Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 August 2018 1 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 I. Important Notice, Table of Contents and Definitions The Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. Mr. Wang Lipeng, The Company leader, Ms. Feng Qiuju, Chief financial officer and the Mr. Gao Feipeng, the person in charge of the accounting department (the person in charge of the accounting) hereby confirm the authenticity and completeness of the financial report enclosed in this semi-annual report. All the directors attended the board meeting for reviewing the semi-annual Report. The development strategy, operation plan and other forward-looking statements involved in this report will not constitute any substantive commitment to the investors by the Company. Investors please be aware of the investment risks. The company has already described the risk items existed in details in the report with reference to (IV) possible risks of X Operation Conditions Discussion and Analysis. The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. 2 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Table of Contents I.Important Notice and Definitions II. Corporate Profile and Key Financial Indicators III. Business Profile IV. Performance Discussion and Analysis V. Important Events VI. Change of share capital and shareholding of Principal Shareholders VII. Situation of the Preferred Shares VIII. Information about Directors, Supervisors and Senior Executives IX. Corporate Bonds X. Financial Report XI. Documents available for inspection 3 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Definition Refers Terms to be defined Definition to Refers Company Law Company Law of the People’s Republic of China to Refers Securities Law Securities Law of the People’s Republic of China to Refers CSRC China Securities Regulatory Commission to Refers SZSE Shenzhen Stock Exchange to Refers Tunghsu Group Tunghsu Group Co., Ltd. to Refers Baoshi Group Shijiazhuang Baoshi Electronics Group Co., Ltd to Tunghsu Optoelectronic , Company, The Refers Tunghsu Optoelectronic Technology Co., Ltd. Company to Refers Tunghsu(Yingkou)Optoelectronic Tunghsu(Yingkou)Optoelectronic Display Co., Ltd. to Refers Xuhong Optoelectronic Sichuan Xuhong Optoelectronic Technology Co., Ltd. to Wuhu Tunghsu Optoelectronic Technology Co., Ltd., was the Refers Wuhu Optoelectronic implementation unit of the non-public item to raise money for and invest to in of “The Project of Production Line for Panel Display Plate” in 2013 Refers Wuhu Equipment Wuhu Tunghsu Optoelectronic Equipment Technology Co., Ltd. to Tunghsu(Kunshan)Display material Co., Ltd., In 2015, was the Refers Tunghsu (Kunshan ) implementation unit of the non-public item to raise money for and invest to in “Project of Production Line for the 5th-generation CF for TFT-LCD”. Refers Tunghsu Construction Tunghsu Construction Group Co., Ltd. to Fuzhou Xufu Optoelectronic Technology Co., Ltd., In 2016, was the Refers Fuzhou Xufu non-public item to raise money for and invest in “Project of Production to Line for the 8.5th-generation CF for TFT-LCD” Fuzhou Optoelectronic Refers Fuzhou Tunghsu Optoelectronic Technology Co., Ltd., In 2016, was the 4 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 to non-public item to raise money for and invest in “Project of Production Line for the 8.5th-generation CF for TFT-LCD” Refers Tunghsu Finance Company Tunghsu Group Finance Co., Ltd. to Refers Shanghai Tanyuan Huigu Shanghai Tanyuan Huigu New Material Technology Co., Ltd. to Refers Xutan New Material Beijing Xutan New Material Technology Co., Ltd. to Refers Mingshuo Technology Mingshuo (Beijing) Electronic Technology Co., Ltd to Refers Tengda Wujiang Tengda Packing Products Co., Ltd. to Shanghai Sunlong Bus Co., Ltd., Refers SUNLONG 2017 issue of shares and payment of cash to buy the assets of the enterpris to e Refers BOE BOE Technology Group Co., Ltd. to Refers CSOT China Star optoelectronics Technology Co., Ltd. to Refers Tianma Tianma Microelectronics Co Ltd to Refers TFT-LCD Thin Film Transistor Liquid Crystal Display to Refers LTPS Low Temperature Poly-silicon to Refers AMOLED Active-matrix organic light emitting diode to A thin glass sheet with extremely smooth surface is a basic component of constituting LCD display device as well as one of the critical basic Refers Glass substrate materials in panel display industry. The glass sheet can be divided into to various generations by its size, and the higher the generation is, the bigger the size will be. Refers G5 glass substrate The size of the 5th-generation glass substrate is 1100 mm×1300 mm. to Refers G6 glass substrate The size of the 6th-generation glass substrate is 1500 mm×1850 mm. to Refers G8.5 glass substrate The size of the 8.5th-generation glass substrate is 2300 mm×2500 mm to Optical film Refers refers to the general name of optical diaphragms such as diffusion, 5 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 to reflection, prism, composite prism, etc., mainly used in TFT LCD backlights. Refers CF Critical original materials of LCD panel for realizing colorization display to Refers Refers to two-dimensional carbon materials related to grapheme, with a Grapheme materials to layer less than 10 carbon atoms In addition to mobile phones, tablet PCs and other displays, for the touch Refers Cover glass screen touch module, display and non-touch screen display to protect the to transparent glass lens Refers Adopting new power systems, fully or mainly rely on new energy-driven New Energy Bus to passenger bus, including pure electric bus and fuel cell bus 6 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 II. Basic Information of the Company and Financial index I. Company Information Stock abbreviation Tunghsu Optoelectronic, Tunghsu B Stock code 000413、200413 Stock abbreviation after Tunghsu Optoelectronic, Tunghsu B change (if any) Stock exchange for listing Shenzhen Stock Exchange Name in Chinese 东旭光电科技股份有限公司 Chinese Abbreviation 东旭光电 English name (If any) Tunghsu Optoelectronic Technology Co.,Ltd. English abbreviation (If any) Tunghsu Optoelectronic Legal Representative Wang Lipeng II. Contact person and contact manner Board secretary Securities affairs Representative Name Gong Xin Wang Qingfei No.5 Court, No.23 A Fuxing Road, No.5 Court, No.23 A Fuxing Road, Contact address Haidian District, Beijing Haidian District, Beijing Tel 010-68297016 010-68297016 Fax 010-68297016 010-68297016 E-mail gongxin_dx@126.com wangqingfei@dong-xu.com III. Other 1. Way of contact Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not □ Applicable √ Not applicable Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more details in annual report 2017. 2. Information inquiry Whether information disclosure and preparation place changed in reporting period or not 7 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 □ Applicable √ Not applicable None of the official presses, website, and place of enquiry has been changed in the semi report period. For details please find the Annual Report 2017. IV. Summary of Accounting Data and Financial Indicators Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data. √Yes □No Reasons for retrospective restatements: Business merger under the same control. Same period of last year YoY+/-(%) Reporting period Before adjustment After adjustment After adjustment Operating Gross income(Yuan) 11,129,851,790.88 4,641,285,527.91 4,876,438,604.10 128.24% Net profit attributable to the shareholders 858,296,089.08 635,855,750.37 637,480,381.47 34.64% of the listed company(Yuan) Net profit after deducting of non-recurring gain/loss attributable to the shareholders 811,345,478.77 559,990,548.41 564,088,026.98 43.83% of listed company(Yuan) Cash flow generated by business 83,617,287.66 -1,414,361,686.97 -1,364,949,813.78 106.13% operation, net(Yuan) Basic earning per share(Yuan/Share) 0.15 0.13 0.13 15.38% Diluted gains per 0.15 0.13 0.13 15.38% share(Yuan/Share)(Yuan/Share) Net asset earning ratio(%) 2.74% 2.84% 2.73% 0.01% As at the end of the As at the end of last year YoY+/-(%) reporting period Before adjustment After adjustment After adjustment Gross assets(RMB) 66,693,831,497.63 67,683,329,226.91 68,610,779,546.18 -2.79% Shareholders’ equity attributable to 31,213,233,914.18 30,922,796,455.46 30,949,718,542.41 0.85% shareholders of the listed company(RMB) V. Differences between accounting data under domestic and overseas accounting standards 1.Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. □ Applicable□√ Not applicable Nil 8 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √Not applicable Nil VI. Items and amount of non-current gains and losses √Applicable □Not applicable In RMB Items Amount Notes Non-current asset disposal gain/loss(including the write-off part -664,826.45 for which assets impairment provision is made) Govemment subsidies recognized in current gain and loss(excluding those closely related to the Company’s business 44,668,918.09 and granted under the state’s policies) Gain/loss on entrusting others with investment or asset 13,923,452.07 Investment financing income management Gain/loss from debt reorganization 484,207.00 Net gain/loss of current term from consolidation of subsidiaries Business combination under the under common control from beginning of term to the -9,555,668.76 same control. Retroactive consolidation date adjustment Entrusted with the operating of the trust to obtain fee income 235,849.06 Other non-operating income and expenditure beside for the above 2,694,248.35 items Less: Influenced amount of income tax 6,987,734.04 Amount of influence of minority interests(After tax) -2,152,164.99 Total 46,950,610.31 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. □ Applicable√ Not applicable None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. III. Business Profile 9 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Ⅰ.Main Business the Company is Engaged in During the Report Period Whether the company needs to comply with the disclosure requirements of the particular industry No The Company is a leading and comprehensive service provider of new materials, high-end equipment manufacturing and new-energy automobile manufacturing at home. It possesses the liquid crystal glass substrate production capacity ranking first in China and fourth all over the world in the field of new materials represented by photoelectric display material and at the same time lays out laterally other core ones such as curved cover glass, color filter and sapphire, etc., which results in its prominence of photoelectric display material industry cluster advantages; its graphene industrial application in initial development period is the extension and important supplementation of new material business. In terms of the high-end equipment manufacturing field, its self-developed complete glass substrate manufacturing equipment has relatively strong technological spillover effect, has extended into several fields and becomes an important income and profit source thereof. For the new energy automobile field, based on Sunlong, it has been advancing industrial development of new energy passenger and logistics cars strongly, has laid out several new energy automobile industry bases in China and has been devoted to making the new energy automobile business into its new growth level. I. New material business system 1. Glass substrate original film business The liquid crystal glass substrate is a core raw material to the upstream of the liquid crystal display panel, with extremely high requirements of manufacturing process. Based on the breakthrough in the field of complete-set of liquid crystal glass substrate production equipment, the company took the lead in breaking the international monopoly and achieved the home-making of liquid crystal glass substrate. Currently, the Company possesses five production bases of liquid crystal glass substrate respectively located in Zhengzhou, Shijiazhuang, Wuhu Fuzhou and Yingkou covering G5, G6, and G8.5 (compatible with 8.6 generation) TFT-LCD liquid crystal glass substrates. The company has 20 liquid crystal glass substrate production lines , with that the mass production capacity tops first in China and ranks fourth in the world. The cover glass is used to protect the touch module and the display screen. The company has the original production line of the advanced float glass substrate in Mianyang, Sichuan, and has the capacity of the first and the world's third high-aluminum cover glass substrate. Performance, the company is the only company in China that masters both the overflow melting method and the floating method. 2. Other display materials business In order to enhance the competitiveness and profitability of the display materials business, the company implements a horizontal extension strategy of the industry chain. Since 2015, it has successively laid out cover glass original film, curved-surfaced cover glass, optical diaphragm, color filters and sapphire to optimize its business structure. Industrial clustering effects appear. The curved cover glass has the advantages of lightness, transparency, anti-fingerprint, anti-glare, and good weather resistance. It can enhance the appearance of smart terminal products and bring excellent touch feeling. The company's optical film covers diffusion, reflection, prism, Subdivisions such as composite prisms, mainly used in TFT LCD backlights. The color filter is a key component of the colorization of the liquid crystal display. The company's main product is the G5 color Filters; sapphire is widely used in LED substrate materials and optical components and other fields, the company's main products are 2-inch and 4-inch LED substrate products. 3. Industrial application of graphene material The graphene has excellent characteristics of optics, electricity, heat and mechanics and important application 10 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 prospects in terms of materialogy and energy, etc. and is deemed as a revolutionary new material. Leading the graphene material industrial application, the Company has already formed four series of grapheme material industrial application products of grapheme battery, graphene electrical heating, graphene anticorrosive paint and grapheme lighting, among which, partial ones have already realized batch production and been sold overseas. Several countries alongside One Belt and One Road become main markets for such graphene products. The grapheme new material layout is a strategic input for long-term development in the future, caters for new material and new energy automobile development direction in the future and has large growth potential and market space. II. High-end equipment manufacturing business Thanks to the company's independent research and development to break through the foreign blockade, the solid foundation laid by the high-tech front-end equipment in the production of glass substrates has been established. Under the background of domestic industrial manufacturing replacing equipment by equipment and satisfying intelligent and efficient production, the company's high-end equipment and technical services Business continues to work. The company's high-end equipment business currently mainly adopts an integrated mode. The business mainly involves high-end equipment such as photoelectric display materials, semiconductor cleaning, grinding, testing, cutting, laminating, automated logistics, and corresponding technical services, control systems and special equipment. Supply of products, with a large number of large group customers who have demand in the intelligent field III. New energy automobile business The company has engaged in the high-end equipment manufacturing industry for almost 20 years and possesses strong spillover capacity from technology to management and from capital to talent. Since it acquired 100% equities of Sunlong through share issuance and assets purchase through capital payment in 2017, based on the listed company platform, the Company has supported Sunlong from several aspects of technology, management, market and resource, etc., exerted industrial synergy with the same, enriched its existing industrial structure, seized rapidly industrial opportunities of new energy passenger and logistics cars. In the first half of the year, the company sold a total of 2,072 passenger cars, a year-on-year increase of 17.53%, including 1,696 new energy buses, accounting for 82% of the total sales, and sales of new energy buses increased by 33%. The new energy vehicle business maintained a good growth momentum. IV. Other business system 1. Electrocommunication product business To break the industrial dilemma of “chip and display panel lack” of China, the Company, through integrating large quantities of customer resources and photoelectric display material sale channels, endeavors to realize the industrial integration and synergy of photoelectric display materials and relevant accessories. Simultaneously, the Company tries to expand import and export channels for liquid crystal display module and storage chip, etc., expand supply and marketing channels for Internet of Things equipment, perfect gradually links of customs clearance, storage and logistics, etc. and provide clients with integrated solutions based on their unique demands. 2. Construction & installation business As a company's traditional business, the construction & installation business has played an important role in assisting the company's production base’s construction and maintenance, thus effectively reducing the company's various project construction costs. Meantime, as a supplement to the main business, and with the continuous development of domestic industrialization and urbanization, the construction & installation business has contributed a certain amount of revenue and profits for the company in recent years. Ⅱ.Major Changes in Main Assets 11 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 1. Major Changes in Main Assets Main assets Major changes Equity assets There were no major changes in this period compared to the previous period. Fixed assets There were no major changes in this period compared to the previous period. Intangible assets There were no major changes in this period compared to the previous period. Construction in process The production line investment construction was formed. 2. Main Conditions of Overseas Assets □ Applicable √ Not applicable Ⅲ.Analysis On core Competitiveness Whether the company needs to comply with the disclosure requirements of the particular industry No In Annual Report 2017, the Company disclosed five core competitive forces, namely “strong advantage in independent research and development and innovation ability”, “scale advantage of core photoelectric display material”, “integration advantage of endogenous and epitaxial industrial chains”, “synergistic advantages of mutual dependence of business sectors” and “advantage in efficient management and decision-making mechanism”. In the first half year of 2018, such core competitive force has been strengthened and deepened further without any other significant change. 12 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 IV. Performance Discussion and Analysis Ⅰ.General In 2018, Tunghsu will forge ahead. Under leadership of the company Board of Directors and management layer and unremitting efforts of all staff, the Company, centering on established strategic layout of the company in the first half year, optimizes the industrial structure positively, deepens the existing product market pattern and promotes strongly development of core business including new materials, high-end equipment manufacturing and new energy automobile, etc. to make each item of business increase stably and rapidly. During the reporting period, the Company achieves an operating income of RMB 11.13 billion , an increase of 128.24% over the same period in 2017; The net profit attributable to shareholders of listed companies, net of non-recurring gains and losses, was RMB 811 million, an increase of 43.83% over the first half of 2017. The company's each business development status in the first half of 2018: 1. Product upgrade and high-generation glass substrate production line performance contribution level improvement As the panel and glass substrate large size and high generation have become an industrial trend in recent years, the Company has liquid glass substrate products covering G5, G6 and G8.5 and is capable of providing each-type high-quality glass substrate product for down-stream clients. Within the report period, its two G8.5 glass substrate production lines in Fuzhou were in good condition and received good production and sales achievements, which make its high-generation glass substrate product market share increased and glass substrate product structure optimized. As the high-generation glass substrate placement and investment projects develop continuously in the future and the company's technical accumulation in glass substrates for OLED display, the Company will have an improved core competitive force in such glass substrate field. 2. Curved cover glass layout and rapid formation of effective capacity Within the report period, the Company implemented “curved display cover glass production project” based on Xuhong Optoelectronic and already formed the annual capacity of [5 million] pieces and supplied the same in batch to clients. The curved cover glass, with flexible, thin, transparent and clean, anti-fingerprint, anti-dazzle and good weather-resistance, etc. characteristics is applicable to the flexible display area as a strong measure adopted by the Company to follow OLED flexile display screen trend. At the same time, after the high aluminum cover glass substrate Sheet Production Line of Xuhong Optoelectronic was included into the Company’s new material industrial system officially in October 2017, such product has set all-time new highs repeatedly through vigorous expansion of end clients and production process and sale type structure optimization and becomes an effective growth point for the Company’s new material business. 3.With synergistic development, continue to advance the optical film, color filter, sapphire business During the reporting period, Tengda Optical Film Business and Jiangsu Jixing Sapphire Business achieved rapid growth, and the supporting supply of Tenda Optics and Jiangsu Jixing Optoelectronic Display Materials had well enhanced the major customers’ adhesiveness of the Company. In December 2017, the Company completed the first 5th generation color filter production line for TFT-LCD. During the reporting period, the Company actively promoted the work including the debugging of color filter production lines, customer development and sample certification. Currently, the Company has obtained orders from customers such as Longteng Optoelectronics. The Color filters has realized the bulk supply, which is conducive to increase the added value of products of the existing G5 liquid crystal glass substrates. 13 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 4. Obtaining big orders and new progress realization in grapheme material industrial application Within the report period, Tunghsu Carbon, MS Technology and Tan Yuan Graphene, subsidiaries of the Company, concluded Graphene Application Product Strategic Partnership Agreement on expansion and sale of graphene electric heating products, graphene street lamp products and graphene anticorrosive paint, etc. with 15 downstream grapheme application enterprises, whose price reaches 610 million yuan. The grapheme material industrial application is getting better in the initial development period and will become an important supplement to its new material business system. In addition, the “lithium-ion secondary battery”(TanYuanG18650) project of Tan Yuan Graphene was deemed as “a high-tech outcome transformation project in Shanghai” by Shanghai High-tech Outcome Transformation Project Certification Office based on the macro-batch production technology of high-quality and low-cost grapheme and was included into the 1st Shanghai High-tech outcome transformation project in 2018. 5. High-end equipment business stable and continuous development In recent years, under the background of domestic industrial manufacturing adopting equipment replacing labor for satisfying the intelligent and efficient production, the Company's high-end equipment business has steadily expanded and well developed, gradually supplying optoelectronic display materials and equipment, semiconductor equipment and other general-purpose equipment to domestic high-end customers. During the reporting period, the Company closely focused on the investment boom of domestic panel production lines and semiconductor production lines, continued to sign equipment business orders with BOE, CSOT, Visionox and other group customers in the intelligent application field, and actively explored the high-end equipment market in the semiconductor field. With the acceleration of investment in the domestic semiconductor production line, the semiconductor equipment business has a broad market space. The Company will strive to expand and develop the high-end equipment market in the semiconductor field, and make the high-end equipment business become another rapid growth point, thus providing new driving force for the steady development of the Company's high-end equipment business. 6. Business upgrade and intelligent robot platform company acquisition The intelligent manufacturing is the development direction of the Company high-end equipment business industry upgrade. Within the report period, the Company realized its high-end equipment manufacturing business expansion into the intelligent platform robot field through acquisition of Shenzhen Sanbao Innovation Intelligence Co., Ltd. Next, it will combine its strong manufacturing industrialization basis, integrate advanced intelligent manufacturing technology, optimize its existing complete-set intelligent scene application capacity, improve its competition in high-end equipment business field, improve its whole business synergy and realize its high-end equipment business industrial upgrade. 7. Expansion into a new city: new energy automobile industry basis location in Jiangsu Within the report period, to seize sufficiently development opportunities of national new energy automobile industry and speed up the industrial layout in new energy automobile field, the Company, based on its technical advantages in new energy automobile and local and investment environmental advantages of Suqian People’s Government, concluded the New Energy Automobile Project Investment Cooperation Agreement with such government on construction of the production basis project with annual capacity of 5,000 new-energy passenger cars and 50,000 new-energy logistics cars through investment of 3 billion yuan in Suqian city. Then, the Company completes the industrial layout of new energy automobile industrial base in East, South, West, North China and will become a new-energy automobile manufacturer of important influence across country after such bases construction and putting into operation. 8. Step-by-step consolidation and synergic development of construction and installation business and 14 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 electrommunication business Within the report period, in terms of construction and installation business, the Company obtained a series of engineering business orders in fields of underground comprehensive pipeline corridor, municipal infrastructure, sponge city and smart city, etc. based on strong comprehensive strength and various flexible business modes, which contribute to the Company’s operation revenue and net profit increase correspondingly; the electrommunication business as a supplement to its main business kept fast increase continuously and played a positive role to increase its industrial synergy and expand its business scale. II.Main business analysis Refer to relevant contents of “1. Summarization” in “Discussion and Analysis of Management”. Changes in the financial data In RMB This report period Same period last year YOY change(%) Cause change Mainly due to business Operating income 11,129,851,790.88 4,876,438,604.10 128.24% growth. Mainly due to the increase in the Operating cost 9,021,989,897.09 3,473,962,810.22 159.70% corresponding cost of business growth 93,892,692.42 42,456,252.57 121.15% Mainly due to the Sale expenses increase in the cost of freight, etc. 389,977,702.76 229,378,673.33 70.01% Mainly due to the increase in the cost of Administrative expenses housing, water and electricity, etc. Financial expenses 395,227,116.30 368,191,927.63 7.34% Mainly due to the growth Income tax expenses 282,130,776.24 191,513,884.53 47.32% of business in the current period. Mainly due to the increase investment in R & D Investment 125,155,597.43 62,869,570.14 99.07% research and development Net cash generate by 83,617,287.66 -1,364,949,813.78 106.13% operating activities Net cash generated by -1,660,557,972.96 -1,088,549,503.22 -52.55% investing activities Net cash generated by -2,092,134,104.87 -629,365,921.93 -232.42% 15 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 financing activities Net increase in cash and -3,671,727,390.78 -3,074,153,558.61 -19.44% cash equivalents Major changes to the profit structure or sources of the Company in the reporting period □ Applicable √Not applicable Breakdown of main business In RMB Increase/decrease Increase/decrease Increase/decrease of principal of gross profit of reverse in the Operating Gross profit business cost over rate over the operating costs same period of revenue rate(%) the same period same period of the previous of previous year the previous year year(%) (%) (%) Industry Optoelectronic 2,162,239,379.37 1,693,307,933.68 21.69% 83.71% 118.34% -12.42% display material Equipment and Technology 3,665,532,801.81 2,886,526,928.27 21.25% 49.79% 93.31% -17.73% serves Industrial application of 22,186,020.97 9,070,660.39 59.12% 3,911.09% 4,162.41% -2.41% graphene New energy 1,022,266,461.81 819,614,476.46 19.82% vehicle Construction 1,555,645,862.34 1,500,887,029.86 3.52% 164.78% 167.26% -0.89% Installation Electronic communication 1,571,252,619.47 1,538,031,287.70 2.11% 139.47% 139.55% -0.03% products Products Optoelectronic 2,162,239,379.37 1,693,307,933.68 21.69% 83.71% 118.34% -12.42% display material Equipment and Technology 3,665,532,801.81 2,886,526,928.27 21.25% 49.79% 93.31% -17.73% serves Industrial application of 22,186,020.97 9,070,660.39 59.12% 3,911.09% 4,162.41% -2.41% graphene New energy 1,022,266,461.81 819,614,476.46 19.82% 16 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 vehicle Construction 1,555,645,862.34 1,500,887,029.86 3.52% 164.78% 167.26% -0.89% Installation Electronic communication 1,571,252,619.47 1,538,031,287.70 2.11% 139.47% 139.55% -0.03% products Area China 8,842,543,603.09 7,343,203,923.92 16.96% 96.95% 136.13% -13.78% Hongkong,Macau 1,091,131,396.31 1,058,509,705.07 2.99% 188.36% 191.85% -1.16% and Taiwan Overseas 65,448,146.37 45,724,687.36 30.14% 67,938.20% 106,337.97% -25.20% III.Non-core business analysis √ Applicable □Not applicable In RMB Proportion in total Amount Explanation of cause Sustainable (yes or no) profit Other income 108,362,056.52 9.21% Government subsidy Yes IV. Analysis of assets and liabilities 1.Significant changes in asset composition In RMB End of Reporting period End of same period of last year Change in As a percentage Reason for significant percentage Amount of total change (%) assets(%) Monetary fund 23,794,597,055.80 35.68% 27,456,759,768.86 40.02% -4.34% Accounts 9,937,647,168.77 14.90% 7,873,419,684.42 11.48% 3.42% receivable Inventories 4,210,883,497.85 6.31% 4,914,482,277.21 7.16% -0.85% Real estate 66,930,130.01 0.10% 58,229,439.86 0.08% 0.02% Investment Long-term equity 2,142,476,783.38 3.21% 2,130,640,158.90 3.11% 0.10% investment Fixed assets 10,938,598,162.98 16.40% 11,378,564,235.15 16.58% -0.18% Construction in 5,387,496,213.47 8.08% 3,663,486,639.90 5.34% 2.74% 17 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 process Short-term loans 6,812,784,698.87 10.22% 5,712,826,382.20 8.33% 1.89% Long-term loans 3,823,532,289.32 5.73% 5,209,726,250.77 7.59% -1.86% 2.Asset and Liabilities Measured by Fair Value □ Applicable √ Not applicable 3. Restricted asset rights as of the end of this Reporting Period Restrictions on asset rights at the end of the reporting period are as follows: 1. The total amount of restricted Cash and bank balances at the end of the reporting period was RMB 2,351,663,690.33,Mainly for fixed deposits, deposits and so on. 2. RMB10,433,568,773.5 at the end of the period. Fixed assets were used as collateral and financial lease objects. 3. At the end of the period, the intangible assets of RMB 350,282,096.92 were borrowed as collateral. 4. At the end of the period, RMB 1,210,207,009.84 was pledged for construction in progress as collateral. 5. At the end of the period, RMB 66,930,130.01 was pledged for Real estate investment as collateral. Ⅴ.Investment situation 1.External investment √ Applicable □Not applicable Investments made in same period of last Investments made in the reporting period +/- % year 3,148,450,556.06 6,175,411,729.77 -49.02% 2.Condition of Acquiring Significant Share Right Investment during the Report Period √Applicable □ Not applicable In RMB Name Progre Gain or Whether of the Invest Invest ss up Less or Date of Main Invest Share Antici to Disclos Compa ment Capital ment Product to the Disclosu Busines ment Proport Partner pated Involve ure ny Amoun Source Horizo Type Balanc Current re(Note s Way ion % Incom in Index Investe t n e Sheet Investm 5) e Lawsuit d Date ent Tunghs u http://w (Ying Glass 195,00 Glass Purcha Long-t Compl -9,555,6 June ww.cnin kou) subst 0,000.0 65.00% Self No substrat 0.00 No se erm eted 68.76 13,2018 fo.com. Optoele rates 0 es cn ctronic Display 18 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Co., Ltd. Shenzh en High-en High-e Sanbao d nd http://w 157,75 Chuang intellige Purcha Long-t intellig Compl -1,101,9 May ww.cnin 0,000.0 67.00% Self No 0.00 No xin nt se erm ent eted 97.15 29,2018 fo.com. 0 Intellig equipm equipm cn ent Co., ent ent Ltd. Shangh ai http://w New Increas 1,400,0 New Sunlon 100.00 Raising Long-t Compl 109,136, ww.cnin energy e 00,000. No energy 0.00 No g Bus % Funds erm eted 890.07 fo.com. vehicle Capital 00 vehicle Co., cn Ltd., Sichuan Xuhong Optoele http://w Increas 800,00 ctronic Glass 100.00 Raising Long-t Glass Compl 44,618,3 ww.cnin e 0,000.0 No 0.00 No Technol cover % Funds erm cover eted 29.52 fo.com. Capital 0 ogy cn Co., Ltd. 2,552,7 143,097, Total -- -- 50,000. -- -- -- -- -- -- 0.00 -- -- -- 553.68 00 3.Situation of the Significant Non-equity Investment Undergoing in the Report Period □ Applicable √ Not applicable 4.Investment of Financial Asset (1)Securities investment □ Applicable √ Not applicable Nil (2)Investment in Derivatives □ Applicable √ Not applicable 19 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Nil VI. Sales of major assets and equity 1. Sales of major assets □ Applicable √ Not applicable The Company had no sales of major assets in the reporting period. 2.Sales of major equity √ Applicable □ Not applicable Proporti Net on on of profits the net Whether contribu profits execute ted by of the as Whether the contribu schedul the equities ted ed and involve Transact to the Influenc amount if failed, Pricing Whether Relation d ion listed e of the of the should principl was the ship equities Disclos Counter Sold Sold price(Te compani selling equities state the Disclos es of the related with the all ure party equities date n es from of the selling reasons ure date equities transacti center complet Index thousan the Compan to the and the selling on party e ed the d yuan) period-b y listed adopted ownersh egin to compani measure ip the sold es to the ments of transfer date total the (Ten amo9un compan thousan t of the y d yuan) net profits Xuyou Electron Tunghsu ic Based Techno Material Same http://w on logy s April parent April ww.cnin 55,000 205.36 No -0.24% audited Yes Yes Yes Group Technol 28,2018 compan 14,2018 fo.com. net Co., ogy y cn assets Ltd. (Wuxi) Co., Ltd. 20 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Ⅶ.Analysis of the Main Share Holding Companies and Share Participating Companies √ Applicable □ Not applicable Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company In RMB Company Sectors Registered Operating Company type Total assets Net assets Turnover Net Profit Name engaged in capital profit Shijiazhuang Xuxin Optoelectron Optoelectro 1,906,000,00 3,614,327,96 2,185,344,57 257,758,187. 50,116,654 Subsidiary ic Display 42,667,836.04 nic 0.00 4.30 3.32 11 .12 material Technology Co., Ltd. Sichuan Xuhong Optoelectron 1,900,000,00 3,933,116,97 2,067,268,81 211,280,233. 52,984,015 Optoelectroni Subsidiary ic Display 44,618,329.52 0.00 5.62 2.55 31 .91 c Technology material Co., Ltd. Shanghai New Energy 2,500,000,00 7,352,250,47 2,848,886,83 851,962,505. 48,645,039 Sunlong Bus Subsidiary 38,466,842.93 Bus 0.00 4.71 1.19 15 .46 Co., Ltd. Guangxi Sunlong New Energy 2,311,111,11 2,835,425,11 1,785,564,78 277,893,932. 78,784,420 Automobile Subsidiary 71,723,089.43 Bus 2.00 1.60 9.07 92 .10 Manufacturin g Co., Ltd. Wuhu Tunghsu Equipment Optoelectroni and 1,000,000,00 12,745,478,0 2,952,254,79 1,448,811,43 596,270,06 c Subsidiary 510,256,680.37 technology 0.00 55.37 0.26 5.46 7.22 Equipment Service Technology Co.,Ltd. Beijing Building and Xufeng Real 870,000,000. 2,204,338,31 783,972,669. 