller that failed to fulfill court judgment or repay large

amount liabilities at maturity.

10. Stock incentive plan, EXOP or other employee motivation plan and its influence


11. Related Party Transactions of Material Importance


(1) Related Party Transactions concerned with Daily Operations

1) Publicly announced issues with further progress or change


Related Party Related

Transaction

Transaction

Content

Pricing Method

and

Decision-making

procedure

2015

Forecast

2015 Actual

Amount

Pilkington

International

Holdings BV

and its related

parties

Sales Product Market Price 300.00 229.21

Pilkington

International

Holdings BV

and its related

parties

Purchasing Royalties Negotiated

Price 1,200.00 579.13

Pilkington

International

Holdings BV

and its related

Borrowing Interests Market Price 200.00 231.20

parties

Pilkington

International

Holdings BV

and its related

parties

Borrowing

Interests

(renew

before due)

Market Price 9,000.00 9,000.00

Luanxian

Xiaochuan

Glass Silica

Sand Co., Ltd.

Purchase

product Raw material Market Price 1,300.00 518.99

2) Connected transactions that were not disclosed in public announcement


Related Party Related Relationship Related

Transaction

Transaction

Content Pricing Method

Related

Transaction

Amount

Bright Intelligent

Curtain Wall Co., Ltd.

SBM controlled

subsidiary Sell product Sell glass Market Price

633.31

Bright Intelligent

Curtain Wall Co., Ltd.

SBM controlled

subsidiary Sell product Sell glass Market Price

246.07

In total / 879.38

Sales order return within big amount /

Statement of connected transaction

Controlling shareholder SBM invested to Bright Intelligent Curtain Wall Co., Ltd., in Aug 2015 and holds 45% of its

equity, so it is the Company’s related party.

(2) Connected transaction due to assets or equity acquisition or sell

1) Publicly announced issues without further progress or change

Overview Query Indexes

No


No.

3) Issues that did not disclosed in public announcement


4) Business performance in the reporting period that should be disclosed if involves

business performance agreement

Not Applicable

(3) Significant connected transaction with joint investment

1) Publicly announced issues without further progress or change

Overview Query Indexes

No


No.

3) Issues that did not disclosed in public announcement


(4) Related Parties’ Creditor Rights and Debt Obligations



Related parties Relationshi

p

Fund Provided to Related Parties Funds Received from Related Parties

Beginning

Balance

Actual

Amount

Ending

Balance

Beginning

Balance

Actual

Amount

Ending

Balance

Beijing

Pennvasia

Glass Co., Ltd.

Affiliate 1,208.91 - 1,208.91

Pilkington

International

Holdings BV

and its

connected

parties

Shareholder 403.53 -392.36 11.17 16,518.36 612.18 17,130.54

Luanxian

Xiaochuan

Glass Silica

Sand Co., Ltd.

Affiliate 1,672.04 - 1,672.04

SBM

Controlling

Shareholder

s

- - - 735.45 - 735.45

Bright

Intelligent

Curtain Wall

Co., Ltd.

SBM

controlled

subsidiary

366.07 -329.25 36.82 0.06 1.47 1.53

Bright

Intelligent

Curtain Wall

Co., Ltd.

SBM

controlled

subsidiary

- 16.02 16.02

In Total 3,650.55 -705.59 2,944.96 17,253.87 613.65 17,867.52

Reason

Raw material purchase and products sales with affiliates; service and

equipments purchase from shareholder; products sales with SBM

controlled subsidiary.

(5) Others

No.

12. Important Contracts and the Fulfillment

(1) Issues of leave trust, subcontract and rent

□Applicable √Not Applicable

(2) Guarantees


Unit: RMB

Outward Guarantee (excluding guarantees for subsidiaries)

Total guarantee amount in reporting period（ subsidiaries

excluded） 0

Ending balance of the guarantee amount（A）（subsidiaries

excluded） 0

Guarantee for subsidiaries

Total guarantee amount in reporting period -5,295,490.14

Ending balance of the guarantee amount（B） 51,700,000.00

Aggregated Guarantee Amount（controlled subsidiaries included）

Total amount（A+B） 51,700,000.00

Ratio to the Company’s net assets (%) 1.49

Including：

Guarantee amount for shareholders, actual controllers and

related parties（C）

0

Guarantee amount for the parties whose assets and liabilities

rate more than 70%（D）

0

Guarantee amount which exceed 50% of net assets 0

Total amount of the above three items（C+D+E） 0

Statement of joint and several liability for outstanding

guarantee

Guarantee Statement

(3) Entrusted assets management

1) Entrusted financing


2) Entrusted loan


3) Other financing product investment and derivatives investment



Type Signing Party Investment

Amount

Investment

Duration Product

Profit and

Loss

Whether

involved in

lawsuit

Financing

Product

Merchants

Bank 17,900

Within 1

year

Principal

Guaranteed 44.05 No

Financing

Product

Lujiazui Trust 1,000

Within 2

year Trust 0.00 No

Financing

Product

Ping An Trust 10,000

Within 2

year Trust 236.71 No

Financing

Product

Shanghai Trust 31,000

Within 2

year Trust 1,494.54 No

Financing

Product

Minmetals Intl.

Trust 20,000

Within 2

year Trust 1,358.28 No

Financing

Product

CITIC Trust 19,500

Within 2


Financing

Product


Within 3


Financing

Product

ZRITC Trust 2,000

Within 6

months Trust 0.00 No

Financing

Product

Haitong

Securities 34,500

At maturity Principal

Guaranteed 963.68 No

Financing

Product

Merchants

Bank 34,500

At maturity Principal

Guaranteed 270.77 No

Financing

Product

Haitong

Securities 5,000

At maturity Trust 292.93 No

Financing

Product


At maturity Trust 1,235.94 No

Financing

Product

Minmetals Intl.

Trust 10,000

At maturity Trust 1,093.41 No

Other Shanghai Trust Current

capital

At maturity Fund of cash pool

management 584.84 No

Statement for other financing product investment and derivatives investment

Ending balance of financing products amounted to RMB 1,114 million, financing

products return aggregated to RMB 94.0408 million in the reporting period.

(4) Other contract of material importance

No.

13. Other Important Events


14. Fulfillment of social responsibility

(1) Fulfillment of social responsibility

As a corporate citizen, the Company always remembers the purpose of high-quality

products, customer service, company development and social dedication, unified

economic and social benefits, fulfilled social responsibility and realized harmonious

development with benefit related parties.

1) Return to shareholders and enhance confidence. The Company has complete

governance structure and standard operation. Since it was listed on the stock market,

the Company has kept returning to shareholders with cash dividends every year,

issued information disclosure prudentially, treated shareholders fairly, improved

shareholders’ value and investors’ confidence.

2) Observed law and disciplines, operated honestly. The Company insisted on honest

operation, strengthened quality supervision by ISO to ensure product security, did

not default liabilities maliciously and kept good relationship with suppliers and

purchasing agent without infringing legitimate interests. The Company was awarded

as Shanghai Civilization Corporation.

3) People come first. The Company complied with Labor Law, protected rights and

interests of all the employees, carried out trainings to enhance employee

competitiveness, established internal communication system, organized recreational

activities and arranged physical examination at regular intervals.

4) Promoted public welfare and brought benefits to the society. The Company

supported public welfare activities, continued donations and dedicated to social

voluntary service.

5) Protected environment and save resources. The Company put ecological

environment preservation and sustainable development at very important position.

The Company carried out measures to protect environment, used safe and

environment-friendly natural gas; the Company dedicated to environment

preservation investment, renovated technology, advanced cleaner production,

promoted low carbon and energy-saving concept, R&D green products, popularized

products of energy conservation and environment protection and strictly observed

the country’s law and regulation of energy conservation and emission reduction.

(2) Environmental protection statement for listed company in highly polluted

industry specified by the state environmental protection department.

Not applicable.

15. Convertible bonds


VI. Ordinary share change and shareholders status

1. Ordinary share change

(1) Sheet of ordinary share change

Unit: Share

Before change ＋/－ for the change After change

Amount Proportion

(%)

New

share

Share

offer

Transfer

common

reserve

fund to

shares

Others Sub-total Amount Proportion

(%)

I. Tradable shares

with restricted

conditions

203,665,987 21.78 -128,722,549 -128,722,549 74,943,438 8.02

1.State-owned

shares

2.shares held by

state-own legal

person

118,126,274 12.64 -43,182,836 -43,182,836 74,943,438 8.02

3.other domestic

shares 85,539,713 9.14 -85,539,713 -85,539,713 0 0

Incl: shares held

by non

state-owned legal

person

71,283,094 7.62 -71,283,094 -71,283,094 0 0

shares held by

natural person 14,256,619 1.52 -14,256,619 -14,256,619 0 0

4.shares held by

overseas entity

Incl: shares held

by overseas legal

person

shares held by

overseas natural

person

II. Tradable

shares without

restricted

conditions

731,250,082 78.22 128,722,549 128,722,549 859,972,631 91.98

1. RMB ordinary

share 543,750,080 58.16 128,722,549 128,722,549 672,472,629 71.92

2. Domestic listed

foreign funded

shares

187,500,002 20.06 187,500,002 20.06

3. overseas listed

foreign funded

shares

4. Others

II. Total shares 934,916,069 100 934,916,069 100

(2) Change of restricted shares


Unit: Share

Shareholder

No. of

restricted

shares in the

beginning

No. of

unlocked

shares

No. of

restricted

shares at the

ending

Restriction

Reason Unlock Date

SBM 74,943,438 0 74,943,438

The shares

from the private

10 Jan 2017

placement in

2013 shall not

be traded

within 36

months since

the end of the

placement.

Hautai Capital

Management Co.,

Ltd.

50,916,496 50,916,496 0

The shares

from the private

placement in

2013 shall not

be traded

within 12

months since

the end of the

placement.

12 Jan 2015

CITIC Securities

Co., Ltd. 28,513,238 28,513,238 0

Shanghai

Chengding Phase

II Equity

Investment Fund

Partnership

(limited

partnership)

20,366,598 20,366,598 0

Greenland Real

Estate (Group)

Co., Ltd.

14,669,598 14,669,598 0

Gong Lei 14,256,619 14,256,619 0

In total 128,722,549 128,722,549 74,943,438 / /

2. Stock Issue and Listing

(1) Stock issuance by 31 Dec 2015

Unit: share Currency: RMB

Stock and

its

Derivative

Securities

Issuance

Date

Issuing

Price (or

interest

rate)

Issuance

Amount

Listing

Date

Approved

Listing

Amount

Transaction

Closing

Date

Ordinary Stock

Private

Placement

Dec

2013

4.91

74,943,438 10 Jan

2017

74,943,438

128,722,549 12 Jan

2015

128,722,549

China Securities Regulatory Commission issued Reply on Private Placement of

Shanghai Yaohua Pilkington Glass Group Co., Ltd.—Approval Document No. [2013]

1455 on 20 Nov 2013 to approve the Company to issue no more than 203,665,987 A

shares through private placement. The Company completed the issuance of

203,665,987 A shares to chosen investors on 30 Dec 2013, the aggregate amount of

raised fund was RMB 999,999,996.17, deducting issuance fee of RMB

21,403,889.55, the net raised fund amount was RMB 978,596,106.62. The Company

handled the procedures of registration and depository in China Securities Depository

and Clearing Co., Ltd Shanghai branch on 3 Jan 2014 to increase the general stock

capital to 934,916,069 shares.

(2) Changes in aggregated shares and restructure of shareholders, assets and liability

of the Company

Not Applicable.

3. Shareholders and Actual Controllers

(1) Shareholders amount

Total number of shareholders in reporting

period

54,345

Number of shareholders at the end of Nov

2015

55,192

(2) Shareholding of the top ten shareholders and the top ten circulation shareholders

(or unrestricted shareholders)

Unit: share

Top Ten Shareholders

Name of

shareholders

Change

Amount

Ending

Balance

Proportion

(%)

Amount of

restricted

shares

Amount of shares

pledged or blocked Nature

Stock

Status

Amount

SBM

0 258,861,720 27.69 74,943,438 No State-owned

legal person

Pilkington

International

Holdings BV

0 141,958,984 15.18 No Overseas

legal person

China Composites

Group Co., Ltd. 155,900 119,090,496 12.74 No State-owned

legal person

Special Securities

Account of GF

Securities Co., Ltd.

of agreed to buy

back securities

trading

-359,900 3,120,100 0.33 unknown unknown

Li Lizhen

15,000 3,003,837 0.32 unknown

Overseas

Natural

Person

TOYO

SECURITIES

ASIA LTD. A/C

CLIENT

-564,482 2,712,187 0.29 unknown

Overseas

legal person

Hong Kong

Haijian Industrial

Co.,Ltd.

221,700 2,509,381 0.27 No Overseas

legal person

WANG SHANG

KEE &/OR CHIN

WAN LAN

50,000 2,171,320 0.23 unknown unknown

Du Lifeng 2,107,910 2,107,910 0.23 unknown unknown

NAITO

SECURITIES CO.,

LTD.

-615,856 2,101,144 0.22 unknown Overseas

legal person

Top ten unrestricted shareholders

Name

Amount of

unrestricted

shares

Stock Type and Amount

Type Amount

SBM 183,918,282 RMB Ordinary Shares 183,918,282

Pilkington International Holdings

BV

141,958,984 RMB Ordinary Shares 117,997,072

Domestic listed foreign

funded shares

23,961,912

China Composites Group Co.,

Ltd.

119,090,496 RMB Ordinary Shares

119,090,496

Special Securities Account of GF

Securities Co., Ltd. of agreed to

buy back securities trading

3,120,100

RMB Ordinary Shares

3,120,100

Li Lizhen 3,003,837 Domestic listed foreign

funded shares

3,003,837

TOYO SECURITIES ASIA

LTD. A/C CLIENT

2,712,187 Domestic listed foreign

funded shares

2,712,187

Hong Kong Haijian Industrial

Co.,Ltd.


funded shares

2,509,381

WANG SHANG KEE &/OR

CHIN WAN LAN


funded shares

2,171,320

Du Lifeng 2,107,910 Domestic listed foreign

funded shares

2,107,910

NAITO SECURITIES CO., LTD. 2,101,144 Domestic listed foreign

funded shares

2,101,144

Notes on related party

relationship and parties acting in

unison

Among the top ten shareholders of the Company, there is related party

relationship between the 1st and 8

th largest shareholder, and they do not have

related party relationship with other shareholders, they also shall not be

regarded as parties acting in unison as provided in Regulations on the Takeover

of Listed Companies; there is no related party relationship between the 2nd

and

3rd

largest shareholder, and they do not have related party relationship with

other shareholders, they also shall not be regarded as parties acting in unison as

provided in Regulations on the Takeover of Listed Companies; The Company

does not know whether there is related party relationship among the rest of the

top ten shareholders or whether they are parties acting in unison as provided in

the Regulations on the Takeover of Listed Companies.

Top ten restricted shareholders

Unit: shares

No Name

Amount of

restricted

shares

Restricted shares that can be

listed

Restricted Conditions Listing

Date

Newly

increased

listing shares

1 SBM 74,943,438 10 Jan

2017 74,943,438

The shares issued in the private

placement cannot be transferred

in 36 months from the issuing

date

4. Controlled shareholder and actual controller

(1) Controlling shareholder

1) Legal person

Name Shanghai Building Materials (Group) Co., Ltd.

Legal Representative Qiu Ping

Date of Establishment 29 December 1993

Business Scope Investment holdings, diversified economy, building

materials, design and manufacture and sale of building

materials equipment and related products, engaged in

architectural engineering and technology development

and transfer business, building decoration engineering

contracting and design and construction, real estate

development and management.

Other domestic and

overseas listed companies

controlled or held equity by

SBM

No.

Other Statement No.

2) The company has no specific explanation for controlling shareholder

No.

3) Query indexes and date regarding change of controlling shareholder

Not Applicable.

4) Property right and control relationship between the Company and controlling

shareholder

27.69% 0.24%

(2) Actual Controller

1) Legal Person

Name Shanghai Land (Group) Co., Ltd.

Legal Representative Feng Jingming

Date of Establishment 15 Nov 2002

Business Scope Land reserve preliminary development, mudflat

construction and management, municipal infrastructure

construction and investment, old residential district

reconstruction, low-rental housing,

government-subsidized affordable housing, investment

and construction of ancillary commercial housing,

real estate development and operation, industrial

investment and property management.

Other domestic and

overseas listed companies

controlled or held equity by

Guosheng

It holds 36.36% equity of China Enterprise (600675)

and 18.20% equity of Green Land (600606)

Other Statement No.

2) The company has no specific explanation for actual controller

No.

3) Query indexes and date regarding change of controlling shareholder

The Company’s previous actual controller, Shanghai Guosheng (Group) Co., Ltd.

Shanghai Yaohua Pilkington Glass Group Co., Ltd

Shanghai Building Materials (Group) Co., Ltd.


Co., Ltd.

0.27%

100%

signed the agreement with Shanghai Land (Group) Co., Ltd. on 28 Sep 2014 to

transferred its SBM equities for free (Please refer to Shanghai Yaohua Pilkington

Glass Group Co., Ltd. Public Announcement on Equity Change for detail, which was

published in Shanghai Securities News, Tai Kung Pao and on SSE website on 14 Oct

2014). Relevant equity and assets transfer and record change in industrial and

commercial bureau have been completed by 31 Dec 2015. (Please refer to Shanghai

Yaohua Pilkington Glass Group Co., Ltd. Public Announcement on Completion of

Shareholders’ Equity Transfer for detail, which was published in Shanghai Securities

News, Tai Kung Pao and on SSE website on 24 Nov 2015)

4) Property right and control relationship between the Company and actual controller

100%

100%

1

27.69%

5) Whether actual controller control the company though trust or other assets

management method

No.

(3) Other information about controlling shareholder and actual controller

No.

5. Other legal person shareholders who hold more than 10% of the Company’s

shares

Unite: Ten thousands of RMB

Name of

shareholders

Legal

representative

Date of

establishment

Organization

Code

Registered

capital Major business scope

Shanghai Land (Group) Co., Ltd.

Shanghai Yaohua Pilkington Glass Group Co., Ltd

Shanghai Building Materials (Group) Co., Ltd.


Co., Ltd.

Shanghai State-Owned Assets Supervision and

Administration Commission

0.27%

100%

Pilkington

International

Holdings BV

Lain Lough 20 January

1981

--

EUR 188.15

million

Shares, financing and management of

other companies, groups and

businesses involved in financial

transactions, acquisition, control, and

dispose of movable and immovable

property. Pilkington International

Holdings BV is a controlled

subsidiary of Pilkington Group

Limited.

China

Composites

Group Co.,

Ltd.

Zhang

Dingjin

1 June 1988 10000844-8 RMB 200

million

National key high-tech enterprise

engaged in sale and production of

wind turbine blades, carbon fiber,

multifunctional paving materials,

carbon core cable, FRP pipes, storage

tank and high pressure vessel, water

treatment and so on a number of

high-tech industrial projects, research

and development of related

technology and equipment,

construction and general contracting

projects.

Remarks No

6. Stock restriction and reducing statement


VII. Relevant situation of preferred stock


VIII. Directors, Supervisors, Senior Officers and Employees

1. Shareholding change and payment

(1) Shareholding Change and Remuneration of current directors, supervisors and

senior officers or those who left office in this reporting period


Unit: Share

Name Title Gender Age

Begin

of

term

office

End

of

term

office

Amount

of shares

in year

beginning

Amount

of

shares

at year

end

+/-

Remuneration from the Company during this

report period (Ten

Thousands of RMB)

(before tax)

Remuneration from the

Company’s related party

Zhao Jian Chairman Male 45

3 Jun

2015

2 Jun

2018 0 0 0 0 Yes

Paul

Ravenscroft

Vice

Chairman Male 45

3 Jun

2015

2 Jun

2018 0 0 0 0 Yes

Eddie Chai Director &

President Male 57

3 Jun

2015

2 Jun

2018 0 0 0 234.3 No

Zhang

Dingjin Director Male 58

3 Jun

2015

2 Jun

2018 0 0 0 0 Yes

Yi Fang Independent

Director Female 45

3 Jun

2015

2 Jun

2018 0 0 0 7 No

Liu Jinwei Independent

Director Male 47

3 Jun

2015

2 Jun

2018 0 0 0 3.5 No

Yang

Chaojun

Independent

Director Male 55

3 Jun

2015

2 Jun

2018 0 0 0 3.5 No

Hu Liqiang Supervisory

Committee

Chairman

Male 59 3 Jun

2015

2 Jun

2018 0 0 0 65.6 No

Xu Hong Supervisor Male 55

3 Jun

2015

2 Jun

2018 0 0 0 22.0 No

Zou

Zhiping Supervisor Male 41

3 Jun

2015

2 Jun

2018 0 0 0 26.0 No

Chen Dixin Vice

President Male 58

3 Jun

2015

2 Jun

2018 0 0 0 63.6 No

Jin Minli Vice

President &

Secretary to

the Board

Female 53 3 Jun

2015

2 Jun

2018 0 0 0 66.0 No

Chu

Yuejiang

Finance

Director Male 41

3 Jun

2015

2 Jun

2018 0 0 0 65.3 No

Qian

Shizheng

Independent

Director Male 64

8 Jun

2012

2 Jun

2015 3.5 No

Chen

Guoqing

Independent

Director Male 54

8 Jun

2012

2 Jun

2015 3.5

Total / / / / / 0 0 0 563.8 /

Name Main Working Experiences in the Last 5 Years

Zhao Jian Deputy Party Secretary and President of SBM, Chairman of SYP Board. Previously

Investment & Development Dept. Chief of Shanghai Urban Construction (Group)

Corporation, Deputy Party Secretary and President of Shanghai Guosheng Assets Co.,

Ltd.

Paul

Ravenscroft

Head of Mergers & Acquisitions of NSG Group; previously solicitor of law firm

Eversheds, Commercial Counsel of Huntsman Tioxide, General Counsel of Pilkington

plc and President of the NSG Group Building Products business in China.

Eddie Chai Director and president of SYP. Previously management counselor for Mckinsey &

Company (Hong Kong); Vice President for Strategic Development, Senior Vice

President for China and President for North China of Lafarge Group; Founder and

President of China Investment Consulting Company; General Representative of

Pilkington/NSG China.

Zhang

Dingjin

Vice President of China National Building Material Co., Ltd. Chairman and General

Manager of China Composites Group Co., Ltd.

Yi Fang Partner of Shanghai Office of Jun He Law Firm, member of State-owned Company

Business Study Committee of Shanghai Lawyer Network. Previously Senior Partner of

AllBright Law Offices.

Liu Jinwei Senior Partner of Shing Wing Accounting Firm. Previously worked in Loan Office of

Forestry Fund Management Department, previously accounting teacher of Beijing

Forestry University Economic Management Academy, Vice President of Beijing

Jincheng Landscape Corporation, Partner of Yuehua Certified Public Accountants Co.,

Ltd. Mr. Liu currently is the independent director of Jinxi AXLE Co., Ltd. and China

Nonferrous Metal Mining (Group) Co., Ltd.

Yang

Chaojun

Finance Professor and Doctoral Supervisor of Economic Management Academy of

Shanghai Jiaotong University, Director of Securities and Finance Research Institution.

Hu Liqiang Labor Union Chairman of SBM and party secretary of SYP. Previously section chief,

branch secretary, deputy party secretary and discipline inspection chief in Shanghai

Yaohua Glass Factory; Vice General Manager of Shanghai New Building Materials

General Company; Chairman and Party Secretary of Shanghai Kaijie Doors &

Windows Co., Ltd. and Party Secretary of Shanghai Cement Plant.

Xu Hong Process manager of information management dept. of the Company. Previously

comprehensive planner, deputy manager, manager of planning section and head of audit

section in the Company.

Zou

Zhiping

Deputy director of the Company’s risk control department. He used to be financial

executive in Jiangsu Huatai Machinery Manufacturing Co., Ltd., project manager in

Wan Long Accounting Firm Shanghai Branch and audit executive in Giordano Group.

Chen Dixin Vice President of SYP. Previously Logistics Manager, Project Manager and Assistant

President.

Jin Minli Vice President and Secretary to the Board Office of Shanghai Yaohua Pilkington Glass

Group Co., Ltd. Previously Senior Assistant Manager and Senior Administration

Manager.

Chu

Yuejiang

Finance Director of Shanghai Yaohua Pilkignton Glass Group Co., Ltd. Previously

Financial Dept. Head of Shanghai Yaohua Pilkignton Glass Group Co., Ltd.

Other situation statement

No.

(2) Stock incentive for the directors, supervisors and the Management in the

reporting period


2. Positions

(1) Positions in shareholding companies


Name

Name of

shareholding

company

Position Beginning

of tenure

End of

tenure

Zhao Jian SBM

Deputy Party Secretary

and President Oct 2013

Dec

2015

Party Secretary and

President Dec 2015

Paul

Ravenscroft

Pilkington

Group

Limited

Head of Mergers &

Acquisitions Department

of NSG Group

May 2008

Zhang

Dingjin

China

Composites

Group Co.,

Ltd.

Chairman of the Board &

General Manager

March

2002

(2) Positions in other companies


Name Name of other company Position Beginning

of tenure

End of

tenure

Zhang Dingjin China Building Materials Co., Ltd. Vice

President

10 March

2005

Yi Fang Shanghai Office of Jun He Law Firm Partner Mar 2011

Liu Jinwei

Shing Wing Accounting Firm Senior

Partner Dec 2006

Jinxi AXLE Co., Ltd. Independent

Director Aug 2010

Sep

2016

China Nonferrous Metal Mining

(Group) Co., Ltd.

Independent

Director Apr 2012

Yang Chaojun

Economic Management Academy of

Shanghai Jiaotong University

Finance

Professor,

Doctoral

Supervisor

and Director

of Securities

and Finance

Research

Institution

Sep 1984

SHENERGY CO.,LTD. Independent

Director Jun 2015

3. Payment of directors, supervisors and senior officers

Decision Making

Procedures for the

remuneration of

directors, supervisors and

the Management

The Company established the Incentive and Appraisal

Management Rules for Senior Officers. Remuneration and

Appraisal Committee and Nomination Committee

stipulate remuneration policy and approves payment plan.

Remuneration and Appraisal Committee and Nomination

Committee would appraise the Management and their

business in charge in accordance with Rules of Working

Procedures as well as the Company’s annual financial

report and annual business plan objectives.

Remuneration foundation

of directors, supervisors

and the Management

The compensation package was decided according to the

senior officer’s title, job responsibility and performance

of last year. It also took reference of compensation

package of the same industry and counterparts.

Remuneration Payable of

directors, supervisors and

the Management

The total remuneration payable of directors, supervisors

and the Management amounted to RMB 5.638 million.

Remuneration received

by all directors,

supervisors and the

Management by 31 Dec

2015

The total remuneration received by all directors,

supervisors and the Management by 31 Dec 2015

amounted to RMB 5.638 million.

4. Changes of directors, supervisors and senior officers

Name Position Change Reason

Zhao Jian Chairman

of the board

Election Reelection of the Board

Paul

Ravenscroft

Deputy

chairman of

the board


Eddie Chai Director,

President


Zhang Dingjin Director Election Reelection of the Board

Yi Fang Independent

Director


Liu Jinwei Independent

Director


Yang Chaojun Independent

Director


Hu Liqiang Supervisory

Committee

Chairman

Election Reelection of the Supervisory

Committee

Xu Hong Supervisor Election Reelection of the Supervisory

Committee

Zou Zhiping Supervisor Election Reelection of the Supervisory

Committee

Chen Dixin Vice

President

Appointment Senior officers appointed by the new

board of directors

Jin Minli Vice

President

and

Secretary to

the Board

Office


board of directors

Chu Yuejiang Financial

Director


board of directors

Qian Shizheng Independent

Director

Left Expiration of the term of office

Chen Guoqing Independent

Director

Left Expiration of the term of office

5. Punishment from securities supervisory institution in the latest three years


6. Staff of the parent company and main subsidiaries

(1) Employee

Total number of employees of the parent

company

190

Total number of employees of the main

subsidiaries

2,842

In total 3,032

Number of retired employees that the parent

company and main subsidiaries need to

undertake the fees

2

Profession

Professions Number

Production staff 1,666

Sales staff 353

Technical staff 303

Financial staff 78

Administrative staff 632

In total 3,032

Education

Education Number

Bachelor Degree or Above 720

Junior College graduates 834

Technical Secondary School and High School 1,116

Below High School 362

In total 3,032

(2) Remuneration Policy

The remuneration policy is established on the purpose of improving management

efficiency, strategy implementation, accelerating the realization of the Company’s

strategic objectives, and fully stimulating the staff’s initiative by the incentive. The

compensation package is consisted of fixed remuneration and performance appraisal

remuneration in order to be fair, incentive, competitive, economic and legal.

Moreover, the Company makes contribution to five social insurances and one

housing fund and pays social insurance charges and housing fund timely.

(3) Training Plan

The Company has training system with different levels to provide with elective

courses and required courses; improve staff’s technology and management

capacity mainly by on job training and position training, which including:

1) Induction training

2) General and specific position technological training

3) Business knowledge and management technology training for management

staff, business managers and intermediate (high) level management manpower

reserve.

4) Academic degree training

5) Specific technical training for key technical staff.

In the reporting period, the Company stipulated training plan for 2015 and

implemented it strictly. The Company conducted 498 trainings with 1108 persons

accumulatively in the whole year. The training introduced many internal courses,

which involved many aspects of the production and operation. The Company

implemented internal control training, adopted ELN, increased the fundamental skill

training for sales people, and provided different training according to different

position requirement. The training plan adopted the methods of hiring outside

training agencies, developing internal courses and inviting internal trainers to

provide different trainings according to different business position necessities.

(4) Labor Outsourcing

Total working hours 4779 thousand working hours

Total remuneration amount RMB 128.5366 million

IX. Corporate Governance

1. Relevant information of corporate governance

(1) Corporate governance

The Company stipulated rules and regulations of AGM, board meeting and

supervisory committee meeting in accordance with laws and regulations of the

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Company Law and Securities Law, clarified duty and authority of decision-making,

implementation and supervision and formulated a legal person governance with

scientific authority, decision-making organization, supervisory organization and the

Management.

The Company revised Rules of Procedure of Shareholders’ General Meeting and the

Articles of Association in accordance with CSRC Rules of Shareholders’ General

Meeting of listed Companies (2014 Revision), SSE Reminder of Listed Companies

Adopting Overall Network Voting for Shareholders’ General Meeting and the

Company’s actual situation, it states to increase network voting at shareholders’

general meeting and calculate the voting of minority shareholders separately when

discuss major events that related to the interests of the minority shareholders to

protect their interests.

Legal person governance is a long term project, the Company will continue to

deepen corporate governance, establish long term mechanism to improve corporate

governance, strength internal control, enhance standard operation, protect legitimate

rights of the Company and shareholders and advance steady development of the

Company in accordance with laws and regulations issued by supervisory authorities.

(2) Establishment and implementation of records and management of insiders of

internal information

The Company established Recording and Managing System of Insiders of Internal

Information, strengthened internal confidential information management, ensured

fairness of information disclosure, implemented recorders of insiders of internal

information and prevented from insider trading.

In the reporting period, the Company strictly implemented the system, recorded the

insiders of internal information in the procedure of reporting, transmission,

compiling, audit and the time when insiders receive internal information before

information disclosure, all of which should be recorded in SSE timely.

Explanation when there is big difference between company governance and CSRC

relevant provisions.

No applicable.

2. Brief of Shareholders’ General Meetings

Meeting Convention Date Reference Website Disclosure Date

Annual Shareholders’

Meeting for 2014

3 Jun 2015

Shanghai Securities News,

Tai Kung Pao

http://www.sse.com.cn

4 Jun 2015

The 1st Extraordinary

Shareholders’ Meeting for

2015

27 Aug 2015 28 Aug 2015

The 2nd

Extraordinary

Shareholders’ Meeting for

2015

17 Sep 2015 18 Sep 2015

Statement of the shareholders’ general meeting

http://www.sse.com.cn/

No.

3. Directors’ duty fulfillment

(1) Attendance at board meeting and shareholders’ general meeting

Name

Independent

director or

not?

Attendance at Board Meeting

Attendance at

Shareholders’

General

Meeting

Meetings

they

should

attend

Attend

in

person

Attend through

correspondence

Attend

though

proxies

Absent

from the

meetings

Not attend

the

meetings in

person for

consecutive

two times

Meetings

they should

attend

Zhao Jian No 10 5 5 0 0 No 3

Paul

Ravenscroft No 10 5 5 0 0 No 2

Eddie Chai No 10 5 5 0 0 No 3

Zhang

Dingjin No 10 5 5 0 0 No 2

Yi Fang Yes 10 5 5 0 0 No 1

Liu Jingwei Yes 5 3 2 0 0 No 1

Yang

Chaojun Yes 5 3 2 0 0 No 2

Qian

Shizheng Yes 5 2 3 0 0 No 0

Chen

Guoqing Yes 5 2 3 0 0 No 0

Please indicate any directors who did not attend the board meeting 2 times in

succession.

No.

Total Board Meetings in 2015 10

Inc: Onsite meetings 5

Telecommunication meetings 5

Onsite & Telecommunication Meetings 0

(2) Different opinions held by independent directors on relevant issues of the

Company

No.

(3) Others

No.

4. The important suggestions provided by the sub-committees under the Board in the

reporting period

In the reporting period, the Strategy Committee convened 2 meetings, analyzed the

operating environment, development trend and competitive layout, discussed product

mix upgrade, idle assets utilization, region and market development, auto glass

business boom as well as environment prevention and technical upgrade of the plants.

The committee reminded the advantage and weakness of the Company in market

competition, potential risks and challenges, and contributed to the significant

decision-making and operation of the Company.

In the reporting period, the Audit Committee convened 5 meetings, all committee

members performed duty prudentially, discussed deeply regarding internal control

system construction of listed company, standard operation, connected transaction,

periodical report and assets efficiency, provided suggestions for non-performing

assets disposal, establishment and implementation of internal control system and self

evaluation of internal control. The Committee convened meeting to discuss

preparation of annual report, evaluated the audit and internal risk control conducted

by the accounting firm and provided suggestion for appointment of accounting firm

for 2016.

In the reporting period, the Remuneration and Appraisal Committee convened 4

meetings, the committee members verified the candidates of new board of directors

and the Management, conducted strict appraisal for the Management and performed

the duty of motivation and supervision.

In the reporting period, the Strategy Committee, Audit Committee and Remuneration

and Appraisal Committee took full advantage of professional function, implemented

committee enforcement regulation strictly, provided with professional suggestions to

the board of directors and advanced the standard development of legal structure of

the Company. Sub-committees under the Board approved all the submitted

proposals.

5. Risks discovered by Supervisory Committee

There were no different opinions held by Supervisory Committee regarding the

supervised issues.

6. The situations that the Company unable to keep its independence in business,

employee, assets, institution and finance and unable to keep its independent

operation ability based on the existence of its controlled shareholder.

No.

Please state the solution, progress and follow-up work of the Company if there is

horizontal competition.

No.

7. Appraisal system for senior officers, and the establishment and implementation of

incentive system in the reporting period

The Company has initially established the appraisal system for senior management

staff. Remuneration and Nomination Committee is in charge of stipulating

remuneration policy and approving payment plan; appraising the business and

management performance of the senior officers and taking it as reference in

accordance with Rules of Working Procedures as well as the Company’s annual

financial report and annual business plan objectives. The Company will optimize the

incentive and restraint mechanisms to be more market-oriented to improve duty

performance of senior officers, enhance corporate governance and maximize the

benefits of the shareholders and the Company.

8. Whether disclosed self-evaluation report on internal control


Evaluation Report on Internal Control for 2015 was approved at the 8th

Meeting of

the 8th

Board of Directors, please refer to the public announcement published on SSE

website on 31 Mar 2016.

9. Audit report on internal control

The Company appointed Zhong Hua Certified Public Accountants LLP for internal

control audit for 2015, Zhong Hua issued standard audit report without reservations,

its (2016) No.1058 Internal Control Audit Report was published on SSE website.

Whether disclosed Internal Control Audit Report: Yes

10. Others

No.

X. Relevant situation of corporate bonds


SYP GLASS GROUP CO., LTD.

Financial Statements and Auditors' Report

For the Year Ended December 31st, 2015

Index

CONTENTS PAGE

Auditors' Report 1-2

The Company and Consolidated Balance Sheets 3-4

The Company and Consolidated Income Statements 5

The Company and Consolidated Statements of Cash Flow 6

The Consolidated Statement of Changes in Shareholder's Equity 7-8

The Company Statement of Changes in Shareholder's Equity 9-10

Notes to the Financial Statements 11-91

1

AUDITORS' REPORT

Zhonghua CPA(2016) No.1054

To the Shareholders of SYP Glass Group Co., Ltd.:

We have audited the accompanying financial statements of SYP Glass Group Co., Ltd. (hereafter "SYP Croup"),

which comprise the consolidated and company balance sheets as at 31 December, 2015 and the consolidated

and company income statements, the consolidated and company statements of changes in shareholder's

equity and the consolidated and company cash flow statements for the year then ended, and the notes to the

financial statements.

Management's Responsibility for the Financial Statements

Management of SYP Group is responsible for the preparation and fair presentation of these financial

statements. This responsibility includes: (a) preparing and fairly presenting the financial statements in

accordance with the requirements of Accounting Standards for Business Enterprises; (b) and designing,

implementing and maintaining internal control relevant to the preparation of the financial statements that are

free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our

audit in accordance with China Standards on Auditing. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidences about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those

risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair

presentation of the financial statements in order to design audit procedures that are appropriate in the

circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by management, as well as evaluating the overall presentation

of the financial statements.

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

audit opinion.

2

Opinion

In our opinion, the accompanying financial statements present fairly in all material respects, the consolidated

and company’s financial position of SYP Group as at 31 December 2015, and their financial performance and

cash flows for the year then ended in accordance with the requirements of Accounting Standards for Business

Enterprises.

Zhonghua Certified Public Accountants Chinese Certified Public Accounts Kai Yu Rong Ming Yang Shanghai, China March 29th, 2016

3

SYP GLASS GROUP CO., LTD. THE COMPANY AND CONSOLIDATED BALANCE SHEETS AS AT DECEMBER 31st, 2015 (All amounts in RMB unless otherwise stated)

Assets Note

s Dec. 31, 2015 Consolidated

Dec. 31, 2014 Consolidated

Dec. 31, 2015 Company


Current assets

Cash and cash equivalents 5.1 411,687,839.48 374,081,933.26 167,635,557.30 154,885,102.29

Financial asset measured at fair value and the variation is included in the current profits and losses

- - - -

Derivative financial assets - - - -

Notes receivable 5.2 365,282,959.08 405,306,820.26 18,473,849.18 235,797,487.77

Accounts receivable 5.3 485,858,470.73 484,984,105.99 88,874,563.77 88,572,580.44

Advances to suppliers 5.4 67,033,690.08 144,263,719.46 28,976,134.39 12,444,894.56

Interest receivable 5.5 433,250.00 5,612,000.00 433,250.00 5,612,000.00

Dividends receivable - - 106,813,456.25 106,813,456.25

Other receivables 5.6 38,014,544.62 46,034,020.21 2,298,075,383.33 1,263,117,569.33

Inventories 5.7 740,268,166.53 757,183,947.67 - 9,675.80

Divided into held-for-trading assets - - - -

Non-current assets due within 1 year - - - -

Other current assets 5.8 510,123,314.57 1,097,417,083.11 478,844,208.23 1,013,653,847.69

Total current assets 2,618,702,235.09 3,314,883,629.96 3,188,126,402.45 2,880,906,614.13

Non-current assets

Available-for-sales financial assets 5.9 1,047,234,132.92 50,000,000.00 705,000,000.00 50,000,000.00

Held-to-maturity investments - - - -

Long-term receivables - - 335,075,288.48 335,075,288.48

Long-term equity investments 5.10 - - 1,222,858,895.72 1,201,768,895.72

Investment properties - - - -

Fixed assets 5.11 3,179,844,391.60 3,496,591,371.10 312,456,783.26 324,846,581.26

Construction in progress 5.12 767,336,286.10 485,925,455.10 354,357,169.77 270,123,893.90

Construction materials 5.13 271,992.43 272,248.84 - -

Disposal of fixed assets 5.14 - 21,400.00 - -

Biological assets - - - -

Oil and gas assets - - - -

Intangible assets 5.15 550,186,389.72 574,133,343.77 73,922,908.43 72,173,620.03

Development expenditures 5.16 8,719,682.90 7,229,802.88 8,719,682.90 7,113,624.85

Goodwill 5.17 - 7,643,536.51 - -

Long-term prepayments 5.18 14,893,756.13 7,738,629.57 - -

Deferred income tax assets 5.19 15,463,375.25 14,875,470.93 5,438,990.26 6,142,089.62

Other non-current assets - - - -

Total non-current assets 5,583,950,007.05 4,644,431,258.70 3,017,829,718.82 2,267,243,993.86

TOTAL ASSETS 8,202,652,242.14 7,959,314,888.66 6,205,956,121.27 5,148,150,607.99

The accompanying notes form part of the financial statements. Legal Representative: Chief Financial Officer: Head of Accounting Department:

4

SYP GLASS GROUP CO., LTD. THE COMPANY AND CONSOLIDATED BALANCE SHEETS AS AT DECEMBER 31st, 2015 (CONTINUED) (All amounts in RMB unless otherwise stated)

Liabilities and owner's equity

Notes Dec. 31, 2015 Consolidated

Dec. 31, 2014 Consolidated



Current Liabilities

Short-term borrowings 5.20 1,572,727,600.00 2,050,518,130.00 1,390,000,000.00 1,170,000,000.00

Financial liabilities measured at fair value and the variation is included in the current profits and losses

- -

Notes payable - -

Derivative financial liabilities 5.21 298,523,364.64 213,100,373.78 17,239,387.55 32,500,000.00

Accounts payable 5.22 562,054,047.72 401,025,889.45 113,920,677.33 87,388,928.31

Advances from customers 5.23 60,456,942.24 51,850,499.31 5,531,102.70 15,615,049.71

Employee benefits payable 5.24 75,213,236.14 63,977,803.16 34,656,332.82 32,804,214.84

Taxes and surcharges payable 5.25 21,874,475.12 24,582,916.67 1,691,299.15 1,525,907.66

Interest payable 5.26 38,089,005.56 5,739,004.20 36,227,836.80 2,059,333.33

Dividends payable 5.27 3,500,000.00 7,652,119.78 4,152,119.78

Other payables 5.28 201,913,640.96 177,069,528.85 64,089,542.16 201,503,363.86

Divided into held-for-trading liabilities - - - Non-current liabilities due within 1 year 5.29 32,202,374.30 241,821,834.75 32,202,374.30 67,009,234.41

Other current liabilities 5.30 999,591,666.65 - 999,591,666.65 -

Total current liabilities 3,866,146,353.33 3,237,338,099.95 2,695,150,219.46 1,614,558,151.90

Non-current liabilities

Long-term borrowings 5.31 100,777,919.75 159,718,569.75 -

Bonds payable - -

Including: Preferred stock - -

Sustainable debt - -

Long-term payables 5.32 85,623,310.88 31,785,812.50 31,785,812.50

Long-term Employee benefits payable - -

Special payables - -

Contingent liabilities - -

Deferred revenue 5.33 643,376,739.20 632,606,280.19 561,854,341.38 580,688,682.91

Deferred income tax liabilities 5.19 33,958,385.10 1,486,369.04 5,845,130.00 -

Other non-current liabilities - -

Total non-current liabilities 863,736,354.93 825,597,031.48 567,699,471.38 612,474,495.41

Total liabilities 4,729,882,708.26 4,062,935,131.43 3,262,849,690.84 2,227,032,647.31

Owner's equity

Paid-in capital 5.34 934,916,069.00 934,916,069.00 934,916,069.00 934,916,069.00

Other equity instruments - -

Including: Preferred stock - -

Sustainable debt - -

Capital reserves 5.35 1,123,043,400.11 1,123,043,400.11 1,101,403,381.86 1,101,403,381.86

Less: Treasury stocks - -

Other comprehensive income 5.36 68,169,014.50 -12,670,868.57 -12,670,868.57 -12,670,868.57

Special reserve - -

Surplus reserve 5.37 492,204,268.27 488,135,589.16 492,204,268.27 488,135,589.16

Unappropriated profits 5.38 258,056,713.10 645,090,957.98 427,253,579.87 409,333,789.23

Total equity attribute to equity holders of the Group

2,876,389,464.98 3,178,515,147.68 2,943,106,430.43 2,921,117,960.68

Minority interest 596,380,068.90 717,864,609.55 -

Total owner's equity 3,472,769,533.88 3,896,379,757.23 2,943,106,430.43 2,921,117,960.68

TOTAL LIABILITIES AND OWNER'S EQUITY

8,202,652,242.14 7,959,314,888.66 6,205,956,121.27 5,148,150,607.99


5

SYP GLASS GROUP CO., LTD. THE COMPANY AND CONSOLIDATED INCOME STATEMENTS FOR THE YEAR ENDED DECEMBER 31st, 2015 (All amounts in RMB unless otherwise stated)

Items Notes 2015

Consolidated 2014

Consolidated 2015

Company 2014

Company

Revenue 5.39 2,747,743,271.77 2,864,912,952.36 143,420,296.98 217,324,954.08

Less: Cost of sales 5.39 2,267,328,348.68 2,264,696,579.53 95,726,813.12 199,644,081.96

Business taxes and levies 5.40 17,401,966.36 15,180,848.47 2,853,262.37 936,576.36

Selling and distribution expenses 5.41 222,620,352.77 188,131,684.13 - -

General and administration expenses 5.42 360,769,891.39 334,631,559.84 61,505,911.34 64,177,995.51

Financial expenses - net 5.43 158,693,862.25 122,545,200.01 74,329,860.15 2,656,333.78

Assets impairment losses 5.44 316,490,022.21 26,467,663.49 -693,912.35 7,207,575.41

Add: Gain (loss) from changes in fair value 5.45 - -1,115,982.11 - -1,115,982.11

Investment income 5.46 94,040,788.46 50,918,949.20 94,031,583.03 99,409,372.75

Including: income from investment in associates and joint ventures

- - - -1,704,933.15

Operating profit -501,520,383.43 -36,937,616.02 3,729,945.38 40,995,781.70

Add: Non-operating incomes 5.47 37,195,111.83 81,006,450.48 43,524,488.28 62,465,385.69

Including: Profits from disposal of non-current assets 14,589,698.81 10,382,202.51 29,323,960.77 9,937,301.65

Less: Non-operating expenses 5.48 1,291,654.19 1,092,618.43 19,413.17 49,429.35

Including: Losses from disposal of non-current assets 1,184,295.90 956,613.29 19,413.17 49,429.35

Total profit -465,616,925.79 42,976,216.03 47,235,020.49 103,411,738.04

Less: Income tax expenses 5.49 23,291,423.72 29,882,382.88 6,548,229.36 632,981.92

Net profit -488,908,349.51 13,093,833.15 40,686,791.13 102,778,756.12

Including: Attributable to equity holders of the Company

-364,267,244.39 53,354,016.90 40,686,791.13 102,778,756.12

Attributable to minority interests -124,641,105.12 -40,260,183.75 -

Other comprehensive income 81,656,447.54 - - -

Attributable to equity holders of the Company 80,839,883.07 - - -

（I）Other comprehensive income couldn’t be reclassified into the profits and losses

- - - -

1.Remeasurement of changes in net liabilities or net assets under defined benefit plans

- - - -

2.The unit of other comprehensive income could not be reclassified to income statements of the investee under the equity methods

- - - -

（II）Other comprehensive income could be reclassified into the profits and losses

80,839,883.07 - - -

1. The unit of other comprehensive income will be reclassified to income statements of the investee under the equity methods

- - - -

2.Gains or losses from the changes of fair value of available for sale financial assets

80,839,883.07 - - -

3. Gains or losses from the reclassification of hold-to-maturity investments to available for sale financial assets.

- - - -

4. The effective part of cash flow hedging gains and losses - - - -

5. The difference between the translations of foreign currency financial statements.

77 - - - -

6.Others - - - -

Attributable to minority interests 816,564.47 - - -

Total comprehensive income -407,251,901.97 13,093,833.15 40,686,791.13 102,778,756.12

Including: Attributable to equity holders of the Company

-283,427,361.32 53,354,016.90 40,686,791.13 102,778,756.12

Attributable to minority interests -123,824,540.65 -40,260,183.75 - -

Earnings per share - - -

-Basic 6.32 -0.39 0.06 - -

-Diluted 6.32 -0.39 0.06 - -

There has not occurred the consolidation under the same control during the reporting period. The accompanying notes form part of the financial statements.