1,094,173,84 408,282,97 Subsidiary construction 311,897,319.71 estate Co., 00 2.81 58 9.22 3.44 Industry Ltd. Acquirement and disposal of subsidiaries in the Reporting period √ Applicable □Not applicable Name Mode Influence Shenzhen Sanbao Chuangxin Intelligent M&A Increase business 21 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Co., Ltd. Tunghsu(Yingkou)Optoelectronic Display M&A Increase business Co., Ltd. Xuyou Electronic Materials Technology Based on overall strategic layout planning Disposition (Wuxi) Co., Ltd. considerations Notes VIII.Structured vehicle controlled by the Company □ Applicable √ Not applicable IX. Prediction of business performance for January -September 2018 Estimation of accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation of reason. □ Applicable√ Not applicable X. Risks facing the Company and countermeasures 1. Risk of macroeconomic cyclical fluctuations The optoelectronic display materials business centered on glass substrate relies on the LCD panel industry, which is a cyclical industry and a downstream industry to the company. As the prosperity of the panel industry is affected by the macroeconomic fluctuations, then if the panel price fluctuates sharply due to the deterioration of the macroeconomic environment or the imbalance between the supply and the demand, the company may face the risk of industry downturn. Improvement actions: The Company, through development for many years, has developed into an advanced comprehensive service provider for new materials, high-end equipment manufacturing and new-energy automobile manufacturing at home from the single manufacturer for liquid crystal glass substrate equipment and liquid crystal glass substrate; at the same time, it will, through close tracking of latest news on macro economy, industrial policies and industrial development, seize the investment and expansion pace and adjust the development strategies timely to guarantee its operation efficiency and effects and deal with macro economy periodic fluctuation effectively. 2. Risk of technological upgrading alternatives The company never stops the technical research and development and technology reserves, and has made breakthroughs in many areas. However, if the downstream panel display industry undergoes major technological changes and the company fails to achieve timely corresponding technological innovation, then the company will face certain risks when the technological upgrading alternatives hit the market. Improvement actions: The Company has very strong technical strength and is the only one at home with two glass substrate manufacturing processes including overflow fusion method and float glass at the same time, among which, TFT-LCD glass substrate complete equipment production line is deemed as “a national strategic innovative product” and the glass liquid processing method in platinum channels obtains “Chinese gold medal for patent”. To deal with risk of technology replacement, the Company will, based on successful industrialization experience obtained, continue strengthening R&D capital investment, strengthen R&D cooperation with 22 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 institutions of higher learning and research institutes and improve the R&D strength in ultrathin, large-size and LTPS glass and OLED new-type display technology glass, etc. 3. The risk caused by the continued fade-out of subsidy policies for new energy vehicles As the new energy auto companies have a certain dependence on government subsidies at this stage, the decline in the subsidy standards will have a certain impact on the future sales of new energy auto products of Sunlong Bus. Although the company has in detail measured the feasibility of the company's implementation of the related business plan after the full fade-out of the subsidy, if there are major adverse changes in the relevant industrial policies in the future, Sunlong Bus will face the risk of that its operating performance will fall short of expectations. Improvement actions: As parts (including power battery) and vehicle manufacturing technical level and production process improve constantly, the infrastructure including charging piles/stations, etc. realizes large-scale coverage, pure electric passenger car endurance mileage and other items of performance improve gradually, the up-stream suppliers release the capacity continuously, the production cost and sale unit price decrease, the new energy automobile popularization brings about pure electric passenger car acceptance improvement on a continuous basis of end clients and the environmental pollution results in the public emphasis improvement on clean energy, it’s predicted that the pure electric passenger car production cost of Sunlong will decrease gradually, which will offset adverse influence from subsidy policy decline and will drive the demand growth and sale of Sunlong new-energy passenger cars in the future. 23 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 V. Important Events 1. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period 1.Annual General Meeting Investor Index to disclosed Meeting Type Convened date Disclosure date participation ratio information The First provisional Provisional Announcement No. shareholders’ shareholders’ 21.88% January 26,2018 January 27,2018 2018-011, General meeting in General meeting www.cninfo.com.cn 2018 The Second provisional Provisional Announcement No. shareholders’ shareholders’ 21.95% March 26,2018 March 27,2018 2018-028, General meeting in General meeting www.cninfo.com.cn 2018 The Third provisional Provisional Announcement No. shareholders’ shareholders’ 21.96% April 25,2018 April 26,2018 2018-052, General meeting in General meeting www.cninfo.com.cn 2018 Annual Announcement No. 2017 Shareholders’ Shareholders’ 22.66% May 10,2018 May 11,2018 2018-059, general meeting General Meeting www.cninfo.com.cn The Fourth provisional Provisional Announcement No. shareholders’ shareholders’ 22.73% June 28,2018 June 29,2018 2018-087, General meeting in General meeting www.cninfo.com.cn 2018 The Fifth provisional Provisional Announcement No. shareholders’ shareholders’ 21.99% July 30,2018 July 31,2018 2018-100, General meeting in General meeting www.cninfo.com.cn 2018 The Sixth Provisional Announcement No. provisional shareholders’ 27.68% Aug 20,2018 Aug 21,2018 2018-117 shareholders’ General meeting www.cninfo.com.cn General meeting in 24 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 2018 2. Preferred stockholders restored voting rights to request to convene Provisional Shareholders’ Meeting. □Applicable√Not applicable II. Proposal for profit distribution and converting capital Reserve into share actual for the reporting period □ Applicable √Not applicable For the reporting period, the Company plans not to distribute cash dividends or bonus shares or convert capital reserve into share capital. III. The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor, senior management personnel and other related parities. √ Applicable □ Not applicable Time of Commitment Period of Commitment Type Contents making Fulfillment maker commitment commitment Commitment on share reform Commitment in the acquisition report or the report on equity changes Commitment made upon the assets replacement Before June 30, 2018, the entire equity of Tunghsu Yingkou, which is held Commitments by Tunghsu on horizontal Group and is competition, entrusted to Tunghsu December Valid for Commitments made upon issuance related the company's Fulfilled Group 14,2017 June30,2018- transaction management, and capital will be occupation injected into Tunghsu Optoelectroni c through cash purchase and add-directiona l share 25 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 issuance. During the above-mentio ned period, if external factors such as the decline in the overall prosperity of the industry, changes in regulatory requirements, and other external factors lead to Tunghsu Yingkou equity not meeting the conditions for asset injection, the actual controllers Li Zhaoting and Tunghsu Group will actively consult with relevant parties and continue to entrust the equity and operating right of the above-said company to Tunghsu Optoelectroni c. Equity incentive commitment 26 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 The controlling shareholder of the company, Tunghsu Group, has announced its plan of increasing its holding of shares not less than 1% and not exceeding 3% of the company’s current total share capital via buying through the Shenzhen Stock Share Other commitments made to minority Tunghsu Exchange February Valid for holdings Fulfilled shareholders Group trading system 2,2018 August 2,2018 commitment (i.e. the secondary market) with not less than RMB 500 million and not exceeding RMB1.5 billion in the next six months since the date of the announcement (February 2, 2018). Tunghsu Group promised not to reduce the holdings of the company's 27 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 shares during the implementatio n period of this plan of increasing share-holding and during the statutory period. Executed timely or not? Yes If the commitment has not been implemented at the end of the reporting period, it is necessary to Not applicable explain the specific reason of failure in implementation and the future work plan. IV. Particulars about engagement and disengagement of CPAs firm Whether the semi-annual financial report had been audited? □ Yes √ Not The semi-annual report was not audited. V. Explanations given by board of directors and supervisory board regarding “ Modified auditor’s” Issued by CPAs firm for the reporting period □ Applicable √ Not applicable VI. Explanations given by Board of Directors regarding “ Modified auditor’s Report” Issued for last year □ Applicable √ Not applicable VII. Bankruptcy and restructuring □ Applicable √ Not applicable No such cases in the reporting period. VIII. Legal matters Significant lawsuits or arbitrations □ Applicable √ Not applicable No such cases in the reporting period. 28 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Other legal matters □ Applicable √ Not applicable IX. Punishments and rectifications □ Applicable √ Not applicable No such cases in the reporting period. X. Credit conditions of the Company as well as its Controlling shareholder and actual Controller □ Applicable √ Not applicable XI.Equity incentive plans, employee stock ownership plans or other incentive measures for employees √ Applicable □Not applicable 1. The scale of Phase 1 for Employee Stock Ownership Plan of Tunghsu Optoelectronic was RMB 495.4 million , subscribing 72,639,296 of non-publicly issued shares of 2015 with full amount through No.2 Changjiang Xingli Oriented Plan, where the above shares were listed in SSE on December 17, 2015, which was with 36-month locking period. 2.The company’s second ESOP, via Zhonghai Trust-Tunghsu Optoelectronic ESOP Collective Funds Trust Plan, in the secondary market bought 52,555,280 shares of the company by centralized bidding and/or bulk trading, with transaction amount of RMB 496,410,000 and the average transaction price of about 9. 45 yuan per share. The buying has been completed as of December 28th 2017 and the ownership has been transferred into the name of the Collective Funds Trust Plan, with a lock-in period of 12 months. The employee stock ownership plan is still locked during the report period. XII.Material related transactions 1. Related transactions in connection with daily operation √ Applicable □Not applicable Whether Trading Principl over the limit Market Index Subjects e of Amount approve price of of of the pricing of trade Ratio in approve Date of Related Relation Type of Price of Way of similar inform related the (ten similar d disclosu parties ship trade trade payment trade ation transacti related thousan trades d(ten re availabl disclos ons transacti d) limited e ure ons thousan or not d) (Y/N) Guangd Controll Selling Constru Referen ong ed by goods ction Currenc April ce price 1,994.53 1,994.53 20,000 No 1,994.53 Huakai the same and Enginee y 20,2018 setting Real actual providin ring 29 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Estate controll g Develop er services ment Co., Ltd. Huidong Baoan Controll Selling Hongji ed by goods Constru Real Referen the same and ction Currenc April Estate ce price 4,661.40 4,661.4 20,000 No 4,661.40 actual providin Enginee y 20,2018 Develo setting controll g ring pment er services Co., Ltd. Huidong Baoan Controll Selling Jinan ed by goods Constru Real Referen the same and ction Currenc April Estate ce price 4,643.51 4,643.51 20,000 No 4,643.51 actual providin Enginee y 20,2018 Develo setting controll g ring pment er services Co., Ltd. Kunmin g Tunghsu Controll Selling Qiming ed by goods Constru Referen Investm the same and ction 14,070.7 14,070.7 Currenc 14,070.7 April ce price 35,000 No ent actual providin Enginee 9 9 y 9 20,2018 setting Develop controll g ring ment er services Co., Ltd. Shengzh Controll Selling ou ed by goods Constru Zhexu Referen the same and ction Currenc April Real ce price 3,516.81 3,516.81 20,000 No 3,516.81 actual providin Enginee y 20,2018 Estate setting controll g ring Co., er services Ltd. Yixian Controll Selling Constru Referen Currenc April Xuhua ed by goods ction ce price 3,961.61 3,961.61 15,000 No 3,961.61 y 20,2018 Park the same and Enginee setting 30 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Constru actual providin ring ction controll g Develop er services ment Co., Ltd. Yingxhu an Fengxia ng Controll Selling Street ed by goods Constru Referen Compre the same and ction Currenc April ce price 4,527.32 4,527.32 11,000 No 4,527.32 hensive actual providin Enginee y 20,2018 setting Constru controll g ring ction er services Manage ment Co., Ltd Zhangzh ou Controll Selling Shenghu ed by goods Constru a ,Real Referen the same and ction Currenc April Estate ce price 2,241.39 2,241.39 20,000 No 2,241.39 actual providin Enginee y 20,2018 Develop setting controll g ring ment er services Co., Ltd. Chongqi Controll Selling ng ed by goods Constru Tunghsu Referen the same and ction Currenc April Real ce price 1,834.88 1,834.88 5,500 No 1,834.88 actual providin Enginee y 20,2018 Estate setting controll g ring Co., er services Ltd. 41,452.2 166,500. Total -- -- -- -- -- -- -- -- 4 00 Details of any sales return of a large Nil amount Give the actual situation in the report period where a forecast had been Nil made for the total amounts of routine related-party transactions by type to 31 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 occur in the current period(if any) Reason for any significant difference between the transaction price and the Nil market reference price (if applicable) 2. Related-party transactions arising from asset acquisition or sold √ Applicable □Not applicable Book Principle value of Valuation of Subjects of Transacti assets transferred Transfer Index of of the pricing Way of on gain or Date of informati Related Relations Type of related the transferr assets(Ten price(Ten parties hip trade payment loss(Ten disclosure on transacti related ed(Ten thousand) thousand) disclosure ons transacti thousand) ons thousand (If any) ) Tunghsu Technol Disposal Based on http://ww ogy Same Equity of 108,394. Monetary April audited 0 55,000 -205.36 w.cninfo. Group control transfer subsidiar 56 funds 14,2018 net assets com.cn Co., ies Ltd. Reasons for the difference between the transfer price and the book value or Nil valuation value(If any) Impact on the company's operating Nil results and financial status If the relevant transaction involves performance agreement, the Nil performance of the report during the reporting period 3. Related-party transitions with joint investments □Applicable √ Not applicable No such cases in the reporting period. 4. Credits and liabilities with related parties √ Applicable □Not applicable Whether has non-operational contact of related liability and debts or not □ Yes √ No No such cases in the reporting period. 32 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 5. Other significant related-party transactions √□Applicable √ Not applicable Nil Website for temporary disclosure of the connected transaction Announcement Date of disclosure Website for disclosure Announcement on the participation of wholly-owned subsidiaries in the PPP (http://www.cninfo.com.cn) January 27,,2018 project private equity investment fund and (Announcement No/:2018-013) related party transactions XIII. Particulars about the non-operating occupation of funds by the Controlling shareholder and other related parties of the Company □Applicable √ Not applicable The company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties during the reporting period. XIV. Significant contracts and execution 1.Entrustments, contracting and leasing (1)Entrustment √ Applicable □Not applicable Description of custodies During the reporting period, the Company continued entrusted with the management of Tunghsu( Yingkou) Optoelectronic Display Co., Ltd. In December 2011, Tunghsu Group signed the Equity Trusteeship Agreement with the Company , of which 60% share rights of Tunghsu (Yingkou) Optoelectronic Display Co., Ltd., were entrusted by the Company, where the agreement went into effect as of March 2012. The clients paid the Company 500 thousand RMB of management fee per year for each subject. Expiration Confirmed Type of Starting Date Name of Date of Entrusting Entrusting of Entrusting Name of Clients/Contractee Trustee/Contra Entrusting /Contracting Fee Asset/Contract /Contracting ctee /Contractin at the Current ing Asset g Period Tunghsu Group, Yingkou Coastal Tunghsu Tunghsu(Ying January 2012 Notes 1 250,000.00 Development Construction Co., Optoelectronic kou) Ltd. Minmetals (Yingkou) Technology Optoelectronic Industrial Park Development Co., Co., Ltd. Display Co., Ltd. Ltd. 33 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Total 250,000.00 Note 1: The trustee fee includes share right trustee fee(500 thousand RMB/year) and operation trustee fee. The operation trustee fee is basic management fee and incentive management fee, of which the basic management fee is RMB 1 million/year, the incentive management fee is counted by 5% of the after-tax net profit yearly achieved by the trustee company Note 2:On April 20, 2016, Tunghsu (Yingkou) Optoelectronic Display Co.,Ltd, upon the approval by general shareholders’ meeting, amended the Article of Association, thus the stake of Tunghsu (Yingkou) Optoelectronic Display Co.,Ltd held by Tunghsu Group was changed to 65% from 60%. Note 3:On June 30, 2018, Tunghsu Group Co., Ltd. transferred all 65% of the shares in Tunghsu (Yingkou) Optoelectronic Display Co., Ltd. to Tunghsu Optoelectronic Technology Co., Ltd. Items which resulted in profit or loss achieving over 10% of the total profit for the Company □ Applicable √ Not applicable No such cases in the reporting period. (2)Contracting □Applicable √ Not applicable No such cases in the reporting period. (3)Leasing □Applicable √ Not applicable No such cases in the reporting period. 2.Significant guarantees √ Applicable □Not applicable (1)Guarantees Ten thousand External Guarantee (Exclude controlled subsidiaries) Relevant Date of Guarantee disclosure Complete happening Actual for Name of the date/No. of Amount of implementa (Date of mount of Guarantee type Guarantee term associated Company the Guarantee tion signing guarantee parties guaranteed or not agreement) (Yes or no) amount Guarantee of the Company for the controlling subsidiaries Complete Guarante Name of the Relevant Amount Date of Actual Guarantee Guarantee implemen e Company disclosure of happening mount of type term tation for 34 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 guaranteed date/No. of guarantee (Date o guarantee or associate the signing not d guaranteed agreement) parties amount (Yes or no) Wuhu Tunghsu Two years Optoelectronic The joint from te date June September Equipment 150,000 37,000 liability of advance of No No 20,2013 25,2014 Technology Co., guaranty te loan due Ltd. date Wuhu Tunghsu Optoelectronic The joint September Equipment July 1,2016 9,500 9,500 liability 1 year No No 7,2017 Technology Co., guaranty Ltd. Wuhu Tunghsu The joint Optoelectronic June November 132,000 83,125 liability 8 years No No Technology Co., 19,2013 12,2013 guaranty Ltd. Wuhu Tunghsu The joint Optoelectronic September 20,000 April 8,2014 20,000 liability 8 years No No Technology Co., 27,2013 guaranty Ltd. Wuhu Tunghsu The joint Optoelectronic September 20,000 May 6,2014 20,000 liability 8 years No No Technology Co., 27,2013 guaranty Ltd. Wuhu Tunghsu The joint Optoelectronic September December 10,000 8,125 liability 8 years No No Technology Co., 27,2013 13,2013 guaranty Ltd. Wuhu Tunghsu The joint Optoelectronic October November 52,300 52,300 liability 6 years No No Technology Co., 31,2016 25,2016 guaranty Ltd. Fuzhou Tunghsu The joint Optoelectronic July 10,000 August 16,2016 10,000 liability 2 years No No Technology Co.,, 29,2016 guaranty Ltd. Wuhu Tunghsu June The joint 15,000 June 29,2018 15,000 7 months No No Optoelectronic 15,2018 liability 35 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Equipment guaranty Technology Co., Ltd. Wuhu Tunghsu The joint Optoelectronic December 6,000 March 1,2018 6,000 liability 1 year No No Technology Co., 25,2017 guaranty Ltd. Wuhu Tunghsu The joint Optoelectronic March 10,000 March 27,2018 10,000 liability 1 year No No Technology Co., 26,2018 guaranty Ltd Wuhu Tunghsu The joint Optoelectronic March 10,000 March 28,2018 10,000 liability 1 year No No Technology Co., 26,2018 guaranty Ltd Wuhu Tunghsu The joint Optoelectronic April 5,000 April 24,2018 5,000 liability 1 year No No Technology Co., 13,2018 guaranty Ltd Wuhu Tunghsu The joint Optoelectronic December 10,500 May 31,2018 10,500 liability 1 year No No Technology Co., 25,2017 guaranty Ltd Wuhu Tunghsu The joint Optoelectronic December 5,000 June 11,2018 5,000 liability 1 year No No Technology Co., 25,2017 guaranty Ltd Wuhu Tunghsu The joint Optoelectronic June 15,000 June 26,2018 15,000 liability 7 months No No Technology Co., 15,2018 guaranty Ltd Zhengzhou Xufei The joint Optoelectronic June 5,000 June 29,2018 5,000 liability 1 year No No Technology Co., 12,2018 guaranty Ltd. Sichuan Xuhong The joint Optoelectronic January 4,000 February 9,2018 4,000 liability 1 year No No Technology Co., 10,2018 guaranty Ltd. Sichuan Xuhong January February The joint 4,000 4,000 1 year No No Optoelectronic 10,2018 12,2018 liability 36 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Technology Co., guaranty Ltd. Suzhou Tengda The joint Optical June 2,000 June 28,2018 2,000 liability 1 year No No Technology Co., 12,2018 guaranty Ltd. The joint Shanghai Sunlong March 5,000 March 30,2018 5,000 liability 1 year No No Bus Co., Ltd. 26,2018 guaranty The joint Shanghai Sunlong March 3,000 April 2,2018 3,000 liability 1 year No No Bus Co., Ltd. 26,2018 guaranty The joint Shanghai Sunlong March 7,000 March 27,2018 7,000 liability 1 year No No Bus Co., Ltd. 26,2018 guaranty Guangxi Sunlong The joint Automobile December 10,000 January 12,2018 10,000 liability 1 year No No Manufacturing 28,2017 guaranty Co., Ltd. From the effective date of the Guarantee Contract to the date of expiration of the performance period of the Tunghsu The joint Finance (Kunshan) May 20,000 May 14,2018 20,000 liability Lease No No Display Material 10,2018 guaranty Contract (if Co., Ltd. the date of expiration of the two financial lease contracts is inconsistent, the latter shall be subject to the 37 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 latter); Total of guarantee for Total of actual guarantee subsidiaries 125,950 for subsidiaries in the 136,500 approved in the Period (B1) Period (B2) Total of guarantee for Total of actual guarantee subsidiaries 540,300 for subsidiaries at 376,550 approved at Period-end (B3) Period-end (B4) Guarantee of the subsidiaries for the controlling subsidiaries Guarante Relevant e Date of Complete disclosure for Name of the Amount happening Actual implemen date/No. of Guarantee Guarantee associate Company of (Date o mount of tation the type term d guaranteed guarantee signing guarantee or guaranteed parties agreement) not amount (Yes or no) Total of Company’s guarantee(namely total of the large three aforementioned) Total of guarantee in the Period Total of actual guarantee in 125,950 136,500 (A1+B1+C1) the Period(A2+B2+C2) Total of actual guarantee at Total of guarantee at Period-end 540,300 Period-end 376,550 (A3+B3+C3) (A4+B4+C4) The proportion of the total amount of actually guarantee in the 12.06% net assets of the company(A4+B4+C4) Including : The debts guarantee amount provided for the Guaranteed parties whose assets-liability ratio exceed 63,500 70% directly or indirectly(E) Description of the guarantee with complex method (2)Illegal providing of external guarantees □ Applicable √Not applicable No illegal providing of external guarantees in the report period. 3. Other significant contracts □Applicable √ Not applicable No such cases in the reporting period. 38 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 XV. Social responsibilities 1.Major environmental protection The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department Main Emission Emission Implemente Verified Company or pollutant Total Excessive Emission Emission port concentratio d pollutant total subsidiary and specific emission emission way port number distribution n emission emission(To name pollutant condition condition (mg/Nm3) standards ns) name After the Total Fuzhou Integrated treatment discharge of Tunghsu wastewater reaches the wastewater Optoelectro discharge 117.1T/ Not COD standard, 1 in the 25mg/L 3.19T/ year nic standard year exceeded enter the southeast Technology GB8978-19 urban corner of Co., Ltd. 97 sewage pipe the plant Sewage After the Total Fuzhou discharge treatment discharge of Tunghsu into urban reaches the wastewater Optoelectro Ammonia sewer water Not standard, 1 in the 1 6.8m/L 0.87T/ year 15.6T/ year nic nitrogen quality exceeded enter the southeast Technology standard urban corner of Co., Ltd. CJ-343-201 sewage pipe the plant 0 Emission After being Standard for processed Sichuan 60m high Air by the SCR Xuhong chimney in Pollutants system, it is Optoelectr Nitrogen the in 83.55T/ 87.26T/ Not discharged 1 530mg/m3 onic Oxide northwest Electronic year year exceeded into the Technolog corner of Glass atmosphere y Co., Ltd. the plant Industry through the GB29495-2 chimney. 013 Sichuan After being 60m high Emission Xuhong processed chimney in Standard for Optoelectro by the SCR the Air Not SO2 1 3.52mg/m3 0.48T/ year 8.49T/year nic system, it is northwest Pollutants exceeded Technology discharged corner of in Co., Ltd. into the the plant Electronic 39 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 atmosphere Glass through the Industry chimney. GB29495-2 013 Sewage Total After the discharge discharge of Shanghai treatment into urban wastewater Sunlong reaches the sewer water Not COD 1 in the 182.25mg/L Bus Co., standard, quality exceeded southeast Ltd. enter the standard corner of urban DB31/445-2 the plant 009 Sewage After the Total discharge treatment discharge of Shanghai into urban reaches the wastewater Sunlong 12.1125mg/ sewer water Not TN standard, 1 in the Bus Co., L quality exceeded enter the southeast Ltd. standard urban corner of DB31/445-2 sewage pipe the plant 009 Sewage After the Total discharge treatment discharge of Shanghai into urban reaches the wastewater Sunlong sewer water Not SS standard, 1 in the 80 mg/L Bus Co., quality exceeded enter the southeast Ltd. standard urban corner of DB31/445-2 sewage pipe the plant 009 Sewage After the Total discharge treatment discharge of Shanghai into urban reaches the wastewater Sunlong 1.5975 sewer water Not Petroleum standard, 1 in the Bus Co., mg/L quality exceeded enter the southeast Ltd. standard urban corner of DB31/445-2 sewage pipe the plant 009 After the Total Sewage treatment discharge of discharge Shanghai reaches the wastewater into urban Sunlong 3.0267 Not TP standard, 1 in the sewer water Bus Co., mg/L exceeded enter the southeast quality Ltd. urban corner of standard sewage pipe the plant DB31/445-2 40 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 009 "Automotiv e Manufacturi High-altitud ng Shanghai e emissions (Painting) Sunlong after Factory Not VOCs 4 16.20mg/mAir Bus Co., treatment west exceeded Pollutant Ltd. has reached Emission the standard Standards" DB32/859-2 014 7.6 mg/m "Emission 0.00136 0.02 High-altitud Standards Shanghai e emissions West part of for Air Sunlong after the middle Pollutants Not SO2 10 Bus Co., treatment of Factory in Industrial exceeded Ltd. has reached Furnaces" the standard DB31/860-2 014 7.5 mg/m "Emission 0.636 0.84 High-altitud Standards Shanghai e emissions West part of for Air Sunlong after the middle Pollutants Not NO 10 Bus Co., treatment of Factory in Industrial exceeded Ltd. has reached Furnaces" the standard DB31/860-2 014 3.79mg/m "Integrated 0.881 1.04 High-altitud Emission Shanghai e emissions South part Standards Sunlong after of the Not PM 18 for Air Bus Co., treatment middle of exceeded Pollutants" Ltd. has reached Factory DB31/933-2 the standard 015 1. Fuzhou Tunghsu optoelectronic operates normally during the whole year and produces main pollution of waste water. In 2017, it built the rain and sewage diversion system and waste water treatment station with designed treatment capacity of 1000t/d, which adopts PH adjustment + secondary concrete sedimentation treatment process. All production waste water will be collected after treatment and meeting standards and discharged into Rongyuan sewage treatment plant together with pre-treated sanitary sewage by septic tank for uniform treatment. The waste water treatment station operates normally during the report period and discharges per standards. 2. Xuhong Optoelectronic operates normally during the whole year and produces main pollution of waste gas. In 41 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 2015, it built SCR flue gas denitration system for discharge of smoke discharged outside kiln after treatment of the same, for which, the continuous online monitoring system is installed. All production waste gas will be discharged through 60m chimney after treatment and meeting standards. SCR system operates normally during the report period and discharges per standards. 3. Sunlong Bus operates normally during the whole year and produces main pollution of waste water, waste gas and hazardous waste. In 2008, for treatment of coating waste water during production, it built the rain and sewage diversion system and industrial waste water treatment station with designed treatment capacity of 10t/h, which adopts physical + biochemical treatment process. All production waste water will be collected after treatment and meeting standards and discharged into urban sewage pipeline (in Yuanshan Road) together with sanitary sewage and into Bailong Port system finally. The waste water treatment station operates normally during the report period and discharges per standards. Waste gas treatment: coating VOCs adopts emission after meeting standards through treatment of zeolite roller+RTO combustion process, low-concentration VOCs discharge bag is equipped with online monitoring system (FID) for real-time monitoring of the emission value; for pollution including PM and welding fume , etc., the filter filter core drum is adopted for dust removal, after which, the gas will be emitted in the upper air after meeting standards; any facility needing heating during production process adopts the natural gas burner and the gas will be burned efficiently through ternary internal circulation process to reduce the energy consumption and pollution emission. 1. Fuzhou Tunghsu optoelectronic implements strictly the environmental influence appraisal system and “simultaneous design, construction and use” system, whose construction project conforms to laws and regulations. For the project, the environmental appraisal reply was obtained in September 2016 from Sichuan Environmental Protection Department. 2. Xuhong Optoelectronic implements strictly the environmental influence appraisal system and “simultaneous design, construction and use” system, whose construction project conforms to laws and regulations. For the project, the environmental appraisal reply was obtained in November 2016 from Sichuan Environmental Protection Department and environmental protection acceptance was already qualified. 3.Sunlong Bus implements strictly the environmental influence appraisal system and “simultaneous design, construction and use” system, whose construction project conforms to laws and regulations. In January 2009, the completion acceptance reply for the project was received from Minhang District Environmental Protection Bureau, Shanghai (MHBGXY[2009] No. 041). 1. Fuzhou Tunghsu Optoelectronic entrusts one qualified third party with preparation of Emergency Program for Environmental Emergencies of Fuzhou Tunghsu Photoelectricity Technology Co., Ltd. and organizes and conducts training on such program regularly to improve the company’s capacity to deal with any environmental pollution emergency practically. 2. Xuhong Optoelectronic entrusts one qualified third party with preparation of Emergency Program for Environmental Emergencies of Sichuan Xuhong Optoelectronic Technology Co., Ltd., sets internally full-time environmental-protection managers and equipment operators for implementation of each environmental-protection job and organizes and conducts training on such program regularly to improve the company’s capacity to deal with any environmental pollution emergency practically. 3.Sunlong Bus entrusts one qualified third party with preparation of Emergency Program for Environmental Emergencies of Shanghai Sunlong Bus Co., Ltd.., sets internally full-time environmental-protection managers and equipment operators for implementation of each environmental-protection job and organizes and conducts training on such program regularly to improve the company’s capacity to deal with any environmental pollution emergency practically. 42 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 1. Fuzhou Tunghsu Optoelectronic abides by national and local laws, regulations and relevant provisions strictly, and entrust Fujian Tuopu Detection Technology Co., Ltd. to carry out monthly detection of wastewater and quarterly detection of noise of Fuzhou Tunghsu Photoelectricity as required, and log in to the self-monitoring website in time every month to upload data information such as detection results. 2. Xuhong Optoelectronic abides by national and local laws, regulations and relevant provisions strictly, and entrusts Sichuan Zhonghuan Environmental Testing Technology Co., Ltd. to carry out quarterly testing of the company’s exhaust gas as required, and Sichuan Jiente Environmental Protection Equipment Co., Ltd. to carry out operation and maintenance of our company’s flue gas online monitoring equipment, so as to ensure that the company’s air pollution data are transmitted to the national environmental protection monitoring platform in real time. 3. Sunlong Bus abides by national and local laws, regulations and relevant provisions strictly, and entrusts Ingel Testing Technology Service (Shanghai) Co., Ltd. to carry out quarterly testing of waste water, waste gas and noise as required, and regularly log in the environmental protection survey platform and the environmental statistics business system to upload data such as testing results. Other environmental information that should be disclosed Company Name of Disposal Storage Place Distruibution Carried Annual Disposal Inentory Name or major Method of Producing Standard Output (tons) Quantity Quanity Subsidiary pollutants and Name characteristic pollutants Shanghai Waste residue, Entrust a Dangerous Painting / 35.18 13.66 18.52 Sunlong Bus waste thinner qualified third waste workshop, Co., Ltd. party for temporary assembly Waste 11.28 6.73 3.05 disposal storage shop, adhesive commissionin sealant g workshop Waste empty 16.53 6.73 4.8 barrel Notes:This table shows the hazardous wastes status of Sunlong Bus. It’s the amount of hazardous waste generated in 2017. The annual amount of hazardous waste changes with the change of production capacity. The untreated inventory is due to the limited annual disposal capacity of the hazardous waste, and it will be disposed in the next year if the treatment and dispose is not completed in the current year. Other environmental protection related information Notes: 1. The Shanghai Municipal Pollutant Discharge Permit obtained by Sunlong Bus does not state the request of the total amount of wastewater discharged and the total amount of normative emissions. The emission concentration in the table is the average value of the quarterly test data. 2. The Shanghai Municipal Pollutant Discharge Permit does not state the requirement of the total amount of volatile organic compounds emitted in the exhaust gas and the total normative amount of emissions. The total 43 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 amount of SO2 and NOX emissions of Sunlong Bus is calculated based on the total amount of natural gas used and the combustion emissions coefficient. 2.Overview of the annual targeted poverty alleviation (1) Precision poverty alleviation planning (2)Half-year poverty relieving summary 1. On February 2, 2018, Tunghsu Photoelectricity donated the first batch of 300 graphene heaters to Fuping County, Hebei Province for free in order to realize clean heating in winter. At the same time, it also donated 200,000 yuan worth of books. This donation is only the first pilot project, and the scope of donation will be appropriately expanded in the later period according to the operation situation. 2. On February 8, 2018, Tunghsu Photoelectricity donated 530 sets of graphene heaters which worth 890,400 yuan and 200,000 yuan worth of books to the central primary school at Gonghui Town, Zhangbei County, Hebei Province and to center gerocomium at Haojiaying township to help primary school students and widows and orphans live in warm in the winter and do their part in the primary and secondary education. 3. On June 19, 2018, Guangxi Sunlong Automobile Manufacturing Co., Ltd., a wholly-owned subsidiary of the company, donated 228,500 yuan to Zhongdang village, which lies at Jiafang Township, Mashan County, Guangxi Province, so as to assist in the Sunlong twinning project of poverty alleviation project of the deep poverty-stricken village in Guangxi: reservoir project of drinking water engineering. 