Legal Representative: Chief Financial Officer: Head of Accounting Department:

6

SYP GLASS GROUP CO., LTD. THE COMPANY AND CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE YEAR ENDED DECEMBER 31st, 2015 (All amounts in RMB unless otherwise stated)

Items Notes 2015

Consolidated 2014

Consolidated 2015

Company 2014

Company

1. Cash flows from operating activities

Cash received from sales of goods or rendering of services

3,369,148,416.45 3,367,532,965.71 309,877,508.24 313,144,816.21

Refund of taxes and surcharges 2,171,922.05 1,573,422.75 - -

Cash received relating to other operating activities 5.50.1 153,278,273.13 58,393,663.70 69,150,615.32 38,487,298.37

Sub-total of cash inflows 3,524,598,611.63 3,427,500,052.16 379,028,123.56 351,632,114.58

Cash paid for goods and services 1,916,500,002.97 2,133,853,908.96 63,341,350.39 192,698,527.84

Cash paid to and on behalf of employees 588,734,619.13 524,659,990.83 84,149,490.88 96,756,818.80

Payments of taxes and surcharges 181,858,599.57 210,912,315.16 4,221,962.46 7,497,003.30

Cash paid relating to other operating activities 5.50.2 306,535,212.71 329,659,004.90 238,022,413.41 72,225,768.99

Sub-total of cash outflows 2,993,628,434.38 3,199,085,219.85 389,735,217.14 369,178,118.93

Net cash flows from operating activities 5.51.1 530,970,177.25 228,414,832.31 -10,707,093.58 -17,546,004.35

2. Cash flows from investing activities

Cash received from disposal of investments 1,196,000,000.00 2,306,703,055.27 1,196,000,000.00 2,306,703,055.27

Cash received from returns on investments 99,210,333.03 27,733,896.73 99,210,333.03 27,733,896.74

Net cash received from disposal of fixed assets, intangible assets and other long-term assets

20,393,437.05 19,677,720.35 107,393.27 17,255,218.33

Cash received from disposal of subsidiaries and other companies

- - - -

Cash received relating to other investing activities 5.50.3 53,073,105.69 32,100,000.00 1,685,175,590.74 95,000,000.00

Sub-total of cash inflows 1,368,676,875.77 2,386,214,672.35 2,980,493,317.04 2,446,692,170.34

Cash paid to acquire fixed assets, intangible assets and other long-term assets

414,678,140.56 521,418,259.07 81,526,875.54 47,940,111.93

Cash paid to acquire investments 1,488,358,869.52 3,302,930,137.86 1,406,620,000.00 3,422,576,002.81

Cash paid to acquire subsidiary - - - 220,000,000.00

Cash paid relating to other investing activities 5.50.4 - 25,522,000.00 2,453,011,486.42 930,996,678.27

Sub-total of cash outflows 1,903,037,010.08 3,849,870,396.93 3,941,158,361.96 4,621,512,793.01

Net cash flows from investing activities -534,360,134.31 -1,463,655,724.58 -960,665,044.92 -2,174,820,622.67

3. Cash flows from financing activities

Cash received from capital contributions 2,340,000.00 - - -

Including: Cash received from capital contributions by minority equity holders of subsidiaries

2,340,000.00 - - -

Cash received from borrowings 3,036,029,900.00 2,421,146,602.36 2,738,250,000.00 1,170,000,000.00

Cash received from issuing bonds - - - -

Cash received from other financing activities - - 106,000,000.00 260,000,000.00

Sub-total of cash inflows 3,038,369,900.00 2,421,146,602.36 2,844,250,000.00 1,430,000,000.00

Cash repayments of borrowings 2,654,644,280.00 2,094,641,235.37 1,520,000,000.00 -

Cash paid for interest expenses and distribution of dividends or profits

135,639,465.22 174,867,618.15 69,111,206.31 37,789,800.99

Including: Cash paid for dividends or profit to minority equity holders of a subsidiary

- 2,641,860.88 - -

Cash paid relating to other financing activities 5.50.5 87,481,150.57 173,119,188.82 206,485,660.43 185,259,878.00

Sub-total of cash outflows 2,877,764,895.79 2,442,628,042.34 1,795,596,866.74 223,049,678.99

Net cash flows from financing activities 160,605,004.21 -21,481,439.98 1,048,653,133.26 1,206,950,321.01

4. Effect of foreign exchange rate changes on cash and cash equivalents

-6,776,263.09 -1,015,749.18 2,255.95 34.37

5. Net (decrease)/increase in cash and cash Equivalents

150,438,784.06 -1,257,738,081.43 77,283,250.71 -985,416,271.64

Add: Cash and cash equivalents at beginning of year 204,320,327.09 1,462,058,408.52 84,546,950.24 1,069,963,221.88

6. Cash and cash equivalents at end of year 5.51.2 354,759,111.15 204,320,327.09 161,830,200.95 84,546,950.24


7

SYP GLASS GROUP CO., LTD. THE CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31

st, 2015

(All amounts in RMB unless otherwise stated)

Items


Attributable to equity holders of the Group

Minority Interest Total Owner's

Equity Share Capital

Other Equity Instruments Capital Surplus

Less: Treasury shares

Other Comprehensive

Income

Special reserve

Surplus reserve Unappropriated

profits Preferred

Stock Sustainable

debt Others

Balance as at Dec. 31, 2014 934,916,069.00 - - - 1,123,043,400.11 - -12,670,868.57 - 488,135,589.16 645,090,957.98 717,864,609.55 3,896,379,757.23

Changes in accounting policies - - - - - - - - - - - -

Correction of accounting errors - - - - - - - - - - - -

Business combination of entities under common controls

- - - - - - - - - - - -

Others - - - - - - - - - - - -

Balance at Jan. 1, 2015 934,916,069.00 - - - 1,123,043,400.11 - -12,670,868.57 - 488,135,589.16 645,090,957.98 717,864,609.55 3,896,379,757.23

Movement for the Year 2015 - - - - - - 80,839,883.07 - 4,068,679.11 -387,034,244.88 -121,484,540.65 -423,610,223.35

I. Total comprehensive income - - - - - - 80,839,883.07 - - -364,267,244.39 -123,824,540.65 -407,251,901.97

II. Capital contribution and withdrawal by owners

- - - - - - - - - - 2,340,000.00 2,340,000.00

-Capital contribution - - - - - - - - - - 2,340,000.00 2,340,000.00

-Capital contributed by other equity instruments holders

- - - - - - - - - - - -

-Share-based payments recognized in owner's equity

- - - - - - - - - - - -

-Others - - - - - - - - - - - -

III. Profit distribution - - - - - - - - 4,068,679.11 -22,767,000.49 - -18,698,321.38

-Reclassification to surplus reserve - - - - - - - - 4,068,679.11 -4,068,679.11 - -

-Distribution to owners - - - - - - - - - -18,698,321.38 - -18,698,321.38

-Others - - - - - - - - - - - -

IV. Reclassification - - - - - - - - - - - -

-Capitalized capital reserve - - - - - - - - - - - -

-Capitalized surplus reserve - - - - - - - - - - - -

-Surplus reserve used to make up losses

- - - - - - - - - - - -

-Others - - - - - - - - - - - -

V. Special reserve - - - - - - - - - - - -

-Appropriation of special reserve - - - - - - - - - - - -

-Usage of special reserve - - - - - - - - - - - -

VI. Others - - - - - - - - - - - -

Balance as at Dec. 31, 2015 934,916,069.00 - - - 1,123,043,400.11 - 68,169,014.50 - 492,204,268.27 258,056,713.10 596,380,068.90 3,472,769,533.88

8


SYP GLASS GROUP CO., LTD. THE CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31

st, 2015


Items


Attributable to equity holders of the Group

Minority Interest Total Owner's

Equity Share Capital



Other Comprehensive

Income

Special reserve


profits Preferred

Stock Sustainable

debt Others

Balance as at Dec. 31, 2013 934,916,069.00 - - - 1,232,879,238.10 - -12,670,868.57 - 477,857,713.55 639,411,459.37 651,338,654.18 3,923,732,265.63

Changes in accounting policies - - - - - - - - - - - -

Correction of accounting errors - - - - - - - - - - - -

Business combination of entities under common controls

- - - - - - - - - - - -

Others - - - - - - - - - - - -

Balance at Jan. 1, 2014 934,916,069.00 - - - 1,232,879,238.10 - -12,670,868.57 - 477,857,713.55 639,411,459.37 651,338,654.18 3,923,732,265.63

Movement for the Year 2014 - - - - -109,835,837.99 - - - 10,277,875.61 5,679,498.61 66,525,955.37 -27,352,508.40

I. Total comprehensive income - - - - - - - - - 53,354,016.90 -40,260,183.75 13,093,833.15


- - - - - - - - - - - -

-Capital contribution - - - - - - - - - - - -


- - - - - - - - - - - -


- - - - - - - - - - - -

-Others - - - - - - - - - - - -

III. Profit distribution - - - - - - - - 10,277,875.61 -47,674,518.29 -2,641,860.88 -40,038,503.56

-Reclassification to surplus reserve - - - - - - - - 10,277,875.61 -10,277,875.61 - -

-Distribution to owners - - - - - - - - - -37,396,642.68 -2,641,860.88 -40,038,503.56

-Others - - - - - - - - - - - -

IV. Reclassification - - - - - - - - - - - -

-Capitalized capital reserve - - - - - - - - - - - -

-Capitalized surplus reserve - - - - - - - - - - - -


- - - - - - - - - - - -

-Others - - - - - - - - - - - -

V. Special reserve - - - - - - - - - - - -

-Appropriation of special reserve - - - - - - - - - - - -

9

-Usage of special reserve - - - - - - - - - - - -

VI. Others - - - - -109,835,837.99 - - - - - 109,428,000.00 -407,837.99

Balance as at Dec. 31, 2014 934,916,069.00 - - - 1,123,043,400.11 - -12,670,868.57 - 488,135,589.16 645,090,957.98 717,864,609.55 3,896,379,757.23

The accompanying notes form part of the financial statements Legal Representative: Chief Financial Officer: Head of Accounting Department:

SYP GLASS GROUP CO., LTD. THE COMPANY STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31

st, 2015


Items


Share Capital



Other Comprehensive

Income

Special reserve


profits Total Owner's

Equity Preferred

Stock Sustainable

debt Others

Balance as at Dec. 31, 2014 934,916,069.00 - - - 1,101,403,381.86 - -12,670,868.57 - 488,135,589.16 409,333,789.23 2,921,117,960.68

Changes in accounting policies - - - - - - - - - - -

Correction of accounting errors - - - - - - - - - - -

Others - - - - - - - - - - -

Balance at Jan. 1, 2015 934,916,069.00 - - - 1,101,403,381.86 - -12,670,868.57 - 488,135,589.16 409,333,789.23 2,921,117,960.68

Movement for the Year 2015 - - - - - - - - 4,068,679.11 17,919,790.64 21,988,469.75

I. Total comprehensive income - - - - - - - - - 40,686,791.13 40,686,791.13


- - - - - - - - - - -

-Capital contribution - - - - - - - - - - -


- - - - - - - - - - -


- - - - - - - - - - -

-Others - - - - - - - - - - -

III. Profit distribution - - - - - - - - 4,068,679.11 -22,767,000.49 -18,698,321.38

-Reclassification to surplus reserve - - - - - - - - 4,068,679.11 -4,068,679.11 -

-Distribution to owners - - - - - - - - - -18,698,321.38 -18,698,321.38

-Others - - - - - - - - - - -

IV. Reclassification - - - - - - - - - - -

-Capitalized capital reserve - - - - - - - - - - -

10

-Capitalized surplus reserve - - - - - - - - - - -


- - - - - - - - - - -

-Others - - - - - - - - - - -

V. Special reserve - - - - - - - - - - -

-Appropriation of special reserve - - - - - - - - - - -

-Usage of special reserve - - - - - - - - - - -

VI. Others - - - - - - - - - - -

Balance as at Dec. 31, 2015 934,916,069.00 - - - 1,101,403,381.86 - -12,670,868.57 - 492,204,268.27 427,253,579.87 2,943,106,430.43


SYP GLASS GROUP CO., LTD. THE COMPANY STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31

st, 2015


Items


Share Capital



Other Comprehensive

Income

Special reserve


profits Total Owner's

Equity Preferred

Stock Sustainable

debt Others

Balance as at Dec. 31, 2013 934,916,069.00 - - - 1,123,095,192.77 - -12,670,868.57 - 477,857,713.55 354,229,551.40 2,877,427,658.15

Changes in accounting policies - - - - - - - - - - -

Correction of accounting errors - - - - - - - - - - -

Others - - - - - - - - - - -

Balance at Jan. 1, 2014 934,916,069.00 - - - 1,123,095,192.77 - -12,670,868.57 - 477,857,713.55 354,229,551.40 2,877,427,658.15

Movement for the Year 2014 - - - - -21,691,810.91 - - - 10,277,875.61 55,104,237.83 43,690,302.53

I. Total comprehensive income - - - - - - - - - 102,778,756.12 102,778,756.12


- - - - -21,691,810.91 - - - - - -21,691,810.91

-Capital contribution - - - - -21,691,810.91 - - - - - -21,691,810.91


- - - - - - - - - - -


- - - - - - - - - - -

-Others - - - - - - - - - - -

III. Profit distribution - - - - - - - - 10,277,875.61 -47,674,518.29 -37,396,642.68

11

-Reclassification to surplus reserve

- - - - - - - - 10,277,875.61 -10,277,875.61 -

-Distribution to owners - - - - - - - - - -37,396,642.68 -37,396,642.68

-Others - - - - - - - - - - -

IV. Reclassification - - - - - - - - - - -

-Capitalized capital reserve - - - - - - - - - - -

-Capitalized surplus reserve - - - - - - - - - - -


- - - - - - - - - - -

-Others - - - - - - - - - - -

V. Special reserve - - - - - - - - - - -

-Appropriation of special reserve

- - - - -

- - - - - -

-Usage of special reserve - - - - - - - - - - -

VI. Others - - - - - - - - - - -

Balance as at Dec. 31, 2014 934,916,069.00 - - - 1,101,403,381.86 - -12,670,868.57 - 488,135,589.16 409,333,789.23 2,921,117,960.68


12

1 COMPANY BACKGROUND

1.1 Company Background

SYP Glass Group Co., Ltd. (hereafter "the Company") was approved to be incorporated by the Ministry

of Foreign Trade and Economics Co-operations with document No. WJMZ (1983)11 on June 7th, 1983. After restructure, the Company issued shares by public offering, the domestic shares (hereafter "A shares") and domestically listed foreign shares ("B shares") to the public, as approved by the relevant department in September 1993. Both shares have been listed in Shanghai Stock Exchange for public trading since January 28th, 1994. The registered capital of the Company is RMB 731,250,082.00 by far, with A shares representing 74.36% of the registered capital and B shares representing 25.64%. The Company issued non-public RMB common shares this year as approved by China Securities Regulatory Commission with document Regulatory Permission [2013] No. 1455. Thus the registered capital was increased by RMB 203,665,987.00. The registered capital of the Company is RMB 934,916,069.00 by far, with A shares representing 79.94% of the registered capital and B shares representing 20.06%. The capital contribution was verified by Shanghai Zhonghua Certified Public Accountants (now named as Zhonghua Certified Public Accountants) as at December 30th, 2013 with Capital Verification Report (2014) No.5736. The company exchanged business licence by the Shanghai Administration of Industry and Commerce in January 6th, 2016, and Unified social credit code is 91310000607210186Q. The registered address of the Company and its business address is Building No. 4-5, 1388 Zhangdong Road, Pudong New Area, Shanghai. The Company and its subsidiaries ("the Group") are mainly engaged in production and sales of clear float glass, tinted float glass and deep processing of products, sales of self-produced products (related to license by virtue of the business license).The major products of the Group include float glass, processed glass and automobile glass. Shanghai Building Materials (Group) Corporation, ultimately controlled by Shanghai Guosheng Group Co., Ltd., was the investor holding the greatest proportion of shares in the Company. The financial statements shall be disclosed in March 29th, 2016, which has been approved by the Board.

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1 COMPANY BACKGROUND（CONTINUED）

1.2 19 Subsidiaries were consolidated by the parent company：

Full name of subsidiaries Type of subsidiaries Levels

Tianjin SYP Engineering Glass Co., Ltd. wholly-owned Level 3

Jiangsu Pilkington SYP Glass Co., Ltd. Partially-owned Level 2

Changshu SYP Special Glass Co., Ltd. wholly-owned Level 2

Jiangsu Huadong SYP Glass Co., Ltd. wholly-owned Level 2

Jiangmen SYP Engineering Glass Co., Ltd. wholly-owned Level 3

Glasslink Limited wholly-owned Level 2

Tianjin Pilkington SYP Glass Co., Ltd. wholly-owned Level 3

Chongqing SYP Engineering Glass Co., Ltd. wholly-owned Level 2

Shanghai SYP Building Glass Co., Ltd. Partially-owned Level 2

Shanghai SYP Engineering Glass Co., Ltd. wholly-owned Level 3

Guangdong SYP Glass Co., Ltd. wholly-owned Level 3

Tianjin SYP Glass Co., Ltd. Partially-owned Level 2

Shanghai SYP Kangqiao Auto Glass Co., Ltd. Partially-owned Level 2

Wuhan SYP Kangqiao Auto Glass Co., Ltd. wholly-owned Level 3

Yizheng SYP Auto Glass Co., Ltd wholly-owned Level 3

Shanghai SYP Shijin Paste Glass Co., Ltd. Partially-owned Level 3

Shanghai SYP Investment Co., Ltd. wholly-owned Level 2

Shanghai SYP Chengding Investment Partnership

(Limited Partnership)

Partially-owned Level 3

2 Basis of preparation

2.1 Basis of preparation The Company shall, on the basis of continuous operation, recognize and measure the actually occurred

transactions and events according to the Accounting Standards for Enterprises-Basic Standards and the provisions of other accounting standards, and then prepare financial statements.

2.2 Continuous operation

The going concern assumption of the company is appropriate in the twelve months from the end of the

reporting period assessed by the company; there is no significant doubt factor upon the company’s ability to continue as a going concern.

14

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

3.1 Statement of compliance with the Accounting Standards of Business Enterprises The financial statements prepared by the Company fairly, in all material respects, present the financial

position of the Company as of December 31st, 2015, and its financial performance, its change of owner’s

equity and its cash flows for the year ended in accordance with Accounting Standards for Business

Enterprises.

3.2 Accounting period The accounting year of the Company coincides with calendar year, i.e., from 1 January to 31st December on

the Gregorian calendar.

3.3 Functional currency The functional currency is Renminbi (RMB).

3.4 Business combination 3.4.1 Business combination of entities under common controls A business combination involving entities or businesses under common control is a business combination

in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory.

The long-term equity investment shall be initially measured at the carrying amount of the net assets

obtained by the acquirer through the transfer of the consideration in a business combination (for example, cash, non-monetary assets or liabilities assumed by the acquirer). As for the balance between the carrying amount of the net assets obtained by the acquirer and the carrying amount of the consideration paid by it, the additional paid-in capital shall be adjusted. If the additional paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted. Costs directly attributable to business combination are recorded into the profits and losses once incurred.

If the consideration of the combination is satisfied by the issue of equity securities, the initial investment

cost of the long-term equity investment shall be the absorbing party’s share of the owners equity of the

party being absorbed in the consolidated financial statements of the ultimate controlling party at

combination date, The aggregate face value of the shares issued shall be accounted for as share capital.

The difference between the initial investment cost and the aggregate face value of the shares issued shall

be adjusted to capital reserve. If the balance of capital reserve is not sufficient, any excess shall be

adjusted to retain earnings.

The audit, legal, valuation and consulting fees, other intermediary fees, and related administrative fees

paid by the absorbing party or acquirer for the business combination, shall be recognized in profit or loss as incurred.

15

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES(CONTINUED)

3.4 Business combination(Contiune)

3.4.2 Business combination of entities not under common controls A business combination of entities or businesses not under common control is a business combination in

which none of the combining entities or businesses is ultimately controlled by the same party or parties both before and after the business combination.

In a business combination achieved in one stage, the cost of combination obtained by the acquirer are

measured at the acquisition-date fair value of the assets transferred by the acquirer, liabilities assumed or incurred by the acquirer and equity instruments issued by the acquirer in exchange of control of an acquiree. In a business combination achieved in stages, the cost of combination is the accumulating costs for each individual acquisition. Such costs as audit, legal, advisory and other professional fees that directly attributable to business combination are included in the profits and losses once incurred. Transaction costs attributed to issue equity securities or debt securities for business combination are recorded into initial recognition amounts of equity securities or debt securities.

The cost of combination and identifiable net assets obtained by the acquirer in a business combination are

measured at the fair value at the acquisition date. The excess of the cost of acquisition over the Group’s share of the fair value of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the Company’s share of fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.

3.4.3 Exercising control over an investee not under common control due to additional investment or other reasons.

In stand-alone financial statements, the investor shall change to the cost method and use the carrying

amount of the previously-held equity investment, together with the additional investment cost, as the initial investment cost under the cost method. When the previously-held equity investment is accounted for under the equity method, any other comprehensive income previously recognized shall be accounted for on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities. For the previously-held equity investment which was accounted for in accordance with “Accounting Standard for Business Enterprises No.22- Financial Instrument: Recognition and Measurement”, the accumulated changes in fair value included in other comprehensive income shall be transferred to profit or loss for the current period upon commencement of the cost method.

When preparing the consolidated financial statements, the acquirer shall remeasured its previously held

equity interest in the acquirer to its fair value at the acquisition date, the difference between the fair value and the carrying amount shall be recognized as investment income for the period when the acquisition take place. When the previously-held equity investment is accounted for under the equity method, any other comprehensive income previously recognized in relation to the acquiree’s equity changes shall be transferred to profit or loss for the current period when the acquisition takes place.

3.5 Basis of preparation of consolidated financial statements 3.5.1 Scope of consolidation The scope of consolidation includes the Company and all of its subsidiaries. The scope of consolidated

financial statements shall be determined on the basis of control.

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3.5 Basis of preparation of consolidated financial statements(Continued) 3.5.2 The basis of control Control exists when the investor has all the following: power over the investee; exposure, or rights to

variable returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of the investor’s returns. Relevant activities refer to activities of the investee that significantly affect the investee’s returns.

3.5.3 Decision-maker and agent An agent only exercises its decision-making rights on behalf the principals and therefore does not control

the investee. When an investor delegates its decision-making authority to an agent on relevant activities of the investee, the investor shall treat the decision-making rights delegated to its agent as held by the investor directly.

A decision maker shall consider the overall relationship between itself, the investee and other investors

involved with the investee in determining whether it is an agent.

1）When a single party holds substantive rights to remove the decision maker without cause, the decision maker is an agent.

2）Except in the situation in(1), a decision maker shall consider: The scope of its decision-making authority over the investee; the substantive rights held by other parties; the remuneration of the decision maker; and the decision maker’s exposure to variability of returns from other interests that it holds in the investee.

3.5.4 Investment entity

A parent is an investment entity when all of the following conditions are satisfied:

1）The company obtains fund from one or more investors for the purpose of providing the investors with investment management services;

2）The company's business purpose is to invest funds solely for returns from capital appreciation, investment income or both for its investors;

3）The company measures and evaluates the performance of substantially all of its investments on a fair value basis.

A parent that is an investment entity usually has all of the following characteristics:

1）it has more than one investment;

2）it has more than one investor;

3）it has investors that are not related parties of the entity;

4）it has ownership interests in the form of equity or similar interests. If the parent is an investment entity, it shall only consolidate the subsidiary (if any) that provides relevant

services that relate to its investment activities and prepare consolidated financial statements. Other subsidiaries shall not be consolidated. Instead, the parent shall measure its investment in other subsidiaries at fair value through profit of loss.

A parent, which itself is not an investment entity, of an investment entity shall consolidate all entities that

it controls, including those indirectly controlled through an investment entity subsidiary.

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3.5 Basis of preparation of consolidated financial statements(Continue) 3.5.5 Consolidation procedures When the accounting policies of its subsidiaries are different from those of the parent, the parent shall

make necessary adjustments to the financial statement of the subsidiary based on its own accounting policies, or require the subsidiary to prepare another set of financial statements in accordance with the parent’s accounting policies.

The consolidated balance sheet, consolidated income statement, consolidated cash flow statement and

consolidated statement of changes in owners’ equity shall be prepared by the parent by combining the balance sheets of the parent and its subsidiaries after eliminating the effects of intergroup transactions, i.e. transactions between the parent and its subsidiaries and transactions between subsidiaries ,on the consolidated balance sheet.

Unrealized profits and losses resulting from the sale of assets by the parent to its subsidiaries shall be

fully eliminated against “net profit attributable to owners of the parent”. Unrealized profits and losses resulting from the sale of assets by a subsidiary to the parent shall be eliminated and allocated between “net profits attributable to owners of the parent” and “non-controlling interests” in accordance with the allocation proportion of the parent in the subsidiary. Unrealized profits and losses resulting from the sale of assets by one subsidiary to another shall be eliminated and allocated between “net profits attributable to owners of the parent” and “non-controlling interests” in accordance with the allocation proportion of the parent in the subsidiary making the sale.

That portion of a subsidiary’s equity that is not attributable to the parent shall be treated as non-controlling interests and presented as non-controlling interests and presented as “on-controlling interests” in the consolidated balance sheet within owners’ equity. That portion of net profits and losses of subsidiaries for the period attributable to non-controlling interests shall be presented in the consolidated income statement below the “net profit “line item as” non-controlling interests”. That portion of the comprehensive income of subsidiaries for the period attributable to non-controlling interests shall be presented in the consolidated income statement below the “total comprehensive income” line item as “total comprehensive income attributable to non-controlling interests”. If there are non-controlling shareholders, “non-controlling interests” shall be separately presented in the consolidated statement of changes in owners’ equity to reflect the movements of non-controlling interests in equity. When the amount of loss for the current period attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders’ portion of the opening balance of owners’ equity of the subsidiary, the excess shall be allocated against the non-controlling interests.

When preparing the consolidated balance sheet, if the parent has acquired a subsidiary or business

during the reporting period through a business combination involving enterprises under common control, the opening balances of the consolidated balance sheet shall be adjusted for that subsidiary or business, the subsidiary’s revenue, expenses and profit, from the beginning to the end of the reporting period in which the combination takes places, shall be included in the consolidated income statement. The cash flow of the subsidiary or business, from the beginning to the end of reporting period in which the combination takes places, shall be included in the consolidated cash flow statement. In addition, relevant items in the comparative statement shall be adjusted as if the reporting entity after the combination has been in existence since the date the ultimate controlling party first obtained control.

18


3.5 Basis of preparation of consolidated financial statements(Continue) 3.5.5 Consolidation procedures(continue) If a subsidiary or business has been acquired through a business combination not involving enterprises

under common control, or by other means, the opening balances of the consolidated balance sheet shall not be adjusted for the subsidiary or business, the revenue, expenses and profits of that subsidiary or business from the acquisition date to the end of the reporting period shall be included in the consolidated income statement. The cash flows of that subsidiary or business, from the acquisition date to the end of reporting period, shall be included in the consolidated cash flow statement.

When preparing the consolidated balance sheet, if the parent has disposed of a subsidiary or business

during the reporting period, the opening balances of the consolidated balance sheet shall not be adjusted for the subsidiary or business, the revenue, expenses and profit of that subsidiary or business, from the beginning of the reporting period to the date of disposal, shall be included in the consolidated income statement, the cash flows of that subsidiary or business, from the beginning of the reporting period to the date of disposal, shall be included in the consolidated cash flow statement.

3.5.6 Accounting treatment for special transactions 3.5.6.1 Acquire a subsidiary’s equity interest held by non-controlling shareholders The difference between the increase in the cost of long-term equity investments as a result of acquisition

of non-controlling interests and the share of net assets of the subsidiary calculated continuously from the acquisition date or the combination date based on the new shareholding proportion shall be adjusted to the capital reserve (capital premium or share premium) in the consolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjusted against retained earnings.