4. During the reporting period, Shanghai Sunlong, Jiangsu Jixing and Suzhou Tenda, which are the wholly-owned subsidiaries of the company, donated 10,000 yuan, 10,000 yuan and 20,000 yuan respectively for poverty alleviation. XVI.Other material events □Applicable √ Not applicable No such cases in the reporting period. XVII. Material events of subsidiaries □ Applicable √ Not applicable 44 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 VI. Change of share capital and shareholding of Principal Shareholders I.Changes in share capital 1. Changes in share capital In shares Before the change Increase/decrease(+,-) After the Change Amount Proporti Capitalizat on Share ion of Bonus Subtot Proportio allotm common Other Quantity shares al n ent reserve fund 1.Shares with conditional 1,385,624,525 24.18% 1,385,624,525 24.18% subscription 1. State-owned legal 60,389,095 1.05% 60,389,095 1.05% person shares 3.Other domestic shares 1,325,235,430 23.13% 1,325,235,430 23.13% Incl:Domestic legal 1,323,974,680 23.11% 1,323,974,680 23.11% person shares Domestic Natural Person 1,260,750 0.02% 1,260,750 0.02% shares II.Shares with 4,344,625,593 75.82% 4,344,625,593 75.82% unconditional subscription 1.Common shares in RMB 4,094,625,592 71.46% 4,094,625,592 71.46% 2.Foreign shares in 250,000,001 4.36% 250,000,001 4.36% domestic market III. Total of capital shares 5,730,250,118 100.00% 5,730,250,118 100.00% Reasons for share changed: □ Applicable √ Not applicable Approval of Change of Shares □ Applicable √ Not applicable Ownership transfer of share changes □ Applicable √ Not applicable Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period 45 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 □ Applicable √ Not applicable Other information necessary to disclose for the company or need to disclosed under requirement from security regulators □ Applicable √ Not applicable 2. Change of shares with limited sales condition □ Applicable √ Not applicable II. Issuing and listing □ Applicable √ Not applicable III. Shareholders and shareholding In Shares Total number of preferred 358,541 (including Total number of common shareholders that had restored 341,239shareholders holding A shareholders at the end of the the 0 shares and 17,302 shareholders reporting period voting right at the end of the holding B shares) reporting period (if any) (note 8) Particulars about shares held above 5% by shareholders or top ten shareholders Proporti Changes Number of share Nature of Number of Amount of Amount of on of in pledged/frozen Shareholders shareholde shares held at restricted un-restricted shares reporting State of r period -end shares held shares held Amount held(%) period share Domestic Non Tunghsu Group -State-own 15.97% 915,064,091 791,889,488 123,174,603 Pledge 799,643,042 4,088,500 ed legal person Domestic Shijiazhuang Non Baoshi Electronic -State-own 5.80% 332,382,171 0 0 332,382,171 Pledge 153,520,000 Group Co., Ltd. ed legal person Domestic Shanghai Huimao Non Enterprise -State-own 4.58% 262,626,262 0 262,626,262 0 Pledge 80,240,722 Management Co., ed legal Ltd. person 46 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 China Fund Management Co., Ltd.-Huaxia Bank-TTCO Trust Co., Ltd.- Other 2.54% 145,759,116 0 0 145,759,116 TTCO Trust Co., Ltd.-Shunjing No.5 Single capital trust Minsheng Royal Fund Management Co., Ltd--Ping Other 1.70% 97,192,224 0 97,192,224 0 An Bank-Daye TrustZengli 2 single Fund Trust Tunghsu Optoelectronic Technology Co., Other 1.27% 72,639,296 0 72,639,296 0 Ltd.-The first ESOP Beixin Ruifeng Fund-China Merchants Bank -Daye Trust- Other 1.08% 62,095,032 0 62,095,032 0 Daye TrustProfit increase 3 single fund plan Domestic Shenzhen Taianer Non Information -State-own 1.07% 61,165,682 0 0 61,165,682 Pledge 55,265,682 Technology Co., ed legal Ltd. person Wanhe Securities -China Merchants Bank -Wanhe Other 0.96% 55,246,500 0 0 55,246,500 Securities and No.1 Collective asset management plan Nuoan Other 0.96% 55,246,487 0 0 55,246,487 Fund-Industrial 47 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Securities-Nanjing Shuangan Assets Management Co., Ltd. Among the top 10 shareholders, CITIC Fund-Huaxia Bank-Tibet Trust-Tibet Trust-Shunjing No.5 Single Fund Trust, and Shenzhen Taianer Information Technology Co., Ltd became the top 10 shareholders of the company by participating in the subscription of the company's non-public share issuance in 2016-and the sale-restricted period for those shares held is 12 months, that is, from August 26, 2016 to August 25, 2017. Among the top 10 shareholders, Shanghai Huimao Enterprise Strategy investors or general Management Co., Ltd, Minsheng Jiayin Fund-Ping An Bank-Daye Trust-Daye Trust Zengli No.2 legal person becomes top 10 Single Fund Trust, and Beixin Ruifeng Fund-China Merchants Bank-Daye Trust-Daye Trust Zengli shareholders due to rights No.3 Single Fund Plan became the top 10 shareholders of the company by participating in the issued (if applicable)(See subscription of shares of the company's 2017 Non-public Share Issuance and Paying Cash to Notes 3) Purchase Assets and Raising Matching Funds and The Related Transaction, with that: the shares held by Shanghai Huihao Enterprise Management Co., Ltd has a sale-restricted period of 36 months, namely from November 30, 2017 - November 29, 2020; and the shares held by Minsheng Jiayin Fund-Ping An Bank-Daye Trust-Daye Trust Zengli No.2 Single Fund Trust and Beixin Ruifeng Fund-China Merchants Bank-Daye Trust-Daye Trust Zengli No.3 Single Fund Plan have a sale-restricted period of 12 months, namely from December 29, 2017 to December 28, 2018. Among the top ten shareholders , Tunghsu Group and Baoshi Group have relationship and Explanation on shareholders constitute persons taking concerted action. The company does not know whether there is participating in the margin relationship between other 8 shareholders or whether they are persons taking concerted action trading business defined in Administrative Measures Relating to Acquisitions of Listed Companies. Shareholding of top 10 shareholders of unrestricted shares Quantity of unrestricted shares held at the end of the Share type Name of the shareholder reporting period Share type Quantity Shijiazhuang Baoshi Electronic RMB Common 332,382,171 332,382,171 Group Co., Ltd. shares China Fund Management Co., Ltd. -Huaxia Bank-TTCO Trust Co., RMB Common 145,759,116 145,759,116 Ltd.-TTCO Trust Co., Ltd.- shares Shunjing No.5 Single capital trust RMB Common Tunghsu Group Co., Ltd. 123,174,603 123,174,603 shares Shenzhen Taianer Information RMB Common 61,165,682 61,165,682 Technology Co., Ltd. shares Wanhe Securities-China Merchants Bank-Wanhe Securities RMB Common 55,246,500 55,246,500 and No.1 Collective asset shares management plan Nuoan Fund-Industrial 55,246,487 RMB Common 55,246,487 48 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Securities-Nanjing Shuangan Assets shares Management Co., Ltd. Zhonghai Trust Co., Ltd.- Zhonghai Trust-Tunghsu RMB Common 52,555,280 52,555,280 Optoelectronic ESOP pooled Fund shares trust Notional Securities fund-Bohai Bank-Minsheng Trust-China RMB Common Minsheng TrustZhicheng No.192 48,619,336 48,619,336 shares Tunghsu Optoelectronic Directional additional l fund trust plan Minsheng Royal Fund Management Co., Ltd.-Ping An Bank-Ping An RMB Common 47,492,649 47,492,649 Trust-Ping An Wealth* Huitai shares No.163 Single Fund Trust RMB Common China Securities Finance Co., Ltd. 30,906,112 30,906,112 shares Explanation on associated relationship or consistent action among the top 10 shareholders of The top 10 tradable shareholders of Shijiazhuang Baoshi Electronic Group Co., Ltd. and the to non-restricted negotiable shares and p ten shareholders of Tunghsu that between the top 10 shareholders Group Co., Ltd. have relationship and constitute persons taking concerted action. of non-restricted negotiable shares and top 10 shareholders Notes to the shareholders involved in financing securities (if any)(See Not applicable Notes 4) Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period. □ Yes √ No The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –back agreement dealing in reporting period. IV. Change of the controlling shareholder or the actual controller Change of the controlling shareholder in the reporting period □ Applicable √ Not Applicable There was no any change of the controlling shareholder of the Company in the reporting period. Change of the actual controller in the reporting period □ Applicable √ Not applicable There was no any change of the actual controller of the Company in the reporting period. 49 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 VII. Situation of the Preferred Shares □Applicable √Not applicable The Company had no preferred shares in the reporting period 50 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 VIII. Information about Directors, Supervisors and Senior Executives I. Change in shares held by directors, supervisors and senior executives □Applicable √Not applicable There was no change in shareholding of directors, supervisors and senior management staffs, for the specific information please refer to the 2017 Annual Report. II. Changes in directors, supervisors and senior management staffs √ Applicable □ Not applicable Name Title Type Date Reason Mr. Li Zhaoting is the chairman of Tunghsu Group, in Director, Board Li Zhaoting Dimission April 25,2018 order to focus more on the overall strategic planning of Chairman Tunghsu Group and related matters. Job changes. Director, Board Wu Jiwei Appointment April 25,2018 New Appointment Chairman Director, Board Unable to perform due to health reasons, apply for Wu Jiwei Dimission August 3,2018 Chairman resignation. Director, Board The chairman of the board of directors was elected by Wang Lipeng Chairman, Elected August 3,2018 the eighth board of directors. General Manager Huang Jinliang CFO Dimission July 27,2018 Job Change Feng Qiuju CFO Appointment July 27,2018 New Appointment Resigned as a director in accordance with the Director, Board Gong Xin Dimission August 3,2018 company's talent strategy adjustment, and continued to secretary serve as secretary of the board of directors 51 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 IX. Corporate Bond Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but not folly cashed on the approval date of annual report Yes 1. Basic information of the corporate bonds Method of Bond repayment of Abbreviated Bond Name Code Issue Date Date Due Balance(RMB’ Interest Rate the principal Bond Name 0000) and interest payment Interest paid 2015- every year, the corporate bond principal will of Tunghsu 15 Tunghsu be repaid with 112243 May 19,2015 May 19,2020 95,604.27 6.80% Optoelectronic bonds the last unpaid Technology interest in one Co., Ltd time as the bond due Listed place or Transaction Shenzhen Stock Exchange place for the corporate bonds Arrangement of investor’s Investor resale option eligibility Information about interest paid The first period bond interest 60,000,000.00 was paid in full amount on schedule in the current and bonds honored during the period. reporting period According to the sell back terms set out in the 2015 Corporate Bond Prospectus of Tunghsu Optoelectronic Technology Co., Ltd. announced by Tunghsu Optoelectronic Technology Co., Ltd., the company issued the First Indicative Notice of Tunghsu Optoelectronic Technology Co., Ltd. on the Adjustment of the Nominal Interest Rate of “15 Tunghsu Bonds” and the Implementation Method of Investors’ Sell Back (notice No.: 2018-036) on April 3, 2018, the Second Indicative Notice of Tunghsu Optoelectronic Technology Co., Ltd. on the Adjustment of Implementation of relevant the Nominal Interest Rate of “15 Tunghsu Bonds” and the Implementation Method of Investors’ special clauses(if applicable) Sell Back (notice No.: 2018-037) on April 4, 2018, and the Third Indicative Notice of Tunghsu such as option clause for the optoelectronic Technology Co., Ltd. on the Adjustment of the Nominal Interest Rate of “15 bond issuer or investors and Tunghsu Bonds” and the Implementation Method of Investors’ Sell Back (notice No.: 2018 - 038) exchangeable clause on April 9, 2018. The sell back price of “15 Tunghsu Bonds” is RMB 100.00 yuan/sheet (excluding interest), the sell back reporting period is from April 3, 2018 to April 9, 2018. The issuer of this corporate bond, i.e. the company, has the right to decide to adjust the coupon rate of the subsequent term at the end of the third year of the current bond’s duration during the duration of the current corporate bond (bond code: 112243, hereinafter referred to as “15 Tunghsu Bonds”). The coupon rate of this bond is 6.00 % in the first three years of the duration. At the end of the third year of the duration of this bond, the company chose to raise the coupon rate, that is, the 52 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 coupon rate of this bond will be raised from 6.00 % to 6.80 % in the next two years of the duration of this bond, and will remain unchanged for this two years (from May 19, 2018 to May 18, 2020). 2.Information about the bond trustee and credit rating agency Bond trustee: 19-20/F, Main Tower , Guangzhou International Guangzhou Business Finance Center, Shi Jianhua, Name Securities Co., Contacts Telephone 020-88836999 Address No.5 Zhujiang Yan Xiangjun Ltd. West Road, Tianhe District Guangzhou City The credit rating agency who follow up and rate the corporate bonds in the reporting period: Business Room 508 Ailiyuan Apartment, No.38 Water Name United Rating Co.,Ltd Address Park North Road, Nankai District, Tianjin City During the report period, the bond trustee, credit rating agency employed by the company that have changed, reasons for Not applicable the change, performing procedures, relevant influence on investors, etc ( if applicable) III. Information about the use of the funds raised by issuing corporate bonds The information of the use of the funds Using the funds raised by issuing corporate bonds strictly conforming to the purpose raised by issuing corporate bonds and stipulated by Rules of Management and Use of the Raised Funds and the Prospectus, related implementation procedure and implemented the corresponding approval procedures Ending balance of the year(Ten thousand) 0 Operation status of the special account for Normal the raised funds Whether the use of the raised funds conforming to the purpose, use plan and The use of the raised funds conformed to the purpose promised in the Prospectus other provisions specified in the Prospectus IV. Information about the rating of the corporate bonds On June 14, 2018, United Ratings Co., Ltd. issued trace rating report LHPZ [2018] No.960 based on the company’s 2017 Annual Report. This rating result is long-term credit rating AA+ and its outlook is "Steady". 53 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (For details, please refer to the "Tracking Rating Announcement" of the company disclosed on www.cninfo.com cn June 16, 2018) According to the United Rating Co.,Ltd’s requirements on tacking and rating, a regular rating shall be carried out within 2 months after the company’s disclosure of 2017 annual report. Also, the United Rating Co.,Ltd shall carry out randomly tracking and rating during the duration of the corporate bonds based on relevant information. V. The corporate bond’s credit mechanism, repayment plan and other safeguard measures for repayment Repayment Plan I. Payment of the interest 1. The interest of the bonds shall be paid each year and the last payment of interest shall be paid with the principal. Every payment of interest shall not be charged on interest after the interest paying day and the principal shall not be charged on interest after the bond’s date due. The interest payment day of this corporate bond is May 19 of each year from 2016 to 2020(If it is not a working day, the payment day will be postponed to the first working day after the day).If the investors exercise the puttable right at the end of the third year in the duration of the bond, the interest payment day of the bonds sold back is May 19 of each year from 2016 to 2018. 2. The payment of the interest of the bonds shall be handled through the bond registration institution and other related institutions. The concrete information of the interest payment will be specified in the Interest Payment Announcement issued on the media designated by CSRC, with in accordance with the relevant state regulations. 3. According to relevant national tax laws and regulations, the investor of the corporate bond shall fully bear the relevant tax should be paid. II. The repayment of the principal 1. The principal will be fully repaid in a time, and its repaying day is May 19, 2020. If the investors exercise the puttable right at the end of the third year in the duration of the bond, the repaying day of the principal of the bonds being sold back is May 19, 2018. (If the repaying day aforesaid is not a working day, the repaying day shall be postponed to the first working day after the original day, and there is no need to pay interest in the deferred period) 2. The repayment of the principal of the bonds will be handled through the bond registration institution and other related institutions. The concrete information of repayment of the principal of the bonds will be specified in the Principal Repayment Announcement issued on the media designated by CSRC, with in accordance with the relevant state regulations. Safeguard measures for the repayment I. A designated special department in charge of the repayment working The company designated its finance department to take the lead in the coordination work for repayment of the bonds and the finance department shall coordinate other relevant departments to schedule the demanded funds for the repayment of the bonds in every year’s financial budget, for ensuring the repayment of the interest and principal of the bonds is timely, guaranteeing the bond-holder’s interest. The company will set up a working team for repayment 15days before the day that is the interest paying day or principal repaying day of the bonds, with the personnel of the finance department being included, to specially in charge of the work of paying the interest of the bonds and the repayment of the principal. II. Establishing Meeting Rules for Bond-holders According to the provisions specified in the Pilot Approach, the company with bond trustee has established the Meeting Rules for Bond-holders for the corporate bonds. The Meeting Rules for Bond-holders specified the scope, procedures and other important items for the bond-holders to exercise rights through the Meeting of the 54 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Bond-holders, which provided a reasonable institutional arrangement for the timely and full payment to the interest and the principal of the corporate bonds. III. Making the full use of the bond trustee According to the requirements specified in the Pilot Approach, the company has adopted the institution of bond trustee, engaged Guangzhou Securities Co.,Ltd as the trustee of the bonds this time and signed the Agreement of Bond Entrusted Management with Guangzhou Securities. The Bond Trustee shall represent all the bond-holders to supervise the relevant information about the company and take all necessary measures to protect the legitimate interest of the bond-holders when the interest or principal of the bonds cannot be repaid in time. The company shall strictly conform to the provisions specified in the Agreement of Bond Entrusted Management, being cooperative when the bond trustee performance its duties, and regularly submit the report of commitment fulfillment status to the bond trustee. When there is a possible bond default, the company shall notice the bond trustee in time, thus the bond trustee can take other necessary measures in time according to the Bond Entrusted Management. Ⅳ. Strictly fulfilling the obligation of information disclosure The company shall adhere to the information disclosure principles of authentic, accurate and completed, making the information of the company’s repaying ability and use of the raised funds to be supervised by the bond trustee and shareholders, for preventing the risk of repayment. According to the Agreement of Bond Entrusted Management and relevant regulations, the company shall release the information of major issues, which include but not limited to the following contents: (1) According to the Prospectus and agreement with the registered trustee institution, the company shall transfer the maturity interest payment or principal to the account designated by the registered trustee institution; (2) By estimate or in fact, the company cannot fully repay the interest or principal of the bonds in time according to the provisions stipulated in the Prospectus; (3) Singing the guarantee contract for external or other major contracts may have significant adverse effects of repaying the interest and principal of the bonds; (4) A severe loss occurred or expected to occur, and the loss exceeds 10% of the net asset audited in the last accounting year; (5) Occurrence of capital reduction, merger, division, dissolution, file for bankruptcy, entering into bankruptcy procedure or other main changes of the company; (6) Occurrence of the amount of subject in the major arbitration or lawsuit exceeding 10% of the net asset audited in the last accounting year; (7) Planning to dispose the asset or debt with subject amount exceeding 10% of the net asset audited in the last accounting year; (8) Planning to change the bond trustee; (9) Failing to perform or Planning to change the stipulations specified in the Prospectus; (10) Alteration of the designated person for specially in charge of the relevant matters of the corporate bonds; (11) Occurrence of suspending the bond transaction; (12) Others may significantly impact the repaying of the interest and principal or circumstances specified by laws, administrative regulations and stipulations by the CSRC or exchange. Ⅴ. Setting up the capital management plan and strictly implementing the plan After the issuance of the bonds, the company shall further reinforce the company’s assets and liabilities management, liquidity management, use management of the raised funds, funds management and so forth according to the company’s debt structure. Also, the company will set up monthly and yearly funds use plan based on the maturity of repaying the interest and principal, ensuring on-schedule, timely and full-amount preparing of the funds for repaying every year’s interest or principal of the bonds to adequately protect the investor’s interest. VI. Commitments According to the resolutions of the issuance of the bonds approved on the board meeting on Oct 21, 2014 and the general meeting of shareholders on Nov 6, 2014, when the company cannot repay the interest or principal of the bonds in time or fully repay the interest or principal of the bonds, the company shall take the following resolutions and make corresponding measures: (1) None profit distribution to shareholders; (2) Postponing capital 55 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 expenditure items, such as major investment, merger and acquisition; (3) Reducing or stopping the salaries and bonuses of the directors and senior management personnel; (4) No transferring of principal responsible personnel and so on. VI. Information about the bond-holder meeting during the reporting period There was no bond-holder meeting convened in the reporting period. VII. Information about the obligations fulfilled by the bond trustee in the reporting period The bond trustee has been continuously following up the company’s credit status, The bond trustee Guangzhou Securities Co., Ltd. disclosed the Tunghsu Optoelectronic Technology Co., Ltd. on April 27, May 10, and August 9, 2018, according to major changes in the chairman of the company and partial bond resale. The company's 2015 corporate bond major issues were entrusted with an interim report on management affairs. VIII. The key accounting data and financial indicators of the latest two years to the end of the reporting period Ten thousand As at the end of the reporting Items As at the end of last year YoY+/-(%)he same period period Current ratio 205.16% 223.59% -18.43% Debt ratio 52.04% 53.11% -1.07% Quick ratio 171.37% 177.08% -5.71% Reporting period The same period of last year At the same time rate of change EBITDA interest coverage ratio 3.44 2.85 20.70% Loans repayment rate 100.00% 100.00% 0.00% Interest payment rate 100.00% 100.00% 0.00% The material reasons for the changed ratio of the accounting data or financial indicators exceeds 30% over the last year □ Applicable √ Not applicable IX. The company fails to repay the debt □ Applicable √ Not applicable No such cases in the reporting period. X. Information about the repayment of interest and principal for other bonds or debt financing instruments 1. Bonds issuing, interest payment and cashing within the report period Nil 2. Unmatured bonds issuing, interest payment and cashing in previous years (1)As approved by China Securities Regulatory Commission file of ZJXK[2015] No. 635, the company issued toward the public 1 billion bones on May 19, 2015 , In 2018, the third-phase bond interest was paid RMB 60,000,000.00; on May 19, 2018, the resale amount was RMB 43,957,300.00, and the coupon rate was adjusted from 6.00% to 6.80%. (2)The company 8th Board of Directors approved the application to National Association of Financial Market 56 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Institutional Investors (NAFMII) for registration and issuance of less than 4.7 billion medium term note on September 8, 2016. The extraordinary general shareholders’ meeting was convoked on September 26, 2016 and approved the program concerning the proposed registration and issuance of the medium term note. The medium term note in 2016 was 4.7 billion in two periods including the first period with two types of (3+2 years) and 5 years totaling up to 3 billion and the second period with two types of (3+2 years) and 5 years totaling up to 1.7 billion, which would both adopt the interest payment per year, principal repayment upon expiration and the interest payment together with the principal cashing for the last period. The interest payment period has not expires within the report period and the interest accrued was RMB147,856,644.84 . XI.Information about the bank credit obtaining and use, as well as repayment of the bank loans during the reporting period The balance of the total amount of the short-term and long-term loans is RMB 13,934,712,962.15, decreased RMB1,184,082,357.41compared with the end of year 2017, which mainly because of the need of the production and operation and the construction of projects. The company strictly conformed to requests of bank loans to use the funds and fully repaid the interest and principal to the bank in time. XII. Information about fulfillment of the stipulations or commitments specified in the Prospectus of the issuance of the bonds during the reporting period During the reporting period, the company had been strictly conforming to the stipulations specified in the Prospectus of the issuance of the bonds to use the raised funds, and the company had fulfilled the commitments of not using any raised funds to indirectly or directly invest real estate business or raise capital for the subsidiaries engaged in real estate business. XIII.Major events occurred during the reporting period The bond trustee Guangzhou Securities Co., Ltd. disclosed the Tunghsu Optoelectronic Technology Co., Ltd. on April 27, May 10, and August 9, 2018, according to major changes in the chairman of the company and partial bond resale. The company's 2015 corporate bond major issues were entrusted with an interim report on management affairs. XIV. Whether the corporate bonds have a guarantor □ Yes √No 57 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 X. Financial Report I. Audit report Has this semi-annual report been audited? □ Yes √ No The semi-annual financial report has not been audited. II. Financial statements Currency unit for the statements in the notes to these financial statements:RMB 1.Consolidated Balance sheet Prepared by: Tunghsu Optoelectronic Technology Co., Ltd. June 30,2018 In RMB Items Year-end balance Year-beginning balance Current asset: Cash and bank balances 23,794,597,055.80 27,456,759,768.86 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable 775,388,432.95 538,128,584.84 Account receivable 9,937,647,168.77 7,873,419,684.42 Prepayments 1,531,060,694.47 2,021,119,950.95 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable 29,306,335.47 49,456,785.29 Dividend receivable Other account receivable 1,349,893,792.08 1,044,890,336.32 Repurchasing of financial assets 58 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Inventories 4,210,883,497.85 4,914,482,277.21 Assets held for sales 126,264,435.58 213,034,435.58 Non-current asset due in 1 year Other current asset 1,207,390,102.41 2,559,947,333.75 Total of current assets 42,962,431,515.38 46,671,239,157.22 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset 243,158,605.30 100,000,056.00 Expired investment in possess Long-term receivable 138,899,570.70 143,988,866.91 Long term share equity investment 2,142,476,783.38 2,130,640,158.90 Property investment 66,930,130.01 58,229,439.86 Fixed assets 10,938,598,162.98 11,378,564,235.15 Construction in progress 5,387,496,213.47 3,663,486,639.90 Engineering material Fixed asset pending for disposal Productive biological assets Gas & petrol Intangible assets 1,149,208,605.35 1,001,796,110.02 R & D petrol 23,318,709.50 15,397,704.97 Goodwill 2,840,823,542.00 2,587,678,140.99 Long-germ expenses to be amortized 15,312,986.85 26,538,304.02 Differed income tax asset 503,169,733.61 526,817,792.76 Other non-current asset 282,006,939.10 306,402,939.48 Total of non-current assets 23,731,399,982.25 21,939,540,388.96 Total of assets 66,693,831,497.63 68,610,779,546.18 Current liabilities Short-term loans 6,812,784,698.87 5,712,826,382.20 Loan from Central Bank Deposit received and hold for others Call loan received Financial liabilities measured at fair value with variations accounted into current income account 59 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Derivative financial liabilities Notes payable 999,267,096.40 1,063,897,679.89 Account payable 4,690,738,505.02 4,636,989,039.65 Advance payment 976,357,517.81 1,655,137,563.63 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 162,528,069.08 207,697,362.25 Tax payable 454,014,088.92 294,979,419.96 Interest payable 196,787,018.42 107,195,147.20 Dividend payable 313,488,825.93 35,000,000.00 Other account payable 1,801,519,889.12 1,887,520,891.88 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Liabilities held for sales Non-current liability due in 1 year 4,373,736,193.82 5,045,608,756.45 Other current liability 159,985,427.25 227,155,178.97 Total of current liability 20,941,207,330.64 20,874,007,422.08 Non-current liabilities: Long-term loan 3,823,532,289.32 5,209,726,250.77 Bond payable 5,625,817,373.23 5,665,126,090.52 Including:preferred stock Sustainable debt Long-term payable 2,976,840,728.76 3,276,308,254.44 Long-term payable employees’s remuneration Special payable Expected liabilities 113,262,230.99 156,421,713.31 Deferred income 555,127,835.23 592,290,617.42 Differed income tax liability 62,295,616.96 60,149,328.74 Other non-current liabilities 608,000,000.00 608,000,000.00 Total non-current liabilities 13,764,876,074.49 15,568,022,255.20 Total of liability 34,706,083,405.13 36,442,029,677.28 60 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Owners’ equity Share capital 5,730,250,118.00 5,730,250,118.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 21,793,727,706.54 21,987,405,220.42 Less:Shares in stock 4,422,320.00 4,422,320.00 Other comprehensive income 3,233.93 -4,518.45 Special reserves 1,990,473.67 1,983,921.21 Surplus reserves 224,133,824.86 224,133,824.86 Common risk provision Undistributed profit 3,467,550,877.18 3,010,372,296.37 Total of owner’s equity belong to the 31,213,233,914.18 30,949,718,542.41 parent company Minority shareholders’ equity 774,514,178.32 1,219,031,326.49 Total of owners’ equity 31,987,748,092.50 32,168,749,868.90 Total of liabilities and owners’ equity 66,693,831,497.63 68,610,779,546.18 Legal representative :Wang Lipeng Person-in-charge of the accounting work:Feng Qiuju Person-in -charge of the accounting organ:Gao Feipeng 2. Balance sheet of the Parent Company In RMB Items Year-end balance Year-beginning balance Current asset: Cash and bank balances 7,180,172,168.51 11,224,359,236.39 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable 1,250,000.00 200,000.00 Account receivable 23,732,862.59 23,837,262.59 Prepayments 7,684,221.64 16,902,375.19 Interest receivable 8,763,055.45 41,868,921.15 61 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Dividend receivable 665,000,000.00 Other account receivable 7,276,060,704.75 4,790,712,672.70 Inventories 499,916,720.50 509,283,364.38 Assets held for sales Non-current asset due in 1 year Other current asset 148,973.38 1,220,148,973.38 Total of current assets 14,997,728,706.82 18,492,312,805.78 Non-current assets: Disposable financial asset 129,500,056.00 100,000,056.00 Expired investment in possess Long-term receivable Long term share equity investment 25,058,355,620.34 23,020,364,897.17 Property investment Fixed assets 42,430,964.28 44,669,881.93 Construction in progress Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 9,513,240.92 9,687,094.58 R & D petrol Goodwill Long-germ expenses to be amortized Differed income tax asset 59,375,663.74 58,105,970.47 Other non-current asset 1,381,400.00 1,381,400.00 Total of non-current assets 25,300,556,945.28 23,234,209,300.15 Total of assets 40,298,285,652.10 41,726,522,105.93 Current liabilities Short-term loans 2,640,000,000.00 2,760,000,000.00 Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Notes payable Account payable 11,734,918.78 15,219,920.86 62 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Advance payment 421,587.90 421,587.90 Employees’ wage payable 2,841,705.33 4,061,413.48 Tax payable 28,982,766.19 28,150,779.48 Interest payable 164,902,902.61 79,827,566.10 Dividend payable 313,488,825.93 Other account payable 983,980,211.32 423,790,359.27 Liabilities held for sales Non-current liability due in 1 year 2,138,316,666.62 2,769,233,333.30 Other current liability Total of current liability 6,284,669,584.68 6,080,704,960.39 Non-current liabilities: Long-term loan 611,000,000.00 1,512,500,000.00 Bond payable 5,625,817,373.23 5,665,126,090.52 Including:preferred stock Sustainable debt Long-term payable Employees’ wage payable Special payable Expected liabilities Differed income Differed income tax liability Other non-current liabilities Total of Non-current liabilities 6,236,817,373.23 7,177,626,090.52 Total of liability 12,521,486,957.91 13,258,331,050.91 Owners’ equity Share capital 5,730,250,118.00 5,730,250,118.