3.5.6.2 Dispose of a portion of the long-term equity investments in a subsidiary without loss of control. When the parent disposes of a portion of the long-term equity investments in a subsidiary without loss of

control, the difference between the amount of the consideration received and the corresponding portion of net assets of the subsidiary calculated continuously from the acquisition date or the combination date related to the disposal of the long-term equity investments shall be adjusted to the capital reserve (capital premium or share premium) in the consolidated financial statements. If the balance of the capital reserve is not sufficient, any excess shall be adjusted against retained earnings.

3.5.6.3 Lose control of an investee due to the disposal of a portion of an equity investment or other

reason, accounting treatment for the remaining equity investment. The remaining equity investment shall be re-measured at its fair value in the consolidated financial

statements at the date when control is lost. The difference between the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and the share of net assets of the former subsidiary calculated continuously from the acquisition date or the combination date based on the previous shareholding proportion, shall be recognized as investment income for the current period when control is lost, and the goodwill related to the subsidiary shall also be derecognized. The amount previously recognized in other comprehensive income in relation to the former subsidiary’s equity investment should be transferred to investment income for the current period when control is lost.

19


3.5 Basis of preparation of consolidated financial statements(Continue) 3.5.6.4Lose control of a subsidiary in multiple transactions in which it dispose of its subsidiary in stages,

and each of the multiple transactions forms part of a bundled transaction which eventual result in loss of control of the subsidiary

These multiple transactions should be accounted for as a single transaction. In the consolidated financial

statements, the difference between the consideration received and the corresponding portion of the subsidiary’s net assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferred to the profit or loss when the parent eventually loses control of the subsidiary.

3.6 Classification of a joint arrangement and Accounting by parties to a joint operation 3.6.1 Classification of a joint arrangement A joint arrangement is classified as either a joint operation or a joint venture. 3.6.2 Accounting by parties to a joint operation A joint operator shall recognize the following items in relation to its interest in a joint operation, and

account for them in accordance with relevant accounting standards:

I）its solely-hold assets, and its share of any assets held jointly;

ii）its solely-assumed liabilities, and its share of any liabilities incurred jointly;

iii）its revenue from the sale of its share of the output arising from the joint operation;

iv）its share of the revenue from the sale of the output by the joint operation;

v）its solely-incurred expenses, and its share of any expenses incurred jointly. 3.6.2 Accounting by parties to a joint operation When a joint operator enters into a transaction with a joint operation, such as a sale of contribution of

assets (except assets that constitute a business), the joint operator shall recognize gains or losses resulting from such a transaction only to the extent of the other parties’ interests in the joint operation before the sale of those assets to a third party by the joint operation. When those assets to be sold or contributed incur an impairment loss as defined in” Accounting Standard for Business Enterprises No.8- Impairment of Assets” and other relevant accounting standards, those losses shall be recognized fully by the joint operator

When a joint operator enters into a transaction with a joint operation, such as a purchase of

assets( except assets that constitute a business), the joint operator shall recognize gains or losses resulting from such a transaction only to the extent of the other parties’ interests in the joint operation until it resells those assets to a third party. When those assets to be purchased incur an impairment loss as defined in” Accounting Standard for Business Enterprises No.8- Impairment of Assets” and other relevant accounting standards, those joint operator shall recognize its share of those losses.

For a party that participates in, but does not have joint control of, a joint operation, if that party has

rights to the assets, and obligations for the liabilities, relating to the joint operation, it shall account for its interest in the arrangement in accordance with former treatment, otherwise, if that party has neither rights to the assets not obligations for the liabilities relating to the joint operation, it shall account for its interest in the joint operation in accordance with the relevant accounting standards.

20


3.7 Cash and cash equivalent Cash presented in the cash flow statements comprise cash in hand and deposits held at call with bank,

and cash equivalent refer to short-term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

3.8 Foreign currency transactions and translations

3.8.1 Foreign currency transactions On the initial recognition, foreign currency transactions are translated into RMB by applying an exchange

rate that approximates the actual spot exchange rate at the dates of transactions. At the balance sheet date, foreign currency monetary items are translated into RMB using the spot

exchange rate at that date. Exchange differences arising from the differences between the spot exchange rate prevailing at the balance sheet date and those spot rates used on the initial recognition are recognized in profit and loss for the current period, except for exchange differences arising from foreign exchange borrowings that have been taken out specially for the acquisition and construction or production of qualifying assets, which are capitalized as part of the cost of those assets. Non-monetary items carried at historical cost continue to be measured at the amounts in functional currency translated using the spot exchange rate at the date of the transactions.

3.8.2 Foreign currency translations The asset and liability items in the balance sheets for foreign operation are translated at the spot

exchange rate on the balance sheet date. Among the owner’s equity items, the items other than “undistributed profits” are translated at the spot exchange rate of the transaction date. The income and expense items in the income statements of overseas businesses are translated at the spot exchange rate of the transaction date. The differences arising from the above translation are presented separately in the owner’s equities. The cash flows of overseas businesses are translated at the spot exchange rate on the date of the cash flows. The effect of exchange rate changes on cash is presented separately in the cash flow statement.

3.9 Financial instruments

3.9.1 Recognition and de-recognition of financial instruments Financial assets or liabilities are recognized on the balance sheet when the Company becomes a party

to the contractual provisions of the financial instrument. Financial assets are derecognized when: I) the contractual rights to receive the cash flows from the

financial assets have expired; or II) all substantial risks and rewards of ownership of the financial assets have been transferred with compliance to the de-recognition criteria of Accounting Standards of Business Enterprises No. 23 - Transfer of Financial Assets.

A financial liability (or a part of financial liability) is derecognized when and only when the obligation specified in the contract is discharged or cancelled.

21


3.9 Financial instruments(Continue) 3.9.2 Classification of financial assets On the initial recognition, financial assets are classified into the following categories: financial assets "at

fair value through profit or loss" (FVTPL), loans and receivables, available-for-sale financial assets and held-to-maturity investments. The classification of financial assets depends on the Company’s intention and ability to hold the financial assets.

i. Financial assets at FVTPL Financial assets are classified as at FVTPL where the financial assets are acquired principally for the

purpose of selling in the near future and are presented as held-for-trading financial assets on the face of the balance sheet.

ii. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are

not quoted in an active market, including accounts receivable, other receivables and long-term receivables.

iii. Available-for-sale financial assets Available-for-sale financial assets are those non-derivative financial assets that are designated as

available-for-sales at initial recognition or are not classified as financial assets at FVTPL, loans and receivables or held-to-maturity investments. The available-for-sale financial assets that are intended to be sold within 12 months subsequent to the balance sheet date are recorded under non-current assets due within 1 year on the face of the balance sheet.

iv. Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments

and fixed maturities that the Company has the positive intention and ability to hold to maturity. The held-to-maturity investments that are expected to mature within 12 months subsequent to the balance sheet date are presented as non-current assets due within 1 year on the face of the balance sheet.

22


3.9 Financial instruments(Continue) 3.9.3 Measurement of financial assets Financial assets are recognized at fair value on the balance sheet when the Company becomes a party

to the contractual provisions of the financial instrument. Transaction costs of financial assets carried at FVTPL are expensed in the income statement; Transaction costs of other financial assets are included in financial assets at initial recognition.

Financial assets carried at FVTPL and available-for-sale financial assets are subsequently measured at

fair value. Investments in equity instruments are measured at cost when they do not have a quoted market price in an active market and whose fair value cannot be reliably measured. Loans and receivables are measured at amortized cost using the effective interest method.

Financial assets carried at FVTPL are subsequently measured at fair value, with gains or losses arising

from changes in fair value as well as dividends and interest income related to such financial assets recognized in profit or loss for the current period.

A gain or loss arising from change in fair value of an available-for-sale financial asset is recognized

directly in equity, except for impairment losses and foreign exchange gains and losses arising from the translation of monetary financial assets. When such financial asset is derecognized, the cumulative gain or loss previously recognized in equity is recognized in income statement. Interest on available for sale debt instrument, calculated using effective interest method, and cash dividends declared by the investee on available-for-sale equity instruments are recognized as investment income in income statement.

3.9.4 Recognition and measurement of the transfer of financial assets The company has transferred nearly all of the risks and rewards related to ownership of the financial

asset to the transferee, derecognize the financial asset; kept nearly all of the risks and rewards, not derecognize the financial asset.

The overall transfer of financial assets to meet the conditions of the termination of the confirmation,

the difference amount between the following items shall be included in the current profits and losses:

1）The book value of the transferred financial asset;

2）The total amount between the price received from the transfer and the cumulative amount of change in fair value which originally direct recorded in the owner's equity (involving the transferred financial assets are available for sale financial assets). Obtains a new financial asset or undertakes a new financial liability Due to the transfer of a financial asset, recognising the financial assets or financial liabilities at fair value on the date of transfer(including call options, put options, forward contracts, swaps, debt guarantees, etc.), and the net financial assets after deducting liabilities as part of the above price. The company signed service contracts with the transferee of the financial asset to provide related services (including collection of cash flow from the financial asset and deliverived the cash flow to the designated depository of funds, etc.) to confirm a service asset or liability on the contacts. The service liability shall be initially measured at fair value and trading as part of the price.

23


3.9 Financial instruments(Continued) Transferring part of financial assets meet the conditions of termination of recognition, the entire book

value of the transferred financial asset shall allocated between the fair value of the part ended and the part that is not terminated (in this case, the service shall be deemed as a part of the assets of financial assets not terminated) and the difference amount between the following items shall be included in the current profits and losses: 1) Book value of the terminated part; 2) Price of the terminated part and the corresponding part of the cumulative amount of changes in fair value which recorded directly in owners’ equity (involving the transfer of financial assets available for sale financial assets and the situation). The accumulative amount of the changes in fair value recognized directly in owners' equity in the corresponding part of the amount in accordance with the termination of recognition, according to the apportionment of the accumulative amount determined between the fair values of financial assets terminated recognition part and not terminated recognition part.

3.9.5Classification of financial liabilities Financial liabilities are classified into the following categories at initial recognition: the financial liabilities

at FVTPL and other financial liabilities. Financial liabilities are classified at FVTPL where the financial liabilities are either held for trading or they are designated at FVTPL.

3.9.6 Measurement of financial liabilities Financial liabilities are recognized at fair value on the balance sheet when the Company becomes a party

to the contractual provisions of the financial instrument. Transaction costs of financial liabilities carried at FVTPL are expensed in the income statement; Transaction costs of other financial liabilities are included in financial liabilities at initial recognition.

Financial liabilities carried at FVTPL are subsequently measured at fair value without consideration of the

possible transaction costs arising from the settlement of financial liabilities in the future. Other financial liabilities are measured subsequently at amortized cost using the effective interest method.

3.9.7 Determination of financial assets and financial liabilities’' fair value The fair value of a financial instrument that is traded in an active market is determined at the quoted

price in the active market. The fair value of a financial instrument for which the market is not active is determined by using a valuation technique. Valuation techniques include using prices of recent market transactions between knowledgeable, willing parties, reference to the current fair value of another financial asset that is substantially the same with this instrument, discounted cash flow analysis and option pricing models.

3.9.8 Impairment of financial assets and accounting methods The Company assesses the carrying amount of financial assets other than financial assets at FVTPL at

each balance sheet date. If there is objective evidence that the financial asset is impaired, the Company shall determine the amount of any impairment loss accounts.

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

24


3.9 Financial instruments When the fair value of available-for-sale financial assets decreases substantially or not temporarily, the

cumulative loss that had been recognized in other comprehensive income shall be reclassified from equity to profit or loss as an impairment loss. If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss shall be reversed, with the amount of the reversal recognized in profit or loss. Impairment losses recognized in profit or loss for an investment in an equity instrument classified as available for sale shall be reversed directly through equity. Impairment losses recognized in profit or loss for investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured shall not be recovered, even if the fair value of such investment increases in the future periods.

Impairment criteria for available for sale financial assets - equity investment:

The specific quantitative criteria for “severe” or “non-temporary decline” of changes of the fair value

If the fair value of the equity instruments at the balance sheet date is lower than its initial investment cost over 50% (including 50%) or less than the initial investment cost lasts for more than a year (including one year), it indicates that the equity investment become impaired; If the fair value of the equity instruments at the balance sheet date is lower than its initial investment cost over 20% (including 20%) but have not yet reached 50%, the company will consider other factors such as price volatility to judge whether the equity instrument investment impaired.

Cost calculation method Determined according to the initial acquisition costs deducted recovered cost amount, amortized amount and the losses already included in the profit and loss.

Method for determining the fair value of the available for sale financial assets

Determined according the final closing price of the securities exchange, unless the available for sale equity instrument investment has restricted period. For these available for sale equity instrument investment with restricted period, impairment amount shall be determined by the final closing price of the securities exchange market deducted the compensation for the market participants due from the risk to bear a specified period sold on the open market.

3.10 Receivables 3.10.1 Receivables that are individually significant and provided for provision separately

The justification and standard for receivables that are individually significant

Accounts receivable or other receivables exceeding RMB 5 million individually.

The method of provision for impairment of receivables that are individually significant

Receivables that are individually significant are subject to separate impairment assessment. A provision for impairment of the receivable is recognized if there is objective evidence that the Company will not be able to collect the full amounts according to the original terms. The provision for impairment of the receivable is established at the difference between the carrying amount of the receivable and the present value of estimated future cash flows.

25


3.10 Receivables

3.10.2 Receivables that are provided for provision on a basis of group

Basis on determining the portfolios are as below

Portfolio 1 Receivable based on aging analysis without individual confirmation.

Portfolio 2 Receivable based on specific identification method.

Methods for provision on a basis of portfolio

Portfolio 1 Aging analysis

Portfolio 2 Specific identification method

Portfolios that aging analysis is used for provision as follows:：

Aging

Percentage of provision for accounts receivable

Percentage of provision for other receivables

1-6months 2% 2%

7-12months 5% 5%

1－2years 10% 10%

2－3years 20% 20%

3－4years 30% 30%

4－5years 60% 60%

Above 5 years 100% 100%

Portfolios that specific identification method is used for provision as follows:

Portfolio Notes

Portfolio 2 The risk of receivables of part of the deposit and the scope of consolidation to related parties were significantly lower than other categories of portfolio should be combined the impairment test separately.

3.10.3 Receivables that are not individually significant but provided for provision separately

The reasons why specific provisions are applied

There is objective evidence that the Company will not be able to collect the full amounts according to the original terms, and the present value of future cash flows is more likely than not to be lower than the carrying amount of the receivable.

The method of provision for impairment of receivables

The provision for impairment of the receivable is established at the difference between the carrying amount of the receivable and the present value of estimated future cash flows.

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3.11 Inventories 3.11.1 Classification of inventories Inventories of the Company includes merchandises, raw material, work-in-progress, finished goods,

low-value consumables, packaging material, turnover materials, goods in transit and consigned materials, presented at the lower of cost and net realizable value.

3.11.2 Inventory costing method Cost is determined using weighted average method upon delivery of inventories. The cost of finished

goods and work in progress comprises raw materials, direct labor and an allocation of all production overhead expenditures incurred based on normal operating capacity. Turnover materials include low-value consumables and packing materials.

3.11.3 The determination of net realizable value and the method of provision for impairment of

inventories The excess of cost over the net realizable value is generally recognized as provision for decline in value of

inventories in the profit or loss. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purposes of inventories being held and effect of post balance sheet events.

For the production of the materials held in its production, the net realizable value of the finished products

is higher than the cost, the material is still in accordance with the cost measurement; decline of the price of materials indicates that the net realizable value of the finished product is lower than the cost, the materials according to the measurement of net realizable value.

The net realizable value of inventory held for the execution of sales contracts or labor contracts is

calculated based on the contract price. Inventories more than the number of the sales contract order quantity, the excess part of the net realizable value of inventories shall be calculated based on general sale price.

3.11.4 Inventory system The Company adopts the perpetual inventory system. 3.11.5 Low-value consumption goods and package material amortization method Low-value consumption goods and package materials are applying one-off amortization method.

3.12 Holding-for-sale assets The following conditions are met simultaneously shall be recognized holding-for-sale assets:

1） The assets must be in its current condition based only on the sale of such assets are usually available for immediate sale and terms;

2） The company has on the disposal of the asset resolution;

3） The company has signed an irrevocable transfer agreement with the transferee;

4） The transfer will be completed within one year.

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3.13 Long-term equity investments 3.13.1 The judgment standard of common control and significant influence In accordance with the relevant agreement on a common control arrangement, and the arrangement

of activities must be sharing the right of control participants agreed to the decision, is regarded as a common control. If there are two or more than two parties to a combination of collective control arrangement, not identified as a common control.

The power to participate in making decisions on the financial and operating policies of the invested

entity, but is not able to control or joint control together with other parties to formulate these policies, identified as the implementation of major influence over the invested entity.

3.13.2 The determination of the cost of investment The long-term equity investment acquired through business combination is measured, on the initial

recognition, with reference to notes 3.4 Business combination of the financial report. The long-term equity investment acquired otherwise than through a business combination is initially measured at its cost, which comprises: i. the purchase price actually paid, if the long-term equity investment is acquired by payment in cash; initial investment cost also includes those costs, taxes and other necessary expenditures directly attributable to the acquisition of the long-term equity investment. ii. The fair value of the equity securities issued, if the long-term equity investment is acquired by issuing equity securities. The costs directly attributable to the issue of equity securities shall be determined in accordance with “Accounting Standard for Business Enter-prizes No.37-Financial Instruments: Presentation and Disclosures”. iii. the fair value of the assets given up, , if the long-term equity investment is acquired through non-monetary transactions, unless a) the exchange transaction lacks commercial substance or b) the fair value of neither the asset received nor the asset given up is reliably measured; the carrying amount of the assets given up less any transaction costs and tax charges, if a) the exchange transaction lacks commercial substance or b) the fair value of neither the asset received nor the asset given up is reliably measured. iv. The fair value of the long-term equity investment, if the long-term equity investment is acquired in a debt restructuring arrangement.

3.13.3 Subsequent measurement and recognition of related profit and loss 3.13.3.1 Subsequent measurement of cost method Where an investor is able to exercise control over an investee, the long-term equity investment shall be

accounted for using the cost method. Under the cost method, a long-term equity investment shall be measured at its initial investment cost. When additional investment is made or the investment is recouped, the cost of the long-term equity investment shall be adjusted accordingly. Cash dividends or profit distributions declared by the investee shall be recognized as investment income in the current period.

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3.13 Long-term equity investments 3.13.3.2 Subsequent measurement of equity method A long-term equity investment in an associate or a joint venture shall be accounted for using the equity

method. Where the initial investment cost of a long-term equity investment exceeds an investor’s interest in the fair values of an investee’s identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost. Where the initial investment cost is less than the investor’s interest in the fair values of the investee’s identifiable net assets at the acquisition date, the difference shall be credited to profit or less for the current period, and the cost of the long-term equity investment shall be adjusted accordingly.

After the investor has acquired a long-term equity investment, it shall recognize its share of the

investee’s net profits or losses, as well as its share of the investee’s other comprehensive income, as investment income or losses and other comprehensive income, and adjust the carrying amount of the investment accordingly, The carrying amount of the investment shall be reduced by the portion of any profit distributions or cash dividends declared by the investee that is attributable to the investor. The investor’s share of the investee’s owners’ equity changes, other than those arising from the investee’s net profit or loss, other comprehensive income or profit distribution, shall be recognized in the investor’s equity, and the carrying amount of the long-term equity investment shall be adjusted accordingly. The investor shall recognize its share of the investee’s net profits or losses after making appropriate adjustments based on the fair values of the investee’s identifiable net assets at the acquisition date. Where the accounting policies and accounting period adopted by the investee are not consistent with those used by the investor, the investor shall, using its own accounting policies and accounting period, adjust the relevant items of the financial statements of the investee, and recognize investment income or loss, other comprehensive income, and other related items, based on the adjusted financial statements of the investee.

The investor shall discontinue recognizing its share of the net losses of the investee after the carrying

amounts of the long-term equity investment together with any long-term interests that in substance form part of the investor’s net investment in the investee are reduced to zero, except to the extent that the investor has incurred obligations to assume additional losses. Where the investee makes net profits subsequently, the investor shall resume recognizing its share of those profits only after its share of the profits equals the share of losses not recognized.

The unrealized profits or losses resulting from transactions between the investor and its associate or

joint venture shall be eliminated in proportion to the investor’s equity interest in the investee, based on which investment income or losses shall be recognized. Any losses resulting from transactions between the investor and the investee, which are attributable to asset impairment in accordance with “Accounting Standard for Business Enterprises No.8-Impairment of Assets” and other appropriate accounting standards shall be recognized in full.

One part of the equity investments in associates holding by risk investment institutions, mutual funds,

trust companies or investment linked insurance funds or similar body’s, regardless of whether the subject has a significant impact on this part of the investment, investors are in accordance with the relevant provisions of the financial policy to measure the indirect holding part of the investment at fair value and included the changes in profit and loss, and the remaining part using the equity method of accounting.

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3.13 Long-term equity investments 3.13.3.3 Measurement of joint control or significant influence( but not control) over an investee due to

additional investment or other reasons When an investor becomes capable of exercising joint control or significant influence( but not control)

over an investee due to additional investment or other reasons, the investor shall change to the equity method and use the fair value of the previously-held equity investment determined in accordance with “Accounting Standard of Business Enterprises No.22-Financial Instruments: Recognition and Measurement”, together with additional investment cost, as the initial investment cost under the equity method. Where the previously- held equity investment is classified as available-for-sale financial assets, the difference between the fair value and carrying amount and the accumulated changes in fair value included in other comprehensive income shall be transferred to profit or loss for the current period upon commencement of the equity method.

3.13.3.4Partial disposal of equity investment When an investor can no longer exercise joint control of or significant influence over an investee due to

partial disposal of equity investment or other reasons, the remaining equity investment shall be accounted for in accordance with “Accounting Standard for Business Enterprises No.22-Financial Instruments: Recognition and Measurement”. The difference between the fair value and the carrying amount at the date of the loss of joint control or significant influence shall be charged to profit or loss for the current period. When the previously-held equity investment is accounted for under the equity method, any other comprehensive income previously recognized shall be accounted for on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities for the current period upon discontinuation of the equity method.

When an investor can no longer exercise control over an investee due to partial disposal of equity

investment or other reasons, and with the retained interest, still has joint control of, or significant influence over, the investee, when preparing the individual financial statements, the investor shall change to the equity method and adjust the remaining equity investment as if the equity method had been applied from the date of the first acquisition. If the investor can not exercise joint control of or significant influence over the investee after partial disposal of equity investment, the remaining equity investment shall be accounted for in accordance with “Accounting Standard for Business Enterprises No.22-Financial Instruments: Recognition and Measurement”, and the difference between the fair value and carrying amount at the date of the loss of control shall be charged to profit or loss for the current period. The preparation of consolidated financial statements shall be performed in accordance with “Accounting Standard for Business Enterprises No.33-Consolidated Financial Statements”.

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3.13 Long-term equity investments 3.13.3.5 Measurement of an equity investment, or a portion of an equity investment, in an associate or

a joint venture that is classified as held for sale An investor shall account for an equity investment, or a portion of an equity investment, in an associate

or a joint venture that is classified as held for sale in accordance with “Accounting Standard for Business Enterprises No.4-Fixed Assets”. Any retained portion of equity investment that has not been classified as held for sale shall be accounted for using the equity method. When an equity investment in an associate or a joint venture previously classified as held for sale no longer meets the criteria to be so classified, it shall be accounted for using the equity method retrospectively as from the date of its classification as held for sale. Financial statements for the periods since classification as held for sale shall be amended accordingly.

3.13.3.6 Disposal of long-term equity investment On disposal of a long-term equity investment, the difference between the proceeds actually received

and the carrying amount shall be recognized in profit or loss for the current period. For a long-term equity investment accounted for using the equity method, any other comprehensive income previously recognized shall be accounted for on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities on a pro-rate basis upon the disposal of the equity investment.

3.14 Investment property

Investment property is initially measured at cost, comprising a land use right that is leased out, a land use right held for transfer upon capital appreciation and a building that is leased out. Subsequent expenditures incurred on an investment property is recognized as cost of the investment property only when: 1) it is probable that economic benefits associated with the investment property will flow to the Company; and 2) the cost of the investment property can be measured reliably. Subsequent expenditure that fails to meet such recognition criteria is recognized in profit or loss in the period in which it is incurred.

The Company uses the cost model for subsequent measurement of an investment property, and adopts

depreciation or amortization policy based on the estimated useful lives and net residual value rates. 3.15 Fixed assets

3.15.1 Recognition Fixed assets are tangible assets that are held for use in the production or supply of services, for rental

to others, or for administrative purposes and have useful lives more than one accounting year. Fixed asset is recognized when: 1) it is probable that the economic benefits associated with the fixed asset will flow to the Company and 2) its cost can be reliably measured.

3.15.2 The categories and useful lives of fixed assets are listed as follows:

Category Useful lives

Residual value

Annual depreciation (amortization) rate

Buildings 20-30years 10% 3-4.5%

Machinery 5-15years 10% 6-18%

Transportation vehicles 5-10years 10% 9-18%

Office and other equipments 5years 10% 18%

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3.15 Fixed assets 3.15.3 Financial lease of fixed assets based on the identification, valuation method When the fixed assets of the company to lease with one or several of the following standards,

identified as finance lease of fixed assets: (1) when the term of lease expires, the ownership of the leased asset will be transferred to the company. (2) the company has the option to purchase the leased assets, at a price which is expected to be far lower than the exercise of the right to choose the fair value of the leased asset, so at the inception of the lease can be reasonably determined the company will exercise the option. (3) Even if the ownership of the asset is not transferred, the lease term accounts for most of the service life of the leased asset. (4) The present value of the minimum lease payments at the inception of the lease, the lease beginning date is almost equal to the fair value of the leased asset. (5) The nature of the leased assets, if not for the larger renovation, the company can only use. The recorded value of financial lease fixed asset shall be the lower between the present fair value of the beginning lease date and the minimum lease payments. The minimum lease payment should be recorded in long-term payment and the difference should be recorded in unrecognized financing charges. Such direct expenses happened during the negotiation and signing of the rent contract (like Fees, legal fees, travel expenses and the stamp tax .etc) which could be attributing to the rent items should be included in the value of rent assets. Unrecognized financing charges should be amortized during the rent period using the effective interest method. The company uses consistent with its own fixed assets depreciation policy provision for depreciation of fixed assets with financing lease. To determine a reasonable obtain the ownership of the leased asset when the term of lease expires, the leased asset depreciated in the use life. Unable to determine when the term of lease expires can obtain the ownership of the leased asset during the lease period, the leased asset depreciated in the shorter one between service lives or the lease term.

3.16 Construction in progress

Construction in progress is measured at actual cost. Actual cost comprises construction costs,

borrowing costs that are eligible for capitalization incurred before the assets are ready for their intended use and other costs necessary to bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets when the assets are ready for their intended use and are depreciated from the next month.

3.17 Borrowing costs

The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset

that needs a substantially long period of time of acquisition and construction for its intended use commence to be capitalized and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to prepare the asset for its intended use have commenced. The capitalization of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use, the borrowing costs incurred hereafter are recognized in profit or loss for the current period. Capitalization of borrowing costs is suspended when the acquisition or construction of a fixed asset is interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.

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3.17 Borrowing costs

For the specific borrowings obtained for the acquisition or construction of a fixed asset qualifying for capitalization, the amount of borrowing costs eligible for capitalization is determined by deducting any interest income earned from depositing the unused specific borrowings in the banks or any investment income arising on the temporary investment of those borrowings during the capitalization period. For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying for capitalization, the amount of borrowing costs eligible for capitalization is determined by applying the weighted average effective interest rate of general borrowings, to the weighted average of the excess amount of cumulative expenditures on the asset over the amount of specific borrowings.

Effective interest method is used to amortise discounts or premiums related to borrowings as the

adjustments to the capitalised interest cost in each reporting period.

3.18 Intangible assets 3.18.1 Valuation method, the service life and the impairment test Intangible assets, including land use rights, patents, technical know-how and other assets acquired

through BOT - Build, Operation and Transfer, are measured at cost. The intangible assets invested by the state-owned investors during the restructure of the Company are initially measured at the appraisal value approved by the state-owned assets administration bureau.

Land use rights are amortized on the straight-line basis over 50 years, the period of the land use rights. If

it is impracticable to allocate the amount paid for the purchase of land use rights and buildings between the land use rights and the buildings on a reasonable basis, the entire amount is accounted for as fixed assets. The patent right is amortized on the straight-line basis over the law effectively period.

For an intangible asset with a finite useful life, the Group reviews the useful life and amortization method

at each financial year-end and makes appropriate adjustments 3.18.2Internal research and development cost The expenditure on an internal research and development project is classified into expenditure on the

research phase and expenditure on the development phase based on its nature and whether there is material uncertainty that the research and development activities can finally create an intangible asset.

Expenditure on the research phase is recognized in profit or loss in the period in which it is incurred.

Expenditure on the development phase is recognized as an intangible asset only if all of the following standards are met: i. it is technically feasible to complete the intangible asset so that it will be available for use; ii. management intends to complete the intangible asset and use or sell it; iii. it can be demonstrated how the intangible asset will generate economic benefits; iv. adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset; and v. the expenditure attributable to the intangible asset during its development phase can be reliably measured.

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3.18 Intangible assets 3.18.2 Internal research and development cost Other development expenditures that do not meet the conditions above are recognized in income

statement as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Capitalized expenditure on the development phase is presented as development costs in the balance sheet and transferred to intangible assets at the date the asset is ready for its intended use.

The carrying amount of intangible asset is reduced to the recoverable amount when the recoverable

amount is less than the carrying amount.

3.19 Long-term assets impairment Separately recognized goodwill is tested at least annually for impairment, irrespective of whether there is

any indication that the asset may be impaired. Fixed assets, intangible assets with definite useful lives and investment property measured using the cost model are tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset. A provision for asset impairment is determined and recognized on an individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of CGU to which the asset belongs is determined. A CGU is the smallest group of assets that is able to generate independent cash inflows.

3.20 Long-term prepayments Long-term prepayments comprise leasehold improvements and various other expenditures incurred but

that should be allocated over the current and future periods of more than one year. Long-term prepayments are evenly amortized over their respective beneficiary period, and are presented at cost net of accumulated amortization.

Nature of Long-term prepayments

Methods Amortization Period

Hobs Straight-line 5 years

Mould and others Straight-line 3-5 years

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3.21 Employee benefits

3.21.1Short-term employee benefits

The company will recognize in the accounting period in which an employee provides service, actually occurred short-term employee benefits as a liability, with a corresponding charge to the profit or loss for the current period or include the benefits in the cost of relevant asset. The occurred employee benefits should be charged to the profit or loss for the current period or include the benefits in the cost of relevant asset based on the actually incurred amount. Employee benefits which are non-monetary benefits shall be measured at fair value. Payments made by an enterprise of social security contributions for employees, such as premiums or contributions on medical insurance, pensions, work injury insurance and maternity insurance, payments of housing funds, and union running costs and employee education costs provided in accordance with relevant requirements shall, in the accounting period in which employees provide service, be calculated according to prescribed bases and percentages of provision in determining the amount of employee benefits and recognize relevant liabilities, with a corresponding charge to the profit or loss for the current period or the cost of a relevant asset.

The company shall recognize the related employee benefits arising from accumulating paid absences when the employees render service that increases their entitlement to future paid absences, the additional payable amounts shall be measured at the expected additional payments as a result of the unused entitlement that has accumulated. The company shall recognize the related employee benefits arising from non-accumulating paid absences in the accounting period the absence occur.

The company shall recognize the related employee benefits payable under a profit-sharing plan when

period in when all of the following conditions are satisfied: i. the company has a present legal or constructive obligation to make such payments as a result of past events; ii. a reliable estimate of the amounts of employee benefits obligation arising from the profit-sharing plan can be made.

3.21.2 Post-employment benefits 3.21.2.1 Defined contribution plans The Company shall recognizing the accounting period in which an employee provides service, the

contribution payable to a defined contribution plan as a liability, with a corresponding charge to the profits or loss for the period or the cost of a relevant asset. Under a defined contribution plan, when contributions are not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employee render the related service, the employee benefits payable shall be measured at the discounted value of all contributions.

3.21.2.2 Defined benefit plans Accounting by an enterprise for defined benefit plan usually involves the following four steps:

i. in accordance with the projected unit credit method, using unbiased and mutually compatible actuarial assumptions to estimate related demographic variables and financial variables, measure the obligations under the defined benefit plan, and determine the periods to which the obligations are attributed, An enterprise shall discount obligations under the defined benefit plan to determine the present value of the defined benefit plan obligations and the current service cost,

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3.21 Employee benefits

ii. when a defined benefit plan has assets, an enterprise shall recognize the deficit or surplus be deducting the present value of the defined benefit plan obligation from the fair value of defined benefit plan assets as a net defined benefit plan liability or net defined benefit plan asset. When a defined benefit plan has a surplus, the enterprise shall measure the net defined benefit plan asset at the lower of the surplus in the defined benefit plan and the asset ceiling. The asset ceiling is the present value of any economic benefits available in the form of refunds from the defined benefit plan or reductions in future contribution to the defined benefit plan. iii. determining the amount that shall be charged to the profit or loss for the current period iv. determining the amount that shall be charged to other comprehensive income.

The company shall attribute benefit obligations under a defined benefit plan to periods of service

provided by employees according to the formula determined by projected unit credit method, with a corresponding charge to the profit or loss for the current period or the cost of a relevant asset. When an employee’s service in later years will lead to a materially higher level of benefit from the defined benefit plan than the earlier years, the company shall attribute accumulated defined benefit plan obligation on a straight-line basis to the period from the date when service by the employee first leads to company’s benefit obligation under the defined plan to the date when further service by the employee will not lead to material increase in defined benefit plan obligation.

At the end of reporting period, an enterprise shall recognize the employee benefits cost arising from

defined benefit plan as : service cost, net interest on the net defined benefit plan liability(asset) and changes as a result of remeasurements of the net defined benefit liability(asset)

Under a defined benefit plan, an enterprise shall recognize the past service cost as an expense for the

current period at the earlier of the following dates:

1）When the plan amendment occurs

2）When the enterprise recognize related restructuring costs or termination benefits The company shall recognize a gain or loss on the settlement of a defined benefit plan when the

settlement occurs. 3.21.3 Termination benefits The company which provides termination benefits to employees shall recognize an employee benefits

liability for termination benefits, with a corresponding charge to the profit or loss for the current period, at the earlier of the following dates: i. when the company cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal. ii. when the company recognizes costs or expenses related to a restructuring that involves the payment of termination benefits.

The company shall reasonably estimate and recognize employee benefits payable in respect of

termination benefits in compliance with the terms of its employment termination plan.

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3.21 Employee benefits 3.21.4 Other long-term employee benefits When other long-term employee benefits provided by the company to the employees satisfied the

conditions for classifying as a defined contribution plan, those benefits shall be accounted for in accordance with the requirements of related standard.

Except as prescribed situation, the company shall recognize and measure the net liability or net asset of

other long-term employee benefits in accordance with the requirements relating to defined benefit plan of this standard. At the end of the reporting period, the company shall recognize the components of cost of employee benefits arising from other long-term employee benefits as followings:

1）Service cost

2）Net interest on the net liability or net assets of other long-term employee benefits

3）Changes as the results of remeasurement of the net liability or net assets of other long-term employee benefits. As a practical expedient, the net total of the foresaid amounts shall be recognized in profit or loss for the

current period or included in the cost of a relevant asset.

If the level of long-term disability benefit depends on the length of service rendered by an employee, the company shall recognize a long-term disability benefit obligation in the period when the service is rendered. If the level of long-term disability benefit does not relate to the years of service provided by the employee, the company shall recognize the long-term disability benefit obligation when an event occurs that causes a long-term disability.

3.22 Provisions

Provisions for product warranties and loss contracts are recognized when the Company has a present

obligation, and it is probable that an outflow of economic benefits will be required to settle the obligation,

and the amount of the obligation can be measured reliably. Provisions are not recognized for future

operating losses.

The amount recognized as a provision is the best estimate of the consideration required to settle the

present obligation at the balance sheet date, taking into account factors pertaining to a contingency such as

the risks, uncertainties and time value of money. Where the effect of the time value of money is material,

the amount of the provision is determined by discounting the related future cash flows.

Provisions are initially measured at the best estimate of the expenditure required to settle the related

present obligation.

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3.23 Revenue recognition

Revenue comes from the sale of goods, rendering of services and transfer of asset use rights. Revenue is recognized only when it is probable that economic benefit will flow to the enterprise, which

will result in an increase in assets or decrease in liabilities and the amount of inflow of economic benefits can be measured reliably.

3.23.1 Sales of goods Revenue from the sale of goods is recognized when significant risks and rewards of ownership of the

goods are transferred to the buyer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and it is probable that the economic benefit associated with the transaction will flow to the Company and the relevant revenue and costs can be measured reliably.

The Group recognizes revenue when the goods are transferred. 3.23.2 Rendering of services Services provided started and finished in the same accounting year, the revenue need to be recognized

when the services been rendered and the full payment or payment evidence has been received; the services started and finished in the difference accounting period, when the total revenue of the contract and the degree of the services complement could be reliably determined, the trade related cost and the cost would happened could be forecast, recognize revenue according to percentage of completion method; the result of long-term contract could be reasonably be expected, recognize revenue according to the checkout completion percentage method.

3.23.3 Transfer of asset use rights Revenue arising from the use by others of entity assets yielding interest and royalties shall be recognized

when: (a) it is probable that the economic benefits associated with the transaction will flow to the entity; and (b) the amount of the revenue can be measured reliably.

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3.24 Government grant

3.24.1 Basis and measurement of government grant related to assets

Grants related to assets are government grants whose primary condition is that the Company qualifying for

them should purchase, construct or otherwise acquire long-term assets. The government grants relating to

assets of the Company mainly refers to technology transformation funds of specific projects from

government department during the reporting period and compensation funds for reconstruction assets

result from demolition. These government grants are recognised as deferred income and are credited to the

income statement on a straight-line basis over the expected lives of the related assets after the completion

of technology transformation project and reconstruction project. The government grants measured at

nominal amount is credited to the income statement directly.

3.24.2 Basis and measurement of government grant related to income

Grants related to income are government grants other than those related to assets. Government grants

relating to income of the Company mainly refers to the financial subsidy funds received related to income

during the reporting period, which is used to compensate the expenses/costs incurred in future, are

recognized as deferred income and then credited to the income statement over the period necessary to

match them with the expenses that they are intended to compensate. Government grants relating to

income, which is used to compensate the expenses/costs incurred in the past, are credited to the income

statement directly.

3.25 Deferred tax assets and liabilities

Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differences

arising between the tax base of assets and liabilities and their carrying amount (including taxable

temporary differences and deductible temporary differences). The deductible losses that can be carried

forward to subsequent years for deduction of the taxable profit in accordance with the tax law are also

taken as deductible temporary differences. No deferred tax liability is recognized for a temporary

difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is

recognized for the temporary differences resulting from the initial recognition of assets or liabilities due to

a transaction other than a business combination, which affects neither accounting profit nor taxable profit

(or deductible loss). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured

at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled.

Deferred tax assets are only recognized for deductible temporary differences, deductible losses and tax

credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilized.

Deferred tax liabilities are recognized for temporary differences arising from investments in subsidiaries,

joint ventures and associates, except where the Company is able to control the timing of the reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future.

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3.26 Leases A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of

an asset. An operating lease is a lease other than a finance lease. 3.26.1 Operating lease Lease payments paid or payable under an operating lease are capitalized or recognized in profit or loss

for the current period using a straight-line basis.

3.26.2 Finance lease

At the commencement of the lease term, the Company records the leased asset at an amount equal to the

lower of the fair value of the leased asset and the present value of the minimum lease payments, each

determined at the inception of the lease, and recognizes a long-term payable at an amount equal to the

minimum lease payments. The difference between the recorded amount of the leased asset and the recorded

amount of the payable is accounted for as unrecognized finance charge

3.27 Goodwill

On acquisition of the investment, any difference between the cost of the investment and the investor's share of the net fair value of the investee's identifiable assets and liabilities is accounted for as goodwill. For business combination of entities not under common controls, the excess of the cost of acquisition over the Company’s share of the fair value of the identifiable net assets acquired is recorded as goodwill.

Goodwill is presented separately on the face of the consolidated financial statements. The excess of the cost of the investment over the Company's share of the fair value of the associate's and joint venture's identifiable assets and liabilities is included in the cost of long-term equity investment.

3.28 Changes in significant accounting policies and Accounting estimates

None during the reporting period.

4 TAXATION

4.1 The major types and rates of taxes applicable to the Company during the current year are set out below

Type Taxable basis Tax rate

Value-added tax ("VAT") Taxable value-added amount 17%

Business tax Taxable turnover 5%

Urban construction tax Total VAT and business tax

As required by the local tax regulations where the Company and its subsidiaries are located

Corporate income tax Taxable income Note 1

Note 1: The applied income tax rate and tax incentives of the Company and its subsidiaries are summarized as

follow: Company Name

Statutory tax rate

Applied tax rate

Tax incentive program

SYP Glass Group Co., Ltd. 25% 25% No tax incentive program

40

Shanghai SYP Building Glass Co., Ltd. 25% 25% No tax incentive program Guangdong SYP Glass Co., Ltd. 25% 25% No tax incentive program

Shanghai SYP Engineering Glass Co., Ltd.

25%

15% Tax incentive for high-tech

enterprises whose applicable tax rate is 15%

Tianjin SYP Engineering Glass Co., Ltd.

25%

15%

Tax incentive for high-tech enterprises whose applicable tax rate is 15%

Tianjin SYP Glass Co., Ltd. 25% 25% No tax incentive program Changshu SYP Special Glass Co., Ltd. 25% 25% No tax incentive program Jiangsu Pilkington SYP Glass Co., Ltd. 25% 25% No tax incentive program Jiangsu Huadong SYP Glass Co., Ltd. 25% 25% No tax incentive program Jiangmen SYP Engineering Glass Co., Ltd. 25% 25% No tax incentive program

Glasslink Limited

16.5%

16.5% 16.5% pursuant to Hongkong tax

regulations with no tax incentive program.

Tianjin Pilkington SYP Glass Co., Ltd. 25% 25% No tax incentive program

Chongqing SYP Engineering Glass Co., Ltd.

25%

15% Tax incentive for west development

whose applicable tax rate is 15% Shanghai SYP Kangqiao Auto Glass Co., Ltd. 25% 25% No tax incentive program

Wuhan SYP Kangqiao Auto Glass Co., Ltd. 25% 25% No tax incentive program

Yizheng SYP Auto Glass Co., Ltd 25% 25% No tax incentive program

Shanghai SYP Shijin Paste Glass Co., Ltd. 25% 25% No tax incentive program

Shanghai SYP Investment Co., Ltd. 25% 25% No tax incentive program

Shanghai SYP Chengding Investment

partnership( limited partnership)

25%

25%

No tax incentive program

41

I

5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5.1 Cash and cash equivalents 5.1.1 Categories Items December 31st,2015 December 31st,2014

Cash on hand 6,638.77 50,479.31

Bank deposits 354,752,472.38 204,269,847.78

Other monetary funds 56,928,728.33 169,761,606.17

Total 411,687,839.48 374,081,933.26

including： the total deposits abroad 7,331,075.21 20,898,768.17

5.1.2 Other restricted cash Items December 31st,2015

Deposits for bank acceptance 38,760,663.19 Performance bond 18,148,277.17 Others 19,787.97

Total 56,928,728.33

5.2 Notes receivable

5.2.1 Categories

Categories December 31st,2015 December 31st,2014

Bank acceptance bills 258,383,112.82 377,466,845.20 Commercial acceptance bills 106,899,846.26 27,839,975.06

Total 365,282,959.08 405,306,820.26

5.2.2 Notes receivable at the end of the company or the discount and endorsed at the balance sheet date

has not yet expired：

Items Final confirmed amount Final unconfirmed amount

Bank acceptance bills 280,347,925.99 -

42

5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS（CONTINUED）

5.3 Accounts receivable 5.3.1 Accounts receivable are analyzed by categories as follows:

December 31st

,2015 December 31st

,2014

Categories

Gross Amount Bad debt provision Gross Amount Bad debt provision

Amount Proportion

s (%)

Amount Proportions

(%) Amount

Proportions (%)

Amount Proportions

(%)

Individually significant and provided for bad debts separately

28,846,527.43 5.25 28,846,527.43 100.00

Provided for bad debts by portfolio

- - - - - - - -

Portfolio 1 517,708,475.69 98.82 31,850,004.96 6.15 518,641,447.09 94.45 33,657,341.10 6.49

Portfolio 2 - - - - - - - -

Sub-total 517,708,475.69 98.82 31,850,004.96 6.15 518,641,447.09 94.45 33,657,341.10 6.49

Individually not significant but provided for bad debts separately

6,199,090.86 1.18 6,199,090.86 100.00 1,640,827.64 0.30 1,640,827.64 100.00

Total 523,907,566.55 100.00 38,049,095.82 7.26 549,128,802.16 100.00 64,144,696.17 11.68

5.3.2 Accounts receivable that are provided for provision using the aging analysis

Aging December 31st,2015

Amount Bad debt provision Proportions

Within 6 months 403,758,178.29 8,075,163.58 2% 7-12 months 19,878,942.20 993,947.12 5% 1-2 years 65,896,176.37 6,589,617.64 10% 2-3 years 12,312,817.52 2,462,563.50 20% 3-4 years 1,908,739.10 572,621.73 30% 4-5 years 1,993,827.01 1,196,296.19 60% Over 5 years 11,959,795.20 11,959,795.20 100%

Total 517,708,475.69 31,850,004.96

Aging

December 31st,2014


Within 6 months 439,084,657.78 8,781,693.16 2% 7-12 months 33,245,481.69 1,662,274.08 5% 1-2 years 18,157,790.56 1,815,779.05 10% 2-3 years 4,470,054.31 894,010.86 20% 3-4 years 4,292,225.35 1,287,667.61 30% 4-5 years 438,302.65 262,981.59 60% Over 5 years 18,952,934.75 18,952,934.75 100%

Total 518,641,447.09 33,657,341.10

43


5.3 Accounts receivable（continued）

5.3.3 Accounts receivable individually not significant and provided for bad debts separately

Customer’s Name Gross amount

Bad debt provision

Proportions

(%) Reasons

Several customers 6,199,090.86 6,199,090.86 100.00 Uncollectible

5.3.4 Accrual, recovery or reversal of bad debts situation during the reporting period: The current provision for bad debts:RMB 6,510,239.82；There is no recovery or reversal of bad debts. 5.3.5 Write-off of accounts receivable during the reporting period

Customer’s Name

Nature of

receivables

Amount written off

Reasons Performed verification procedures

Related party transactions

Several customers

Trade receivables

32,605,840.17

Liquidated customers or long-aging receivables that cannot be collected despite several attempts.

Confirmed by the Board of Directors

No

5.3.6 Top five outstanding amounts

Customer’s

Name Relationship Amount Aging

Proportion of the outstanding amounts to the total accounts

receivable（%）

Customer A

Independent third party

55,915,509.15

Within 2 years and five or more

10.67

Customer B

Independent third

party

28,956,163.22

Within 1 year

5.53

Customer C

Independent third

party

24,547,148.78

Within 2 years and

five or more

4.69

Customer D

Independent third

party

22,879,976.77

Within 1 year

4.37

Customer E

Independent third

party

20,687,955.31

Within 2 years

3.95

44

5.5 Interest receivable

Items December 31st,2015 December 31st,2014

Guaranteed financial income 433,250.00 5,612,000.00


5.4 Advances to suppliers

5.4.1 Categories by aging

Aging

December 31st,2015 December 31st,2014

Amount

Proportions

（%） Amount

Proportion

s（%）

Within 1 year 55,361,304.26 82.59 133,472,110.94 92.52 1-2 years 10,841,602.24 16.17 10,199,616.64 7.07 2-3 years 293,169.30 0.44 26,436.69 0.02 Over 3 years 537,614.28 0.80 565,555.19 0.39

67,033,690.08 100.00 144,263,719.46 100.00

5.4.2 Significant advances to suppliers aging more than one year

Supplier’s Name Relationship Amount Aging Reasons

Supplier A

Supplier

6,240,000.00

1-2 years

The contract has not been completed

Supplier B

Supplier

1,539,000.00

1-2 years


Supplier C

Supplier

956,800.00

1-2 years


5.4.3 Top five advances to suppliers

Supplier’s

Name Relationship Amount Aging Reasons

Supplier A

Supplier

16,245,000.00

Within 1 year


Supplier B

Contractor of construction

7,764,000.00

Within 1 year

Project settlement has not been completed

Supplier C

Supplier

6,240,000.00

1-2 years


Supplier D

Contractor of construction

3,827,325.60

Within 1 year

Project settlement has not been completed

Supplier E

Supplier

2,000,000.00

Within 1 year


45


5.6 Other receivables

5.6.1 Other receivables are analyzed by categories as follows:

December 31st

, 2015 December 31st

, 2014

Categories Gross amount Bad debt provision Gross amount Bad debt provision

Amount Proportions

(%) Amount

Proportions (%)

Amount Proportions

(%) Amount

Proportions (%)


28,809,476.86 41.57 28,809,476.86 100.00 28,809,476.86 37.32 28,809,476.86 100.00


- - - - - - - -

Portfolio 1 19,241,483.05 27.76 1,626,938.43 8.46 16,194,399.04 20.98 1,560,378.83 9.64

Portfolio 2 20,400,000.00 29.43 - - 31,400,000.00 40.67 - -

Sub-total 39,641,483.05 57.20 1,626,938.43 4.10 47,594,399.04 61.65 1,560,378.83 3.28


854,802.51 1.23 854,802.51 100.00 792,119.48 1.03 792,119.48 100.00

Total 69,305,762.42 100.00 31,291,217.80 45.15 77,195,995.38 100.00 31,161,975.17 40.37

5.6.2 Other receivables that are provided for provision using the aging analysis

Aging December 31st, 2015


Within 6 months 15,113,847.42 302,276.94 2% 7-12 months 1,185,511.53 59,275.58 5% 1-2 years 1,255,648.93 125,564.90 10% 2-3 years 581,324.92 116,265.00 20% 3-4 years 24,239.90 7,271.97 30% 4-5 years 161,565.78 96,939.47 60% Over 5 years 919,344.57 919,344.57 100%

Total 19,241,483.05 1,626,938.43

Aging

December 31st, 2014


Within 6 months 12,158,257.39 243,165.15 2% 7-12 months 1,338,413.41 66,920.66 5% 1-2 years 1,137,456.22 113,745.62 10% 2-3 years 76,350.54 15,270.11 20% 3-4 years 259,291.78 77,787.53 30% 4-5 years 452,849.84 271,709.90 60% Over 5 years 771,779.86 771,779.86 100%

Total 16,194,399.04 1,560,378.83

46


5.6 Other receivables（continued）

5.6.3 Other receivables individually significant and provided for bad debts separately

Customer’s Name

Gross Amount

Bad debt provision

Proportions

（%） Reasons

Luanxian Xiaochuan Glass Silica Sand Co., Ltd.