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 21,833,675,749.27 21,861,207,672.90 Less:Shares in stock 4,422,320.00 4,422,320.00 Other comprehensive income Special reserves Surplus reserves 205,144,600.53 205,144,600.53 63 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Undistributed profit 12,150,546.39 676,010,983.59 Total of owners’ equity 27,776,798,694.19 28,468,191,055.02 Total of liabilities and owners’ equity 40,298,285,652.10 41,726,522,105.93 3.Consolidated income statement In RMB Items Report period Same period of the previous year I. Income from the key business 11,129,851,790.88 4,876,438,604.10 Incl:Business income 11,129,851,790.88 4,876,438,604.10 Interest income Insurance fee earned Fee and commission received II. Total business cost 10,088,242,118.58 4,162,420,389.45 Incl:Business cost 9,021,989,897.09 3,473,962,810.22 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 186,096,120.70 48,928,687.73 Sales expense 93,892,692.42 42,456,252.57 Administrative expense 389,977,702.76 229,378,673.33 Financial expenses 395,227,116.30 368,191,927.63 Asset impairment loss 1,058,589.31 -497,962.03 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 23,706,518.19 6,676,924.21 Incl: investment gains from affiliates 11,836,624.48 -15,506,492.83 Gains from currency exchange (“-”for loss) Assets disposal income -664,826.45 Other income 108,362,056.52 86,680,000.00 64 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 III. Operational profit(“-”for loss) 1,173,013,420.56 807,375,138.86 Add :Non-operational income 5,945,896.93 70,508,514.69 Less:Non business expenses 2,767,812.01 602,497.65 IV.Total profit(“-”for loss) 1,176,191,505.48 877,281,155.90 Less:Income tax expenses 282,130,776.24 191,513,884.53 V. Net profit 894,060,729.24 685,767,271.37 1.Net continuing operating profit 894,060,729.24 685,767,271.37 2.Termination of operating net profit Net profit attributable to the owners of 858,296,089.08 637,480,381.47 parent company Minority shareholders’ equity 35,764,640.16 48,286,889.90 VI. Other comprehensive income 14,095.23 -1,368.93 Net of profit of other comprehensive inco me attributable to owners of the parent co 7,752.38 -1,368.93 mpany. (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit pla ns of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclass ified into profit or loss. (II) Other comprehensive income that will be 7,752.38 -1,368.93 reclassified into profit or loss. 1.Other comprehensive income under the equity method investee can be reclassifie d into profit or loss. 2.Gains and losses from changes in fair v alue available for sale financial assets 3.Held-to-maturity investments reclassifi ed to gains and losses of available for sal e financial assets 4.The effective portion of cash flow hedg es and losses 5.Translation differences in currency fina 7,752.38 -1,368.93 65 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 ncial statements 6.Other Net of profit of other comprehensive inco 6,342.85 me attributable to Minority shareholders’ equity VII. Total comprehensive income 894,074,824.47 685,765,902.44 Total comprehensive income 858,303,841.46 637,479,012.54 attributable to the owner of the parent company Total comprehensive income 35,770,983.01 48,286,889.90 attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share 0.15 0.13 (II)Diluted earnings per share 0.15 0.13 The current business combination under common control, the net profits of the combined party before achieved ne t profit of RMB-9,555,668.76, last period the combined party realized RMB-5,213,532.93. Legal representative :Wang Lipeng Person-in-charge of the accounting work:Feng Qiuju Person-in -charge of the accounting organ:Gao Feipeng 4. Income statement of the Parent Company In RMB Items Report period Same period of the previous year I. Income from the key business 55,315,982.40 38,597,681.18 Incl:Business cost 38,492,540.23 28,092,263.28 Business tax and surcharge 2,172,697.75 3,585,313.26 Sales expense Administrative expense 24,293,737.94 22,819,056.56 Financial expenses 251,600,276.69 251,791,850.48 Asset impairment loss 7,901,312.69 -279,738.15 Add:Gains from change of fir value (“-”for loss) 66 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Investment gain(“-”for loss) 5,131,289.44 6,675,734.01 Incl: investment gains from affiliates 11,835,887.67 -15,507,683.03 Assets disposal income Other income II. Operational profit(“-”for loss) -264,013,293.46 -260,735,330.24 Add :Non-operational income 671.41 6,388.00 Less:Non business expenses 0.15 III.Total profit(“-”for loss) -264,012,622.20 -260,728,942.24 Less:Income tax expenses -1,269,693.27 3,374,750.50 IV. Net profit(“-”for net loss) -262,742,928.93 -264,103,692.74 1.Net continuing operating profit -262,742,928.93 -264,103,692.74 2.Termination of operating net profit V.Net of profit of other comprehensive i ncome (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit pl ans of changes in net debt or net assets 2.Other comprehensive income under th e equity method investee can not be recl assified into profit or loss. ( II ) Other comprehensive income that will b e reclassified into profit or loss. 1.Other comprehensive income under th e equity method investee can be reclassi fied into profit or loss. 2.Gains and losses from changes in fair value available for sale financial assets 3.Held-to-maturity investments reclassif ied to gains and losses of available for s 67 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 ale financial assets 4.The effective portion of cash flow hed ges and losses 5.Translation differences in currency fin ancial statements 6.Other VI. Total comprehensive income -262,742,928.93 -264,103,692.74 VII. Earnings per share: (I)Basic earnings per share (II)Diluted earnings per share 5. Consolidated Cash flow statement In RMB Items Report period Same period of the previous year I.Cash flows from operating activities Cash received from sales of goods or 9,938,756,230.71 5,146,821,885.37 rending of services Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Net increase of trade financial asset disposal Cash received as interest, processing fee and commission Net increase of inter-bank fund received Net increase of repurchasing business 68 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Tax returned 89,994,925.74 171,066,018.68 Other cash received from business 730,551,299.36 203,747,413.68 operation Sub-total of cash inflow 10,759,302,455.81 5,521,635,317.73 Cash paid for purchasing of 8,162,424,567.65 5,213,805,385.34 merchandise and services Net increase of client trade and advance Net increase of savings n central bank and brother company Cash paid for original contract claim Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 608,921,172.96 277,912,435.10 Taxes paid 568,158,273.01 544,190,992.27 Other cash paid for business activities 1,336,181,154.53 850,676,318.80 Sub-total of cash outflow from business 6,886,585,131.51 10,675,685,168.15 activities Cash flow generated by business -1,364,949,813.78 83,617,287.66 operation, net II.Cash flow generated by investing Cash received from investment 1,251,030,000.00 5,399,999,000.00 retrieving Cash received as investment gains 13,923,452.07 22,183,417.04 Net cash retrieved from disposal of 1,339,040.00 fixed assets, intangible assets, and other long-term assets Net cash received from disposal of 393,727,652.59 subsidiaries or other operational units Other investment-related cash received 200,000,000.00 190,962.49 Sub-total of cash inflow due to 1,860,020,144.66 5,422,373,379.53 investment activities Cash paid for construction of 2,686,335,621.99 1,082,436,888.19 fixed assets, intangible assets and other long-term assets Cash paid as investment 408,243,324.50 5,375,599,000.00 Net increase of loan against pledge 69 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Net cash received from subsidiaries and 107,762,094.14 2,886,994.56 other operational units Other cash paid for investment 50,000,000.00 318,237,076.99 activities Sub-total of cash outflow due to 6,510,922,882.75 3,520,578,117.62 investment activities Net cash flow generated by investment -1,660,557,972.96 -1,088,549,503.22 III.Cash flow generated by financing Cash received as investment 4,169,500.00 185,130,000.00 Incl: Cash received as investment from 4,169,500.00 185,130,000.00 minor shareholders Cash received as loans 3,146,840,211.91 3,307,676,666.66 Cash received from bond placing Other financing –related ash received 565,785,278.10 461,896,848.85 Sub-total of cash inflow from financing 3,716,794,990.01 3,954,703,515.51 activities Cash to repay debts 4,528,169,601.04 3,299,247,331.44 Cash paid as dividend, profit, or 640,756,867.95 785,097,280.87 interests Incl: Dividend and profit paid by 30,000,000.00 subsidiaries to minor shareholders Other cash paid for financing activities 640,002,625.89 499,724,825.13 Sub-total of cash outflow due to 4,584,069,437.44 5,808,929,094.88 financing activities Net cash flow generated by financing -2,092,134,104.87 -629,365,921.93 IV. Influence of exchange rate -2,652,600.61 8,711,680.32 alternation on cash and cash equivalents V.Net increase of cash and cash -3,671,727,390.78 -3,074,153,558.61 equivalents Add: balance of cash and cash 25,114,660,756.25 25,537,802,101.80 equivalents at the beginning of term VI ..Balance of cash and cash 21,442,933,365.47 22,463,648,543.19 equivalents at the end of term 6. Cash Flow Statement of the Parent Company In RMB Items Amount in this period Amount in last period 70 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 I.Cash flows from operating activities Cash received from sales of goods or 63,990,000.00 51,105,726.47 rending of services Tax returned 13,719.30 Other cash received from business 330,847,011.69 4,513,958,096.78 operation Sub-total of cash inflow 394,850,730.99 4,565,063,823.25 Cash paid for purchasing of 33,858,206.35 172,870,594.52 merchandise and services Cash paid to staffs or paid for staffs 16,144,890.38 5,039,091.78 Taxes paid 3,755,213.45 8,445,826.76 Other cash paid for business activities 217,407,719.04 7,197,399,250.81 Sub-total of cash outflow from business 271,166,029.22 7,383,754,763.87 activities Cash flow generated by business 123,684,701.77 -2,818,690,940.62 operation, net II.Cash flow generated by investing Cash received from investment 1,770,000,000.00 5,399,999,000.00 retrieving Cash received as investment gains 678,923,452.07 592,183,417.04 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received Sub-total of cash inflow due to 2,448,923,452.07 5,992,182,417.04 investment activities Cash paid for construction of fixed assets, intangible assets and other long-term assets Cash paid as investment 2,617,565,500.00 9,117,899,000.00 Net cash received from subsidiaries and other operational units Other cash paid for investment 12,759,192,480.99 170,000,000.00 activities Sub-total of cash outflow due to 15,376,757,980.99 9,287,899,000.00 71 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 investment activities Net cash flow generated by investment -12,927,834,528.92 -3,295,716,582.96 III.Cash flow generated by financing Cash received as investment Cash received as loans 580,000,000.00 2,016,666,666.66 Cash received from bond placing Other financing –related ash received 10,804,871,140.21 108,271,893.76 Sub-total of cash inflow from 11,384,871,140.21 2,124,938,560.42 financing activities Cash to repay debts 2,276,373,966.68 1,576,266,666.68 Cash paid as dividend, profit, or 348,534,414.26 552,539,171.23 interests Other cash paid for financing activities 28,679,113.18 Sub-total of cash outflow due to 2,624,908,380.94 2,157,484,951.09 financing activities Net cash flow generated by financing 8,759,962,759.27 -32,546,390.67 IV. Influence of exchange rate 433,490.32 alternation on cash and cash equivalents V.Net increase of cash and cash -4,044,187,067.88 -6,146,520,423.93 equivalents Add: balance of cash and cash 11,224,359,236.39 16,951,756,537.76 equivalents at the beginning of term VI ..Balance of cash and cash 7,180,172,168.51 10,805,236,113.83 equivalents at the end of term 7. Consolidated Statement on Change in Owners’ Equity Amount in this period In RMB Amount in this period Owner’s equity Attributable to the Parent Company Other Equity Minor instrument Other Commo Total of Items shareho Share Less: Speciali Capital Compre Surplus n risk Retaine owners’ Capita prefer Shares zed lders’ Sustai reserves hensive reserves provisio d profits equity l red Other in stock reserve equity nable Income n stock debt 72 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 5,730, 21,987, 3,010,3 1,219,0 32,168, I.Balance at the 4,422,3 -4,518.4 1,983,9 224,133 250,11 405,220 72,296. 31,326. 749,868 end of last year 20.00 5 21.21 ,824.86 8.00 .42 37 49 .90 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the 5,730, 21,987, 3,010,3 1,219,0 32,168, 4,422,3 -4,518.4 1,983,9 224,133 beginning of 250,11 405,220 72,296. 31,326. 749,868 20.00 5 21.21 ,824.86 current year 8.00 .42 37 49 .90 -193,67 -444,51 -181,00 III.Changed in the 7,752.3 6,552.4 457,178 7,513.8 7,148.1 1,776.4 current year 8 6 ,580.81 8 7 0 (1)Total 7,752.3 858,296 35,764, 894,068 comprehensive 8 ,089.08 640.16 ,481.62 income (II)Investment -270,36 4,169,5 3,899,1 or decreasing of 4.11 00.00 35.89 capital by owners 1.Ordinary Share 4,169,5 4,169,5 s invested by share 00.00 00.00 holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity -270,36 -270,36 4.Other 4.11 4.11 -401,11 -401,11 (III)Profit 7,508.2 7,508.2 allotment 7 7 1.Providing of 73 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 surplus reserves 2.Providing of common risk provisions 3.Allotment to the -401,11 -401,11 owners (or 7,508.2 7,508.2 shareholders) 7 7 4.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V). Special 6,552.4 6,552.4 reserves 6 6 1. Provided this 6,552.4 6,552.4 year 6 6 2.Used this term -193,40 -484,45 -677,85 (VI)Other 7,149.7 1,288.3 8,438.1 7 3 0 5,730, 21,793, 3,467,5 31,987, IV. Balance at the 4,422,3 3,233.9 1,990,4 224,133 774,514 250,11 727,706 50,877. 748,092 end of this term 20.00 3 73.67 ,824.86 ,178.32 8.00 .54 18 .50 Amount in last year In RMB Amount in last year Owner’s equity Attributable to the Parent Company Total Minor Items Share Other Equity Capital Less: Other Speciali Surplus Commo Retaine shareho of Capita instrument reserves Shares Compre zed reserves n risk d profits lders’ owner 74 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 l in stock hensive reserve provisio equity s’ prefer Sustai Income n equity red Other nable stock debt 4,939, 16, 1,823,6 1,093,0 24,379, I.Balance at the 4,422,3 188,044 928,98 338,960 95,278. 61,728. 268,550 end of last year 20.00 ,070.48 3.00 ,810.89 31 31 .99 Add: Change of accounting policy Correcting of previous errors Merger of entities -157,61 195,000 89,140, 126,528 under common 2,768.1 ,000.00 997.13 ,229.03 control 0 Other II.Balance at the 4,939, 16,533, 1,666,0 1,182,2 24,505, 4,422,3 188,044 beginning of 928,98 960,810 82,510. 02,725. 796,780 20.00 ,070.48 current year 3.00 .89 21 44 .02 790,32 5,453,4 1,344,2 7,662,9 III.Changed in the -4,518.4 1,983,9 36,089, 36,828, 1,135. 44,409. 89,786. 53,088. current year 5 21.21 754.38 601.05 00 53 16 88 (1)Total 1,733,2 1,923,8 -4,518.4 190,638 comprehensive 01,682. 36,083. 5 ,919.68 income 30 53 (II)Investment 790,32 6,690,3 7,863,5 382,886 or decreasing of 1,135. 26,329. 33,506. ,041.50 capital by owners 00 82 32 1.Ordinary Share 790,32 6,728,5 7,901,7 382,886 s invested by share 1,135. 22,710. 29,887. ,041.50 holders 00 65 15 2 . Holders of oth er equity instrume nts invested capital 3.Allotment to the owners (or shareholders) -38,196, -38,196, 4.Other 380.83 380.83 (IV) Internal 36,089, -388,91 -35,000 -387,82 75 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 transferring of 754.38 1,896.1 ,000.00 2,141.7 owners’ equity 4 6 1. Capitalizing of 36,089, -36,089, capital reserves (or 754.38 754.38 to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up -352,82 -387,82 -35,000 losses by surplus 2,141.7 2,141.7 ,000.00 reserves. 6 6 4. Other (VI )Special reserves 1. Provided this year 2.Used this term (VII)Other IV. Balance at the end of this term (V) Special 1,983,9 1,906,1 3,890,0 reserves 21.21 20.38 41.59 1. Provided this 38,971, 1,906,1 40,877, year 707.64 20.38 828.02 -36,987, -36,987, 2.Used this term 786.43 786.43 -1,236,8 -503,60 -1,740,4 (VI)Other 81,920. 2,480.5 84,400. 29 1 80 5,730, 21,987, 3,010,3 1,219,0 32,168, IV. Balance at the 4,422,3 -4,518.4 1,983,9 224,133 250,11 405,220 72,296. 31,326. 749,868 end of this term 20.00 5 21.21 ,824.86 8.00 .42 37 49 .90 8.Statement of change in owner’s Equity of the Parent Company Amount in this period In RMB Items Amount in this period 76 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Other Equity instrument Other Less: Common Total of Share Capital Compreh Surplus Retaine preferre Sustain Shares in risk owners’ Capital Other reserves ensive reserves d profits d stock able stock provision equity Income debt I.Balance at the 5,730,25 21,861,20 4,422,320 205,144,6 676,010 28,468,19 end of last year 0,118.00 7,672.90 .00 00.53 ,983.59 1,055.02 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the 5,730,25 21,861,20 4,422,320 205,144,6 676,010 28,468,19 beginning of 0,118.00 7,672.90 .00 00.53 ,983.59 1,055.02 current year -663,86 III.Changed in the -27,531,9 -691,392, 0,437.2 current year 23.63 360.83 0 (I)Total -262,74 -262,742, comprehensive 2,928.9 928.93 income 3 (II) Investment or -27,531,9 -27,531,9 decreasing of 23.63 23.63 capital by owners 1.Ordinary Share -27,531,9 -27,531,9 s invested by share 23.63 23.63 holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other -401,11 (III)Profit -401,117, 7,508.2 allotment 508.27 7 1.Providing of 77 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 surplus reserves 2.Allotment to the -401,11 -401,117, owners (or 7,508.2 508.27 shareholders) 7 3.Other (IV)Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V) Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at the 5,730,25 21,833,67 4,422,320 205,144,6 12,150, 27,776,79 end of this term 0,118.00 5,749.27 .00 00.53 546.39 8,694.19 Amount in last year In RMB Amount in last year Other Equity instrument Other Less: Common Total of Items Share Capital Compreh Surplus Retaine preferre Sustain Shares in risk owners’ Capital Other reserves ensive reserves d profits d stock able stock provision equity Income debt I.Balance at the 4,939,92 15,130,19 4,422,320 169,054,8 696,998 20,931,75 end of last year 8,983.00 1,736.27 .00 46.15 ,223.03 1,468.45 Add: Change of 78 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 accounting policy Correcting of previous errors Other II.Balance at the 4,939,92 15,130,19 4,422,320 169,054,8 696,998 20,931,75 beginning of 8,983.00 1,736.27 .00 46.15 ,223.03 1,468.45 current year III.Changed in the 790,321, 6,731,015 36,089,75 -20,987, 7,536,439 current year 135.00 ,936.63 4.38 239.44 ,586.57 (I)Total 360,897 360,897,5 comprehensive ,543.75 43.75 income (II) Investment or 790,321, 6,731,015 7,521,337 decreasing of 135.00 ,936.63 ,071.63 capital by owners 1.Ordinary Share 790,321, 6,728,522 7,518,843 s invested by share 135.00 ,710.65 ,845.65 holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 2,493,225 2,493,225 4.Other .98 .98 -381,88 (III)Profit 36,089,75 -345,795, 4,783.1 allotment 4.38 028.81 9 1.Providing of 36,089,75 -36,089, surplus reserves 4.38 754.38 2.Allotment to the -345,79 -345,795, owners (or 5,028.8 028.81 shareholders) 1 3.Other (IV)Internal transferring of owners’ equity 79 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V) Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at the 5,730,25 21,861,20 4,422,320 205,144,6 676,010 28,468,19 end of this term 0,118.00 7,672.90 .00 00.53 ,983.59 1,055.02 III. Brief introduction of the Company Approved by Hebei Economic System Reform Commission with the Approval of Establishment of Tunghsu Optoelectronic Technology Co., Ltd.(Hereinafter referred to as “The Company” or “Tunghsu Optoelectronic”)(Ji Ti Gfai Wei Gu Zi(1992) No.5 Document) in 1992, Shijiazhuang Baoshi Electronic Glass Co., Ltd. is a joint stock limited company jointly established by Shijiazhuang Kinescope General Factory (transformed into Shijiazhuang Baoshi Electronics Group Co., Ltd.later), China Electronic Import and export Corporation and Zonghua Hebei Import and Export Company. At the Time of establishment, the Company had 25.68 million shares (the par value of each share is RMB 10) and total share capital of RMB 256.80 million. On July 17, 1993, the Company held a provisional shareholders' general meeting and decided to split the stock equity with par value of RMB 10 per share into stock equity with par value of RMB 1 per share. As a result, the total number of the Company's shares became 256.80 million and its total share capital became RMB 256.80 million. Approved by Securities Commission under State Council with the Approval of Issue of 100 Million Domestically Listed Foreign Investment Shares by Shijiazhuang Baoshi Electronic Glass Co., Ltd. (Zheng Wei Fa (1996) No. 15 Document) on June 11, 1996, the Company issued 100 million domestically listed foreign investment shares (B shares) (the par value of each share is RMB 1). Approved by China Securities Regulatory Commission with the Approval of the Application of Shijiazhuang Baoshi Electronic Glass Co., Ltd. to Publicly Issue Shares (Zheng Jian Fa Zi (1996) No. 174 Document) on August 30 of the same year, the Company publicly issued 26.20 million shares (the par value of each share is RMB 1). As of September 17, 1996, the total share capital of the Company increased to RMB 383 million. According to the Approval of Private Issue of Shares by Shijiazhuang Baoshi Electronic Glass Co., Ltd. (Zhen Jian 80 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Xu Ke (2012) No. 1661 Document) issued by China Securities Regulatory Commission ("CSRC"), the Company privately issued 520 million RMB ordinary shares (A shares) to specific investors at the price of RMB 9.69 per share on April 3, 2013. All investors subscribed for shares in cash. After this private issue, the registered capital of the Company was changed to RMB 903.00 million. The controlling shareholder of the company by the Shijiazhuang Baoshi Electronic Group Co., Ltd. changed to Tu nghsu Group , a direct stake of 14.40%, Shijiazhuang Baoshi Electronic Glass Co., Ltd. held the indirectly 12.27% of the share. The 6th Provisional shareholder meeting in 2013 approved the name change of Shijiazhuang Baoshi Electronic G lass Co., Ltd. to Tunghsu Optoelectronic Technology Co., Ltd.. According to the resolution of annual shareholder meeting in 2013 and the provisions of amendments to articles of association approved on April 27, 2014, the company has transferred 20 shares for each 10 shares to all shareholders, and with total shares of 1806 million transferred on the basis of the general capital of 903 million on December 31, 2013. Thus, the registered capital of RMB1806 million applied to add by the company should be transferred into the share capital by the capital reserve with the reference date on May 27, 2014, and the registered capital is RMB2709 million after changed. As per the provisions of “Restricted Stock Incentive Plan of Tunghsu Optoelectronic Technology Co., Ltd. (Draft)” and its summary proposal approved after the second temporary shareholders’ resolution in 2014, the company has implemented the stock option incentive to grant 41 people the restricted stocks of RMB3,080,000.00 with the price of RMB3.88 per share, which are all in cash subscription. Thus, the company shall increase the share capital of RMB3.08 million and the capital reserve of RMB 8,870,400.00, and the share capital is RMB2,712,080,000.00 after changed. Under the provisions of “Proposal on Repurchase of Part of Domestic Listed Foreign Shares (Share B)” approved after the second temporary shareholders’ resolution in 2014, the company has repurchased 49,999,999.00 B shares released outside, and the repurchased shares shall be written off and the registered capital is reduced correspondingly. Thus, the company shall decrease the share capital of RMB49,999,999.00 and the capital reserve of RMB218,024,376.60, and the share capital is RMB2,662,080,001.00 after changed. Referring to the resolutions determined on the 27th Meeting of the 7th Board of Directors of the company, the 31st Meeting of the 7th Board of Directors, the 1st General Meeting of Extraordinary Shareholders in 2015, the 38th Meeting of the 7th Board of Directors and the Regulatory Approval No. [2015] 2270 by China Securities Regulatory Commission: Replies on Approval of Private Issuing of Stocks by Tunghsu Photoelectric Technology Co., Ltd., it is approved that the company issues new shares less than 1,186,943,620 privately. The planned number of privately issued stocks is less than (including) 1,186,943,620. The actual issuance number of the stock is 1,173,020,525, and the modified equity capital is 3,835,100,526.00 yuan. According to Proposals on the Repurchase and Cancellation of Partial Restricted Shares deliberated and approved on the 43rd Meeting of the 7th Board of Directors of the company convened on October 29, 2015, the company plans to repurchase and cancel restricted shares. The granted but unlocked restricted shares held by left equity incentive objects sum to 100,000 at the repurchase price of 3.78 yuan/share. Other forms of lease besides financial leasing are considered as operating leasing According to ZJXK [2016] No. 1322 document On the Approval of Non-public Stock to Tunghsu Optoelectronic Technology Co. Ltd permitted by China Securities Regulatory Commission and also was resolved in the 7th board of the forty-eight meeting and the first extraordinary shareholders' general meeting,it is approved that the company issues new shares less than 1,104,928,457.00 privately. The planned number of privately issued stocks is less than (including) 1,104,928,457.00. The actual issuance number of the stock is 1,104,928,457.00, and the modified equity capital is 4,939,928,983.00 yuan. According to the company's eleventh meeting of the eighth Board of Directors held on March 20, 2017, the 81 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 eighteenth meeting of the eighth Board of Directors held on June 9, 2017, the fourth temporary shareholders’ general meeting of 2017 held on June 26, 2017 and the Approval on Tunghsu Optoelectronic Technology Co., Ltd’s Share Issuance to Objects Including Shanghai Huimao Enterprise Management Co., Ltd for Asset Purchase and Raising Matching Funds by CSRC (Zhen Jian Xu Ke [2017] No. 1841 Doc), approved that the company shall issue 262,626,262 shares to Shanghai Huimao Enterprise Management Co., Ltd (hereinafter referred to as "Shanghai Huimao"), 106,326,446 shares to Tunghsu Group Co., Ltd (hereinafter referred to as "Tunghsu Group"), 11,380,165 shares to Mianyang Science and Technology City Development Investment (Group) Co., Ltd (hereinafter referred to as "Mianyang Science and Technology Group") and 5,020,661 shares to Sichuan Changhong Electric Appliance Co., Ltd (hereinafter referred to as "Sichuan Changhong") for purchasing the underlying assets; and approved that the Company shall raise no more than RMB 3,750,000,000 of matching funds by the company’s non-public share issuance. The Company actually issued 385,353,534.00 shares for purchasing the assets, The issue price per share is 9.90 yuan; and issued 404,967,601.00 shares for raising the matching funds, The issue price per share is 9.26 yuan;thus the capital stock after the change became RMB 5,730,250,118.00. As of June 30, 2018, Registered capital : RMB 5,730,250,118.00, Legal representative: Wang Lipeng, Enterprise unified social credit code: 911301001043959836, Registered Address: No.9, Huanghe Road, Shijiazhuang High-tech Industrial Development Area, Shijiazhuang, Hebei Province. Tunghsu Optoelectronic Parent Company is the Tunghsu Group,Uitimate controller is Li Zhaoting. Financial statements and notes to the financial statements approved at the 46th meeting of the 8th Board of Directors on August 30, 2018. The company's business scope: investing in the project investments with its own funds; research and development of machinery equipment and electronic products; manufacturing and production-process development of various non-standard equipments and components; processing and sales of electronic products for grinding machine (excluding public safety equipment and devices); self operated and agent import and export business of various commodities and technologies; computer system integration, software development, technical consulting; installation of electrical and mechanical equipment (not including pre-licensing ones), engineering advice. (All of the above scope, excluded those prohibited or restricted by laws, regulations and State Council decisions; matters needing approval by other departments can be operated after the approval). In the reporting period, 19 subsidiaries and 86 sub-subsidiaries were included in the consolidation scope by the company, see details at Note 9 “Rights and Interests in Other Subjects ”. The consolidation scope of the company increased by 24 ,decreased by 2 and a net increased by 22 companies year on year at this reporting period, see details at Note 8“Change of IV.Basis for the preparation of financial statements 1. Basis for the preparation of financial statements The financial statements of the company are prepared based on the going-concern assumption and the actual transactions and items,,the Company prepared financial statements in accordance with the ASBE-Basic Standard and revised thereafter, Application Guidance of Accounting Standard for Business Enterprises, Interpretation of Accounting Standards for Business Enterprises and other regulations(hereinafter referred to as “the Accounting 82 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Standards for Business Enterprises”, “China Accounting Standards” or “CAS”),Rules for Preparation Convention of Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission. In accordance with Accounting Standards for Business Enterprises, the Company has adopted the accrual basis of accounting. Except for certain financial instruments, the Company adopts the historical cost as the principle of measurement in the financial statements. The valuation will be made according to the lower one between the amount of on-sales non-current assets after fair value deducts the predicted costs and the original book value which conforms to the condition of being on-sales. When assets are impaired, provisions for asset impairment are made in accordance with relevant requirements. 2. Ongoing-operation The company has the capacity to continually operate within 12 months at least since the end of report period, and hasn’t the major issues impacting on the sustainable operation ability. V. The company's major accounting policies, accounting estimates and prior errors Important prompt: Nil 1.Statement on compliance with accounting standards for business Enterprises The Company state: the financial statements prepared are in line with the requirements in enterprise accounting st andards in line with of system, and have truly and completely reflected of the financial status in June 30,2018 , operational results, cash flow, and other relevant information of January –June 2018. 2.Accounting year: The Group’s fiscal periods include fiscal years and fiscal periods shorter than a complete fiscal year..from January 1 to December 31 as one accounting year. 3. The operating cycle The normal business cycle refers to the period starting from assets purchased for processing to cash or cash equivalents converted. The Company uses a 12-month operating cycle as liquidity classification criteria for its assets and liabilities. 4. Currency for bookkeeping: The Company takes RMB as the standard currency for bookkeeping. 83 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 5. Accounting treatments for a business combinations under common control and under non common control The term "business combination" refers to a transaction or event combining two or more separate enterprises into one reporting entity. Business combinations are classified into business combinations involving enterprises under common control and business combinations not involving enterprises under common control. (1) A business combination involving enterprises under common control A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. For the business combination involving enterprises under common control, the party obtaining the control right over other enterprises involved in the combination on the combination date is the combining party, while other enterprises involved in the combination is the combined party. The combination date is the date on which one combining enterprise obtains control of other combining enterprises. Assets and liabilities obtained are measured at their respective carrying amounts as recorded by the combining entities at the date of the combination. The difference between the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the combination [the aggregate face value of shares issued as consideration] is adjusted to the share premium in capital reserve. If the share premium is not sufficient to absorb the difference, any excess is adjusted against retained earnings. Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred. (2)A business combination not involving enterprises under common control A business combination not involving enterprises under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties before and after the combination. For the business combination not involving enterprises under common control, the party obtaining the control right over other enterprises involved in the combination on the combination date is the combining party, while other enterprises involved in the combination is the combined party. The combination date is the date on which one combining enterprise obtains control of other combining enterprises. 84 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for control of the acquiree, the intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services and other associated administrative expense attributable to the business combination are charged to profit or loss when they are incurred. The costs of issuing equity or debt securities as a part of the consideration for the acquisition are included in the carrying amounts of these equity or debt securities upon initial recognition. The contingent costs as a part of the consideration for the acquisition are included in the cost of combination on fair values at the acquisition date, and will be adjusted if any new situation incurred or further evidence provided in 12 months subsequent to acquisition date, then the goodwill will be adjusted accordingly. The acquiree’s identifiable assets, liabilities and contingent liabilities, acquired by the acquirer in a business combination, that meet the recognition criteria are measured at fair value at the acquisition date. Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is treated as an asset and recognised as goodwill. Where the cost of combination is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer firstly reassesses the measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination. If after that reassessment, the cost of combination is still less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the acquirer recognizes the remaining difference immediately in profit or loss for the current period. The deductible temporary difference from the acquiree not recognized as deferred tax assets on the acquisition date, will be recognized as deferred tax assets, if in 12 months subsequent to acquisition date, there is new information indicating that relative situation exists and the economic benefit associated with the deductible temporary difference will flow to the Company, the goodwill will be reduced accordingly. If the goodwill is less than the deductible temporary difference, the difference will be charged into profit or loss in current period. For a business combination involving enterprise not under common control and achieved in stages, it should make judgement on whether those transactions are regard as “Package deal” based on “No. 5 Notice on Explanation on Accounting Standards for Business Enterprises by the Ministry of Finance" (CAIKUAI [2012] No.19) and Article 51 of "Accounting Standards for Business Enterprises No. 33: Consolidated Financial Statement". If it is regarded as “package deal”, the accounting treatment refers to above-mentioned principle and “Long-term equity investment” in Note III, 14; If it is not regarded as “package deal”, the accounting treatment should be different for individual and consolidated financial statements. In individual financial statement, the initial investment cost is the sum of the book value of equity investment held before the acquisition date and the cost of new investment on acquisition date. When the stock equity held before the acquisition date involving other consolidated incomes, at the disposal date, other consolidated incomes related to this investment shall be subjected to accounting treatment (i.e. except the corresponding share accounted by equity method in the change due to remeasurement and setting of net indebtedness or net assets of benefit plan, the remaining shall be transferred to the current investment income) on the same basis as that adopted by the acquiree for the direct disposal of relevant assets or liabilities. 85 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 In consolidated financial statement, the share equity held before the acquisition date shall be measured again according to the fair value of this share equity on the acquisition date, the balance of the fair value and its book value shall be counted in the current investment income; when the share equity held before the acquisition date involving other consolidated incomes, other consolidated incomes related shall be subjected to accounting treatment (i.e. except the corresponding share accounted by equity method in the change due to remeasurement and setting of net indebtedness or net assets of benefit plan, the remaining shall be transferred to the current investment income of the acquisition date) on the same basis as that adopted by the acquiree for the direct disposal of relevant assets or liabilities. 6. Preparation on consolidation financial statements (1) Preparation on consolidation financial statements The company starts to include the actual control right to the net assets and the production and management decisions of the subsidiaries into the combination scope since the date of the actual right acquired, and will stop covering into the combination scope on the date of the actual right lost. For the disposed subsidiaries, the business performance and the cash flow before the disposal date have been properly covered in the consolidated profit statement and the consolidated cash flow statement. For the subsidiaries disposed in the current period, the opening balance of the consolidated balance sheet shall not be adjusted. Meanwhile, for the subsidiaries increased through the business combination under non-common control, the business performance and the cash flow after the acquisition date have been properly included in the consolidated profit statement and the consolidated cash flow statement, and the opening balance and the comparison balance of the consolidated financial statement shall not be adjusted. For the subsidiaries increased through the business combination under common control, the business performance and the cash flow from the beginning of current combination period to the combination date have been properly included in the consolidated profit statement and the consolidated cash flow statement, and the comparison balance of the consolidated financial statement shall be adjusted simultaneously. When preparing the consolidated financial statement, the necessary adjustment shall be made according to the accounting policy of the company and the financial statement of the subsidiaries during the fiscal period if the accounting policy or the fiscal period adopted by the subsidiaries and the company is discrepant. For the subsidiaries acquired through the business combination under non-common control, the financial statement shall be adjusted on the basis of the fair value of the identifiable net assets on the acquisition date. All the major balances, transactions and the unrealized profits of the company shall be offset in the preparation of the consolidated financial statement. Those not belong to the company in the shareholders’ equity and the current net profit or loss of the subsidiaries shall be respectively as the minority equity and the minority interest income and individually listed under the shareholders’ equity and the net profit of the consolidated financial statement. The minority equity portion from the net profit or loss in current period shall be as “minority interest income” and listed under the net profit in the consolidated financial statement. Moreover, the minority equity is still offset even if the losses of the subsidiaries undertaken by the minority shareholders are beyond the portion of the shareholders’ equity shared by the minority shareholders of the company at the beginning of period. 86 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 When the control on the original subsidiaries lost due to the disposal of partial equity investment or other reasons, the remaining equity should be measured again according to the fair value on the control lost date. The difference of the consideration acquired by the disposal of equity and the fair value of the surplus equity minus the net assets portion of the original subsidiaries calculated from the purchase date as per the original stock proportion shall be recorded into the current investment income after the control lost. Other comprehensive returns relevant to the original subsidiary shares investment shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquiree when the control lost (Namely, all the rest are transferred into the current investment incomes, with the exception of the changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the original subsidiaries). Thereafter, the subsequent measurement shall be made for the rest equity according to the relevant provisions of “Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investment” or “Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”. For the details, please see Notes III, 14 “Long-term Equity Investment” or Notes III, 10 “Financial Instruments”. For the equity investment in the subsidiary through the step-by-step disposal of multiple transactions till the control right lost, the company should respectively dispose all the transactions if belong to the package deal. As long as the terms, conditions and economic influence on all the transactions of the disposal of the equity investment in the subsidiary meet one status below, it usually shows that the multiple transactions matters should be conducted the accounting treatment as the package deal: ① these transactions are made simultaneously or under the consideration of the influence each other. ② these transactions shall be as the whole to achieve one complete business results. ③ one transaction occurs depending on the appearance of other one transaction at least. ④ one transaction is economic under the consideration with other transactions even if it is not economic when individually considerate. For the non-package deal, each transaction shall be respectively conducted the accounting treatment according to the applicable principles of “Partial Disposal of Long-term Equity Investment in Subsidiary without Control Lost” (please refer to 14, (2) ④ in Notes III,) and “The Control on Original Subsidiary Lost due to Disposal of Part of Equity Investment or Other Reasons” (details please see forepart). For the package deal from the transactions after the disposal of equity investment in the subsidiary till the control right lost, the transactions shall be as one transaction of the disposal of subsidiary and the control lost for the accounting treatment. Therefore, every balance between the net assets proportion of the subsidiary shared relative to the disposal price and the disposal investment before the control right lost, shall be recognized as other comprehensive incomes in the consolidated financial treatment and transferred into the current profits and losses when the control lost. 7. Accounting treatment for classification and co-operation of joint arrangement Joint arrangement is an arrangement whereby two or more parties have joint control. The Company classified the joint arrangement into co-operation arrangement and joint venture according to the right and obligation involving in the joint arrangement. Under co-operation, the Company has joint control and rights to the relevant assets and liability of the arrangement. Under joint venture, the Company only has joint control and rights to the net assets of the arrangement. 87 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 The company adopts equity method to calculate investment to joint enterprises by referring to accounting policies stated in "Long-term Stock Ownership for Equity Method Calculation" in Note III 14 (2). Under co-operation, the Company recognizes 1) its solely held of assets and liability, 2) assets and liabilities jointly owned based on share proportions, 3) revenue from sales of assets jointly owned by the Company, 4) revenue from sales of assets based on share proportions, 5) expense incurred by the Company, 6) expense incurred based on share proportions. When the Company invests, sells or purchase assets (the asset does not constitute a business, the same below), to or from the co-operation, the Company only recognizes the profit or loss belong to other joint parties before selling those assets to third party. If those assets are impaired in compliance with Accounting Standards for Business Enterprises No.8-Assets impairment, the Company should recognize loss for all the invested or sold assets to co-operation. For the assets purchased from co-operation, the Company should recognize loss based on share proportion. 8. Cash and cash equivalent Cash and cash equivalents comprise cash on hand, deposits that can be readily withdraw on demand, and short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of change in value. 9. Conversion method of foreign currency transactions (1) Conversion method of foreign currency transactions The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying the foreign currency amount by the spot exchange rate on the transaction dates, while the foreign currency exchange business or transactions relating to foreign currency exchange are recorded in the functional currency by applying to the foreign currency amount at the actual exchange rate used. (2) Conversion method of foreign currency monetary items and foreign currency non-monetary items Foreign currency monetary items are convered using the spot exchange rate on the balance sheet date. The exchange gains or losses arising from occurrence of transactions and exchange of currencies are recognized in profit or loss for the period, except that (1) exchange differences related to a specific-purpose borrowing denominated in foreign currency that qualifies for capitalization are capitalized as part of the cost of the qualified asset during the capitalization period; (2) exchange differences arising from changes in the carrying amounts of available-for-sale monetary items are recognized as other comprehensive income. Foreign currency non-monetary items measured at historical cost are converted to the amounts in functional currency at the spot exchange rates on the dates of the transactions and the amounts in functional currency remain unchanged. Foreign currency non-monetary items measured at fair value are re-converted at the spot exchange rate on the date the fair value is determined. Difference between the re-converted functional currency amount and the original functional currency amount is treated as changes in fair value (including changes of exchange rate) and is recognized in profit and loss or as other comprehensive income. (3) Conversion of financial statements denominated in foreign currencies 88 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 As an accounting treatment in respect to a foreign operation, if there are monetary items relating to the investment to foreign operation, the resulting conversion differences are recognized in other comprehensive income as “conversion reserve”. The conversion differences accumulated in shareholders’ equity with respect to a foreign operation is transferred to profit or loss in the period when the foreign operation is disposed. Assets and liabilities of foreign operation are converted to Renminbi at the spot exchange rate on the balance sheet date. Equity items, excluding retained earnings, are converted to Renminbi at the spot exchange rates at the transaction dates. Income and expenses of foreign operation are converted to Renminbi at the rates that approximate the spot exchange rates at the transaction dates. The beginning balance of retained earnings is the prior year ending balance of retained earning converted, while the ending balance of retained earnings is sum total of converted items of income statement. The resulting conversion differences are recognized in other comprehensive income. The conversion differences accumulated in shareholders’ equity with respect to a foreign operation is transferred to profit or loss in the period when the foreign operation is disposed Cash flow denominated in foreign currency and cash flow of foreign operation are converted to Renminbi at the spot exchange rate at the transaction date. The effect of foreign exchange fluctuation is treated as recociling item that is separately disclosed on cash flow statement. The beginning balance is present as same as converted balance of financial statement in prior year. The conversion differences accumulated in shareholders’ equity with respect to a foreign operation is transferred to profit or loss in the period when the foreign operation is fully or partially disposed or lost control over the foreign operation due to other causes. Disposing investment in a foreign operation without losing control, the conversion differences accumulated in shareholder’s equity associated with the disposing part is transferred to minority stockholder’s interest. Disposing investment in a foreign operation which is joint venture enterprise, the conversion differences accumulated in shareholder’s equity associated with the disposing part is transferred to profit or loss in the disposing period with the disposing proportion. 10. Financial instruments Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. For financial assets and financial liabilities at fair value through profit or loss, transaction costs are recognized in profit and loss for the current period. For other financial assets and financial liabilities, transaction costs are included in their initial recognized amounts. (1) Fair value of financial assets and financial liabilities Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If an active market exists for specific financial assets or liabilities, quoted prices in active markets for identical assets or liabilities are used as fair value. Quoted prices in an active market refers to the prices which are readily available regularly in exchange markets, brokers, industry associations and other pricing institutions and represents the prices at which the assets or liabilities are traded in an arm length transaction in the marketplace. If an active market does not exist, the Company uses valuation model to determine the fair value. Valuation model takes into account quoted price for identical or similar assets or liabilities between familiar and willing parties, quoted price for similar assets or liabilities in an active market, discounted cash flow method and options pricing model. (2) Classification, Recognition and Measurement of Financial Assets 89 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. On initial recognition, the Company's financial assets are classified into one of the four categories, including financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables, and available-for-sale financial assets. ① Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading and those designated upon initial recognition as at fair value through profit or loss. 90 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 A financial asset held for trading is the financial asset that meets one of the following conditions: A the financial asset is acquired for the purpose of selling it in a short term; B. the financial asset is a part of a group of identifiable financial instruments that are collectively managed, and there is objective evidence indicating that the enterprise recently manages this group for the purpose of short-term profits; C. the financial asset is a derivative, except for a derivative that is designated as effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured. The financial assets or financial liabilities meeting any of the following requirements can be designated, on initial recognition, as financial assets or financial liabilities at fair value through profit or loss and of which the variation is included in the current profits and losses: A. The designation is able to eliminate or obviously reduce the discrepancies in the recognition or measurement of relevant gains or losses arising from the different basis of measurement of the financial assets or financial liabilities; B. The official written documents on risk management or investment strategies of the enterprise concerned have recorded that the combination of said financial assets, the combination of said financial liabilities, or the combination of said financial assets and financial liabilities will be managed and evaluated on the basis of their fair values and be reported to the key management personnel. Financial assets at fair value through profit or loss are subsequently measured at fair value. The gains or losses related to financial assets at fair value through profit or loss and dividend or interest income related to those financial assets are recognized in profit or loss for the current period. ②Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind of financial assets are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition, impairment or amortization are recognized in profit or loss for the current period. The effective interest method is a method of calculating the amortized cost of a financial asset or a financial liability (or a group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period, using the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or financial liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Company estimates future cash flows considering all contractual terms of the financial asset or financial liability (without considering future credit losses), and also considers all fees paid or received between the parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc. ③ Loans and Receivables 91 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Financial assets classified as loans and receivables by the Company include notes receivable, accounts receivable, interest receivable, dividends receivable, and other receivables. Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit or loss for the current period. ④ Available-for-sale financial assets Available-for-sale financial assets include non-derivative financial assets that are designated on initial recognition as available for sale, and financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments. Cost of available-for-sale investments in debt instruments are measured on the basis of the post-amortization cost at period end, which is the initially recognized amount of financial asset or financial liability deducting the already paid principal, plus or minus the accumulated amount of amortization incurred from amortizing the balance between the initially recognized amount and the amount of the maturity date by adopting the actual interest rate method and deducting the impairment loss that have actually incurred. Cost of available-for-sale investments in equity instruments is the initially recognized amount at acquisition. Available-for-sale financial assets are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensive income and included in the capital reserve, except that impairment losses and exchange differences related to amortized cost of financial assets are recognized in profit or loss, until the financial assets are derecognized, at which time the gains or losses are released and recognized in profit or loss. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivative financial assets that are linked to and must be settled by delivery of such unquoted equity instruments are subsequently measured at cost. Interests obtained and the dividends declared by the investee during the period in which the available-for-sale financial assets are held, are recognized in investment income. Impairment of Available-for-sale financial assets 92 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 If all the related information considered indicates that the decline in fair value of available-for-sale financial assets is significant or non-temporary decline, impairment incurred for available-for-sale financial assets. Significant decline refers to accumulated decline in fair value exceed 20%; non-temporary decline refers to continuous decline in fair value more than 12 months. When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in fair value previously recognized directly in capital reserve is reclassified from the capital reserve to profit or loss. The amount of the cumulative loss that is reclassified from capital reserve to profit or loss is the difference between the acquisition cost (net of any principal repayment and amortization) and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss. If, subsequent to the recognition of an impairment loss on available-for-sale financial assets, there is objective evidence of a recovery in value of the financial assets which can be related objectively to an event occurring after the impairment is recognized, the previously recognized impairment loss is reversed. The amount of reversal of impairment loss on available-for-sale equity instruments is recognized as other comprehensive income, while the amount of reversal of impairment loss on available-for-sale debt instruments is recognized in profit or loss. If an impairment loss has been incurred on an investment in unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured, or on a derivative financial asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the impairment loss on such financial asset is not reversed once it is recognized. (3) Transfer and measurement of financial assets The Company derecognizes a financial asset only when: ① the contractual rights to the cash flows from the financial asset expire; or ② it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity; or ③ it transfers the financial asset, neither transfers nor retains substantially all the risks and rewards of ownership but has not retained control over the financial assets. If the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, and retains its control of the financial asset, it recognizes the financial asset to the extent of its continuing involvement in the transferred financial asset and recognized an associated liability. The extent of the enterprise's continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset. For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the difference between (1) the carrying amount of the financial asset transferred; and (2) the sum of the consideration received from the transfer and any cumulative gain or loss that has been recognized in other comprehensive income, is recognized in profit or loss. 93 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 If the transfer of partial financial asset satisfies the derecognition criteria, the entire book value of the transferred financial asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not been stopped, be apportioned according to their respective relative fair value and the difference between the amounts of the following 2 items shall be included into the profit or loss of the current period: (1)The book value of the portion whose recognition has been stopped; (2)The sum of consideration of the portion whose recognition has been stopped, and the portion of the accumulative amount of the changes in the fair value originally recorded in the owner's equities which is corresponding to the portion whose recognition has been stopped. In terms of financial assets sold with recourse or financial assets transferred by endorsement, the Company shall determine whether substantially all the risks and rewards of ownership of the financial asset are transferred. Where an enterprise has transferred substantially all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. If it retained substantially all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset. If the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, the Company shall determine whether it retains the control of the financial assets and account the financial assets in accordance with the Standards mentioned above. (3) Classification and Measurement of Financial Liability On initial recognition, financial liabilities are classified as either financial liabilities at 'fair value through profit or loss' (FVTPL) or 'other financial liabilities'. The financial liabilities initially recognized shall be measured at their fair values. For the financial liabilities at fair value through profit or loss, the transaction expenses thereof shall be directly recorded into the profit or loss of the current period; for other financial liabilities, the transaction expenses thereof shall be included into the initially recognized amount. ① Financial liabilities at fair value through profit or loss The transactional financial liabilities and designated financial liabilities at fair value through profit or loss are classified under the same criteria as the transactional financial assets and designated financial assets at fair value through profit or loss. On subsequent measurement of financial liabilities at fair value through profit or loss, gain or loss arising from changes in fair value and dividends and interests related to the financial liabilities are recognized in the profit or loss of the current period. ② Other Financial Liability 94 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 For a derivative liability that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price in an active market) whose fair value cannot be reliably measured, it is subsequently measured at cost. Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with gain or loss arising from derecognition or amortization recognized in profit or loss. (5) Derecognition of financial liabilities The Company derecognizes a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged. An agreement between the Company (an existing borrower) and an existing lender to replace the original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized and the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss. (6) Offsetting financial assets and financial liabilities When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, financial assets and financial liabilities are offset with the net amounts presented on the balance sheet. Otherwise, financial assets and financial liabilities are separately presented on the balance sheet without offsetting. (7) Equity Instruments An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued (including refinanced), repurchased, sold or cancelled by the Company are treated as changes in equity. Changes in the fair value of equity instruments are not recognized. Transaction costs related to equity transactions are deducted from equity. Distributions to holders of equity instruments by the Company (excluding dividends) reduce shareholders’ equity. The Company does not recognize changes in fair value of equity instruments. 11. Account receivable The receivables include accounts receivable and others, etc. (1) Provision for bad debts of account receivable that are individually significant The judgment basis for significant single-item amount or The accounts receivable with single-item amount of RMB 5 standard for significant amount million and above The method of separate provision for bad debts of the accounts Impairment test shall be separately conducted. If the test proves receivable with significant single-item amount the occurrence of impairment, impairment loss shall be 95 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 determined and provision for bad debts shall be made according to the difference between the present value of its future cash flow and its book value. For the accounts receivable whose impairment is not proved by separate test, such accounts receivable, together with those with insignificant single-item amount, are divided into some groups based on similar characteristics of credit risks. For these groups of accounts receivable, provision for bad debts shall be made according to the regulation mentioned in "(2) provision for bad debts shall be made for accounts receivable on group basis". (2)The accounts receivable of bad debt provisions made by credit risk Group Name Withdrawing Method Aging Group Aging Analysis Method Other Group Other method In Group ,Accounts on age basis in the portfolio: √ Applicable □ Not applicable Aging Rate for receivables(%) Rate for other receivables(%) During the credit period 0.00% 0.00% The credit period within 1 year 5.00% 5.00% 1-2 years 10.00% 10.00% 2-3 years 30.00% 30.00% 3-4 years 50.00% 50.00% 4-5 years 70.00% 70.00% Over 5 years 100.00% 100.00% In Group, adopting balance percentage method for bad debt provision: □ Applicable √ Not applicable In Group ,adopting other method for bad debt provision: √ Applicable □ Not applicable Name Account receivable proportion Other account receivable proportion Related party group 0.00% 0.00% Security deposit 0.00% 0.00% Deposit 0.00% 0.00% Petty cash 0.00% 0.00% (3) Accounts receivable that are individually insignificant but with bad debt provision provided on an 96 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 individual basis The accounts receivable with single-item amount of less than Reason for separate provision for bad debts RMB 5 million whose risk characteristics can’t be reflected by provision for bad debts on basis of group. Provision for bad debts is made according to the difference Method of provision for bad debts between the present value of its future cash flow and its book value. 12. Inventories Whether the company needs to comply with the disclosure requirements of the particular industry No (1)Classification of Inventories This enterprise's inventories is classified as raw materials, works in process, finished products, circulation materials, low-value consumption goods, packing materials, supplies purchasing, engineering construction, development cost,etc. (2) Obtaining and Measurement of Inventories The perpetual inventory systems are adopted for this enterprise's inventories. The inventories shall be measured by their actual cost when they are obtained. Raw materials, works in process, finished products, etc. shall be measured with the weighted average method when they are being sent out. Low-value consumption goods shall be written off by one-off write-off method when they are withdrawn for use. Circulation packaging materials shall be recorded into cost according to the predicted usage times. (3) Methods to make provision for loss on decline in value of inventories If the cost of inventories is higher than the net realizable value at the end of each period, this enterprise shall make the provision for the loss on decline in value of inventories. This enterprise makes provision for the loss on decline in value of inventories on the ground of each item of inventories. If the factors causing any write-down of the inventories have disappeared, the amount of write-down shall be resumed and be reversed from the provision for the loss on decline in value of inventories that has been made. (4) Method for confirming the net realizable value of inventories The net realizable value of inventories refers to the amount of the estimated selling price, less the estimated costs of completion, the estimated selling costs and related tax payments. 13.Asset-held for sale The Company will retrieve its book value by means of selling assets (including the exchange of commercial non-monetary assets) instead of sequentially using a non-monetary asset or a disposal group, and when meeting two of the following conditions, the book value will be divided into on-sales category: (1) When a certain non-monetary assets or a certain disposal group sells such kind of assets in similar transactions in accordance with the convention , assets can be sold immediately under the current situation. (2)The Company has made decision for the selling plans and has acquired assured purchase commitment, predicting that selling will be completed within one year.( The selling, which can only be sold after acquiring approval from relevant authorities or supervision departments according to relevant provision requirement , has acquired its approval ). The Company will be specifically for dividing the non-current assets or disposal group which are acquired from 97 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 reselling into on-sales category on acquisition date if on acquisition date they can meet the stipulated condition that the predicted selling will be completed within one year , and in a short term (usually 3 months) they are likely to meet other conditions of dividing into on-sales category. When the non-monetary assets and disposal group were measured by the Company at the beginning or remeasured and divided into on-sales category on balance sheet date, if its book value is higher than the net amount after fair value deducts selling expense, the book value will be written down to the net amount after fair value deducts selling expense, and the written-down amount will be confirmed as assets impairment losses and counted into the current profits and losses, and the impairment provision with on-sales assets will be withdrawn in the meanwhile. For the on-sales disposal group’s confirmed amount of loss of asset impairment, the book value of goodwill will be deducted first, and its book value will then be deducted proportionally according to the book value’s percentages of all non-current assets in the disposal group which can be adopted by the measurement stipulations of Accounting Standards for Business Enterprises NO.42- On-sales Non-current Assets, Disposal Groups and Operation Termination If any increment occurs in the net amount after the on-sales non-current assets on the subsequent balance sheet date deducts selling expense, the amount deducted previously will be recovered and will be transferred back within the amount of asset impairment losses confirmed after being divided into on-sales category, and the amount transferred back will be counted into the current profits and losses. There will be no restitution for asset impairment losses confirmed before being divided into on-sales category. The amount deducted previously of on-sales disposal group shall be recovered, and when after being divided into on-sales category, it will be transferred back within the amount of impairment confirmed by non-current assets by the means of the measure stipulations of Accounting Standards for Business Enterprises NO.42- On-sales Non-current Assets, Disposal Groups and Operation Termination, and the amount transferred back will be counted into the current profits and losses. There will be no restitution for the book value of goodwill which has been deducted and for asset impairment losses confirmed before being divided into on-sales category which can be adopted by the measure stipulation of this principle. No depreciation and amortization will be made in the non-current assets which are on sales or in the disposal group. Confirmation will continue to be made in the debt interest in on-sales disposal group as well as other expenses. When the non-current assets or the disposal group can not meet the conditions of dividing into on-sales category, the Company will not continue to divide it into on-sales category or remove the non-current assets from the on-sales disposal group, and the valuation will be made according to the lower one between two of followings: (1)Book value before being divided into on-sales category, and the amount of money after being under the situation where book value is supposed not to be divided into on-sales category and adjustment is made in depreciation, amortization or impairment which should have been confirmed. (2)Recoverable amount. When derecognizing the on-sales non-current assets or disposal group, the Company will count the gains and losses which are yet to be confirmed into the current profits and losses. 14.Long-term Equity Investment 98 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Long-term equity investments refer to all investments that are the Company with control of, joint control of, or significant influence over, an investee. The Company accounted investments that are the Company without control of, joint control of, or significant influence over, an investee as financial assets available-for-sale or financial assets at fair value through profit or loss. Please refer to Note III 10 “Financial instruments” for detail. Joint control refers to the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Significant influence refers to the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies. (1) Initial measurement For business combination under common control, if the consideration of the merging enterprise is that it makes payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of combination, regard the share of the book value of the stockholder's equity of the merged enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reserve. If the capital reserve is in sufficient to dilute, the retained earnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of combination, regard the share of the book value of the stockholder's equity of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. Business combination under common control achieved in stages by several transactions shall determine whether the transactions belong to one package. If the transactions belong to one package, the Company accounted these transactions as one transaction with control of the investee. If the transactions do not belong to one package, on the date of combination, the Company shall regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the sum of book value of long-term equity investments prior to the combination and the book value of consideration paid at the date of combination in order to achieve control of the investees shall offset against the capital reserve. If the capital reserve is in sufficient to dilute, the retained earnings shall be adjusted. No accounting treatment will be made for the other comprehensive income arising from equity investment under equity method before the combination date or recognized with available-for-sale financial assets. 99 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 For business combination under different control, the Company accounts initial cost of long-term equity investment as combination costs on the acquisition date. Combination costs refer to the fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the acquirer. Business combination under different control achieved in stages by several transactions, shall determine whether the transactions belong to one package. If the transactions belong to one package, the Company accounts these transactions as one transaction with control of, joint control of, significant influence over, the investee. If the transactions do not belong to one package, the initial cost of long-term equity shall be accounted under cost method and recognized amount shall be the sum of book value of long-term equity investment before acquisition and cost of additional investment. For equity investments previously accounted under equity method, other comprehensive income related to these investments does not change. For equity investments previously accounted as financial assets available for sale, difference between fair value and book value and accumulated changes in fair value originally recorded in other comprehensive income shall be transferred to profit or loss of current period. The direct cost for the business combination of the combining party shall, including the expenses for audit, assessment and legal services, be recorded into the profits and losses at the current period. Besides the long-term equity investments formed by business combination, the initial cost of a long-term equity investment obtained by other means shall be initially recognized at cost.The cost shall be ascertained in accordance with the provisions as follows: (a) The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is actually paid; (b) The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of the equity securities issued; (c) The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment contract or agreement; (d) The initial cost of a long-term investment obtained by the exchange of non-monetary assets shall be the fair value or book value of transferred assets. (e) The initial cost of a long-term investment shall be the fair value of the long-term investment; etc. The initial cost also consists of the expenses directly relevant to the obtainment of the long term equity investment, taxes and other necessary expenses. Long-term equity investment which, due to additional investment, can exercise significant influence over, joint control of, but not control of, the investees, shall recognize its cost as the sum of fair value of long-term equity investment before additional investment and cost of additional investment according to Accounting Standard for Business Enterprises No.22-Recognition and Measurement of Financial Instruments. (2) Subsequent Measurement and Recognition Method Long-term equity investments which are the Company with joint control of (excluding joint operation), significant influence over the investees shall be accounted under equity method. Besides, long-term equity investments which are the Company with control of the investees shall be accounted under cost method. (1)A long-term equity investment accounted under cost method Under the cost method, long-term equity investment is measured at initial cost, additional investments or disinvestments shall make an adjustment to the cost of long-term equity investment. The investment income recognized by the Company shall be limited to the dividends or profits declared to distribute by the invested entity, 100 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 except dividends or profits declared in the consideration paid to acquire the investees. (2) A long-term equity investment accounted under the equity method. Under the equity method, where the initial investment cost of a long-term equity investment exceeds the Company’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost. Where the initial investment cost is less than the Company’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the difference is recognized in profit or loss for the period, and the cost of the long-term equity investment is adjusted accordingly. Under the equity method, the Company recognizes its share of the net profit or loss and other comprehensive income made by the investee as investment income and other comprehensive income respectively, and adjust the carrying amount of the long-term equity investment accordingly; The carrying amount of the investment is reduced by the portion of any profit distributions or cash dividends declared by the investee that is distributed to the Company; the share of changes in owners' equity of the investee other than those arising from net profit or loss, other comprehensive income and profit distribution are recognized in the capital reserve, the carrying amount of the long-term equity investment is adjusted accordingly. The Company recognizes its share of the investee's net profit or loss after making appropriate adjustments based on the fair value of the investee’s individual separately identifiable assets, etc. at the acquisition date. Where the accounting policies and accounting period adopted by the investee are not consistent with those of the Company, the Company shall adjust the financial statements of the investee to conform to its own accounting policies and accounting period, and recognize investment income and other comprehensive income based on the adjusted financial statements. For the Company's transactions with its associates and joint ventures where assets contributed or sold does not constitute a business, unrealized intra-group profits or losses are recognized as investment income or loss to the extent that those attributable to the Company's proportionate share of interest are eliminated. However, unrealized losses resulting from the Company's transactions with its associates and joint ventures which represent impairment losses on the transferred assets are not eliminated. When the assets invested by the Company to associates or joint ventures constitute an operation, and the investors thereafter own long-term equity investment without control of the Company, fair value of the operation invested shall be accounted as cost of additional long-term equity investments, and difference between initial recognized cost of additional long-term equity investments and its book value shall be accounted in the profit or loss of current period. When the assets sold by the Company to associates or joint ventures constitute an operation, the difference between consideration paid and book value of the operation shall be recorded in profit or loss of current period. When the assets bought by the Company from associates or joint ventures constitute an operation, gain or loss related shall be recognized according to Accounting Standard for Business Enterprises No.20-Business Combination. 