16,720,362.20 16,720,362.20 100.00

Aged over 3 years, due to the deterioration of its financial conditions, the receivable is not expected to be collected.

Beijing Pennvasia Glass Co., Ltd.

12,089,114.66

12,089,114.66

100.00

Aged over 3 years, due to the deterioration of its financial conditions, the receivable is not expected to be collected.

28,809,476.86 28,809,476.86

5.6.4 Other receivables individually not significant but provided for bad debts separately

Content of other receivables

Gross Amount

Bad debt provision

Proportions

（%） Reasons

A company

675,241.86 675,241.86 100.00

Aged over 3 years, the other receivable cannot be collected.

A company 94,062.31 94,062.31 100.00 Uncollectible



Individual

50,000.00 50,000.00 100.00

Individual departure, the other receivable cannot be collected.

854,802.51 854,802.51

5.6.5 Accrual, recovery or reversal of bad debts situation during the reporting period: The current provision for bad debts:RMB 129,242.63；There is no recovery or reversal of bad debts. 5.6.6 There is no write-off of bad debts during the reporting period.

5.6.7 Categories by nature

Nature of other receivables Gross amount at

December 31st,2015

Gross amount at December 31st,2014

Deposits 27,833,375.37 34,737,546.69

Exchanges between

companies

33,341,867.35 31,572,260.14

Utility bills 829,988.21 1,614,864.70

Petty cash 3,125,434.24 2,218,979.77

Others 4,175,097.25 7,052,344.08

Total 69,305,762.42 77,195,995.38

47


5.6 Other receivables（continued） 5.6.8 Top five outstanding amounts due from related parties:

Customer’s Name

Relationship Amount Aging

Proportion of the outstanding amounts to

the total other

receivables（%）

Customer A Independent third party 20,400,000.00 3-4 years 29.43

Customer B Related party 16,720,362.20 Over 5 years 24.13

Customer C Related party 12,089,114.66 Over 5 years 17.44

Customer D Independent third party 4,964,929.39 Within 1 year 7.16

Customer E Independent third party 2,500,000.00 Within 1 year 3.61

5.7 Inventories 5.7.1 The inventory is categorized as below: December 31st,2015 December 31st,2014

Items Cost

Provision for the decline

in value of inventories

Net book value Cost

Provision for the decline in value of inventories

Net book

value

Raw material 214,487,769.10 33,254,869.73 181,232,899.37 238,628,132.08 7,567,378.90 231,060,753.18

Packaging material 849,448.18 - 849,448.18 1,249,211.84 - 1,249,211.84

Low-value consumables 9,453,903.76 40,894.79 9,413,008.97 14,177,357.36 - 14,177,357.36

Finished goods 511,731,330.19 67,107,021.08 444,624,309.11 453,397,680.97 35,720,069.30 417,677,611.67

Work-in-progress 104,148,500.90 - 104,148,500.90 99,811,184.68 6,792,171.06 93,019,013.62

Total 840,670,952.13 100,402,785.60 740,268,166.53 807,263,566.93 50,079,619.26 757,183,947.67

5.7.2 Provision for the decline in value of inventories

Items Opening balance Additions Decreases

Closing balance Accruals Others Reversals or

write offs Others

Raw material

7,567,378.90

31,008,046.3

2

-

5,320,555.49 - 33,254,869.73

Low-value consumables

- 40,894.79 - - - 40,894.79

Finished goods

35,720,069.30

43,348,696.9

9

-

11,961,745.21 - 67,107,021.08

Work-in-progress 6,792,171.06 - - 6,792,171.06 - -

Total

50,079,619.26

74,397,638.1

0

-

24,074,471.76 - 100,402,785.60

Note: the net realizable value of the raw material is determined according to the raw material price deducting

related tax fee; the net realizable value of the finished goods is determined based on the contract price of year 2016 or the average sales price in 2015 December; the net realizable value of work-in-progress is determined according to the plate number multiplied by the corresponding cost price; the difference between the net realizable value and the carrying cost of inventory should be recorded as provision for decline in value of inventory; the write off the provision of inventory was mainly due to the sales of inventory and the related provision of inventory wrote off.

48


5.8 Other current assets


Income tax of the accrued trade in allowance

100,732,176.18 92,417,083.11

Advance payment of land value-added tax

391,138.39 -

Financial products 409,000,000.00 1,005,000,000.00

Total 510,123,314.57 1,097,417,083.11

Financial products including 230 million Yuan trust products and 179 million Yuan guaranteed financial

products.

5.9 Available-for-sales financial assets 5.9.1 Available-for-sales financial assets：

Items


Amount Bad debt provision

Net book value Amount Bad debt provision

Net book value

Available-for-sales debt instruments

705,000,000.00 - 705,000,000.00 - - -

Available-for-sales equity instruments at fair value

342,234,132.92 - 342,234,132.92 - - -

Available-for-sales equity instruments at cost

- - - 50,000,000.00 - 50,000,000.00

Others - - - - - -

Total 1,047,234,132.92 - 1,047,234,132.92 50,000,000.00 - 50,000,000.00

5.9.2 End of period available-for-sales financial assets at fair value：

Categories Available-for-sales equity instruments

Available-for-sales debt

instruments Total

The cost of equity instruments 233,358,869.52 - 233,358,869.52

Fair value 342,234,132.92 - 342,234,132.92

Accumulated changed amount

of fair value included in other comprehensive income

80,839,883.07 - 80,839,883.07

Impairment amount - - -

49


5.10 Long-term equity investments

Investee

Opening balance

Additions or decreases

Closing balance

Provision for impairment

loss Additions

Decreases

Investment gains and losses

recognized under the equity method

Other comprehensive

income adjustment

Other

changes in equity

Cash dividends or

profits declared in Year 2014

Addition of provision

for impairmen

t loss

Others

Jointly run company


- - - - - - - - - - -


1,032,040.65 - - - - - - - - 1,032,040.65 1,032,040.65

Total 1,032,040.65 - - - - - - - - 1,032,040.65 1,032,040.65

Notes: （1）The original investment cost of Beijing Pennvasia Glass Co., Ltd is RMB6,988,694.48, share holding ratio is 35%. For Beijing Pennvasia Glass Co., Ltd’s operation condition

is still poor with a negative net assets balance for several years, the Company adjusted cost of long-term investment of this company to zero according to the equity method. （2）The original investment cost of Luanxian Xiaochuan Glass Silica Sand Co., Ltd is RMB821,000.00, share holding ratio is 35%. For Luanxian Xiaochuan Glass Silica Sand Co.,

Ltd’s operation condition is still poor with a negative net assets balance for several years, the Company adjusted cost of long-term investment of this company to zero according to the equity method in the previous year.

50

5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS（CONTINUED） 5.11 Fixed assets

5.11.1 Changes in fixed assets in the current year are as follows:

Items

Buildings Transportation

Vehicles

Machinery Office and other

equipments

Total

I. Cost

December 31st,2014 1,922,576,614.27 74,802,522.02 3,429,452,410.86 95,829,497.20 5,522,661,044.35

Increases for the year 158,282,214.13 6,073,980.85 476,312,283.67 7,918,281.95 648,586,760.60

1.Purchase 1,225,188.35 3,164,238.97 308,016,252.29 3,906,318.83 316,311,998.44

2.Transferred from construction in progress

157,057,025.78

2,909,741.88

168,296,031.38

4,011,963.12

332,274,762.16

Decreases for the year 3,129,535.00 2,351,606.40 681,301,753.73 1,051,793.24 687,834,688.37

1.Disposal or retirement 3,129,535.00 2,351,606.40 109,224,731.17 1,051,793.24 115,757,665.81

2. Transferred to construction in progress

-

-

572,077,022.56

-

572,077,022.56

December 31st,2015 2,077,729,293.40 78,524,896.47 3,224,462,940.80 102,695,985.91 5,483,413,116.58

II.Accumulated

depreciation

December 31st,2014 506,242,175.46 47,720,142.29 1,408,896,459.31 49,050,201.11 2,011,908,978.17

Increases for the year 78,022,013.03 6,175,140.97 490,771,041.92 9,078,872.92 584,047,068.84

1.Accrual 71,279,774.78 6,175,140.97 249,459,170.27 9,078,872.92 335,992,958.94

2. Increase for the year 6,742,238.25 - 241,311,871.65 - 248,054,109.90

Decreases for the year 3,019,672.69 2,476,732.17 426,389,843.19 966,214.31 432,852,462.36

1.Disposal or retirement 3,019,672.69 2,476,732.17 69,750,956.60 966,214.31 76,213,575.77

2. Transferred to construction in progress

-

-

356,638,886.59

-

356,638,886.59

December 31st,2015 581,244,515.80 51,418,551.09 1,473,277,658.04 57,162,859.72 2,163,103,584.65

III.Provision for impairment

loss

December 31st,2014 - 216,899.03 13,943,796.05 - 14,160,695.08

Increases for the year 3,091,877.70 36,754.30 121,951,808.84 1,224,004.41 126,304,445.25

1.Accrual - 36,754.30 121,951,808.84 1,224,004.41 123,212,567.55

2. Increase for the year 3,091,877.70 - - - 3,091,877.70

Decreases for the year - - - - -

1.Disposal or retirement - - - - -

2.Transferred to construction in progress

-

-

-

-

-

December 31st,2015 3,091,877.70 253,653.33 135,895,604.89 1,224,004.41 140,465,140.33

IV.Net book value

1.December 31st,2015 1,493,392,899.90 26,852,692.05 1,615,289,677.87 44,309,121.78 3,179,844,391.60

2.December 31st,2014 1,416,334,438.81 26,865,480.70 2,006,612,155.50 46,779,296.09 3,496,591,371.10

51


5.11 Fixed assets（continued）

5.11.2 Temporary idle fixed assets

Items Cost Accumulated depreciation

Provision for

impairment loss Net book value Notes

Buildings 115,123,076.11 27,506,622.08 - 87,616,454.03

Machinery 168,567,531.69 67,892,685.80 81,424,814.99 19,250,030.90

Office and other equipments 5,979,710.89 4,189,087.15 1,224,004.41 566,619.33

Transportation vehicles 4,298,758.27 3,734,333.86 36,754.30 527,670.11

Total 293,969,076.96 103,322,728.89 82,685,573.70 107,960,774.37

Note: the temporary idle fixed asset of the Company is Changshu second rolling production line and processing

line.

52


5.12 Construction in progress

5.12.1 Construction in progress

Items


Gross Amount Provision for impairment

loss Net book value Gross Amount

Provision for impairment loss

Net book value

Changshu Fire Prevention Glass Project 186,079,336.61 92,254,229.97 93,825,106.64 182,732,901.32 27,635,195.37 155,097,705.95

Jiangsu Float Glass Production Line 215,438,135.97 36,885,885.30 178,552,250.67 - - -

Tianjin SYP Coated Glass Project 41,356,441.65 - 41,356,441.65 - - -

Chongqing Engineering Glass Processing

Glass Project phase I - - -

43,862,953.06 - 43,862,953.06

Chongqing Engineering Glass Processing

Glass Project phase II 24,099,478.51 - 24,099,478.51

- - -

Yizheng Auto Glass Production Line - - - 4,799,542.54 - 4,799,542.54

Wuhan Auto Glass Production Line - - - 3,045,083.83 - 3,045,083.83

Kangqiao Auto Glass Laminated EPB-L

Bending furnace 39,762,639.11 - 39,762,639.11

- - -

Kangqiao Auto Glass Tempering

Furnace 49C 17,413,497.93 - 17,413,497.93

- - -

CS3 Transforming Project 365,770,896.58 11,413,726.81 354,357,169.77 281,537,620.71 11,413,726.81 270,123,893.90

Others 17,969,701.82 - 17,969,701.82 8,996,275.82 - 8,996,275.82

Total 907,890,128.18 140,553,842.08 767,336,286.10 524,974,377.28 39,048,922.18 485,925,455.10

53

5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS（CONTINUED） 5.12.2 Movement of significant construction project

Project’s Name

Budget (in a

hundred million)

Opening balance Additions

Complete and transfer to fixed assets/intangible

assets

Other reduction

s

Closing balance

Proportion between

engineering input and budget

（%）

Stage of completion

（%）

Amount of accumulated

interest capitalized

Including：Amount of interest

capitalized in Year 2014

Proportion of interest

capitalized in Year 2014 (%)

Capital source

Changshu Fire Prevention Glass

Project 1.43 182,732,901.32 23,384,914.93 20,038,479.64 - 186,079,336.61 102.82 - 10,265,258.42 - -

Bank loan and subscription

funds

Tianjin SYP Coated Glass Project 0.5 170,748.72 41,185,692.93 - - 41,356,441.65 82.71 80.00 1,279,822.81 1,279,822.81 5.30 Bank loan and the own funds

Jiangsu Float Glass Production Line - - 215,438,135.97 - - 215,438,135.97 In the planning In the planning - - - -

Chongqing Engineering Glass

Processing Glass Project phase II 2.32 - 24,099,478.51 - - 24,099,478.51 10.39 10.38 - - -

Bank loan and subscription

funds

Shanghai Auto Glass Laminated

EPB-L Bending furnace 0.46 - 39,762,639.11 - - 39,762,639.11 86.44 86.44 - - - the own funds

Shanghai Auto Glass Bending

furnace 49C 0.19 - 17,413,497.93 - - 17,413,497.93 91.65 91.65 - - - the own funds

Chongqing Engineering Glass

Processing Glass Project phase I 1.5 43,862,953.06 12,948,705.87 56,811,658.93 - - 106.41 100.00 2,065,962.43 - -

Bank loan and the own funds

Yizheng Auto Glass Production Line 2.85 4,799,542.54 10,398,660.09 15,198,202.63 - - 69.66 100.00 - - - the own funds

Wuhan Auto Glass Production Line 2.74 3,045,083.83 223,492,682.39 226,537,766.22 - - 93.24 100.00 1,499,704.74 1,499,704.74 5.07 Bank loan and the own funds

CS3 Transforming Project 1.62 281,537,620.71 84,233,275.87 - - 365,770,896.58 82.64 80.00 - - - the own funds

Total 516,148,850.18 692,357,683.60 318,586,107.42 - 889,920,426.36 15,110,748.40 2,779,527.55

54


5.12 Movement of significant project（continued）

5.12.3Provision for impairment loss

Items Provision for

impairment loss Reasons

Changshu Fire Prevention Glass Project

64,619,034.60

A portion of the equipment is to be disposed.

Jiangsu Float gall Producion First Line

36,885,885.30

A portion of the equipment is to be scrapped during the production innovation.

Total 101,504,919.90

5.13 Project material


Project material for Changshu 1st phase of the Project

271,992.43

272,248.84

5.14 Disposal of fixed assets


Transportation vehicles - 21,400.00

55


5.15 Intangible assets

5.15.1 Intangible assets

Items Land use rights Royalties Software Proprietary technology Total

I. Cost

December 31st,2014 532,857,661.54 208,934,078.53 4,647,943.29 5,736,280.81 752,175,964.17

Additions 29,719.88 - 5,309,695.62 - 5,339,415.50

1.Purchase 29,719.88 - 5,309,695.62 - 5,339,415.50

2.Internal research

and development - - - - -

3.Increases from the

merger of enterprises - - - - -

Decreases - - - - -

1.Disposals - - - - -

December 31st,2015 532,887,381.42 208,934,078.53 9,957,638.91 5,736,280.81 757,515,379.67

II. Accumulated amortization

December 31st,2014 96,044,340.11 78,935,335.17 2,903,603.99 159,341.13 178,042,620.40

Additions 11,027,651.64 15,490,803.60 855,820.75 1,912,093.56 29,286,369.55

1.Accrual 11,027,651.64 15,490,803.60 855,820.75 1,912,093.56 29,286,369.55

Decreases - - - - -


December 31st,2015 107,071,991.75 94,426,138.77 3,759,424.74 2,071,434.69 207,328,989.95

III. Provision for

impairment

December 31st,2014 - - - - -

Additions - - - - -

1.Accrual - - - - -

Decreases - - - - -


December 31st,2015 - - - - -

IV.Net book value - - - - -

1.December 31st,2015 425,815,389.67 114,507,939.76 6,198,214.17 3,664,846.12 550,186,389.72

2.December 31st,2014 436,813,321.43 129,998,743.36 1,744,339.30 5,576,939.68 574,133,343.77

56


5.16 Development expenditures

Items December 31

st,2014

Additions Decreases

December 31

st,2015

Internal development expenditure

Others Confirmed as

intangible assets

Transferred to the income statement

ERP 7,229,802.88 4,895,302.14 - 3,405,422.12

- 8,719,682.90

Note: Development expenditure is the cost of Yonyou NC-ERP system.The project developed by two phases,

and one has been finished and turned into intangible assets. It is currently carried out phase II..

5.17 Goodwill 5.17.1 The original value of goodwill

Investee December 31st,2014 Additions Decreases December 31st,2015


2,420,911.43 - - 2,420,911.43

Shanghai SYP Building Glass Co., Ltd. 5,222,625.08 - - 5,222,625.08

Total 7,643,536.51 - - 7,643,536.51

5.17.2 Provision for impairment loss Investee December 31st,2014 Accrual December 31st,2015

Shanghai SYP Engineering Glass Co., Ltd. - 2,420,911.43 2,420,911.43

Shanghai SYP Building Glass Co., Ltd. - 5,222,625.08 5,222,625.08

Total - 7,643,536.51 7,643,536.51

Note: The company tested consolidated goodwill at the balance sheet date,and it was found that Shanghai SYP Bulding Glass Co., Ltd and Shanghai SYP Engineering Glass Co., Ltd operated at a loss this year and no excess profit was expected to be brought by the consolidated goodwill.So the company recognized full provision for impairment of goodwill.

5.18 Long-term prepayments

Items December 31st

,2014 Additions Amortization Other

decreases December 31

st,2015

Hob 1,890,992.22 5,203,790.70 1,483,053.21 - 5,611,729.71

Mould 5,681,320.90 5,693,857.11 2,242,522.69 - 9,132,655.32

Others 166,316.45 149,795.27 166,740.62 - 149,371.10

Total 7,738,629.57 11,047,443.08 3,892,316.52 - 14,893,756.13

5.19 Deferred income tax assets/ Deferred income tax liabilities 5.19.1 Undeducted Deferred Income Tax Assets

Items


Deductible temporary differences

Deferred

income tax assets

Deductible temporary differences

Deferred

income tax assets

Impairment provision 65,638,740.23 15,463,375.25 62,524,964.20 14,875,470.93

http://dict.youdao.com/w/intangible/#keyfrom=E2Ctranslation

http://dict.youdao.com/w/assets/#keyfrom=E2Ctranslation

http://dict.youdao.com/w/consolidated/#keyfrom=E2Ctranslation

http://dict.youdao.com/w/goodwill/#keyfrom=E2Ctranslation

http://dict.youdao.com/w/consolidated/#keyfrom=E2Ctranslation

http://dict.youdao.com/w/goodwill/#keyfrom=E2Ctranslation

57


5.19 Deferred income tax assets/ Deferred income tax liabilities（continued） 5.19.2 Undeducted Deferred Income Tax Liabilities

Items


Taxable

temporary differences

Deferred

income tax liabilities

Taxable

temporary differences

Deferred

income tax liabilities

Valuation of the trading of financial instruments and derivative financial instruments

108,875,263.40 27,218,815.85 - -

Deferred taxation 41,269,305.01 6,739,569.25 29,727,380.80 1,486,369.04

Total 150,144,568.41 33,958,385.10 29,727,380.80 1,486,369.04

5.19.3 Details of unrealized deferred income tax assets


Deductible temporary differences 801,488,585.83 164,789,590.35 Deductible losses 839,986,054.54 562,801,824.03

Total 1,641,474,640.37 727,591,414.38

5.19.4 Amount of deductible losses of unrealized deferred income tax assets due in the next year.

The Year December 31st,2015 December 31st,2014 Notes

2015 - 425,026.45 2016 64,914,610.37 66,258,006.85 2017 221,303,522.85 221,303,522.85 2018 110,886,449.18 119,007,191.54 2019 150,313,077.09 155,808,076.34 2020 292,568,395.05 -

合计 839,986,054.54 562,801,824.03

58


5.20 Short-term borrowings 5.20.1 Categories Items December 31st,2015 December 31st,2014

Credit loans 1,532,727,600.00 1,618,990,200.00 Pledged loans - 159,094,000.00 Collateral loans 40,000,000.00 232,433,930.00 Guaranteed loans - 40,000,000.00

Total 1,572,727,600.00 2,050,518,130.00

Collateral loans: Chonging SYP Engneering Glass Co.,Ltd. borrowing RMB 40 million Yuan from Agricultural Bank of China use the land use right located in Construction Village Wandong Town Wansheng Economic Development Zone (Real estate license 2014 No. 01882) as collateral.

5.21 Notes payable Categories December 31st,2015 December 31st,2014

Commercial acceptance bills 143,529,172.63 103,787,737.05

Bank acceptance bills 154,994,192.01 109,312,636.73

Total 298,523,364.64 213,100,373.78

5.22 Accounts payable 5.22.1 Accounts payable Items December 31st,2015 December 31st,2014

Within 1 year 510,274,866.08 331,091,787.82

Over 1 year 51,779,181.64 69,934,101.63

Total 562,054,047.72 401,025,889.45

59

5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS（CONTINUED） 5.22 Accounts payable（continued）

5.22.2 Significant accounts payable aged more than one year

Items December 31st,2015 Reasons for

non-repayment

Supplier A 26,527,262.65

Not exceed the credit period

Supplier B 1,634,153.73 Not exceed the credit

period Supplier C 1,375,200.00


Supplier D 935,432.11 Not exceed the credit

period Supplier E 924,969.30


Total 31,397,017.79

5.23 Advances from customers 5.23.1 Advances from customers Items December 31st,2015 December 31st,2014

Within 1 year 56,268,747.63 44,525,055.82

Over 1 year 4,188,194.61 7,325,443.49

Total 60,456,942.24 51,850,499.31

5.23.2 Significant advances from customers aged more than one year

Items December 31st,2015

Reasons for non-repayment

Supplier A 326,263.90 Not settled

Supplier B 293,683.35 Not settled

Supplier C 148,700.00 Not settled

Supplier D 116,908.59 Not settled

Total 885,555.84

5.24 Employee benefits payable 5.24.1 Employee benefits payable

Items Opening balance

Additions Decreases Closing balance

1. Short-term employee

benefits 62,344,000.45 544,025,748.60 533,669,226.36 72,700,522.69

2. Post-employment

benefits 1,633,802.71 41,808,235.36 42,498,343.02 943,695.05

3. Termination benefits - 14,136,068.15 12,567,049.75 1,569,018.40

4. Other employee benefits

within one year - - - -

Total 63,977,803.16 599,970,052.11 588,734,619.13 75,213,236.14

60


5.24 Employee benefits payable(continued) 5.24.2 Short-term employee benefits

Items Opening balance


1. Wages or salaries, bonuses, allowances, subsidies

60,177,556.56 477,524,435.58 467,376,522.97 70,325,469.17

2.Staff welfare 412,281.51 18,495,204.65 18,426,588.44 480,897.72

3.Social security contributions 801,052.50 22,585,127.89 22,858,239.28 527,941.11

Including: Medical insurance 668,824.65 18,877,658.32 19,130,362.85 416,120.12

Work injury insurance 83,895.11 2,253,646.08 2,258,186.65 79,354.54

Maternity insurance 48,332.74 1,453,823.49 1,469,689.78 32,466.45

4.Housing funds 85,042.80 19,994,164.81 19,958,478.61 120,729.00

5.Union running costs and employee education costs

868,067.08 4,754,676.59 4,577,257.98 1,045,485.69

6. Employee benefits arising from non-accumulating paid absences

- - - -

7. Employee benefits payable under a profit-sharing plan

- - - -

8.Others - 672,139.08 472,139.08 200,000.00

Total 62,344,000.45 544,025,748.60 533,669,226.36 72,700,522.69

5.24.3 Defined contribution plans

Items

Opening balance


Basic pension insurance 1,505,519.87 39,069,350.93 39,705,441.59 869,429.21

Unemployment insurance 119,586.06 2,621,635.42 2,679,029.59 62,191.89

Pension funds 8,696.78 117,249.01 113,871.84 12,073.95

Total 1,633,802.71 41,808,235.36 42,498,343.02 943,695.05

5.25 Taxes and surcharges payable

Categories December 31st,2015 December 31st,2014

Corporate income tax 5,941,984.39 5,179,318.37

Value-added tax 11,830,982.36 14,640,394.44

Business tax 147,638.45 251,574.88

Land use tax 763,153.29 1,105,107.26

Property tax 1,132,768.15 1,436,039.03

Urban construction tax 324,761.71 260,433.62

Education surcharge 394,696.76 327,437.83

Stamp tax 512,615.94 724,499.20

Individual income tax 777,603.91 547,800.61

Others 48,270.16 110,311.43

Total 21,874,475.12 24,582,916.67

61


5.26 Interest payable


Interest payable for long-term borrowings

1,050,823.45 2,331,065.83

Interest payable for short-term borrowings

2,736,473.78 3,407,938.37

Interest payable for enterprise bond

34,301,708.33 -

Total 38,089,005.56 5,739,004.20

5.27 Dividends payable


Ordinary Shares Dividend 3,500,000.00 7,652,119.78

Note: The final dividends payable for Shanghai SYP Kangqiao Auto Glass Co.,Ltd. to deal with Shanghai Building Materials (Group) Co., Ltd. Due to Shanghai SYP Kangqiao Auto Glass Co.,Ltd. is currently in development,so it did not pay.