101 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 The Company discontinues recognizing its share of net losses of the investee after the carrying amount of the long-term equity investment together with any long-term interests that in substance form part of its net investment in the investee is reduced to zero. If the Company has incurred obligations to assume additional losses of the investee, a provision is recognized according to the expected obligation, and recorded as investment loss for the period. Where net profits are subsequently made by the investee, the Company resumes recognizing its share of those profits only after its share of the profits exceeds the share of losses previously not recognized. (3) Acquisition of non-controlling shares When preparing consolidated financial statements, differences between additional long-term equity investments due to acquisition of non-controlling shares and attributable share of invested entity’s identifiable net assets accumulated since acquisition date (or consolidation date) at shareholding ratio after acquisition, shall adjust capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. (4) Disposal of long-term equity investments 102 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 In consolidated financial statements, when parent company partially disposes long-term equity investments in subsidiaries without losing control, the difference between proceeds received and attributable share of invested entity’s identifiable net assets related to such investments sold, shall be recorded in shareholder’s equity; when parent company partially disposes long-term equity investments in subsidiaries with control lost, adjustments shall be made in accordance to Note III 6 (2). Under other circumstances, for disposal of long-term equity investment, the Company shall derecognize such investment and recognize in profit or loss the difference between the proceeds received, and the carrying amount of the investment in the associates and joint ventures. In terms of long-term equity investments accounted under equity method, the accounting method after disposal shall not change. The Company shall account for proportionate amount previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities. The Company shall also reclassify to current period profit or loss the proportion of changes in shareholders’ equity that had previously been recognized excluding changes arising from net gain or loss, other comprehensive income, profit or loss. In terms of long-term equity investments accounted under cost method, the accounting method after disposal shall not change. The Company shall account for proportionate amount previously recognized in other comprehensive income, arising from according equity method or recognition and measurement standard of financial instruments before control of investees, in relation to that investment on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities. The amount in other comprehensive income shall be transferred to current period profit or loss proportionately. When the Company loses control over an investee due to partial disposal of its shares, during preparation of individual financial statements, if the Company with retained shares after disposal can still joint control, or influence over, the investee, the Company shall account for the investment under equity method and retained shares shall be adjusted as would have been required if the retained shares had been recorded on initial recognition under equity method; if the Company with retained shares after disposal cannot joint control, or influence over, the investee, the Company shall account for the investment under the recognition and measurement standard of financial instruments and recognize in profit or loss difference between the fair value of any retained shares and carrying amount of the investment at the date of control lost. The Company shall account for amount previously recognized in other comprehensive income, arising from according equity method or recognition and measurement standard of financial instruments before control of investee in relation to that investment on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities. If equity method is used before control, the Company shall also reclassify to current period profit or loss changes in shareholders’ equity that had previously been recognized excluding changes arising from net gain or loss, other comprehensive income, profit or loss. If retained shares are accounted under equity method, other comprehensive income and changes in shareholders’ equity shall be transferred to current period profit or loss proportionally; if retained shares are accounted under cost method, other comprehensive income and changes in shareholders’ equity shall be transferred to current period profit or loss at once. 103 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 When the Company ceases to joint control or influence over investee due to partial disposal of its shares, retained shares shall be accounted for under recognition and measurement standard of financial instruments and difference between fair value and carrying amount shall be recorded in current period profit or loss. The Company shall account for amount previously recognized in other comprehensive income arising from equity method in relation to that investment on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities. The Company shall also reclassify to current period profit or loss the proportion of changes in shareholders’ equity that had previously been recognized excluding changes arising from net gain or loss, other comprehensive income, profit or loss. When the Company ceases to control an investee due to partially dispose its shares by stages, if transactions belong to one package, each transaction shall be accounted for as one event which lead to control cease. Prior to control lost, the difference between proceeds received and carrying amount of investment sold shall be recorded in other comprehensive income first and transferred to current period profit or loss when control lost. 15. Investment real estate The measurement mode of investment property The measurement by the cost method Depreciation or amortization method Investment property refers to the properties held for the purpose of generating rent and/or capital appreciation. The company’s investment property includes the land use right rented and the constructions leased. The Company makes initial measurement at the costs that the properties is acquired and records as part of the property costs the subsequent expenses that could bring economic benefit inflows and be measured reliably while other subsequent expenses as part of current profit and loss. Such properties are depreciated or amortized in accordance with the relevant regulations for fixed assets or intangible assets. 16. Fixed assets (1) Recognition criteria for fixed assets Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and have useful lives of more than one accounting year. A fixed asset is recognized only when it is probable that economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. Fixed assets are initially measured at cost. (2)Depreciation methods Estimated useful Estimated residual value Type Detail Depreciation rate(%) rate Life Over the period of title (the period specified on the real estate title House and Building Straight-line method 5 3.17 certificate or land use right certificate) or 30 years in case of no period 104 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 of title Kiln Straight-line method 5 5 19 Platinum passage Straight-line method 3 95.50 1.5 Glass flat-panel and other Straight-line method 15 5 6.33 equipment other equipment Straight-line method 10 5 9.5 Transportation Straight-line method 5 5 19 equipment According to the length Temporary equipment Straight-line method 0 of the project Testing, quality inspection, office Straight-line method 5 5 19 equipment, tools and other tool The platinum channel is mainly made up of precious metals such as platinum and rhodium, which almost has no losses. Hence, the channel has a higher rate of net residual value. Thereinto, the fixed asset whose asset impairment provision has been withdrawn should also have its accumulated amount deducted to count and confirm the depreciation rate. When the year of the fixed asset comes to an end, the Company will review its service life, net residual value and depreciation method. Should there be any differences between the estimated amount of service life and the initially estimated one, adjustment will be made for the service life; Should there be any differences between the estimated amount of net residual value and the initially estimated one, adjustment will be made for the estimated one. (3)Cognizance evidence and pricing method of financial leasing fixed assets Fixed assets from finance lease are depreciated during the useful life if it is reasonable to determine that the ownership could be obtained upon lease expiration; otherwise, the Company chooses the shorter of the lease period and the remaining useful life to depreciate the assets. When the year of the fixed asset comes to an end, the Company will review its service life, net residual value and depreciation method. Should there be any differences between the estimated amount of service life and the initially estimated one, adjustment will be made for the service life; Should there be any differences between the estimated amount of net residual value and the initially estimated one, adjustment will be made for the estimated one. (4)Charge for Major Overhaul The Company conducts regular checking on major overhaul fee incurred in the fixed asset, and any parts of the fee that have unambiguous evidence to indicate they conform with the condition for confirming fixed asset will be counted into the fixed asset costs, otherwise into the profit and loss of the current period. During the interval period of regular major overhaul, the fixed asset will be depreciated as before. 105 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 17. Construction in progress The costs of construction in progress include all necessary project expenditures, the borrowing expenses that should be capitalized before the works reaches the expected usable status and other relevant expenses. Construction in progress changes to fixed assets when it reaches the expected usable status. 18. Borrowing expenses Borrowing costs include interest expenses, amortization of discount or premium, auxiliary expenses, exchange differences arising from foreign currency borrowings, etc. Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are capitalized when expenditures for such asset and borrowing costs are incurred and activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced. Capitalization of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes ready for its intended use or sale. Other borrowing costs are recognized as an expense in the period in which they are incurred. Where funds are borrowed under a specific-purpose borrowing, the amount of the capitalized interest is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed under general-purpose borrowings, the Company determines the amount of interest to be capitalized on such borrowings by applying a capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest rates applicable to the general-purpose borrowings. During the capitalization period, exchange differences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency are capitalized as part of the cost of the qualifying asset. The exchange differences related to the principal and interest on foreign currency borrowings other than a specific-purpose borrowing are recognized as a financial expense when incurred. The qualifying assets to be capitalized are fixed assets, investment properties and inventories which need to be acquired, constructed or produced through a long period of time, in order to become ready for its intended use or sale. If general borrowings are used to purchase, construct or produce the capitalization eligible assets, the borrowing cost to capitalize is the weighted average of the accumulated assets expenditures in exceed of the special borrowings times the capitalization rate of the used general borrowings, which is determined by the weighted average interest rate of the general borrowings. 19.Biological Assets 20.Oil & Gas assets 21.Intangible assets 1. Valuation Method, Service Life and Impairment Test of Intangible Assets The Company makes initial measurements on intangible assets in terms of the costs and determines the useful life when obtaining the assets. For intangible assets of a limited useful life, from the time the assets are available for 106 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 use, the Company adopts the amortization method that reflects realization of the expected economic benefits, or the straight-line amortization method if unable reliably to determine how to realize the expected economic benefits; and no amortization are made for intangible assets of an unlimited useful life. At the end of each year, the Company reviews the useful life and amortization methods of intangible assets of a limited useful life and makes adjustments and accounting treatment if different from the previous estimates. For the intangible assets that are estimated to produce no more economic benefits in the future, the Company records the book value of such assets all in current profit and loss. 2. Accounting Policy of Internal Research and Development Expenditure The expenditures for internal research and development projects of an enterprise shall be classified into research expenditures and development expenditures. The research expenditures shall be recorded into the profit or loss for the current period. Development expenses can only be capitalized when the following conditions are satisfied: the technology is feasible for use or sales; there is the intention to use or sell the intangible assets; it can be proven that the product generated by the intangible assets is demanded or the intangible assets in demanded; if the intangible is used internally, it can be proven that it is useful; with necessary technical and financial resources and other resources to complete the development of the intangible assets and the intangible assets can be used or sold; the development expense can be reliably measured. If not, the development expense is accounted into the current gain/loss account. If a research project meets the above-mentioned conditions and passes the technical and economic feasibility study, the project will enter the development stage. 107 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 22. Impairment of the long-term assets Fixed assets, construction in progress, intangible assets with finite useful lives, investment properties measured using the cost model and long-term equity investments in subsidiaries, joint ventures and associates are tested for impairment if there is any indication that an asset may be impaired at the balance date. If there is an indication that the asset may be impaired, the Company shall estimate the recoverable amount and perform impairment test. Goodwill, intangible assets with indefinite useful life and intangible assets not available for use, shall be tested each year no matter whether there is an indication that the asset may be impaired. 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 to sell and the present value of the future cash flows expected to be derived from the asset. Fair value shall be determined as the price as stipulated in the sales agreement in the orderly transaction. Where there is no sales agreement but there is an active market of assets, fair value shall be determined as the quoted price in active market for identical assets or liabilities. Where there is no sales agreement and no active market of assets, fair value shall be estimated according to the best information available. The disposal expenses shall include the relevant legal expenses, relevant taxes, truckage as well as the direct expenses for bringing the assets into a marketable state. The present value of the expected future cash flow of an asset shall be determined by the discounted cash with an appropriate discount rate, on the basis of the expected future cash flow generated during the continuous use or final disposal of an asset. Provision for asset impairment is determined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows. Goodwill that is separately presented in the financial statements is tested at least annually for impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test, the carrying value of goodwill is allocated to the related asset groups or groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset group or group of asset groups, including the goodwill allocated, is lower than its carrying amount, the corresponding impairment loss is recognized. The impairment loss is first deducted from the carrying amount of goodwill that is allocated to the asset group or group of asset groups, and then deducted from the carrying amounts of other assets within the asset groups or groups of asset groups in proportion to the carrying amounts of other assets. Once the above asset impairment loss is recognized, it will not be reversed for the value recovered in the subsequent periods. 23.Long-term amortizable expenses Long-term unamortized expenses are valued at the actual costs and amortized at average in an estimated beneficial period of time. If those cannot benefit the Company in future accounting periods, the remaining will be recorded 108 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 24 Employees’ Remuneration (1) Accounting methods for short-term compensation Employee remuneration refers to all kinds of rewards or compensations given in return for employees’ services or employment termination. It includes short-term compensation, post-employment benefits, demission benefits and other long-term employee benefits as well as the benefits the Company provides to employees’ spouses, children, dependents, deceased employees’ family and other beneficiaries. The Company classifies into short-term compensation the employee remuneration that needs to be paid off entirely in the twelve months following the reporting year the employees have provided their services, which excludes those given for employment termination. Short-term compensation includes payroll, bonus, allowances and subsidies, employee welfare, social security expenses including medical insurance, injury insurance and birth insurance, housing fund, labor union and employee training expenditures, short-term paid leaves, short-term profit share plans, non-monetary benefits and other short-term rewards. It recognizes as liabilities the actual short-term compensation incurred during the accounting period that the employees provide their services and records in current profit and loss or the relevant asset costs. Non-monetary benefits are measured at the fair value. (2) Accounting methods for post-employment benefits Post-employment benefits are mainly defined contribution plans, which include basic pension, unemployment insurance etc. The corresponding contributions are recorded in the relevant asset costs or current profit and loss when incurred. (3) Accounting methods for demission benefits Demission benefits are the compensations paid to terminate employment before expiration or encourage employees to accept lay-off. (4) Accounting methods for other long-term employee benefits Other long-term employee benefits are all other employee compensations than short-term compensation, post-employment benefits and demission benefits. They are long-term paid leaves, long-term benefits for the disabled, long-term profit sharing plans etc. 25. Estimated Liabilities The Company recognizes as estimated liabilities the obligations that meet the following conditions: A. Current obligations being undertaken by the Company; B. Fulfillment of the obligations that lead to cash flow out of the Company; C. The amount of the obligations that can be measured reliably. If it is expected that a third party can compensate for all or partial expenditures to pay off the recognized estimated liabilities, the compensation can be recognized separately as assets only when the Company is sure to receive it. The amount to recognize cannot exceed the book value of the recognized liabilities. 109 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 26 Share-based Payment (1) Types of Share-based Payment It is divided into equity-settled share-based payment and cash-settled share-based payment. (2) Recognition of Equity Instruments’ Fair Value For the granted equity instruments that there is an active market for, e.g. options, the Company determines the fair value by reference to the quotation prevailing in the active market. For those that there is no active market for, the options pricing model is adopted to determine the fair value. (3) Recognition Basis for Best Estimates on Exercisable Equity Instruments On each balance sheet date during the vesting period, the Company makes best estimates based on the latest number changes of its employees and adjusts the quantity of estimated exercisable equity. The final quantity of estimated exercisable equity instruments should be consistent with that of the actual ones on vesting dates. 27.Preferred shares, perpetual capital securities and other financial instruments 28.Revenues Whether the company needs to comply with the disclosure requirements of the particular industry No Income, is an enterprise formed in daily activities, will lead to an increase in shareholders' equity, the total inflow of capital has nothing to do with the economic interests of the owner of investment. The company involved in inco me, including revenue from selling goods, income of labor ,transferring assets use right and Construction contract income. (1) Merchandise sales The merchandises will be transferred to the purchaser when they meet with both the major risk and reward of the merchandise ownership; The Company will no longer keep the continuous management right which is usually related to the ownership, and no longer carry out valid control on the merchandises sold; The amount of income can be reliably calculated; Relevant economic interest can inflow; Relevant costs incurred or about to incur can be reliably calculated to confirm the realization of the income of merchandise sales. Specific methods for revenue recognition: Companies which are engaged in photoelectric display materials, graphene and electronic communication products, according to the stipulations in the sales contract, will have their revenue recognized after the goods have been delivered to clients and checked and accepted by clients; Those which are engaged in passenger car business, according to the agreement, Confirm the sales revenue when the goods are delivered to the customer and invoiced according to the contract.; Those which are engaged in export sales business will have their revenue recognized when receiving the export certificate(customs declaration). (2) Services Service transaction can be estimated reliably, meaning the following conditions are satisfied: amount of revenue c an be measured reliably; the relevant economic benefits are likely to flow into the enterprise; completion of the tra 110 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 nsaction can be measured reliably; transactions that have occurred and will occur costs can be reliably measured For the services that start and end during the same accounting year, the revenue shall be recognized upon completion; if the services end in a different accounting year and the service transaction results can be measured reliably, the Company adopts the completion percentage method to recognize the revenue on balance sheet dates; if not measurable reliably, the Company recognizes the revenue at the amount of the service costs that are incurred and can be compensated expectedly; otherwise, the service costs incurred are recognized as current expenses. The Company adopts the following methods to determine the completion progress of service transactions: ①measurement of the completed jobs; ②the proportion of the completed services to all; ③the proportion of the costs incurred to the total. The company provides services at the balance sheet date, the transaction can not be reliably estimated, it shall be t reated as follows: the costs incurred are expected to be compensated, according to the amount of labor costs that h ave occurred service revenue is recognized, and the same amount knot turn labor costs; the costs incurred are not e xpected to be compensated, labor costs should be recognized in profit or loss has occurred, no service revenue is r ecognized. Contract or agreement entered into with other companies, including the sale of goods when providing services, the sale of goods and rendering of services can be measured in part to distinguish and separate, should be part of the s ale of goods as sale of goods, the provision of services and as part of the provision of services deal with. Sales of goods and rendering of services can not be distinguished, or can be distinguished but can not be measured separat ely, should be part of the sale of goods and provision of services as part of the total sales of goods. If property management has provided service, economic interest related to property management service is able to flow into the enterprise, and costs related to the property management service can be reliably calculated, the realization of property management income will be confirmed. (3) Use Rights of Assets on Alienation The right of using transferred asset includes lease earning, intermediate business income, interest income and usage fee income. When the right of use the transferred asset can, at the same time, conform with the condition that relevant interest income is likely to inflow and the income amount can be reliably calculated, the income of the right of use the transferred asset can be confirmed. The interest income will be counted and confirmed according to the time and actual interest rate of the enterprise’s monetary capital used by others; The charge for use will be counted and confirmed according to charging time and method stipulated in the relevant contracts or agreements. (4) Construction Contracts Under the situation where the result of contract forming can be reliably estimated, the contract income and contract costs will be confirmed by the contract’s completion percentage on the balance sheet date. The contract’s completion percentage will be confirmed by the proportion that the accumulated contract costs actually incurred occupies the predicted total contract cost That the result of construction contract can be reliably estimated refers to that the following can be conformed with at the same time: 1)The total income of contract can be reliably calculated; 2)The economic interest related 111 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 to the contract has major possibility to flow into the enterprise; 3)The contract costs actually incurred can be clearly distinguished and reliably calculated; 4)The completion progress of contract and the costs which still needs to incurred for completing the contract can be reliably confirmed. If the result of construction contract can not be reliably estimated while its costs can be recoverable, the contract income will be confirmed according to the actual contract costs which can be recoverable, and the contract costs will be confirmed the contract fee at its current period; The contract costs which can not be recoverable will be confirmed as not the cost income but the cost fee when the recovery incurs. If the uncertainties that result construction contract to be not reliably estimated no longer exist, the income and fee related to the construction contract will be confirmed according to the completion percentage. If the predicted total contract cost is more than the total contract income, the predicted loss be will confirmed as the current fee. The accumulated cost of the construction contract which has incurred, the accumulated gross profit (loss) has been confirmed, and the payment amount which has been settled will be presented as the net amount after offset in the balance sheet. The part that the sum of the accumulated cost incurred and the accumulated gross profit (loss) confirmed more than the payment amount settled will be presented as the one which has been completed but yet to be settled.The part, where the sum that the payment amount settled of the construction contract is more than the accumulated cost incurred and the accumulated gross profit (loss) confirmed, will be presented as the one which has been settled but yet to be completed. 29.Governmental subsidy (1)Basis and accounting methods for assets related government subsidies Government subsidy means the Company gratuitously obtains monetary assets or non-monetary assets from the government, not including the capital into which the government invests as a investor who has relevant ownership interest. Government subsidies are divided into the subsidy related to assets and the other related to earnings. Government subsidies related to monetary assets will be measured according to the amount received or the amount receivable. Those which related to non-monetary assets will be measured according to fair value; For any fair value which can not be reliable to be obtained, the assets will be measured according to the nominal amount, and the one measured according to the nominal amount will be directly counted into the current profits and losses. The government grants pertinent to assets are recognized as deferred income and are credited to profit or loss by stages in accordance with a reasonable and systematic method within the useful life of the pertinent assets. If the pertinent assets are sold, transferred, scrapped or destroyed before the end of their useful life, the non-allocated pertinent deferred income balance shall be transferred to the profit or loss of the period of assets disposal, and the recognized government grant needs to be refunded, then it shall write down the carrying amount of the relevant deferred income and the excess part shall be included in the current profit and loss. 112 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 2. Judgment Basis and Accounting Treatment Method of Government subsidy related to Income The government grants pertinent to income that are used to compensate the relevant costs or losses of the subsequent period of the enterprise are recognized as deferred income and are credited to the current profit or loss for the period when the relevant costs, expenses or losses are recognized; those government grants used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the current profits and losses. For the government subsidy which includes both the assets related part and the income related part, the different parts are treated separately; if it is difficult to distinguish, the whole is classified as the government subsidy related to the income. Government subsidies related to the daily activities of the company shall be included in other earnings in accordance with the substance of the economic business. Government subsidies not related to the daily activities of the company shall be included in the non-operating income and expenditure. 30. Deferred income tax assets/Deferred income tax liability The balance between the book value and the tax basis of some items of assets and liabilities, as well as the temporary differences issued as the balance between the book value and the tax basis of the tax basis items that unrecognized as assets and liabilities but can be determined as per the provisions of tax law, which shall be determined as the deferred income tax assets and the deferred income tax liabilities in accordance with the balance sheet debt law. Taxable temporary differences related to the initial recognition of goodwill, as well as the initial recognition of an asset or liability in a transaction that neither belongs to a business consolidation, nor affects the accounting profit and taxable income (or deductible loss) when it happens, the relevant deferred income tax liabilities shall not be recognized. In addition, as for taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, if the Company could control the reverse time of such differences and such differences cannot be reversed in the foreseeable future, the relevant deferred income tax liabilities also shall not be recognized. Apart from the above-mentioned exceptional cases, the Company recognizes all other deferred income tax liabilities caused by taxable temporary differences. Deductible temporary differences related to the initial recognition of an asset or liability in a transaction that neither belongs to a business consolidation, nor affects the accounting profit and taxable income (or deductible loss) when it happens, the relevant deferred income tax assets shall not be recognized. In addition, as for deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, if such differences cannot be reversed in the foreseeable future or are not likely to obtain the taxable income to deduct the deductible temporary differences of the taxable income, the relevant deferred income tax liabilities shall not be recognized. Apart from the above-mentioned exceptional cases, the Company recognizes other deferred income tax liabilities caused by deductible temporary differences within the limit of likely obtained taxable income that can be used to deduct the deductible temporary differences of the taxable income. The corresponding deferred tax assets of deductible loss and tax reduction that can be carried forward during subsequent years shall be recognized within the limit of likely obtained future taxable income that can be used to deduct the deductible loss and tax reduction. As per the provisions of tax law, the deferred income tax assets and deferred income tax liabilities shall be measured at the applicable tax rates used during the period of expectation recovery of relevant assets or pay-off relevant liabilities at the balance sheet date. The book value of the deferred income tax assets shall be re-checked at the balance sheet date. The book value of 113 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 the deferred income tax assets shall be written-down if it is unlikely to obtain sufficient taxable income in the future to deduct the benefit of the deferred tax assets and the written-down amount shall be carried forward if it is likely to obtain sufficient taxable income. 31.Operational leasing (1)Accounting of operational leasing The Company will transfer substantially all the risks and rewards of ownership of an asset lease is recognized as a finance lease. Other forms of lease besides financial leasing are considered as operating leasing. Lease payments under an operating lease shall be accounted into the relevant asset cost or current profit or loss over the lease term on a straight-line basis. (2) Accounting Method for Financing Leases At the commencement of the lease term, an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments shall be regarded as the recorded value of the leased assets and an amount equal to the minimum lease payments shall be recognized as a long-term recorded value of the leased assets of payables. The balance between the recorded amount of the leased asset and the recorded amount of the payable shall be accounted for as unrecognized finance charge. 32. Other significant accounting policies and estimates (1)Discontinued Operation Discontinued operation means enterprises which can meet one of the following conditions and can be distinguished into a constituent part separately, and this part has been disposed or divided into a on-sales category. ②This part is a one of the related parts which proposes to dispose an independent main business or an independent main business area. ③This part is a subsidiary acquired from being specifically for reselling. For accounting treatment methods for discontinued operation, see the relevant descriptions at Article 13- Possession of On-Sales Asset in Note III (2) Share Repurchase Share repurchase refers to the behavior of repurchasing a certain sum of Company's outstanding stocks from the stock market by cash and other methods; and the behavior that the incentive objects of restricted stocks fail to submit a written application to the Board in the prescribed period shall be deemed as voluntarily give up the unlocking, the corresponding restricted stocks shall no longer be unlocked and shall be logged out after the repurchase at the awarded price by the Company. If any period fails to meet the unlocking conditions within the unlocking period, the restricted stock with the unlocking application qualification in the current period cannot be unlocked and shall be logged out after the repurchase by the Company. Upon the legal procedures and reporting approval and through repurchasing the Company’s stocks, the Company’s reduction of capital is conducted according to the total nominal value of written-off stocks. The part of price paid to stock repurchase (including transaction expenses) that excesses the total nominal amount shall offset 114 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 the capital reserve (share premium), earned surplus and undistributed profits in sequence; The part of price paid to stock repurchase (including transaction expenses) that less than the total nominal amount shall increase the capital reserve (share premium). 33.Change of main accounting policies and estimations (1)Change of main accounting policies □Applicable √Not applicable (2) Change of main accounting estimations □ Applicable √ Not applicable 34.Other 1. Income tax Income tax is composed of current income tax and deferred income tax. All taxes and expenses are written in current profit and loss except those for reputation adjustment in enterprise combination or trades directly counted into shareholder’s equity or some deferred income tax which is counted in shareholder’s equity. Current income tax is payable tax amount currently calculated as current taxable income. Payable tax amount is calculated by adjusting pre-tax accounting profit specified in related tax laws. The company confirms deferred income tax by adopting liability method in Balance Sheet based on the temporary difference between book value of asset and liability in Balance Sheet and tax base. Temporary difference of items of payable taxes are confirmed to be related deferred income tax liabilities, except the temporary difference of payable taxes are made in the following conditions: A. Initial confirmation of reputation or that of assets or liabilities made in trades with these features: the trade is not enterprise combination and it neither influences accounting profit nor amount of payable tax when it happens. B. As for temporary difference of items of payable taxes related to investment to subsidiaries, joint enterprises and associated enterprises. The temporary difference return time may be controlled and may not return in foreseeable future. On the date of balance sheet , the company will calculate deferred income tax assets and deferred income tax liabilities according to applicable tax between expected recovered assets and paid liabilities, and also the company will reflect the income tax influence in ways of expected recovered assets and paid liabilities on the date of balance sheet. On the date of balance sheet, the company will check the book value of the deferred income tax assets. If it was unlikely to obtain sufficient taxable income taxes to offset benefit of deferred income tax assets, while it was likely to obtain sufficient taxable income, carrying amount of deferred income tax assets shall be written down. 2. Safety production expenses 115 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 The company counts and draws safety production expenses specified in Notification on Printing and Distributing and Administrative Measures on Drawing and Using Enterprise’s Safety Production Expenses issued by Ministry of Finance and State Administration of Work Safety. Safety production expenses is specialized in improving safe production. Safety production expense is counted into related product’s cost or current profit and loss. At the same time, it is also counted into specialized reserve. In case the safety production expense to be delivered is used in expense, we directly consume specialized reserve. In case safety production expense to be delivered belongs to fixed asset and is spent in construction in-process, confirm it as fixed asset when the project is completed safely and is ready to put into use. Meantime, consume specialized reserve as the cost forming into fixed asset and confirm it as equivalent accumulated depreciation. 3. Judgement and Estimation for Significant Accounting During the process of applying accounting policies, due to to inherent uncertainties in business activities, the Company requires judgement, estimation and assumption for the book value of the report items which can not be measured accurately. Such judgement, estimation and assumption is made basing on the previous experience of the Company’s management as well as the consideration of other relevant factors. And the reported amount of revenue, cost and asset, as well as the disclosure of balance sheet date and the liability will be influenced by such judgement, estimation and assumption; However, there may be differences between the actual result caused by the uncertainties of such estimation and the current estimation of the Company’s management, thereby significant adjustment will be made for the assets influenced in the coming future and the indebted book value. The Company will periodically recheck the above-mentioned judgement, estimation and assumption based on going concern. The changes of accounting estimation only influence those which are influenced at the current period, and of which the influence number will be confirmed at that current period; For those changes which have influence both at the current period and the future period, the influence number of them will be confirmed at that current period and the future period. On balance sheet date, the significant fields where the Company needs to make judgement, estimation and assumption for the financial statement items will be as follows: (1)Revenue Recognition-Construction Contract When the result of construction contract can be estimated reliably, the Company will confirm the contract revenue on balance sheet date by adopting Percentage of Completion Method. The percentage of completion will be confirmed according to Article 26-Revenue Recognition Principle in Note III and it will be totalized in each accounting year of executing this contribution contract. Significant judgement needs to be made when confirming the percentage of completion, the contract cost occurred, the total predicted revenue of the contract and total cost of the contract, as well as the recoverability of the contract. The project management will make judgement mainly by means of previous experience and work. The total predicted revenue and total cost of the contract, as well as the estimation changes of contract execution result will probably have effect on the operation revenue, the operation cost at the current changing period or at the subsequent period, as well as the profits and losses during that period, and significant influence is likely to be formed due to the above-mentioned changes. (2) Provision for bad debts The Company uses the allowance method to account for bad debt losses in accordance with the accounting policy for accounts receivable. Impairment of accounts receivable is based on the assessment of the recoverability of accounts receivable. The identification of impairment of accounts receivable requires management's judgment and 116 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 estimation. The difference between the actual result and the original estimate will affect the book value of accounts receivable and the provision or reversal of bad debt provision for accounts receivable during the period in which the estimate is changed. (3) Inventory falling price preparation According to the inventory accounting policy, the Company measures the lower of cost and net realizable value, and makes provision for inventory devaluation for inventory whose cost exceeds net realizable value, obsolete and unsalable. The depreciation of inventories to net realizable value is based on the assessment of the saleability of inventories and their net realizable value. Identification of impairment of inventories requires management to make judgments and estimates on the basis of obtaining conclusive evidence and considering the purpose of holding the inventory and the influence of events after the balance sheet date. The difference between the actual result and the original estimate will affect the book value of inventory and provision or reversal of inventory depreciation provision during the period in which the estimate is changed. (4) Depreciation and amortization After considering the salvage value of investment real estate, fixed assets and intangible assets, the company shall accrue depreciation and amortization on a straight-line basis over its useful life. The Company regularly reviews the service life to determine the amount of depreciation and amortization expenses to be included in each reporting period. The service life is determined by the Company based on past experience of similar assets and combined with expected technical updates. If there has been a significant change in previous estimates, the depreciation and amortization expense will be adjusted in the future period. (5) Deferred income tax assets Insofar as it is highly probable that there will be sufficient taxable profits to offset losses, the company will recognize deferred income tax assets for all unused tax losses. This requires the management of the company to use a large number of judgments to estimate the time and the amount of future taxable profits, and combine the tax planning strategy to determine the amount of deferred income tax assets that should be recognized. (6) Income tax In the normal business activities of the company, there are certain uncertainties in the final tax treatment and calculation of some transactions. It requires the approval of the tax authorities on whether some items can be listed as deductible in the profit before tax. If there is a difference between the final recognized result of these taxation matters and the originally estimated amount, the difference will have an impact on the income tax and the deferred income tax of that period with the final recognition being made. VI. Taxation 1.Main categories and rates of taxes Taxes Tax references Applicable tax rates Sales revenue and VAT 3%、10%、16%、17%、11% Technical services revenue Urban construction tax Turnover tax to be paid allowances 7% Enterprises income tax Taxable income 9%、10%、15%、16.5%、25% VAT Technical services revenue 6% 117 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Educational surtax Turnover tax to be paid allowances 3% Local education surcharge Turnover tax to be paid allowances 2% The disclosure on the rate of income tax of taxpayers in different enterprises is stated below Name of Taxpayer Rate of Income Tax 2.Tax Preference ① On September 29, 2015,The Company was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2015. ②On July 20, 2017,Wuhu Tunghsu Optoelectronic Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2017. ③On October 21, 2016,Wuhu Tunghsu Optoelectronic Equipment Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ④On November 21, 2016,Shijiazhuang Tunghsu Optoelectronic Equipment Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑤On August 3, 2015,Zhengzhou Xufei Optoelectronic Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2015. ⑥On November 21, 2016,Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑦On November 30, 2016,Jiangsu Jixing New Material Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑧On November 24, 2016,Shanghai Tanyuan Huigu New Material Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑨On December 1, 2016,Mingshuo(Beijing) Electric Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⑩On October 25, 2017,Beijing Xutan New Material Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company 118 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2017. ⑾On November 17, 2017,Suzhou Tengda Optical Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2017. ⑿On December 8, 2016,Sichuan Xuhong Optoelectronic Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⒀On November 24, 2016,Shanghai Sunlong Bus Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⒁On December 8, 2016,Chengdu Tunghsu Intelligence Technology Co., Ltd. was rated as the national high-tech enterprise with validity of 3 years. As per the provisions of enterprise income tax law, the Company adopts 15% enterprise tax rate applicable for high-tech enterprises for three years since 2016. ⒂Daosui Group Tibet Construction Development Co., Ltd, based on the “Notice of the People's Government of Tibet Autonomous Region on Issuing the Measures for the Implementation of Enterprise Income Tax Policy of Tibet Autonomous Region” (Zangzhengfa [2014] No. 51) policy, enjoys the corporate income tax at the rate of 15% for the strategy of developing the western region and is exempted from the 40% tax share that originally belongs to the local place, thus actually implementing the income tax rate of 9%. ⒃Guangxi Yuanzheng New Energy Automobile Co., Ltd, based on the Guangxi People’s Government’s Circular on the Continuation and Revision of Certain Policies Concerning the Promotion of the Open Development of the Guangxi Beibu Gulf Economic Zone” (Gui Zhengfa [2014] No. 5) policy, enjoys the corporate income tax at the rate of 15% for the strategy of developing the western region and is exempted from the 40% tax share that originally belongs to the local place, thus actually implementing the income tax rate of 9%. ⒄Harbin Sunlong New Energy Automobile Sales Co., Ltd, based on the “Notice of Ministry of Finance, State Administration of Taxation on the Relevant Issues Concerning the Preferential Policies for Small-scale, Low-profit Enterprises” (Cai Shui [2011] No. 117) and the 28th clause of “The People's Republic of China Enterprise Income Tax Law”- that the small profit-making enterprise that meets the requirements enjoys a reduction of 20% tax rate on the corporate income tax, actually implements the income tax rate of 10%. 3.Other VII. Notes to the major items of consolidated financial statement 1.Cash and bank balances In RMB Items Year-end balance Year-beginning balance Cash 460,584.36 2,461,658.94 Bank deposit 23,203,703,585.91 26,666,668,936.88 119 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Other 590,432,885.53 787,629,173.04 Total 23,794,597,055.80 27,456,759,768.86 Other notes The amount of restricted cash and bank balances by the end of the period is RMB 2,351,663,690.33. 2.Financial assets measured at fair value through current profit and loss 3.Derivative financial assets □Applicable √ Not applicable 4.Note receivable (1)Classification bill receivable In RMB Items Year-end balance Year-beginning balance Bank acceptance 327,763,684.95 267,121,031.99 Trade acceptance 447,624,748.00 271,007,552.85 Total 775,388,432.95 538,128,584.84 (2)Note receivable pledged by the Company at the period -end (3)Note receivable endorsed or discounted by the Company as at June 30.2018 but not expired on the balance sheet date In RMB Amount underecognized as at June Items Amount derecognized as at June 30,2018 30,2018 Bank acceptance 215,608,081.81 Trade acceptance 598,836,048.03 Total 814,444,129.84 (4)There is no notes transferred to accounts receivable because drawer of the notes fails to exited the contract or agreement Notes:As of the semi-annual disclosure date, the company has signed an agreement with the relevant parties, the company will receive the RMB 215 million of notes receivable from the company, such as Waterma, to give the ticket holder, etc., and finally obtain the assessed value of not less than RMB 215 million of assets. "(Money funds do not need to be assessed). 5. Account receivable (1)Classification account receivables. 120 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 In RMB Year-end balance Year-beginning balance Provision for bad Book balance Book balance Provision for bad debts debts Book Category Book Value Proport Value Proportio Proportio Proportion Amount ion Amount Amount Amount n(%) n(%) (%) (%) Accounts receivable of individually withdrawing bad debt 169,193,82 169,193, 175,782 175,782,0 1.66% 100.00% 0.00 2.16% 100.00% 0.00 provision with 9.11 829.11 ,084.76 84.76 significant individual amount Account receivables with provision for 7,975,7 bad debt made on a 10,042,312, 98.34 104,665, 9,937,647 102,357,1 7,873,419,6 1.04% 76,808. 97.84% 1.28% portfolio with similar 738.35 % 569.58 ,168.77 24.41 84.42 83 risk credit characteristics basis 8,151,5 10,211,506, 100.00 273,859, 9,937,647 278,139,2 7,873,419,6 Total 2.68% 58,893. 100.00% 3.41% 567.46 % 398.69 ,168.77 09.17 84.42 59 Accounts receivable subject to individually withdrawing bad debt provision with significant individual amount.. √ Applicable □Not applicable In RMB Amount in year-end Account receivable(Unit) Provision for bad Account receivable Proportion% Reason debts Inner Mongolia Not expected to be recovered as a result Zhunxing Heavy Haul 136,922,651.00 136,922,651.00 100.00% of litigation Expressway Co., Ltd. Notes:For the account receivable of Korea Sunlong Bus Co. Ltd-that the outstanding payment of goods has been long delayed due to the disruption of Korea Sunlong Bus vehicle sales caused by the serious 32,271,178.11 32,271,178.11 100.00% Co.Ltd contraction of Korean Tourism Market and the Policy of Automobile Emission Standard, the company has adopted a variety of dunning measures, but has not yet achieved results. At the end of the 121 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 period, the company conducted a separate impairment test for that. After being tested for impairment, the impairment loss was determined based on the difference of the present value of its future cash flow lower than its book value, making the provision for bad debts. Total 169,193,829.11 169,193,829.11 -- -- Accounts receivable of combinational withdrawing bad debt provision by aging analysis method √ Applicable □Not applicable In RMB Amount in year-end Aging Account receivable Provision for bad debts Proportion% Withitem 1 year Within credit period 6,478,928,089.29 Within 1 year after credit period 823,936,445.65 41,196,822.36 5.00% Subtotal within 1 year 7,302,864,534.94 41,196,822.36 1-2 years 141,927,415.09 14,192,741.51 10.00% 2-3 years 26,330,517.90 7,899,155.37 30.00% 3-4 years 58,707,194.54 29,353,597.27 50.00% 4-5 years 5,458,198.00 3,820,738.60 70.00% Over 5years 8,202,514.47 8,202,514.47 100.00% Total 7,543,490,374.94 104,665,569.58 Notes: Receivable accounts on which had debt provisions are provided on percentage analyze basis in a portfolio □Applicable √Not applicable Receivable accounts on which had debt provisions are provided by other ways in the portfolio Provisionfor Provision for Group name Amount in year-end Amount in year- beginning bad debt bad debts State subsidy. Local subsidy 2,129,070,128.00 2,160,997,954.00 Other Group 369,752,235.41 293,949,697.69 Total 2,498,822,363.41 2,454,947,651.69 (2)Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB8,855,265.67;The amount of the reversed or collected part during the reporting period was of RMB3,817,512.69. 122 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (3)The current accounts receivable written-offs situation In RMB Items Amount written-offs situation Sales goods 9,317,563.46 Account receivables actually written-offs during the reporting period: In RMB Nature of account Reason for written Verification Arising form related Name Amount written-off receivable -off procedures transactions(Y/N) Bankruptcy and Foshan Sanshui liquidation of the Yuejing Automobile Sales goods 6,588,255.65 enterprise is not Internal approvals No Transportion Co., expected to be Ltd. recovered. Total -- 6,588,255.65 -- -- -- Notes: (4)The ending balance of account receivables owed by the imputation of the top five parties The total receivable amount of top five closing balances collected by the debtors in the current reporting period is RMB3,135,836,063.48 which accounts for 30.71% of the total receivables. The total amount of closing balance for corresponding accrued bad-debt provision is RMB158,300.88. (5)Account receivable which terminate the recognition owning to the transfer of the financial assets (6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable 6. Advance payments (1)Disclosed by aging: In RMB Amount in year-end Amount in year- beginning Aging Amount Proportion(%) Amount Proportion(%) Within 1 year 1,317,256,741.99 86.04% 1,771,543,035.64 87.65% 1-2 years 156,933,894.37 10.25% 196,495,357.45 9.72% 2-3 years 15,382,125.47 1.00% 27,318,669.74 1.35% Over 3 years 41,487,932.64 2.71% 25,762,888.12 1.28% Total 1,531,060,694.47 -- 2,021,119,950.95 -- Notes : Nil. 123 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (2)The ending balance of Prepayments owed by the imputation of the top five parties As of June 30, 2018, the total amount of the top five companies in advance payments is RMB 283,116,591.02 , accounting for 18.49% of the total ending balance of prepayments of advance payments. Other notes: 7.Interest receivable (1)Classification Interest receivable In RMB Items Amount in year-end Amount in year-begin Fixed deposit 29,306,335.47 49,456,785.29 Total 29,306,335.47 49,456,785.29 (2)Important overdue interest 8.Dividend receivable (1)Dividend receivable (2)Dividend receivable aging over 1 years 9. Other accounts receivable (1) Other accounts receivable disclosed by category In RMB Amount in year-end Amount in year- begin Book Balance Bad debt provision Book Balance Bad debt provision Category Book Proportio Proportio Proportio Proportion( Book value Amount Amount value Amount Amount n(%) n(%) n(%) %) Other Accounts receivable of individually 9,171,03 9,171,03 9,056,8 9,056,821 withdrawing bad debt 0.66% 100.00% 0.83% 100.00% 3.44 3.44 21.74 .74 provision with significant individual amount Other receivables 1,374,76 99.34% 24,875,1 1.81% 1,349,893 1,080,8 98.85% 35,930,81 3.32% 1,044,890,3 subject to provision 8,974.30 82.22 ,792.08 21,148. 2.05 36.32 for bad debts on 37 credit risk 124 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 characteristics basis Other Accounts receivable of individually 3,471,1 3,471,143 withdrawing bad debt 0.32% 100.00% 43.41 .41 provision with non-significant individual amount 1,093,3 1,383,94 34,046,2 1,349,893 48,458,77 1,044,890,3 Total 100.00% 2.46% 49,113. 100.00% 4.43% 0,007.74 15.66 ,792.08 7.20 36.32 52 Other receivable accounts with large amount and were provided had debt provisions individually at end of period. √ Applicable □ Not applicable In RMB End of term Other receivable(Unit) Other Bad debt Proportion Reason receivable provision Notes:For the account receivable of Korea Sunlong Bus Co. Ltd-that the outstanding payment of goods has been long delayed due to the disruption of vehicle sales caused by the serious contraction of Korean Tourism Market and the Policy of Automobile Emission Standard, the company has adopted a variety of dunning measures, but has not KoreasunlongBusCo.Ltd 9,171,033.44 9,171,033.44 100.00% yet achieved results. At the end of the period, the company conducted a separate impairment test for that. After being tested for impairment, the impairment loss was determined based on the difference of the present value of its future cash flow lower than its book value, making the provision for bad debts. Total 9,171,033.44 9,171,033.44 -- -- Other receivable of combinational withdrawing bad debt provision by aging analysis method √ Applicable □ Not applicable In RMB Amount in year-end Aging Other account receivable Provision for bad debts Proportion(%) Withinitem 1 year Within credit period 321,164,774.89 125 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Within 1 year after credit period 60,045,557.92 3,002,277.90 5.00% Subtotal Within 1 year 381,210,332.81 3,002,277.90 1-2 years 77,846,956.73 7,784,695.67 10.00% 2-3 years 41,371,145.56 12,411,343.66 30.00% 3-4 years 210,338.53 105,169.39 50.00% Over 5 years 1,571,695.60 1,571,695.60 100.00% Total 502,210,469.23 24,875,182.22 Notes: Other receivable account in Group on which bad debt provisions were provided on percentage basis: □Applicable √Not applicable Other Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: √ Applicable □ Not applicable In RMB Group name Amount in year-end Bad debt provision Persona Returnable Insurance 2,683,210.08 Deposit 862,419,394.97 Export tax refunds 7,455,900.02 Total 872,558,505.07 (2)Bad debt provision accrual collected or switch back Bad debt provision accrual was RMB7,115,436.63, the account collected or switches back amounting to RMB18,056,854.76. Significant amount of reversed or recovered bad debt provision: In RMB Name Amount Method Sichuan Panxi Lingshan Tourism 7,891,958.95 Retracted Investment Development Co., Ltd Total 7,891,958.95 -- (3) Other account receivables actually cancel after write-off In RMB Items Amount Sales goods 3,471,143.41 Of Which, Other receivable write-off: In RMB Nature of account Reason for written Verification Arising form related Name Amount written-off receivable -off procedures transactions(Y/N) 126 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Bankruptcy and Foshan Sanshui liquidation of the Yuejing Automobile Sales goods 3,471,143.41 enterprise is not Internal approvals No Services Co., Ltd. expected to be recovered. Total -- 3,471,143.41 -- -- -- Notes: (4) Other account receivables category by nature of money In RMB Naature Ending book balance Beginning book balance Current account 387,321,573.47 413,488,631.19 Deposit 862,419,394.97 592,692,531.83 Project petty cash 80,043,589.50 68,529,879.43 Persona Returnable Insurance 2,683,210.08 2,564,564.43 Export tax refunds 7,455,900.02 6,453,137.37 Other 44,016,339.70 9,620,369.27 Total 1,383,940,007.74 1,093,349,113.52 (5)The ending balance of other receivables owed by the imputation of the top five parties In RMB Portion in total other Bad debt provision Name Nature Year-end balance Age receivables(%) of year-end balance Within credit Sichuan City period :80,000,000.0 Construction No.5 0; Within 1 year Infrastructure Deposit 200,000,000.00 14.45% after credit Development Co., period:120,000,000. Ltd. 00 Sichuan Panxi Lingshan Tourism Enterprises fund Investment 93,188,661.00 Within credit period 6.73% transfers Development Co., Ltd. Chongqing Haolong Enterprises fund Platinum Industry 69,163,611.11 Within credit period 5.00% transfers Co., Ltd. 127 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Sichuan Nengtou New City Anning Valley Tourism Equity transfer 51,970,000.00 Within credit period 3.76% Investment and Development Co., Ltd. Within credit period :2,830,829.70 Tibet transportation ; Within 1 year after Deposit 35,154,463.70 2.54% Dept. credit period:32,323,634.0 0 Total -- 449,476,735.81 -- 32.48% 10.Inventory (1)Inventory types In RMB Year-end balance Year-beginning balance Items Provision for bad Provision for bad Book Balance Book value Book Balance Book value debts debts Raw materials 1,829,971,611.21 22,577,740.86 1,807,393,870.35 2,210,317,909.51 23,802,249.09 2,186,515,660.42 Processing 237,283,016.68 1,443,698.36 235,839,318.32 243,932,972.44 1,443,698.36 242,489,274.08 products Stock goods 495,293,750.48 17,267,664.82 478,026,085.66 457,130,464.91 9,080,902.13 448,049,562.78 Completed but unsettled assets caused by 844,012,557.86 844,012,557.86 760,198,642.91 760,198,642.91 construction contract Commissioned processing 20,173,731.74 20,173,731.74 13,306,134.19 13,306,134.19 material Development cost 749,023,361.73 749,023,361.73 1,188,193,081.41 1,188,193,081.41 Commissioned processing 23,770,009.81 23,770,009.81 65,383,734.21 65,383,734.21 material land arrangement 52,644,562.38 52,644,562.38 10,346,187.21 10,346,187.21 Total 4,252,172,601.89 41,289,104.04 4,210,883,497.85 4,948,809,126.79 34,326,849.58 4,914,482,277.21 128 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Whether the company is required to comply with the "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 4 - listed companies engaged in seed industry, planting business" disclosure requirements No (2) Inventory depreciation reserve In RMB Beginning of Increased in current period Decreased in current period Items End of term term Provision Other Transferred back Other Raw materials 23,802,249.09 1,224,508.23 22,577,740.86 Processing 1,443,698.36 1,443,698.36 products Stock goods 9,080,902.13 8,186,762.69 17,267,664.82 Total 34,326,849.58 8,186,762.69 1,224,508.23 41,289,104.04 Notes 1:Basis of provision for inventory revaluation reserve was cost and net realizable value, and reason of inventory revaluation reserve provision was that final realizable net value was lower than cost. (3) Explanation on inventories with capitalization of borrowing costs included at ending balance The end of the development cost includes interest capitalization of 117,430,461.67 yuan. (4) Assets unsettled formed by construction contract which has completed at period-end In RMB Items Amount Accumulated Incurred Cost 6,320,487,912.95 Accumulated Confirmed Gross Profit 443,903,048.67 Settlement Amount 5,920,378,403.76 Unliquidated Completed Assets Formed in the Construction 844,012,557.86 Contract Other notes: 11. Holding assets for sale In RMB Items End book value Fair value Estimated disposal cost Estimated disposal time Long-term Equity 126,264,435.58 126,264,435.58 December 31,2018 Investment 129 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Total 126,264,435.58 126,264,435.58 -- Other notes: Notes:Subsidiary-Shenzhen Xuhui Investment Control Co., Ltd. acquires Sub-Subsidiary Mingshuo (Beijing) Electric Technology Co., Ltd., and the acquisition agreement stipulates that: Mingshuo (Beijin g) Electric Technology Co., Ltd.’s original subsidiary, Mingshuo (Beijing) Trade Co., Ltd., Huzhou Mingwang Li ghting Technology Co., Ltd Pursuant to the agreement of the acquisition of sub-subsidiary company Daoshui Group Engineering Co., Ltd.: Daosui Group Engineering Co., Ltd originally held a subsidiary .Sichuan Panxi Liangshan Travel Investment Development Co., Ltd.,Sichuan Panxi Lingshan Travel Investment Huanshun real estate Co., Ltd. Subei Hexing Water Co., Ltd. was stripped after the acquisition, Sold on 31 December 2018 12. Non current assets due within one year 13. Other current assets In RMB Items Year-end balance Year-beginning balance USD exchange 58,000,000.00 58,000,000.00 Prepayment of income tax 1,149,390,102.41 1,281,947,333.75 Short –term Financing 1,220,000,000.00 Total 1,207,390,102.41 2,559,947,333.75 14. Available-for-sale financial assets (1) Available-for-sale financial assets In RMB Closing balance Opening balance Items Provision for Provision for Book balance Book value Book balance Book value impairment impairment Available-for-sale Equity 243,158,605.30 243,158,605.30 100,000,056.00 100,000,056.00 instrument Cost measured 243,158,605.30 243,158,605.30 100,000,056.00 100,000,056.00 Total 243,158,605.30 243,158,605.30 100,000,056.00 100,000,056.00 (2)Available-for-sale financial assets measured by cost (3)Available-for –sale financial assets measured at cost at the end of the year In RMB 130 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Book balance Provision for impairment Percentage Cash of dividends Investee Balance of End of Balance of End of shareholdi Increase Decrease Increase Decrease for the term term term term ng in year investees% Beijing Yihuatong 100,000,05 100,000,05 5.51% Technolog 6.00 6.00 y Co., Ltd. Beijing Shenwei Lixing 29,500,000 29,500,000 16.48% Auto .00 .00 Service Co., Ltd. China Metallurgi cal investment 113,658,54 113,658,54 fund 9.30 9.30 manageme nt (Beijing) Co., Ltd. 100,000,05 143,158,54 243,158,60 Total -- 6.00 9.30 5.30 (4) Changes of the impairment of the available-for-sale financial assets during the reporting period ⑸Relevant description of the end of the fair value of the equity instruments at the end of a serious decline in fair value or non temporary decline but not related to impairment provision Other notes: Notes 1: On July 10, 2017, the Company subscribed for 1,282,052.00 shares of the add-directional share issuance of the New Third Board Beijing Yihuatong Technology Co., Ltd at the price of RMB 78.00 per share, with paying the consideration of RMB 100,000,056.00. After the subscription, the company holds 5.51% stake of Beijing Yihuatong Technology Co., Ltd. As it’s unable to obtain fair value, the estimate is measured at cost. Notes 2:On January 15, 2018, the Company obtained 16.48% equity of Beijing Shenwei Shixing Automobile Service Co., Ltd. by RMB 29.5 million, and as there was no quotation in the active market and its fair value couldn’t be reliably measured, the subsequent measurement was carried out according to cost. Notes 3:On January 27, 2018, the Company’s wholly-owned subsidiary-Tunghsu Construction Group Co., Ltd, MCC Jianxin Investment Fund Management (Beijing) Co., Ltd., Beijing Dongfang Xujie Fund Management Co., Ltd., China Metallurgical Group Co., Ltd., and Postal Savings Bank of China Chongqing Branch jointly signed the 131 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 “Private Investment Fund Contract of the Government and Social Capital Cooperation (PPP) Project of the Municipal Pipeline Project of Funan New District of Hengshui City” and the “Private Investment Fund Contract of Government and Social Capital Cooperation (PPP) of Municipal Road Engineering of Funan New District of Hengshui City” ). As there was no quotation in the active market and its fair value couldn’t be reliably measured, the subsequent measurement was carried out according to cost. 15. Held-to-maturity investment (1) Held-to-maturity investment (2) Important held-to-maturity investment at period-end (3) Reclassify of held-to-maturity investment in the period 16. Long-term account receivables (1)Long-term account receivables In RMB End of term Beginning of term Items Provision for Provision for Range of rate Book balance Book value Book balance Book value impairment impairment Sale of 138,899,570.7 138,899,570.7 143,988,866.9 143,988,866.9 commodities by 4.75%-20.56% 0 0 1 1 installment 138,899,570.7 138,899,570.7 143,988,866.9 143,988,866.9 Total -- 0 0 1 1 (2) Long-term account receivables recognition terminated due to transfer of financial assets (3) Long-term account receivables transferred and assets & liability formed by its continuous involvement 17. Long-term equity investment In RMB Increase/decrease Closing Other Withdraw balance Additi Deduct comprehe Declarati Opening Gains/loss Other n Closing of Investees on ion nsive on of cash balance under equity changes impairme Other balance impairme invest invest income dividends method in equity nt nt ment ment adjustmen or profit provision provision ts I. Joint ventures 132 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 II. Associates Tunghsu Group 2,004,062,20 2,010,533 6,471,235.43 Finance 4.94 ,440.37 Co., Ltd. Tunghsu (Deyang) Graphene Industry 20,436,738.1 20,467,00 Develop 30,264.58 1 2.69 ment Fund Partnershi p (LP) Zibo Bus 32,678,813.5 35,127,75 service 2,448,937.71 7 1.28 Co., Ltd. CUHK internatio nal 73,306,968.0 76,193,15 2,886,186.76 business 8 4.84 factoring co., Ltd 2,130,484,72 11,836,624.4 2,142,321 Subtotal 4.70 8 ,349.18 2,130,484,72 11,836,624.4 2,142,321 Total 4.70 8 ,349.18 Other notes At the beginning of the period, the long-term equity investment of the subsidiary Tunghsu Technology Co., Ltd. was RMB 155,434.20, and there was no change in the current period. Tunghsu Technology Co., Ltd. is registered in Germany and is currently in the process of cancellation and liquidation. According to the relevant laws of Germany, the cancellation of liquidation requires a two-year public notice period, during which the agency is managed by Tunghsu Optoelectronic Technology Co., Ltd. Unable to control the company, this period is not included in the scope of consolidation. 18. Investment real estate (1) Investment real estate by cost measurement √ Applicable □Not applicable In RMB 133 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Items House, Building Land use right Construction in process Total I. Original price 1. Balance at 58,843,742.66 58,843,742.66 period-beginning 2.Increase in the current 9,513,629.19 9,513,629.19 period (1) Purchase (2)Inventory\Fixed assets\ Transferred from 9,513,629.19 9,513,629.19 construction in progress (3)Increased of Enterprise Combination 3.Decreased amount of the period (1)Dispose (2)Other out 4. Balance at period-end 68,357,371.85 68,357,371.85 II. Accumulated amortization 1.Opening balance 614,302.80 614,302.80 2.Increased amount of 812,939.04 812,939.04 the period (1) Withdrawal 614,302.80 614,302.80 (2)Other transfers 198,636.24 198,636.24 3.Decrease in the reporting period (1)Disposal (2)Other out 4.Closing balance 1,427,241.84 1,427,241.84 III. Impairment provision 1.Opening balance 2.Increase in the reporting period 134 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (1)Withdrawal 3.Decrease in the reporting period (1)Disposal (2)Other out 4. Closing balance IV. Book value 1.Book value of the 66,930,130.01 66,930,130.01 period-end 2.Book value of the 58,229,439.86 58,229,439.86 period-begin (2) Details of fixed assets failed to accomplish certification of property □ Applicable √ Not applicable (3) Investment real estate without certificate of ownership 19. Fixed assets (1) List of fixed assets In RMB Machinery Items House, building Transportations Other equipment Total equipment I. Original price 1. Balance at 2,113,818,494.63 11,507,570,974.31 122,144,132.07 185,704,090.92 13,929,237,691.93 period-beginning 2.Increase in the 2,974,656.29 65,079,558.53 6,393,175.10 13,954,213.99 88,401,603.91 current period (1) Purchase 2,559,600.13 56,226,791.96 5,953,249.38 9,296,571.11 74,036,212.58 (2) Transferred from con 415,056.16 1,440,795.02 439,925.72 677,559.87 2,973,336.77 struction in progress (3)Increased of 7,361,971.55 3,980,083.01 11,342,054.56 Enterprise Combination 135 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (4)Investment real estate transfer (5)Sale-leasebacks (6)Other increase 50,000.00 50,000.00 3.Decreased amount 10,927,023.65 43,952,557.36 4,468,678.34 4,262,534.50 63,610,793.85 of the period (1)Disposal 1,413,394.46 43,952,557.36 4,468,678.34 4,262,534.50 54,097,164.66 (2)Investment 9,513,629.19 9,513,629.19 real estate transfer (3)Sale-leasebacks (4)Other increase 4. Balance at 2,105,866,127.27 11,528,697,975.48 124,068,628.83 195,395,770.41 13,954,028,501.99 period-end II. Accumulated depreciation 1.Opening balance 404,808,570.47 2,014,259,680.21 57,491,501.47 73,521,319.79 2,550,081,071.94 2.Increased amount 47,901,589.56 410,967,573.71 8,354,593.22 8,881,287.49 476,105,043.99 of the period (1) Withdrawal 47,901,589.56 410,860,677.91 8,354,593.22 8,789,262.43 475,906,123.13 (2)Increased of Enterprise 106,895.80 92,025.06 198,920.86 Combination (3)Investment real estate transfer (4)Sale-leasebacks (5)Other increase 3.Decrease in the 910,487.15 8,539,821.51 1,437,885.02 459,968.08 11,348,161.76 reporting period (1)Disposal 711,850.91 8,539,821.51 1,437,885.02 459,968.08 11,149,525.52 (2)Sale-leasebacks (3)Other decrease 198,636.24 198,636.24 4.Closing balance 451,799,672.88 2,416,687,432.42 64,408,209.67 81,942,639.20 3,014,837,954.17 III. Impairment provision 1.Opening balance 36,444.84 555,940.00 592,384.84 2.Increase in the reporting period 136 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (1)Withdrawal 3.Decrease in the reporting period (1)Disposal 4. Closing balance 36,444.84 555,940.00 592,384.84 IV. Book value 1.Book value of the 1,654,066,454.39 9,111,974,098.22 59,104,479.16 113,453,131.21 10,938,598,162.98 period-end 2.Book value of the 1,709,009,924.16 9,493,274,849.26 64,096,690.60 112,182,771.13 11,378,564,235.15 period-begin (2) Fixed assets temporarily idled (3) Fixed assets rented by finance leases In RMB Accumulated Accumulated Items Original book value Book value depreciation depreciation Platinum channel 278,041,238.65 6,986,248.73 271,054,989.92 Machinery equipment 1,388,411,273.94 270,572,104.36 1,117,839,169.58 (4) Fixed assets leased in the operating leases (5) Fixed assets without certificate of title completed In RMB Items Book value Reason Substation 288,854.51 Processing Boiler room 3,988,717.38 Processing 20. Project under construction (1)Project under construction In RMB Year-end balance Year-beginning balance Items Book balance Provision for Book value Book balance Provision for Book value 137 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 devaluation devaluation Wuhu LCD glass substrate 2,171,311,589.88 2,171,311,589.88 1,992,039,147.54 1,992,039,147.54 production line project Wuhan LCD glass substrate 14,645,209.52 14,645,209.52 14,645,209.52 14,645,209.52 production line project Kunshan Color 508,106,857.14 508,106,857.14 363,976,794.49 363,976,794.49 film project G8.5 glass substrate 431,034,482.76 431,034,482.76 production line Polarizer project 763,009,412.48 763,009,412.48 Surface display 408,325,886.73 408,325,886.73 15,954,258.93 15,954,258.93 cover glass Yingkou LCD glass substrate 425,964,281.66 425,964,281.66 410,371,760.10 410,371,760.10 production line project New energy bus and logistics 1,309,658,561.00 1,309,658,561.00 vehicle production project Other 133,094,554.30 133,094,554.30 118,135,266.36 118,135,266.36 Total 5,402,141,422.99 14,645,209.52 5,387,496,213.47 3,678,131,849.42 14,645,209.52 3,663,486,639.90 (2) Changes of significant construction in progress In RMB Includin Capitaliz g: Amount Transferr ation of Current Capitaliz Increase Balance at year ed to Other Proporti Progress interest amount ation of Source Name Budget at this in beginnin fixed decrease on(%) of work accumul of interest of funds period year-end g assets ated capitaliz ratio(%) balance ation of interest Wuhu 7,576,52 1,992,03 179,272, 2,171,31 739,441, 44,760,0 Raising LCD 95.49% 95.49% 0,000.00 9,147.54 442.34 1,589.88 815.06 30.13 Funds glass 138 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 substrate producti on line project Kunshan Color 3,115,50 363,976, 144,130, 508,106, Raising 17.79% 17.79% film 0,000.00 794.49 062.65 857.14 Funds project Producti on Line for the 8.5th-ge 6,950,00 431,034, 431,034, Raising 14.64% 14.64% neration 0,000.00 482.76 482.76 Funds Glass glass substrate Xuyou Sheet 2,200,00 763,009, 763,009, glass Disposed Other 0,000.00 412.48 412.48 Phase I Project Surface display 1,497,38 15,954,2 392,371, 408,325, Raising 27.84% 27.84% cover 0,000.00 58.93 627.80 886.73 Funds glass New energy bus and logistics 2,955,07 1,309,65 1,309,65 Raising 47.94% 47.94% vehicle 4,600.00 8,561.00 8,561.00 Funds producti on project 24,294,4 3,134,97 2,456,46 763,009, 4,828,43 739,441, 44,760,0 Total 74,600.0 -- -- -- 9,613.44 7,176.55 412.48 7,377.51 815.06 30.13 0 139 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (3)Impairment provision of construction projects 21. Engineering Material 22.Liquidation of fixed assets 23. Productive biological assets (1) Measured by cost □ Applicable √ Not applicable (2) Measured by fair value □ Applicable √ Not applicable 24. Oil-and-gas assets □ Applicable √ Not applicable 25. Intangible assets (1)Information In RMB I Land use Non patent Patent Right of trade Patent right Software Other Total tems right technology technology mark I. Original price 1. Balance at 887,528,257. 