5.28 Other payables 5.28.1 Reported according to the nature of other payables Items December 31st,2015 December 31st,2014

Accrued costs and expenses 52,295,462.92 33,675,138.73

Payable between enterprises 119,279,293.59 116,192,690.29

Deposits 9,209,511.48 6,967,899.10

Withholding personal social

security

678,206.46 123,812.50

Others 20,451,166.51 20,109,988.23

Total 201,913,640.96 177,069,528.85

5.28.2 Significant other payables aged more than one year

Relationship Amount Reasons


51,920,000.00 Not exceed the credit period

Related party


Related party





750,000.00 Not exceed the credit period

Total 107,765,463.77

62


5.29 Non-current liabilities due within one year Items December 31st,2015 December 31st,2014

Long-term borrowing due within one year

- 77,133,200.00

Long-term payables due within one year

32,202,374.30 164,688,634.75

Total 32,202,374.30 241,821,834.75

5.30 Other current liabilities

5.30.1 Category： Items December 31st,2015 December 31st,2014

Short term bond payable

999,591,666.65

-

5.30.2 Changes of other current liabilities

Bond name Face value Issuing

date Bond period

Issuing value Opening balances

Additions Provision for interest at par

Premium/ Discount amortization

Deceases Final balances

Short-term

financing

bonds

500,000,000.00 2015.3.25 1 year 500,000,000.00 - 499,250,000.00

20,680,000.00

625,000.00

-

499,875,000.00

Short-term

financing

bonds

300,000,000.00 2015.4.27 1 year 300,000,000.00 - 299,400,000.00

10,375,000.00

450,000.00

-

299,850,000.00

Short-term

financing

bonds

200,000,000.00 2015.5.27 1 year 200,000,000.00 - 199,600,000.00

5,584,500.00

266,666.65

-

199,866,666.65

Total 1,000,000,000.0

0 - 998,250,000.00

36,639,500.00

1,341,666.6

5

-

999,591,666.65

5.31 Long-term borrowings

5.31.1 Category of long-term borrowings Items December 31st,2015 December 31st,2014

Guaranteed loans 51,700,000.00 -

Credit loans 49,077,919.75 159,718,569.75

Total 100,777,919.75 159,718,569.75

63


5.31 Long-term borrowings(Continued) 5.31.2 Long-term borrowings

Creditors

Beginning date

Maturity date

Currency

Interest rate

（%）


Local Currency Amount Local Currency Amount

Bank of China Tianjin Dagang Branch

2013-8-12

2019-8-12

RMB

Benchmark interest rates of

more than 5 years

RMB49,077,919.75

RMB29,077,919.75

Bank of Communications Jiangxia branch

2015-6-30

2020-6-30

RMB

Benchmark interest rates of

more than 5 years

RMB34,000,000.00

-

Bank of Communications Jiangxia branch

2015-5-8

2020-5-8

RMB

Benchmark interest rates of more than

5 years

RMB17,700,000.00

-

5.32 Long-term payables 5.32.1 Long-term payables Items December 31st,2015 December 31st,2014

Financing Lease Payable - 31,785,812.50 Long-term Payable Between

Enterprises

85,623,310.88 -

Total 85,623,310.88 31,785,812.50

64


5.33 Deferred Revenue

Items December 31st

,2014 Increase Decrease December 31st

,2015 Reasons

Government Grant 625,798,722.86 33,915,700.00 16,337,683.66 643,376,739.20 Government Grant Unrealized profit and

loss from sale and leaseback

6,807,557.33 - 6,807,557.33 -

Sale and Leaseback

Total 632,606,280.19 33,915,700.00 23,145,240.99 643,376,739.20

Items related to government grant

Items Opening balance Increase

Included in non-operating

income of 2014

Other

changes Closing balance

Related to assets/profits

Deferred revenue from Jiyang factory relocation compensation

575,660,830.71 -

13,806,489.33

-

561,854,341.38

Related to assets

Grant for construction energy saving glass deep processing project Infrastructure

31,672,000.00 -

1,845,750.00

-

29,826,250.00

Related to assets

Technical innovation and energy efficiency improvement project for SASAC enterprises

18,465,892.15 - 423,463.67 - 18,042,428.48

Related to assets

Industrial transformation and upgrading project

16,000,000.00 - - 16,000,000.00 Related to assets

The colored glaze line DIP Project

-

1,600,000.00

26,666.66

-

1,573,333.34

Related to assets

Technological transformation for annual output of 800000 pieces of high performance special windshield production line

-

4,550,000.00

-

- 4,550,000.00 Related to assets

Chongqing infrastructure - 11,765,700.00 235,314.00 - 11,530,386.00 Related to assets

Total 625,798,722.86 33,915,700.00 16,337,683.66 - 643,376,739.20

5.34 Paid in Capital

Items December 31st,2014 Movement（+、-） December 31st,2015

Shares Proportions

（%）

New issues

Bonus share

s

Capitalized capital reserve

Others Total Shares Proportions

（%）

1. RMB common shares 747,416,067 79.94 - - - - - 747,416,067 79.94 2. Domestically listed foreign shares

187,500,002 20.06 - - - - - 187,500,002 20.06

Total shares 934,916,069 100.00 - - - - - 934,916,069 100.00

5.35 Capital reserve

Items December 31

st,2014

Additions for the year

Decreases for

the year December 31

st,2015

Share premium 1,121,291,075.63 - - 1,121,291,075.63

Other capital reserve 1,752,324.48 - - 1,752,324.48

Total 1,123,043,400.11 - - 1,123,043,400.11

65

5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS（CONTINUED） 5.36 Other comprehensive income

Items

December 31

st,

2014

Amount of 2015

December 31st

, 2015

Amount before income tax

Less: Other comprehensive

income transferred to net profit and

loss

Less: Income tax

Other comprehensive income after tax attribute to the

Company

Other comprehensive income after tax attribute to the

Minority interest

I. Other comprehensive income couldn’t be reclassified into the profits and losses

- - - - - - -

（ I ） Other comprehensive income couldn’t be reclassified into the profits and losses

- - - - - - -

1.Remeasurement of changes in net liabilities or net assets under defined benefit plans

- - - - - - -

2.The unit of other comprehensive income could not be reclassified to income statements of the investee under the equity methods

-12,670,868.57 108,875,263.39 - 27,218,815.85 80,839,883.07 816,564.47 68,169,014.50

（ II ） Other comprehensive income could be reclassified into the profits and losses

- - - - - - -

1. The unit of other comprehensive income will be reclassified to income statements of the investee under the equity methods

- 108,875,263.39 - 27,218,815.85 80,839,883.07 816,564.47 80,839,883.07

2.Gains or losses from the changes of fair value of available for sale financial assets

- - - - - - -

3. Gains or losses from the reclassification of hold-to-maturity investments to available for sale financial assets.

- - - - - - -

4. The effective part of cash flow hedging gains and losses

-12,670,868.57 - - - - - -12,670,868.57

III. Total other Comprehensive income -12,670,868.57 108,875,263.39 - 27,218,815.85 80,839,883.07 816,564.47 68,169,014.50

66


5.37 Surplus reserve

Items December 31st,2014

Additions for the year

Decreases for the year

December 31st,2015

Statutory surplus reserve 303,321,222.31 4,068,679.11 - 307,389,901.42 Discretionary surplus reserve 184,814,366.85 - - 184,814,366.85

Total 488,135,589.16 4,068,679.11 - 492,204,268.27

The net profit of the parent company of 2015 is RMB40,686,791.13yuan and appropriated the

statutory surplus reserve according to 10% of the net profit.

5.38 Inappropriate profits

Items Year 2015 Year 2014

Balance as at Dec. 31, 2014 before adjustments 645,090,957.98 639,411,459.37 Adjusted amount of the opening balance (Increase+，

Decrease-)

- -

Balance as at Dec. 31, 2014 after adjustments 645,090,957.98 639,411,459.37 Including: Net profits attributable to equity holders of

the Company

-364,267,244.39 53,354,016.90

Less: Appropriation of statutory surplus reserve 4,068,679.11 10,277,875.61 Appropriation of discretionary surplus reserve - - Ordinary shares' dividends payable 18,698,321.38 37,396,642.68 Ordinary shares’ dividends converted into equity - - Inappropriate profits at the year end 258,056,713.10 645,090,957.98

5.39 Revenue and cost of sales

5.39.1Revenue and cost of sales

Items Year 2015

Year 2014

Revenue Cost Revenue Cost

Main operations

2,694,124,940.8

6 2,235,197,157.57 2,809,447,515.72 2,217,731,250.71

Other

operations

53,618,330.91 32,131,191.11 55,465,436.64 46,965,328.82

Total

2,747,743,271.7

7 2,267,328,348.68 2,864,912,952.36 2,264,696,579.53

5.39.2 Revenue and cost of main operations analyzed by product are set out below（in ten thousands）



Processed glass 142,920.50 119,154.38 154,692.95 118,220.18

Float glass 64,868.24 56,786.34 81,178.35 68,790.11

Auto glass 61,623.75 47,579.00 45,073.45 34,762.84

269,412.49 223,519.72 280,944.75 221,773.13

67


5.39 Revenue and cost of sales（continued） 5.39.3 Revenue and cost of main operations analyzed by region are set out below（in ten thousands）

Regions Year 2015 Year 2014


Beijing 13,345.51 11,502.05 17,931.19 14,804.42

Shanghai 63,233.94 46,049.57 42,718.48 27,138.22

Northeast 24,015.22 21,294.65 38,418.45 31,835.50

North China 6,804.45 6,312.62 20,265.16 17,863.44

Eastern China 69,865.48 60,751.70 98,672.32 79,382.61

South China 29,247.77 26,154.69 23,242.98 19,787.05

Central China 18,065.03 15,471.48 8,989.72 7,242.65

Northwest 1,914.06 1,902.00 1,266.72 1,185.23

Southwest 19,657.59 16,327.15 14,847.79 12,226.61

Overseas customer

23,263.45 17,753.80 14,591.94 10,307.40

269,412.49 223,519.72 280,944.75 221,773.13

5.39.4 Top five customers are analyzed as below:

Customer Name Revenue Proportion of the total revenue

Customer A 117,427,973.18 4.27%

Customer B 95,781,100.54 3.49%

Customer C 95,364,154.54 3.47%

Customer D 65,966,059.55 2.40%

Customer E 50,458,905.86 1.84%

Total 424,998,193.67 15.47%

5.40 Business taxes and levies


Business tax 3,276,709.37 2,416,902.97

Urban construction tax 6,702,705.87 5,557,977.70

Education surcharge 6,642,276.98 6,393,901.70

River management fee and water conservancy fund

780,274.14 812,066.10

Total 17,401,966.36 15,180,848.47

68


5.41 Selling and distribution expenses


Employee expenses 56,428,128.15 46,615,178.22 Freight and insurance 96,842,792.45 92,475,038.07 Office expenses 8,534,696.03 5,613,441.65 Entertainment expenses 7,660,492.90 7,210,184.25 Sales commission 18,649,207.43 15,486,147.05 Travelling expenses 7,539,154.90 5,327,987.27 Quality loss 6,406,898.41 1,483,891.64 Rental fees 4,016,380.46 4,132,560.94 Storage fees 14,401,251.04 8,231,426.58 Marketing fees 1,367,329.75 823,287.71 Others 774,021.25 732,540.75

Total 222,620,352.77 188,131,684.13

5.42 General and administrative expenses


Employee benefits expenses 147,737,448.43 130,165,892.13 R&D expenses 61,167,165.96 72,360,852.73 Depreciation and amortization 29,972,203.16 30,361,119.85 Taxation expenses 19,927,079.91 22,287,215.50 Consulting services expenses 8,304,215.83 5,537,171.65 Property and rental fees 8,454,528.35 4,570,040.65 Water, electronic expenses and

consumption of materials

9,088,476.08 7,276,336.68

Entertainment expenses 2,305,953.97 3,006,257.74

Travelling expenses 4,775,622.93 5,796,106.71

Office and correspondence fees 3,937,512.48 3,494,456.58

Repair costs 1,520,302.85 4,407,674.19

Vehicle costs 5,313,817.16 4,692,118.89

Shut-down loss 35,874,491.26 19,893,102.44

The labor protection articles 2,606,500.82 2,029,200.24

Labor union and employee

education expenses

1,898,055.63 1,774,066.14

Labor protection fees 730,740.51 1,290,172.74

Canteen fees 4,360,266.25 3,624,720.37

Personnel management fees 3,928,549.95 3,804,183.92

Board of directors' expenses 718,677.57 743,637.99

Insurance expenses 2,456,983.02 993,876.48

Testing and certification fees 813,774.50 1,286,697.27

Others 4,877,524.77 5,236,658.95

Total 360,769,891.39 334,631,559.84

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5.43 Financial expenses Items Year 2015 Year 2014

Interest expenses 145,139,025.42 130,676,994.81

Less: interest income 6,957,702.67 9,517,389.79

Net interest expenses 138,181,322.75 121,159,605.02

Foreign exchange loss 32,511,391.93 5,267,700.19

Less: foreign exchange income 18,492,121.14 7,748,938.75

Foreign exchange loss-net 14,019,270.79 -2,481,238.56

Bank charges and others 6,493,268.71 3,866,833.55

Total 158,693,862.25 122,545,200.01

5.44 Assets impairment losses Items Year 2015 Year 2014

Bad debt provision 6,639,482.45 8,155,570.20 Provision for the decline in value of inventories 74,397,638.10 17,635,243.57 Impairment losses of fixed assets 123,212,567.55 676,849.72 Impairment losses of construction in progress 104,596,797.60 - Impairment losses of goodwill 7,643,536.51 -

Total 316,490,022.21 26,467,663.49

5.45 Gain (loss) from changes in fair value Gains resulted from changes in fair values of

the following

Year 2015 Year 2014

Held-for-trading financial assets - -1,115,982.11

5.46 Investment income


Gains of long-term equity investment recognized under equity method

- -

Gains on disposal of long-term equity investments

- -

Gains on financial asset measured at fair value and the variation is included in the current profits and losses

- -

Gains on disposal of financial asset measured at fair value and the variation is included in the current profits and losses

- 1,405,929.83

Gains on held-for-maturity investments during holding period

- -

Gains on available for sale financial assets

30,163,016.76 -

Gains on disposal of available for sale financial assets

- -

Gains on held-for-maturity investments - - Gains on financing products 63,877,771.70 49,513,019.37

Total 94,040,788.46 50,918,949.20

70


5.47 Non-operating incomes 5.47.1 Non-operating incomes

Items Year 2015 Year 2014 Including:

extraordinary gains or losses

Gains on disposal of non-current assets 14,589,698.81 10,382,202.51 14,589,698.81

Including： Gains on disposal of fixed assets

14,589,698.81 10,382,202.51

14,589,698.81

Gains on disposal of intangible assets - - -

Compensation income 1,950.00 5,050.00 1,950.00

Government grants 21,836,731.93 51,155,601.49 21,836,731.93

Unplayable accounts payable 611,397.91 19,434,031.40 611,397.91

Others 155,333.18 29,565.08 155,333.18

Total 37,195,111.83 81,006,450.48 37,195,111.83

5.47.2 Government grants

Category Year 2015 Year 2014 Asset related/

Income related

Amortization of government grants associated with assets 13,806,489.33 32,431,977.64 Asset related

Patent support funds 5,655.00 7,910.00 Income related

Pudong district employee professional training financial

subsidies

- 15,165.00

Income related

financial subsidies - 439,000.00 Income related

Self-owned brand project reward fund - 200,000.00 Income related

Awards on outstanding tax contributions - 250,000.00 Income related

Subsidy of special energy-saving and low-radiation glass

material

300,000.00 500,000.00

Income related

Electronically Subsidies - 500,000.00 Income related

Technical reconstruction special fund - 1,350,000.00 Income related

Discount compensation - 325,200.00 Income related

Electronically Subsidies - 64,800.00 Income related

Industry special fund - 3,698,000.00 Income related

University students subsidy fund - 13,300.00 Income related

Building energy saving glass deep processing project

subsidy

- 428,000.00 Asset related

Encourage the expansion of export reward fund - 25,022.00 Income related

Subsidy for source of pollution - 5,000.00 Income related

Technical innovation and energy efficiency improvement

project for SASAC enterprises

423,463.67 10,034,107.85 Asset related

Kangqiao industry district “Special contribution enterprise”

reward

- 10,000.00 Income related

71


5.47 Non-operating incomes（continue） 5.47.2 Government grants（continue）

Category Year 2015 Year 2014 Asset related/

Income related

Employee training financial subsidies - 502,617.00 Income related

Employee professional training financial subsidies - 355,502.00 Income related

Pudong district financial subsidies 113,000.00 - Income related

Subsidy for cleaner production 330,000.00 - Income related

Pudong district development of science and technology

fund

216,000.00 - Income related

Subsidy for patent model 120,000.00 - Income related

Little Giant reward on Science and Technology 1,218,359.17 - Income related

Tianjing financial subsidies 574,086.10 - Income related

Subsidy for Chongqing infrastructure 2,883,650.00 - Asset related

Chongqing colored glaze line DIP special subsidy funds 26,666.66 - Asset related

Individual income tax return 14,400.00 - Income related

Chongqing Wansheng economic development zone

subsidiy

552,648.00 - Income related

Subsidiy for patent Pilot work of the enterprises in Shanghai 280,000.00 - Income related

Subsidy for building materials simulation technology 707,000.00 - Income related

Subsidy for Wuhan infrastructure 235,314.00 - Asset related

Subsidy for Yizheng export base of 2015 30,000.00 - Income related

Total 21,836,731.93 51,155,601.49

5.48 Non-operating expenses

Items Year 2015 Year 2014 Including:

extraordinary gains or losses

Losses on disposal of non-current assets

1,184,295.90 956,613.29 1,184,295.90

Including： Losses on disposal of fixed assets

1,184,295.90

956,613.29

1,184,295.90

Fines and penalties 103,426.49 114,956.40 103,426.49

Others 3,931.80 21,048.74 3,931.80

Total 1,291,654.19 1,092,618.43 1,291,654.19

5.49 Income tax expenses 5.49.1 Income tax expenses Items Year 2015 Year 2014

Current income tax calculated according to tax law and related regulations

18,626,127.83 27,618,030.88

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Deferred income tax 4,665,295.89 2,264,352.00

Total 23,291,423.72 29,882,382.88


5.49 Income tax expenses(continue)

5.49.2 Adjustment procedure of accounting profit and income tax

Items Year 2015

Total profit -465,616,925.79

Income tax expenses based on the calculation of statutory tax rate

-116,404,231.47

Impact on the different income tax rate of subsidiary company 23,833,210.70

Impact on the adjustment of previous income tax 887,442.60

Impact on Non-taxable income -9,741,678.61

Impact on un-deductible cost, expenses and losses -10,194,685.56

Impact on the deductible losses from the unrealized deferred income tax assets of previous years

-3,737,165.03

Impact on the deductible temporary difference/losses from unrealized deferred income tax assets of current year

131,897,566.56

Impact on the timing difference from realized deferred income tax liabilities of current year

6,739,569.24

As sales income 11,395.29

Income tax expenses 23,291,423.72

5.50 Notes to consolidated cash flow statements 5.50.1 Cash received relating to other operating activities


Interest income 6,957,702.67 9,517,389.79 Subsidies 8,030,242.60 18,758,238.93 Decrease in circulation restricted

deposit 112,832,877.84 20,532,983.41

Exchanges between enterprises 24,844,102.11 4,514,581.30 Others 613,347.91 5,070,470.27

Total 153,278,273.13 58,393,663.70

5.50.2 Cash paid relating to other operating activities


Payments relating to selling and distribution expenses

166,617,109.08 138,335,381.52

Payments relating to general and administrative expenses

133,317,476.63 130,534,081.21

Bank charges 6,493,268.71 3,866,833.55 Restricted cash - 56,786,703.48 Others 107,358.29 136,005.14

Total 306,535,212.71 329,659,004.90

73


5.50 Notes to consolidated cash flow statements(continue) 5.50.3 Cash received relating to other investing activities


Investment related government subsidy 29,365,700.00 32,100,000.00

Increased margin related investment activtiy

23,707,405.69 -

53,073,105.69 32,100,000.00

5.50.4 Cash paid relating to other investing activities


Increase of Project guarantee bail - 25,522,000.00

5.50.5Cash paid relating to other financing activities


Financing lease rent 87,481,150.57 173,119,188.82

74


5.51 Supplementary information to the cash flow statement

5.51.1 Supplementary information to the cash flow statement


I. Reconciliation of net profit to cash flow from operating activities:

Net profit -488,908,349.51 13,093,833.15

Add: Provision for asset impairment 316,490,022.21 26,467,663.49

Depreciation of fixed assets and biological assets and depletion of oil and gas assets

335,992,958.94 327,608,516.21

Amortization of intangible assets 29,286,369.55 25,602,561.59

Amortization of long-term prepaid expenses 3,892,316.52 2,031,571.48

Losses on disposal of fixed assets, intangible assets and

other long-term assets (Less gains)

-13,405,402.91 -9,425,589.22

Losses on Write-off of fixed assets - -

Losses on changes in fair values (less gains) - 1,115,982.11

Financial expenses (less income) 151,915,288.51 128,195,756.25

Losses arising from investments (less gains) -94,040,788.46 -50,918,949.20

Decrease in deferred tax assets (less increase) -587,904.32 3,443,986.09

Increase in deferred tax liabilities (less decrease) 5,253,200.21 -1,179,634.09

Decrease in inventories (less increase) -57,481,856.96 -103,221,693.10

Decrease in operating receivables (less increase) 123,195,408.15 -27,402,429.08

Increase in operating payables (less decrease) 219,368,915.32 -106,996,743.37

Others - -

Net cash flow from operating activities 530,970,177.25 228,414,832.31

II. Significant investing and financing activities that do not

involve cash receipts and payments:

Conversion of debt into capital - -

Convertible bonds due within one year - -

Fixed assets acquired under finance leases - -

III. Net changes in cash and cash equivalents:

Closing balance of cash 354,759,111.15 204,320,327.09

Less: Opening balance of cash 204,320,327.09 1,462,058,408.52

Add: Closing balance of cash equivalents - -

Less: Opening balance of cash equivalents - -

Net increase in cash and cash equivalents 150,438,784.06 -1,257,738,081.43

75

5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS（CONTINUED） 5.51 Supplementary information to the cash flow statement（continued） 5.51.2 Cash and cash equivalents Items December 31st, 2015 December 31st, 2014

I. Cash 354,759,111.15 204,320,327.09

Including: Cash on hand 6,638.77 50,479.31

Cash at bank readily withdrawn on demand 354,752,472.38 204,269,847.78

Other currency funds readily withdrawn on

demand

-

-

II. Cash equivalents - - Including: debt investment due within three

months -

-

III. Cash and cash equivalent at year end 354,759,111.15 204,320,327.09

Including: restricted cash and cash equivalents of parent company or intergroup subsidiaries

- -

5.52 Restricted assets on ownership or usage right

Items Book value as at

December 31st, 2015 Reasons

Cash and cash equivalents 56,928,728.33 Circulation of bail is limited Fixed assets 92,679,748.27 Pledge for bank loans Intangible assets 61,035,871.09 Pledge for bank loans

Total 210,644,347.69

76


5.53 Foreign currency items 5.53.1 Foreign currency items

Items Closing balance as at December 31st, 2015 of Foreign Currency

Exchange rate Closing balance as at

December 31st, 2015 of RMB

Cash and cash equivalents Including: USD 6,461,136.78 6.4936 41,956,037.79 EURO 128,933.50 7.0952 914,808.97 HKD 2,294.45 0.8378 1,922.29 GBP 10.42 9.6159 100.20 JPY 2,328.00 0.0539 125.48 AUD 28,584.35 4.7276 135,135.37 Account Receivable Including: USD 1,027,781.95 6.4936 6,674,004.87 EURO 745,086.61 7.0952 5,286,538.52 HKD 1,292,027.83 0.8378 1,082,460.92 AUD 850,417.87 4.7276 4,020,435.52 Other receivables Including: USD 149,751.64 6.4936 972,427.25 Advances to suppliers Including: USD 18,182.08 6.4936 118,067.15 EURO 14,396.16 7.0952 102,143.63 Advances from customers Including: USD 1,121,382.52 6.4936 7,281,809.53 JPY 5,976.00 0.0539 322.11 Account payable Including: USD 2,398,348.89 6.4936 15,573,918.35 EURO 3,362,439.61 7.0952 23,857,181.52 GBP 503,526.22 9.6159 4,841,857.78 AUD 8,595.24 4.7276 40,634.86 Other payables Including: USD 2,639,158.09 6.4936 17,137,636.97 Short-term loan Including: USD 3,500,000.00 6.4936 22,727,600.00 Long-term payables Including: USD 13,185,800.00 6.4936 85,623,310.88

6 CHANGES IN SCOPE OF CONSOLIDATION

6.1 Business combination of entities under common controls

6.1.1 Business combination of entities under common controls in the reporting period The company added an enterprise in the scope of consolidation in the reporting period,the combined party

named Shanghai SYP Chengding Investment Partnership (Limited Partnership) which paid-in capital is RMB234,400,000.00 and investment proportion is 99%.

77

7 DISCLOSURE OF INTERESTS IN OTHER ENTITIES

7.1 Equity in the subsidiaries 7.1.1 Composition of the Group s

Full name of subsidiaries

Operating Address

Registered Address

Business nature Shares（%）

Access to subsidiaries Direct Indirect

Tianjin SYP Engineering Glass Co., Ltd.

Tianjin Tianjin Manufacturing - 100 Invested

Jiangsu Pilkington SYP Glass Co., Ltd.

Changshu Changshu Manufacturing 50 - Invested

Changshu SYP Special Glass Co., Ltd.

Changshu Changshu Manufacturing 75 25 Invested

Jiangsu Huadong SYP Glass Co., Ltd.

Changshu Changshu Manufacturing 100 - Invested

Jiangmen SYP Engineering Glass Co., Ltd.

Jiangmen Jiangmen Manufacturing - 100 Invested

Glasslink Limited Hongkong Hongkong Trading 100 - Invested

Tianjin Pilkington SYP Glass Co., Ltd.

Tianjin Tianjin Manufacturing - 57 Invested

Chongqing SYP Engineering Glass Co., Ltd.

Chongqing Chongqing Manufacturing 100 - Invested

Shanghai SYP Building Glass Co., Ltd.

Shanghai Shanghai Manufacturing 71.25 25 Business combination

involving entities not under common control


Shanghai Shanghai Manufacturing - 100 Business combination


Guangdong SYP Glass Co., Ltd.

Shenzhen Shenzhen Manufacturing - 100 Business combination


Tianjin SYP Glass Co., Ltd. Tianjin Tianjin Manufacturing 50 25

Business combination involving entities not under

common control

Shanghai SYP Kangqiao Auto Glass Co.,Ltd

Shanghai Shanghai Manufacturing 50.26 - Business combination


Yizheng SYP Auto Glass Co.,Ltd

Yizheng Yizheng Manufacturing - 100 Business combination


Wuhan SYP Kangqiao Auto Glass Co.,Ltd

Wuhan Wuhan Manufacturing - 100 Business combination


Shanghai SYP Shijin CoatsGlass Co., Ltd

Shanghai Shanghai Manufacturing - 51 Business combination


Shanghai SYP Investment Co.,Ltd.

Shanghai Shanghai Investing 100 - Invested

Shanghai SYP Chengding Investment partnership (limited partnership)

Shanghai Shanghai Investing - 99 Invested

The company holds 50% shares of Jiangsu Pilkington SYP Glass Co.,(hereafter refer to Jiangsu Pilkington) and was entrusted to manage Jiangsu Pilkington, the company can be appointed and approved Jiangsu Pilkington’s key management personnel, leading the economic activities of Jiangsu Pilkington and effectively control Jiangsu Pilkington, so Jiangsu Pilkington was included in the consolidated scope in financial statements as a subsidiary..

78

7 DISCLOSURE OF INTERESTS IN OTHER ENTITIES（CONTINUED）

7.1 Equity in the subsidiaries 7.1.2 Important Partially-owned subsidiaries

Full name of subsidiaries

Shares portion

of minority (%)

Gains and losses

attributable to the

minority shareholders

of 2015

Declaration amount of

dividends to minority

shareholders of 2015

Closing balance of

minority interest


50 -53,093,772.31 - 36,787,255.65


3.75 -2,445,102.85 - 16,080,276.43

Tianjin SYP Glass Co., Ltd.

25 -11,354,151.26 - 126,223,529.54

Tianjin Pilkington SYP Glass Co., Ltd.

43 -62,783,774.08 - 66,565,901.49


49.74 4,580,877.06 - 344,551,851.83

79


7.1.3 Financial information of important Partially-owned subsidiaries Unit: Ten thousand

Subsidiaries’

Name

December 31st


, 2014

Current assets Non-current

assets Total assets

Current

liabilities

Non-current

liabilities

Total

liabilities

Current

assets

Non-current

assets

Total

assets

Current

liabilities

Non-current

liabilities

Total

liabilities


23,821.56 44,848.81 68,670.37 43,750.58 17,562.33 61,312.91 27,840.52 55,389.50 83,230.02 65,253.81 - 65,253.81


74,272.47 105,646.39 179,918.86 111,514.52 4,907.79 116,422.31 71,856.69 115,240.88 187,097.57 98,887.70 15,971.86 114,859.56

Tianjin SYP Glass Co., Ltd.

44,473.36 113,261.62 157,734.98 76,081.44 24,507.53 100,588.97 47,537.28 121,829.04 169,366.32 76,714.78 24,685.50 101,400.28

Tianjin Pilkington SYP Glass Co., Ltd. 15,023.39 27,101.80 42,125.19 26,644.75 - 26,644.75 18,150.66 34,418.26 52,568.92 22,487.60 - 22,487.60


55,076.86 73,200.04 128,276.90 50,121.56 8,582.28 58,703.84 56,872.00 46,168.92 103,040.92 32,588.73 1,846.59 34,435.32

Subsidiaries’ Name

Year 2015 Year 2014

Revenue Net profit

Total

comprehensive

income

Net cash flows from

operating activities Revenue Net profit

Total

comprehensive

income

Net cash flows from

operating activities

Jiangsu Pilkington SYP Glass Co., Ltd. 32,630.16 -10,618.75 -10,618.75 2,563.55 39,580.91 -4,002.03 -4,002.03 -1,559.44

Shanghai SYP Building Glass Co., Ltd. 131,624.20 -8,741.46 -8,741.46 24,618.60 149,095.41 6,198.54 6,198.54 24,407.88

Tianjin SYP Glass Co., Ltd. 58,668.18 -10,820.04 -10,820.04 6,343.26 62,504.38 -1,373.93 -1,373.93 8,173.72

Tianjin Pilkington SYP Glass Co., Ltd 25,412.09 -14,600.88 -14,600.88 1,118.63 23,946.74 -6,590.60 -6,590.60 -1,337.00

Shanghai SYP Kangqiao Auto Glass Co.,Ltd 64,148.01 920.96 920.96 12,552.22 46,965.99 614.48 614.48 -3,527.91

80


7.2 Equity in the associates or joint ventures

7.2.1 Associates

Name of Associates

Operating Address

Registered Address

Business nature

Shares（%） Accounting methods for associates and

joint ventures Direct Indirect


Beijing Beijing Manufacturing and sales of glass

35.00 - Equity method


LuanXian, Hebei Province

LuanXian, Hebei Province

Manufacturing and sales of silica sand

35.00 - Equity method

7.2.2 Financial information of Associates

Items

Closing balance/Actual amount of 2015

Closing balance/Actual amount of 2014

Book value of investment - -

Total amount according to the

calculation of the shareholding portion

Net profit -5,269,317.23 -2,605,126.58

Other comprehensive income - -

Total comprehensive income -5,269,317.23 -2,605,126.58

7.2.3 The excess loss of associate

Name of Associates Unrealized cumulative losses of prior period

Unrealized loss of the

current period（or the net profit shared in the current

period）

Unrealized cumulative losses as

at Dec 31, 2015

Beijing Pennvasia Glass Co., Ltd. -9,548,153.23 -5,290,828.32 -14,838,981.55

Luanxian Xiaochuan Glass Silica Sand Co., Ltd. -1,132,938.24 21,511.09 -1,111,427.15

81

8 THE DISCLOSEURE OF FAIR VALUE

8.1 The Closing fair value of assets and liabilities at air value

Iterms

Fair value at Dec 31st, 2015

The first level

measured at fair value

The second level measured

at fair value measurement

The third level measured at fair

value measurement

Total

Sustaining fair value

（ I）Financial assets at fair value and

through profit or loss

1. Trading financial assets - - - -

1.1 Investment in debt instruments - - - -

1.2 Investments in equity instruments - - - -

1.3 Derivative financial assets - - - -

2. Financial assets designated as at fair value and through profit or loss

2.1 Investment in debt instruments - - - -

2.2 Investments in equity instruments - - - -

(II) .Available for sale financial assets 342,234,132.92 - - 342,234,132.92

1. Investment in debt instruments - - - -

2. Investments in equity instruments 342,234,132.92 - - 342,234,132.92

3.Others - - - -

(III）Investment property

1. Leased land use rights - - - -

2. Rental buildings - - - -

3.Held and prepared for transfer after appreciation land use rights

- - - -

（IV）Biological assets

1. Consumable biological assets - - - -

2. Productive biological assets - - - -

……

Continues to fair value of total assets 342,234,132.92 - - 342,234,132.92

（V）Trading financial liabilities

1. Trading bonds issued - - - -

2. Derivative financial liabilities - - - -

3.Others - - - -

（VI）Financial liabilities designated at fair value through profit or loss

- - - -

……

Continues to fair value of total liabilities - - - -

II.Non-continuous measurement of fair value

（I）Assets held for sale - - - -

……

Unsustainable fair value of total assets - - - -

……

Unsustainable fair value of total liabilities - - - -

8.2 The basis for determining market price measured by continuous and non-continuous fair value of the first

level: publicly traded price.

82

9 RELATED PARTIES AND RELATED PARTY TRANSACTIONS

9.1 Related parties where a control relationship exists

Company Name Place of

registration

Nature of business

Registered Capital

(in RMB ten thousands)

Proportion of shareholdings

（%）

Proportion of voting power

（%）

Shanghai Building Materials (Group) Corporation

Shanghai

Industrial investments

200,000 27.69 27.69

The ultimate controller of the company: Shanghai Real Estate(Group) Co.,Ltd

9.2 Subsidiaries of the Company

Please refer to the information of subsidiaries of the company in Note 7.1.

9.3 Associates of the Group Please refer to the information of associates of the company in Note 7.2.

9.4 Other related parties of the Company

Company Name Relationship

Pilkington Group Ltd. and its subsidiaries Important equity shareholders Shanghai Boji Intelligent Curtain Wall Co.,Ltd Subsidiary of the parent company Shanghai Boji Intelligent Curtain Wall Glass New

Materials Co.,Ltd Subsidiary of the parent company

9.5 Related party transactions

9.5.1 Purchase and sales of goods/ receipt and rendering of services

9.5.1.1 Purchase of goods/receipt of services

Related parties Nature of

transactions Year 2015 Year 2014

Pilkington Group Ltd. and its subsidiaries

Purchase of equipments and

materials 269,156.95 108,820.21

Pilkington Group Ltd. and its subsidiaries Receipt of services 5,791,334.99 10,395,048.59 Pilkington Group Ltd. and its subsidiaries Interest 2,311,961.54 2,311,961.53 Luanxian Xiaochuan Glass Silica Sand Co., Ltd. Purchase of silicon 5,189,854.88 6,350,266.44 9.5.1.2 Sales of goods/rendering of services

Related parties Nature of

transactions Year 2015 Year 2014

Pilkington Group Ltd. and its subsidiaries Sales of glass 2,022,898.64 5,124,463.89 Shanghai Boji Intelligent Curtain Wall Co.,Ltd Sales of glass 6,333,082.68 7,484,005.83

Shanghai Boji Intelligent Curtain Wall Glass New Materials Co.,Ltd

Sales of glass 2,460,744.36 -

83

9 RELATED PARTIES AND RELATED PARTY TRANSACTIONS（CONTINUED）

9.5 Related parties transactions(continued)

9.5.2 Guarantees The company is guarantor：

Guaranteed party Guaranteed

amount

Commencing date

Maturity

date Completed

Wuhan SYP Kangqiao Auto Glass Co.,Ltd 17,700,000.00 2015-5-8 2020-5-8 NO

Wuhan SYP Kangqiao Auto Glass Co.,Ltd 34,000,000.00 2015-6-30 2020-6-30 NO

9.5.3 Key management personnel remuneration


Key management personnel remuneration 5.638 million 7.995 million

9.6 Balance due to/from related parties

9.6.1 Balance due from related parties

Items Name of

related parties

December 31st,2015

December 31st,2014

Gross

Amount

Bad debt provision

Gross Amount

Bad debt provision

Accounts receivable Pilkington Group

Ltd.

111,704.34 2,234.09 4,035,295.21 80,705.90

Accounts receivable

Shanghai Boji Intelligent Curtain Wall Co.,Ltd

368,195.59 7,363.91 3,660,735.95 73,214.72

Accounts receivable

Shanghai Boji Intelligent Curtain Wall Glass New Materials Co.,Ltd

160,200.91 3,024.02 - -

Other receivables


16,720,362.20 16,720,362.20 16,720,362.20 16,720,362.20

Other receivables Beijing Pennvasia

Glass Co., Ltd.

12,089,114.66 12,089,114.66 12,089,114.66 12,089,114.66

9.6.2 Balance due to related parties

Items Name of related parties

December 31st,2015

December 31st,2014

Net Book Value Net Book Value

Accounts payable Pilkington Group Ltd. 26,527,262.65 34,040,649.28

Other payables Pilkington Group Ltd. 59,154,839.82 50,459,043.99

Other payables Shanghai Building Materials (Group) Corporation

3,854,529.56 3,854,529.56

Dividends payable Shanghai Building Materials (Group) Corporation

3,500,000.00 3,500,000.00

Non-current liabilities due within one year

Pilkington Group Ltd. - 80,683,910.20

Long-term payables Pilkington Group Ltd. 85,623,310.88 -

Advance payments Shanghai Boji Intelligent Curtain Wall Co.,Ltd

15,320.35 628.73

84

10 COMMITMENTS AND CONTINGENCIES

10.1 Significant commitments As at December 31st, 2015, the Company has no significant commitments that need to be disclosed.

10.2 Contingencies

As at December 31st, 2015, the Company has no significant contingencies that need to be disclosed. 11 EVENTS AFTER BALANCE SHEET According to the annual profit distribution plan adopted at eighth session of the board of directors the

eighth meeting, net profit attributable to equity holders of the year is negative,and no annual profit distribution or Capital reserve capitalization proposed in 2015. The profit distribution plan will be commented after approval of the general meeting of shareholders.

Except for the above-mentioned events, as at March 29th,2016, the Company has no significant events after

balance sheet that need to be disclosed. 12 OTHER SIGNIFICANT EVENTS The company did not have any other important matters in the reporting period which have a significant

impact in reading and understanding of the financial statements.

85

13 NOTES TO THE COMPANY FINANCIAL STATEMENTS

13.1 Accounts receivable

13.1.1 Accounts receivable are analyzed by categories as follows:

December 31st


, 2014

Category

Gross Amount Bad debt provision Gross Amount Bad debt provision

Amount Proportion

s (%)

Amount Proportion

s (%)

Amount Proportion

s (%)

Amount Proportions

(%)


- - - - - - - -


- - - - - - - -

Portfolio 1 84,231,999.07 76.83 20,656,877.08 24.52 112,001,737.06 100.00 23,429,156.62 20.92

Portfolio 2 25,299,441.78 23.08 - - - - - -

Sub-total 109,531,440.85 99.91 20,656,877.08 18.86 112,001,737.06 100.00 23,429,156.62 20.92


99,420.03 0.09 99,420.03 100.00 - - - -

Total 109,630,860.88 100.00 20,756,297.11 18.93 112,001,737.06 100.00 23,429,156.62 20.92

13.1.2 Accounts receivable that are provided for provision using the aging analysis


Gross Amount Bad debt provision Proportions

Within 6 months 2,141,671.85 42,833.44 2% 7-12 months 7,012,062.35 350,603.12 5% 1-2 years 50,428,085.25 5,042,808.53 10% 2-3 years 9,969,350.31 1,993,870.06 20% 3-4 years 1,028,195.02 308,458.51 30% 4-5 years 1,835,827.17 1,101,496.30 60% Over 5 years 11,816,807.12 11,816,807.12 100%

Total 84,231,999.07 20,656,877.08



Within 6 months 75,629,426.55 1,512,588.53 2% 7-12 months 338,084.32 16,904.22 5% 1-2 years 10,000,888.17 1,000,088.82 10% 2-3 years 2,659,506.94 531,901.39 20% 3-4 years 4,125,996.32 1,237,798.90 30% 4-5 years 294,900.01 176,940.01 60% Over 5 years 18,952,934.75 18,952,934.75 100%

Total 112,001,737.06 23,429,156.62

86

13 NOTES TO THE COMPANY FINANCIAL STATEMENTS（CONTINUED）

13.1 Accounts receivable(continued)

13.1.3Accounts receivable individually significant and provided for bad debts separately

Customer’s Name Gross Amount

Bad debt provision

Proportions

(%) Reason

None - - -

13.1.4 Accounts receivable individually not significant but provided for bad debts separately

Customer’s Name Gross Amount

Bad debt provision

Proportions

(%) Reason


13.1.5 The provision of bad debts recovered or reversed in this period. The Reversal for bad debts of the current period is 554,374.41 Yuan; There is no previous written-off of accounts

receivable recovered in this period.

13.1.6 Write-off of accounts receivable during the reporting period:

Customer’s Name

Nature of receivables

Amount

written off Reasons

Related party transactions

Several customers

Trade receivables

2,118,485.10

Balance of receivables with long-aging which failed to be collected despite several attempts to collect or with bankrupt customers

No

13.1.7 Top five outstanding amounts

Customer’s Name

Relationship Amount Aging

Proportion of the outstanding amounts to

the total accounts

receivable（%）

Customer A


34,792,010.52

Within 2 years and over 5 years

31.74

Customer B


16,487,216.49

Within 3 years 15.04

Customer C


7,655,149.70

Within 2 years 6.98

Customer D


3,197,126.36

Within 1 years 2.92

Customer E


2,630,345.09

Within 2 years 2.40

87


13.2 Other receivables

13.2.1 Other receivables are analyzed by categories as follows:

December 31st, 2015 December 31st, 2014

Categories Gross Amount

Bad debt provision

Gross Amount

Bad debt provision

Amount (%) Amount (%) Amount (%) Amount (%) Individually significant and provided for bad debts separately

- - - - - - - -


Portfolio 1 1,735,636.07 0.08 999,663.91 57.60 3,946,740.70 0.31 1,139,201.85 28.86

Portfolio 2 2,297,339,411.17 99.92 - - 1,260,310,030.48 99.69 - -

Sub-total 2,299,075,047.24 100.00 999,663.91 0.04 1,264,256,771.18 100.00 1,139,201.85 0.09


- - - - - - - -

Total 2,299,075,047.24 100.00 999,663.91 0.04 1,264,256,771.18 100.00 1,139,201.85 00.09

13.2.2 Other receivables that are provided for provision using the aging analysis



1-6 months 281,619.78 5,632.40 2% 7-12 months - - 5% 1-2 years - - 10% 2-3 years 524,980.10 104,996.02 20% 3-4 years 1.00 0.30 30% 4-5 years 100,000.00 60,000.00 60% Over 5 years 829,035.19 829,035.19 100%

Total 1,735,636.07 999,663.91



1-6 months 1,153,088.06 23,061.76 2% 7-12 months 870,848.89 43,542.44 5% 1-2 years 600,379.10 60,037.91 10% 2-3 years 3,228.33 645.67 20% 3-4 years 210,726.00 63,217.80 30% 4-5 years 399,435.13 239,661.08 60% Over 5 years 709,035.19 709,035.19 100%

Total 3,946,740.70 1,139,201.85

88


13.2 Other receivables(continued) 13.2.3 The provision of bad debts recovered or reversed in this period. The Reversal for bad debts of the current period is 139,537.94 Yuan,and there is no previous written-off of

other receivables recovered in this period. 13.2.4 There is no write off other payables in this reporting period.

13.2.5 Nature of other payables

Nature of other payables December 31st,2015 December 31st,2014

Deposits 20,924,980.10 21,517,527.10 Loans from enterprises 2,277,772,402.55 1,240,619,065.67 Petty cash 327,663.59 757,098.70 Others 50,001.00 1,363,079.71

Total 2,299,075,047.24 1,264,256,771.18

13.2.6 Top five other receivables

Customer’s

Name Relationship Amount Aging

Proportion of the outstanding amounts

to the total other

receivables（%）

Customer A Related party 576,323,249.13 Within 2 years 25.07 Customer B Related party 401,210,385.28 Within 3 years 17.45

Customer C Related party 259,670,952.86 Within 2 years 11.29 Customer D Related party 254,834,417.52 Within 3 years 11.08 Customer E Related party 214,021,048.07 Within 1 year 9.31

13.3 Long-term equity investment 13.3.1 Long-term equity investment

Items

December 31st

,2015 December 31st

,2014

Gross Amount Provision for impairment

loss Net book value Gross Amount

Provision for

impairment loss

Net book value

Investments in subsidiaries

1,222,858,895.72 - 1,222,858,895.72 1,201,768,895.72 - 1,201,768,895.72

89


13.3 Long-term equity investment(continued)

13.3.2 Investments in subsidiaries

Investee December 31st

,2014 Additions for

the year

Decreases for the year

December 31st

,2015 Addition of

provision for impairment loss

Provision for

impairment loss

Tianjin SYP Glass Co., Ltd. 77,040,847.00 - - 77,040,847.00 - -

Shanghai SYP Building Glass Co., Ltd. 233,908,515.75 - - 233,908,515.75 - -

Glasslink Limited 7,448,940.00 - - 7,448,940.00 - -

Jiangsu Pilkington SYP Glass Co., Ltd. 194,768,042.34 - - 194,768,042.34 - -

Changshu SYP Special Glass Co., Ltd. 126,314,824.99 - - 126,314,824.99 - -

Jiangsu Huadong SYP Glass Co., Ltd. 50,000,000.00 - - 50,000,000.00 - -

Chongqing SYP Engineering Glass Co., Ltd 75,000,000.00 21,090,000.00 - 96,090,000.00 - -

Shanghai SYP Kangqiao Auto Glass Co., Ltd. 337,287,725.64 - - 337,287,725.64 - -

Shanghai SYP Investment Co.,Ltd. 100,000,000.00 - - 100,000,000.00 - -

Total 1,201,768,895.72 21,090,000.00 - 1,222,858,895.72 - -

90


13.4 Revenue and cost of sales

Items Year 2015

Year 2014


Major operations 38,976,571.20 38,976,335.28 129,358,443.48 129,344,697.44 Other operations 104,443,725.78 56,750,477.84 87,966,510.60 70,299,384.52

Total 143,420,296.98 95,726,813.12 217,324,954.08 199,644,081.96

13.5 Investment income Items Year 2015 Year 2014

Gains of long-term equity investment recognized under cost method

- 50,195,356.70

Gains of long-term equity investment recognized under equity method

- -1,704,933.15

Gains on disposal of long-term equity investments

- -

Gains on held-for-trading financial assets during holding period

- -

Gains on disposal of held-for-trading financial assets - 1,405,929.83 Gains on held-for-maturity investments during

holding period -

-

Gains on held-for-maturity investments - - Gains on the holding of Available for sale financial

assets

30,163,016.76 -

Gains on disposal of Available for sale financial assets

- -

Gains on Financial products 63,868,566.27 49,513,019.37

Total 94,031,583.03 99,409,372.75

91

14 SUPPLEMENTARY INFORMATION

14.1 Schedule of extraordinary gains or losses Items Year 2015 Notes

Gains or losses from the disposal of non-current assets, including the reversal of the provision of impairment loss

13,405,402.91

Tax allowance and exemption which were approved by overstepping authorities or approved without former approval documents or accidental happened.

-

Government grants recognized through the profits or losses, except for those closely relating to the Company's normal operations and continuous enjoying based on certain amount or quantity according to the relevant regulations of the State

21,836,731.93

Payment for the use of state funds which was included in the profits and losses of the reporting period

-

Gains or losses from Investment cost is less than the fair value of the identifiable net assets of the invested enterprise when the company obtain the subsidiary companies, associated enterprises and joint enterprises.

-

Gains or losses from nonmonetary assets exchange. - Gains or losses from the assets invested or managed on behalf of

others

63,877,771.70

The assets provision caused by irresistible force, e.g. natural disasters

-

Gains or losses from debt restructuring - Expenses of enterprises restructuring, e.g. find place expenses for

unemployed workers, integration costs.

-

Gains or losses from transaction of the unfair transaction price excess the fair value

-

Net profit of subsidiaries from the beginning of the current year to the combination date of the business combination under the common control

-

Gains or losses from the contingencies which unrelated to the company normal business

-

In addition to the normal operation of the business related to the effective hedging business, gains or losses from changing of fair value of holding trading financial assets and financial liabilities, and gains or losses from disposal of trading financial assets, financial liabilities held for trading and available for sale financial assets.

30,163,016.76

Reversed receivables of individual impairment test for impairment - Gains from entrusted loans provided to outsiders - Gains or losses from the changes in the fair value model for

subsequent measurement of the fair value of investment real estate.

-

Gains or losses from the one-time adjustment effected in the profits and losses of the current period according to the requirement of the tax, accounting and other laws.

-

Trustee fee income from be entrusted with the operation - Other extraordinary income and expense besides above listed 661,322.80 Other items satisfied the definition of extraordinary gains or losses - Effect of income tax -523,940.16 Extraordinary gains or losses attributable to minority shareholders

(after tax)

-846,940.04

Total 128,573,365.90

92

14 SUPPLEMENTARY INFORMATION (CONTINUED)

14.2 Return on net assets and EPS

Profit for the reporting period

Weighted average return on

net assets

EPS

Basic EPS Diluted EPS

Calculated based on net profit attributable to ordinary equity holders

-12.19 -0.39 -0.39

Calculated based on net profit attributable to ordinary equity holders after extraordinary gains and losses

-16.50 -0.53 -0.53

15 APPROVAL OF FINANCIAL STATEMENTS The Company and consolidated financial statements were approved by the board of directors and

authorized for issue. SYP Glass Group Co., Ltd. Legal representative：Jian Zhao Accountant in charge：Yuejiang Chu Head of accounting department：Shijun Bian Date: March 29th, 2016

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