23,582,996.8 150,931,868. 87,050,298.1 1,156,848,48 period-begin 7,755,063.97 12 0 85 3 4.87 ning 2.Increase in 118,694,555. 53,938,713.4 14,445,166.6 191,072,596. the current 3,994,161.16 29 1 7 53 period (1) Purchase 118,694,555. 122,919,383. 250,000.01 3,974,827.83 29 13 (2)Internal R&D (3) Increased of 53,688,713.4 14,445,166.6 68,153,213.4 19,333.33 Enterprise 0 7 0 Combination 140 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (4)Investor investment 3.Decreased amount of the period (1)Disposal (2)Other 4. Balance at 1,006,222,81 77,521,710.2 165,377,035. 11,749,225.1 87,050,298.1 1,347,921,08 period-end 2.41 1 52 3 3 1.40 II. Accumulated amortization 1. Balance at 76,219,489.0 28,677,985.2 44,050,066.0 155,052,374. period-begin 3,138,879.85 2,965,954.66 9 0 5 85 ning 2. Increase in 11,476,283.1 21,445,707.0 43,660,101.2 the current 1,668,516.73 8,282,595.52 786,998.72 9 4 0 period (1) 11,476,283.1 21,445,707.0 42,850,991.0 1,221,110.79 7,921,466.35 786,423.71 Withdrawal 9 4 8 (2) Increased of 447,405.94 361,129.17 575.01 809,110.12 Enterprise Combination 3.Decreased amount of the period (1)Disposal (2)Other 4. Balance at 87,695,772.2 36,960,580.7 65,495,773.0 198,712,476. 4,807,396.58 3,752,953.38 period-end 8 2 9 05 III. Impairment provision 1. Balance at period-begin ning 141 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 2. Increase in the current period (1) Withdrawal 3.Decreased amount of the period (1) Disposal 4. Balance at period-end 4. Book value 1.Book value 918,527,040. 72,714,313.6 128,416,454. 21,554,525.0 1,149,208,60 7,996,271.75 at period -end 13 3 80 4 5.35 2.Book value at 811,308,768. 20,444,116.9 122,253,883. 43,000,232.0 1,001,796,11 4,789,109.31 period-begin 03 5 65 8 0.02 ning ⑵Details of Land use right failed to accomplish certification of property In RMB Items Book value Reason Land use right 70,964,030.64 50% outstanding 26. Research and development expenditure In RMB Beginning Ending Items Increase in the period Decrease in period balance balance Graphene and Lithium 3,883,495.16 3,883,495.16 Battery Project Magnolia lamp design 762,432.49 7,676.59 770,109.08 project 142 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Landscape street lamp 2,141,940.99 544,636.17 2,686,577.16 design project Distributed photovoltaic 2,022,956.97 528,195.42 2,551,152.39 power plant project Low voltage distribution 2,055,487.81 582,267.04 2,637,754.85 system project High voltage distribution 3,096,837.78 792,293.21 3,889,130.99 system project Intelligent photovoltaic 914,598.09 264,391.71 1,178,989.80 junction box Electric vehicle charging pile 519,955.68 556,235.87 1,076,191.55 Project in 2017 EAS supply 1,002,691.08 1,002,691.08 chain system Development of main Control 830,927.10 830,927.10 system for AC charging pile High efficiency 830,926.55 830,926.55 lighting project High efficiency 836,864.94 836,864.94 street lamp project Jingang 1,143,898.85 1,143,898.85 143 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Robot 15,397,704.9 23,318,709.5 Total 7,921,004.53 7 0 27. Goodwill (1) Original book value of goodwill In RMB Name of the investees or the Opening balance Increase Decrease Closing balance events formed goodwill Mingshuo (Beijng) Electronic 32,783,882.96 32,783,882.96 Technology Co., Ltd. Chenzhou Hongcheng Public Traffic 10,163,443.61 10,163,443.61 Constriction Development Co., Ltd. Daosui Group Engineering Co., 40,095,298.31 40,095,298.31 Ltd. Chuanglian Huatai(HK) Co., 722,450.89 722,450.89 Ltd. Suzhou Tengda Optics 82,350,192.94 82,350,192.94 Technology Co., Ltd. Guangxi Sunlong Automobile 55,664,910.37 55,664,910.37 Manufacturing Co., Ltd . Shanghai Tanyuan Huigu 33,935,384.57 33,935,384.57 New Material Co., Ltd. 144 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Shanghai Sunlong Bus Co., 2,331,962,577.34 2,331,962,577.34 Ltd. Zhongcheng national 130,169,968.13 130,169,968.13 construction co., Ltd. Shenzhen Sanbao Innovation 66,201,670.16 66,201,670.16 Intelligent Co., Ltd. Huaxi Nanchong Automobile Co., 56,773,762.72 56,773,762.72 Ltd. Total 2,587,678,140.99 253,145,401.01 2,840,823,542.00 (2)Impairment provision of goodwill In RMB Name of the investees or the Opening balance Increase Decrease Closing balance events formed goodwill Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill impairment losses: Other notes: The increase in goodwill at the end of the period compared to the beginning of the period was mainly due to the ac quisition of subsidiaries Zhongcheng national construction co., Ltd. , Shenzhen Sanbao Innovation Intelligent Co., Ltd. And Huaxi Nanchong Automobile Co., Ltd. in the current period. 28.Long-term amortization expenses In RMB Balance in Increase at this Amortization Items Other decrease Balance in year-end year-begin period balance Building renovation 20,884,579.02 7,773,533.85 9,874,189.85 8,816,276.17 9,967,646.85 NEG Technology 5,653,725.00 308,385.00 5,345,340.00 Use fee 145 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Total 26,538,304.02 7,773,533.85 10,182,574.85 8,816,276.17 15,312,986.85 29.Deferred income tax assets/deferred income tax liabilities (1)Details of the un-recognized deferred income tax assets In RMB Balance in year-end Balance in year-begin Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Assets devaluation 347,775,330.45 69,202,590.32 361,268,489.05 72,770,445.79 provision Not realized the internal 2,098,364,756.73 336,844,649.16 2,184,936,479.37 350,438,261.98 profit Deductible loss 424,876,022.19 66,260,756.48 454,060,832.38 65,723,232.56 Deferred income 72,120,337.62 11,065,630.90 73,641,000.14 11,046,150.02 difference Non-identical control 9,519,323.16 1,007,829.65 8,652,114.93 783,147.37 enterprise Projected liability 32,515,694.09 8,128,923.52 38,543,627.93 9,635,906.98 Advance quality margin 80,746,536.90 10,659,353.58 117,878,085.38 16,420,648.06 Total 3,065,918,001.14 503,169,733.61 3,238,980,629.18 526,817,792.76 (2)Details of the un-recognized deferred income tax liabilities In RMB Balance in year-end Balance in year-begin Items Temporarily Deductible Deferred Income Tax Temporarily Deductible Deferred Income Tax or Taxable Difference liabilities or Taxable Difference liabilities Impairment of assets under the control of 336,100,199.64 62,295,616.96 349,818,170.15 60,149,328.74 enterprises under the same control Total 336,100,199.64 62,295,616.96 349,818,170.15 60,149,328.74 (3) Deferred income tax assets or liabilities listed by net amount after off-set In RMB Items Trade-off between the End balance of deferred Trade-off between the Opening balance of 146 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 deferred income tax income tax assets or deferred income tax deferred income tax assets and liabilities liabilities after off-set assets and liabilities at assets or liabilities after period-begin off-set Deferred income tax 503,169,733.61 526,817,792.76 assets Deferred income 62,295,616.96 60,149,328.74 liabilities (4)Details of income tax assets not recognized In RMB Items Balance in year-end Balance in year-begin Deductible losses 426,483,832.61 83,300,016.16 Bad debt provision 40,093.76 86,413.68 Impairment of fixed assets 1,935,234.19 1,935,234.19 Fixed assets depreciation reserves 36,444.84 36,444.84 Provision for impairment of construction 14,645,209.52 14,645,209.52 projects Total l 443,140,814.92 100,003,318.39 (5)Deductible losses of the un-recognized deferred income tax asset will expire in the following years In RMB Year Balance in year-end Balance in year-begin Remark 2018 3,000,263.93 2,986,414.60 2019 5,846,342.08 5,860,191.41 2020 3,470,816.94 3,751,170.54 2021 9,394,061.76 32,084,711.54 2022 17,012,060.02 38,617,528.07 2023 37,247,797.62 0.00 2024 383,871.35 0.00 2025 3,421,161.58 0.00 2026 10,452,118.86 0.00 2027 8,444,562.81 0.00 2028 327,810,775.66 0.00 Total 426,483,832.61 83,300,016.16 -- 30 .Other non-current assets In RMB 147 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Items Balance in year-end Balance in year-begin Prepaid land fund 6,590,000.00 Prepaid engineering equipment 282,006,939.10 299,812,939.48 Total 282,006,939.10 306,402,939.48 31.Short –term loans (1)Short-term loans by category In RMB Items Balance in year-end Balance in year-begin Pledge loan 558,370,000.00 320,666,279.80 Mortgage loan 292,900,000.00 374,600,000.00 Guarantee loan 5,765,000,000.00 4,997,500,000.00 Credit loan 196,514,698.87 20,060,102.40 Total 6,812,784,698.87 5,712,826,382.20 Notes: Notes 1. There is no mature but unredeemed short-term borrowing in the company during the accounting period. Notes 2.At the end of the period, the company's credit loans of RMB 196,514,698.87. Notes 3. The final mortgage was RMB 292,900,000.00. (1)The sub-subsidiary Shenzhen Xinyintong Technology Co., Ltd via mortgage loan borrowed RMB 22,000,000.00, with that Zhang Lixia provided the house property of No. 5000615797 Shen Fangdizi and Zhong Yuhua provided the house property of No. 3000415955 Shen Fangdizi as the collateral, and Zeng Jiankai, Zhong Yuhua and Zhang Lixia provided the joint and several liability guarantee ( 2 ) The sub-subsidiary Daosui Group Engineering Co., Ltd via mortgage loan borrowed RMB 120,900,000.00, thereinto, a: for RMB 53,000,000.00 , the guarantors were Yang Jianzhong and You Shaoguo, with the mortgage of the land of Mianguoyong (2014) No. 0227 and the No. 0358 house property of Mianning County Fangquanzheng Zi of Sichuan Panxi Lingshan Tourism Investment Development Co., Ltd; b: For RMB 26,000,000.00, the guarantors were Yang Jianzhong and You Shaoguo, with the mortgage of the No. 0358 house property of Mianning County Fangquanzheng Zi, the No. 45, No. 46, No. 48 to No. 52 house properties of Real Estate Certificate of Yue Limited Liability Zi and the lands of No.2016-1, No. 2016-2, No. 2016-4 to No. 2016-8 of Yueguoyong (2013) of Huaying Minghua Trading co., Ltd; c: Of which 2 were 27500000.00 yuan, the guarantors were Yang Jianzhong and You Shaoguo, with the mortgage of No. 011160, No. 011161 and No. 011164 house properties of Huafangquanzheng, the No. 200700978-200700984 house properties of Guangfangquanzheng and the No.384 land of Huaguoyong (2012); d: for RMB 14,400,000.00, the guarantor was Yang Jianzhong, with the mortgage of No.011160, No. 011161 and No. 011164 house properties of Huafangquanzheng and the No.20070 (3) The Sub-subsidiary Fuzhou Xufu Optoelectronic Technology Co., Ltd via mortgage loan borrowed RMB 150,000,000.00, with the maximum amount guarantee provided upon using the Fuzhou Xufu Optoelectronic Technology Co., Ltd’s own plant and equipment; Notes 4: Guarantee loan was RMB 5,765,000,000.00 148 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Whereby, (1) Tunghsu Group Co., Ltd offered RMB 400,000,000.00 joint liability guarantee to The Company, Li Zhaoting offered RMB960,000,000.00 joint liability guarantee to the Company,Tunghsu Group and Li Zhaoting offered RMB1,150,000,000.00 Guarantee to the company,Tunghsu Group,Li Zhaoting and Li Qing offered RMB 1,280,000,000.00 Guarantee to the Company (2) Tunghsu Group , The company and Li Zhaoting offered RMB 80,000,000.00 joint liability guarantee to the Subsidiary –Sichuan Xuhong Optoelectronic Technology Co., Ltd. (3) Tunghsu Group Offered RMB250,000,000.00 Joint liability guarantee to the subsidiary-Zhengzhou Xufei Optoelectronic Technology Co., Ltd.,Tunghsu Group and Li Zhaoting Offered RMB 280,000,000.00 guarantee to the Sub- subsidiary- Zhengzhou Xufei Optoelectronic Technology Co., Ltd., The Company Offered RMB50,000,000.00 guarantee to Sub- subsidiary- Zhengzhou Xufei Optoelectronic Technology Co., Ltd.,Tunghsu Group Offered RMB250,000,000.00 Joint liability Guarantee to Sub- Subsidiary-Suzhou Tengda Potics Technology Co., Ltd.,The Company Offered RMB20,000,000.00 guarantee to Sub- subsidiary- Suzhou Tengda Potics Technology Co., Ltd. (4) The Company offered RMB 245,000,000.00 joint liability guarantee to the subsidiary- Wuhu Tunghsu Optoelectronic Technology Co., Ltd. (5)The Company offered RMB205,000,000.00 guarantee to the subsidiary- Wuhu Tunghsu Optoelectronic Technology Co., Ltd., The Company and Li Zhaoting offered RMB210,000,000.00 guarantee to the subsidiary- Wuhu Tunghsu Optoelectronic Technology Co., Ltd.,Tunghsu Group and The company offered RMB200,000,000.00 guarantee to the subsidiary- Wuhu Tunghsu Optoelectronic Technology Co., Ltd. (6) Tunghsu offered RMB935,000,000.00 joint liability guarantee to the Subsidiary –Shanghai Sunlong Bus Co., Ltd.,Tunghsu Group and Li Zhaoting offered RMB100,000,000.00 joint liability guarantee to the Subsidiary –Shanghai Sunlong Bus Co., Ltd.,Tunghsu Group and The company offered RMB50,000,000.00 joint liability guarantee to the Subsidiary –Shanghai Sunlong Bus Co., Ltd., The company offered RMB100,000,000.00 guarantee to the Subsidiary –Shanghai Sunlong Bus Co., Ltd.,Tunghsu Group offered RMB245,000,000.00 joint liability guarantee to the Sub-Subsidiary –Guangxi Sunlong Automobile Manufacturing Co., Ltd., The company offered RMB100,000,000.00 guarantee to the Sub-Subsidiary –Guangxi Sunlong Automobile Manufacturing Co., Ltd.,Shanghai Sunlong Bus ffered RMB30,000,000.00 joint liability guarantee to the Sub-Subsidiary –Guangxi Sunlong Automobile Manufacturing Co., Ltd . Notes 5:Final pledge loan amount was RMB558,370,000.00. Including: The pledge borrowing of RMB142,500,000.00 was provided a pledge guarantee by Wuhu Tunghsu Optoelectronic Equipment Technology Co., Ltd using the term deposit certificate of RMB 150,000,000.00; The pledge borrowing of RMB180,000,000.00 was provided a pledge guarantee by Sub--Subsidiary Hunan Tunghsu Weigao Medical instrument Co., Ltd using the term deposit certificate of RMB100,000,000.00; Tunghsu Group provides joint liability guarantee; The pledge borrowing of RMB69,000,000.00 was provided a pledge guarantee by Sub—Subsidiary Daoshui Group Co., Ltd using the term deposit certificate of RMB72,010,000.00; The pledge borrowing of RMB142,500,000.00 was provided a pledge guarantee by Wuhu Tunghsu Optoelectronic Technology Co., Ltd using the term deposit certificate of RMB150,000,000.00; The pledge borrowing of RMB24,370,000.00 was provided a pledge guarantee by Sub—Subsidiary Shenzhen Xinyingtong Technology Co., Ltd using the term deposit certificate of RMB24,370,000.00; (2) Situation of Overdue Outstanding Short-Term Borrowing Final overdue outstanding short-term borrowing was zero. 149 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 32. Financial liabilities measured at fair value through current profit and loss 33. Derivative financial liabilities □ Applicable√ Not applicable 34. Note payable In RMB Items Balance in year-end Balance in year-begin Commercial acceptance 344,370,940.00 237,603,082.40 Bank acceptance bills 654,896,156.40 826,294,597.49 Total 999,267,096.40 1,063,897,679.89 Amount due in next fiscal period is RMB0.00. 35. Account payable (1)Account payable In RMB Items Balance in year-end Balance in year-begin Engineering fund 1,392,966,173.99 1,095,153,995.50 Material fund 3,191,668,273.67 3,433,073,854.24 Transportation expenses 13,759,120.88 11,172,407.72 Technology Service 5,495,219.34 6,069,737.32 Other 86,849,717.14 91,519,044.87 Total 4,690,738,505.02 4,636,989,039.65 (2)Significant accounts payable that aged over one year In RMB The reason for not repaid or carried forwar Items Balance in year-end d Failure to meet agreed terms and duration Wuxi Jingke automobile Part Co., Ltd. 18,121,142.66 of payment Failure to meet agreed terms and duration Jiangsu Chengyi Technology Co., Ltd. 11,328,581.84 of payment Total 29,449,724.50 -- 150 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 36.Advance account (1)Advance account In RMB Items Closing balance Opening balance Goods 394,669,033.49 635,268,325.76 Engineering fund 581,688,484.32 1,019,869,237.87 Total 976,357,517.81 1,655,137,563.63 (2) Accounts payable with major amount and aging of over one year (3)Information of unliquidated completed assets formed in the construction contract at the end of the period 37. Employee compensation payable (1)Classification of employee compensation payable In RMB Items Balance in year-begin Increase at this period Decrease at this period Balance in year-end I. Short –term wages 205,475,973.45 595,147,895.45 640,164,409.72 160,459,459.18 II. Welfare after waving of position-fixed 2,221,388.80 30,526,036.84 30,678,815.74 2,068,609.90 provision scheme III. Termination benefit 633,692.10 633,692.10 Total 207,697,362.25 626,307,624.39 671,476,917.56 162,528,069.08 (2)Short-term remuneration In RMB Items Balance in year-begin Increase in this period Payable in this period Balance in year-end 1.Wages, bonuses, 158,272,400.10 541,739,195.25 589,129,164.56 110,882,430.79 allowances and subsidies 2.Employee welfare 54,843.85 15,315,888.40 15,327,038.59 43,693.66 3. Social insurance 1,209,437.58 15,908,948.99 15,918,971.63 1,199,414.94 premiums Including:Medical 1,043,116.93 13,903,813.19 13,891,643.80 1,055,286.32 insurance Work injury insurance 66,261.87 964,919.36 984,415.41 46,765.82 151 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Maternity insurance 100,058.78 1,040,216.44 1,042,912.42 97,362.80 4. Public reserves for 986,360.29 13,192,401.82 13,532,528.32 646,233.79 housing 5.Union funds and staff 44,804,730.41 5,765,542.19 3,069,334.05 47,500,938.55 education fee 8.Other 148,201.22 3,225,918.80 3,187,372.57 186,747.45 Total 205,475,973.45 595,147,895.45 640,164,409.72 160,459,459.18 (3)Defined contribution plans listed In RMB Items Balance in year-begin Increase in this period Payable in this period Balance in year-end 1. Basic old-age 2,080,192.50 29,094,532.72 29,231,356.98 1,943,368.24 insurance premiums 2.Unemployment 141,196.30 1,431,504.12 1,447,458.76 125,241.66 insurance Total 2,221,388.80 30,526,036.84 30,678,815.74 2,068,609.90 38.Tax Payable In RMB Items Balance in year-end Balance in year-begin VAT 95,390,421.31 60,982,068.15 Enterprise Income tax 177,344,409.38 170,094,083.01 Individual Income tax 31,738,325.42 30,271,740.75 City Construction tax 6,198,035.13 7,530,509.66 Business Tax 3,789,219.75 3,789,219.75 Land VAT 123,402,213.97 House property tax 8,631,784.38 8,631,413.12 Land use tax 1,616,902.49 1,802,208.59 Educational surtax 4,547,924.65 6,453,814.04 Stamp Tax 504,198.36 3,666,280.55 Output tax to be transferred 850,654.08 1,758,082.34 Total 454,014,088.92 294,979,419.96 39. Interest payable In RMB 152 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Items Balance in year-end Balance in year-begin Long-term loans interest of installment and 38,757,921.27 29,020,856.73 interest charge Enterprise bond interest 147,856,644.87 66,833,709.29 Short term loan interest payable 10,172,452.28 11,340,581.18 Total 196,787,018.42 107,195,147.20 40. Dividends payable In RMB Items Balance in year-end Balance in year-begin Common dividends 313,488,825.93 35,000,000.00 Total 313,488,825.93 35,000,000.00 41.Other payable (1)Disclosure by nature In RMB Items Balance in year-end Balance in year-begin Related party current account 211,378,080.73 475,619,957.85 Project Current account 1,033,083,932.83 727,962,152.15 Deposit 323,299,588.22 332,892,760.85 Government Subsidy 15,000,000.00 15,000,000.00 Social security withholding 1,508,838.35 1,823,102.07 Engineering fund 0.00 55,246,500.11 Stock right fund 195,500,000.00 252,444,235.97 Restricted stock repurchase obligations 4,422,320.00 4,422,320.00 Other 17,327,128.99 22,109,862.88 Total 1,801,519,889.12 1,887,520,891.88 153 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (2) Other payables with large amount and aging of over one year 42. Divided into liability held for sale 43.Non-current liabilities due within 1 year In RMB Items Balance in year-end Balance in year-begin Long-term loans due within 1 year 3,298,395,973.96 4,196,242,686.59 Long-term Account payable due within 1 1,041,049,457.67 801,679,583.06 year Deferred income due within 1 year 34,290,762.19 47,686,486.80 Total 4,373,736,193.82 5,045,608,756.45 Other notes: Note 1: Non-current liabilities due within one year was decreased at the end of the period, The main reason is the decrease in borrowings due within one year. Note 2: long-term loans due within one year could be referred to Note VII,45. Note 3: long-term account receivable due within one year could be referred to Note VII,47. Note 4: Deferred income due within one year could be referred to Note VII,51. 44.Other current liabilities In RMB Items Closing balance Opening balance USD exchange 66,166,000.00 65,342,000.00 For resale tax 93,819,427.25 79,012,267.85 Financing 82,800,911.12 Total 159,985,427.25 227,155,178.97 45. Long-term loan (1) Category of long-term loan In RMB Items Closing balance Opening balance Pledge loans 450,000,000.00 950,000,000.00 Mortgage loans 3,619,711,596.66 4,096,235,604.06 Guarantee loans 3,052,216,666.62 4,359,733,333.30 Less :Long-term loan due 1 year -3,298,395,973.96 -4,196,242,686.59 154 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Total 3,823,532,289.32 5,209,726,250.77 Notes: Notes 1:At the end of the period, the Company has no long-term borrowings that have not yet been repaid. Notes 2:The Guarantee of RMB 3,052,216,666.62 is both the mortgage loan and the guarantee loan, reclassified into the non-current liabilities due within one year RMB 2,253,216,666.62. (1)RMB 1,414,650,000.00 borrowings to provide the joint guarantee,, of which RMB 1,299,650,000.00 was reclassified to non-current liabilities due within one year; Tunghsu Group Co., Ltd and Li Zhaoting provided the joint and several guarantee for the company's borrowings of RMB740,666,666.62, of which RMB 644,666,666.62 was reclassified to non-current liabilities due within one year; Tunghsu Group Co., Ltd provided the joint and several guarantee for the company's borrowings of RMB194,000,000.00, of which of 194,000,000.00 was reclassified to non-current liabilities due within one year; Tunghsu Group Co., Ltd, Tunghsu Optoelectronics Investment Co., Ltd and Li Zhaoting provided the guarantee for the Company. (2)Tunghsu Group Co., Ltd and Tunghsu Optoelectronic Technology Co., Ltd provided the joint and several guarantee for RMB 100,000,000.00 for Fuzhou Tunghsu Optoelectronic Technology Co., Ltd; Provide joint guarantees, which are reclassified to non-current liabilities of RMB 100,000,000.00 due within one year.。Nippon Electric Glass Co., Ltd provided the joint and several guarantee for the sub-subsidiary Fuzhou Tunghsu Optoelectronic Technology Co., Ltd’s borrowings of RMB 188,000,000.00. (3)Meishan Shengtong Financing Guarantee Co., Ltd provided the joint and several guarantee for Daosui Group Engineering Co., Ltd’s borrowings of RMB 14,900,000.00, of which RMB 14,900,000.00 was reclassified to non-current liabilities due within one year; Notes 3: The mortgage borrowings of RMB 3,619,711,596.66 were both mortgage borrowings and guarantee borrowings, of which RMB1,045,179,307.34 was reclassified to non-current liabilities due within one year. Thereinto: (1)For the borrowings of RMB584,699,600.00, RMB213,233,200.00 was reclassified to non-current liabilities due within one year, and the collateral and the guarantor: a: The guarantor Tunghsu Group Co., Ltd provided the joint and several guarantee for the borrowings equivalent to RMB 450 million under this item and the interest, penalties, compound interest, compensation, liquidated damages, damages, and expense of realization of creditor's rights arising from that amount to the lender; b: the assessment value of the collateral-the above-ground buildings and the equipment(including the 4 precious metal lines of platinum channel) were RMB1,055,713,019.27. (2)For the loan of 455,000,000.00 yuan, 35,000,000.00 yuan will be reclassified into non-current liabilities due within one year, the mortgage and pledge guarantee of the loan: a. the property of YFQZYZ No. F 20150301716 , YFQZYZ No. F 20150301767 , YFQZYZ No. F20150301734, YFQZYZ No. F20150301760, YFQZYZ No. F20150301711, YFQZYZ No. F20150301725, YFQZYZ No. F20150301769 and YFQZYZ No. F20150301747 of Tunghsu (Yingko) optoelectronic Technology Co., Ltd. are used as collateral; b. Tunghsu Group Co., Ltd. provides 40,000,000 shares pledge joint and several guarantee for Tunghsu (Yingko) optoelectronic Technology Co., Ltd. (3)For the borrowings of 525,000,000.00 yuan, 375,000,000.00 yuan was reclassified to non-current liabilities due within one year, and the collateral and the guarantor: a: The mortgagor Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd used the can-be-mortgaged assets formed by the project including the land use right, buildings and machinery and equipment (including three precious metal lines of platinum channel) for providing the mortgage guarantee; b: Tunghsu Group Co., Ltd, Li Zhaoting and Li Qing provide the guarantee. (4)For the loan of 1,312,500,000.00 yuan, 375,000,000.00 yuan will be reclassified into non-current 155 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 liabilities due within one year, the collateral and guarantor of the loan are: a. eight precious metal platinum channel assets owned by Wuhu Tunghsu optoelectronic Technology Co., Ltd. are used to provide mortgage guarantee; b. the company provides joint and several liability guarantee for the subsidiary company of Wuhu Tunghsu optoelectronic Technology Co., Ltd. (5)For the loan of 272,000,000.00 yuan, 136,000,000.00 yuan will be reclassified into non-current liabilities due within one year, the collateral and guarantor of the loan are: a. Wuhu Tunghsu optoelectronic Technology Co., Ltd. will provide mortgage guarantee through mortgaging 202 mu of state-owned land use rights, the factory building after the completion of the project and 2 precious metal platinum channels; b. the guarantor of the loan is Wuhu Construction Investment Co., Ltd. (6)For the loan of 370,000,000.00 yuan, 80,000,000.00 yuan will be reclassified into non-current liabilities due within one year, the collateral and guarantor of the loan are: a. WK(G)GY 2013 No. 020, WK(G)GY 2013 No. 021, WK(G)GY 2014 No. 008 land use right mortgage owned by Wuhu Tunghsu Photoelectricity Equipment Technology Co., Ltd. and fixed assets after the completion of the project; b. the company provides joint and several liability guarantee for its subsidiary of Wuhu Tunghsu Photoelectricity Equipment Technology Co., Ltd. (7)For the loan of 50,275,333.28 yuan, 5,801,000.00 yuan will be reclassified into non-current liabilities due within one year, the collateral and guarantor of the loan are: the joint and several liability guarantee is provided by Zeng Jiankai and his spouse zhong Yuhua, and the collateral is the housing mortgage provided by Shenzhen Xinyingtong Technology Co., Ltd. (8)For the loan of 266,663.38 yuan, 175,107.34 yuan will be reclassified into non-current liabilities due within one year, the collateral and guarantor of the loan are: Zeng Jiankai provides joint and several liability guarantees, and provides vehicles worth 729,238.00 yuan as collateral. (9)For the loan of 30,000,000.00 yuan, 30,000,000.00 yuan will be reclassified into non-current liabilities due within one year, the collateral and guarantor of the loan are: a. the mortgaged property is property worth 16,000,000 yuan of Yongfangquanzheng Zi No. 02674664.b. Gui (2015) Nanning Real Estate Right No. 0000039 Land Certificate which worth 20,000,000; c. Ye Jianhui and Yang Xiangyang provide joint and several liability guarantee. (10)For the loan of 19,970,000.00 yuan, 19,970,000.00 yuan will be reclassified into non-current liabilities due within one year, the mortgage loan is both a mortgage loan and a guarantee loan. The guarantors are Yang Jianzhong and Hong Shuping, and the collateral is Yu (2016) Hechuan District Real Estate Right No. 000587685 real estate of Chongqing Haolong Platinum Industrial Co., Ltd. Notes4:the pledged loan of 450,000,000.00 yuan is both the pledged loan and the guaranteed loan, and 0.00 yuan is reclassified into the non-current debt due within one year. The Pledged and guarantor of the loan are: a. the collateral is the 5 million circulating shares of Tunghsu Photoelectricity Technology Co., Ltd. held by Tunghsu Group Co., Ltd. and the corresponding equity of 178,750,000.00 yuan of pain-in capital contributed by Tunghsu Intelligent Technology Co., Ltd. held by Tunghsu Group Co., Ltd.; b. Tunghsu Group Co., Ltd. and Li Zhaoting will provide the guarantee. Other notes including interest rate range: Notes 5.Rate of annual long-term borrowing is generally ranged from 3.68%--8.17%. 156 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 46.Bond payable (1)Bond payable In RMB Items Balance in year-end Balance in year-begin 15 Tunghsu bonds 950,657,303.79 993,310,440.39 Mid-term note I 2,984,051,742.33 2,981,914,109.61 Mid -term note II 1,691,108,327.11 1,689,901,540.52 Total 5,625,817,373.23 5,665,126,090.52 (2)Changes of bonds payable(Not including the other financial instrument of preferred stock and perpetual capital securities that classify as financial liability In RMB 15 1,000,00 2015.5.1 1,000,00 993,310, 60,000,0 1,304,16 43,957,3 950,657, Tunghsu 5 years 0,000.00 9 0,000.00 440.39 00.00 3.40 00.00 303.79 bonds Mid-ter 3,000,00 2016.11. 3,000,00 2,981,91 2,137,63 2,984,05 5 years m note I 0,000.00 17 0,000.00 4,109.61 2.72 1,742.33 Mid 1,700,00 2016.12. 1,700,00 1,689,90 1,206,78 1,691,10 -term 5 years 0,000.00 02 0,000.00 1,540.52 6.59 8,327.11 note II 5,700,00 5,665,12 60,000,0 4,648,58 43,957,3 5,625,81 Total -- -- -- 0,000.00 6,090.52 00.00 2.71 00.00 7,373.23 (3) Note to conditions and time of share transfer of convertible bonds (4)Other financial instruments that are classified as financial liabilities The issuance of preferred stock and other financial instruments such as perpetual debt Table of changes in financial instruments such as preferred stock and perpetual debt Other notes Notes 1: On September 8, 2016, the 8th board of directors meeting of the company examined and approved the company’s application for registration of the medium-term notes issued no more than RMB 4.7 billion. The accepting institution was National Association of Financial Market Institutional Investors. On September 26, 2016, the extraordinary shareholders' general meeting adopted the bill on the registration and issuance of medium-term notes. RMB 4.7 billion medium-term notes was divided into 2 phases in 2016. Among them: total amount of the first phase of the medium-term notes varieties (3 + 2) and five-year notes was RMB 3 billion. Total amount of the second phase of the medium-term notes varieties (3 + 2) and five-year notes was RMB 1.7 billion. Notes 2:On May 19, 2015, the “15 Tunghsu Debt” with a total amount of RMB 1 billion was issued. In May 2018, 157 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 the resale amount was RMB 43,957,300.00, and the coupon rate was adjusted from 6.00% to 6.80%. 47. Long-term payable (1) Long-term payable listed by nature of the account In RMB Items Balance in year-end Balance in year-begin Long-term payable 4,800,919,822.81 4,935,555,693.56 Less:Unconfirmed financing costs 783,029,636.38 857,567,856.06 Less:Port due Within 1 year 1,041,049,457.67 801,679,583.06 Total 2,976,840,728.76 3,276,308,254.44 Other notes: Name of lessor Initial amount Increase in the period Repayment amount Closing balance Beijing Cultural Technology Finance Leasing Co., Ltd. 167,086,894.20 55,695,631.40 111,391,262.80 Beijing Guozi Finance Leasing Co., Ltd. 202,205,984.26 28,886,569.18 173,319,415.08 Haitong Hengxin International Leasing Co., Ltd. 287,692,310.00 57,538,462.00 230,153,848.00 Ligen Finance Leasing(Shanghai) Co., Ltd. 54,449,784.17 18,149,928.04 36,299,856.13 Jiangsu Runxing Finance Leasing Co., ltd. 224,000,000.00 8,000,000.00 216,000,000.00 Lujin Shenhua Finance Leasing (Shanghai) Co., Ltd. 137,134,391.04 17,141,798.88 119,992,592.16 Xian Runyin Finance Leasing Co., Ltd. 597,659,736.26 57,517,019.88 540,142,716.38 Dongyin Finance leasing (Tianjing)Co., Ltd. 83,196,130.50 27,732,043.50 55,464,087.00 Chengdu Huaming Finance leasing Co., Ltd 1,087,051,918.75 1,087,051,918.75 Chengyu Finance Leasing Co., Ltd. 59,056,693.20 13,174,635.21 45,882,057.99 Sichuan Tianfu Finance Leasing Co., Ltd. 52,857,785.54 5,682,233.61 47,175,551.93 Hebei Finance Leasing Co., ltd. 30,492,852.61 15,160,194.28 15,332,658.33 Wanjiang Finance Leasing Co., Ltd. 1,168,483,194.45 25,785,833.33 1,142,697,361.12 Huayun Finance Leasing Co., Ltd. 234,847,209.70 26,284,719.96 208,562,489.74 158 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Hubei Finance Leasing Co., Ltd. 331,846,944.60 55,307,824.10 276,539,120.50 Hengqin Jintou International Finance Leasing Co., Ltd. 217,493,864.28 36,248,977.38 181,244,886.90 Shandong Expressway Global Financing Leasing Co., Ltd. 313,670,000.00 313,670,000.00 Total 4,935,555,693.56 313,670,000.00 448,305,870.75 4,800,919,822.81 Notes: Tunghsu Group Co., Ltd. offered a guarantee of Financing Leasing at RMB 1,056,813,432.82 , Tunghsu Group Co., Ltd, Li Zhaoting offered a guarantee of Financing Leasing at RMB 208,471,400.97. Tunghsu Group Co., Ltd, Li Zhaoting and Li Qing offered a guarantee of Financing Leasing at RMB 802,200,013.06. The company offered a guarantee of Financing Leasing at RMB 723,000,000.00. 48. Long-term employee salary payable (1)Long-term employee salary payable (2) Changes of defined benefit plans 49. Specific payable 50. Estimates liabilities In RMB Items Balance in year-end Balance in year-begin Rreason Lispendens 32,515,694.09 38,543,627.93 Product guarantee 80,746,536.90 117,878,085.38 Total 113,262,230.99 156,421,713.31 -- 51.Deferred income In RMB Items Beginning of term Increased this term Decreased this term End of term Reason Govemment Subsidy 601,213,644.42 10,500,000.00 22,295,047.03 589,418,597.39 Less :Government subsidies due within -36,478,840.45 2,824,600.01 636,521.72 -34,290,762.16 one year Not realized after 38,763,460.00 38,763,460.00 sale rental return Less:Unrealized -11,207,646.55 11,207,646.55 customer service due 159 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 within 1 year rent to profit or loss Total 592,290,617.42 24,532,246.56 61,695,028.75 555,127,835.23 -- Details of government subsidies In RMB Amount Other income Amount of New subsidy Asset-related Beginning of transferred to recorded in cost deducted Other Items in current End of term orincome-rel term non-operatio the current in the current changes period ated nal income period period Grant of 25,438,800.0 24,316,500.0 Related to Government 1,122,300.00 0 0 assets Infrastructure Grant of Industry Revitalizatio Related to n and 2,644,444.61 116,666.64 2,527,777.97 assets Technology Reconstructio n Project Grant of Glass-tube Related to Secondary 0.00 assets Environment al Protection Technical Related to reconstructio 2,666,666.65 133,333.34 2,533,333.31 assets n Grant of Glass Related to 9,999,999.94 500,000.00 9,499,999.94 Substrate assets Project Industry Related to Development 4,666,666.65 233,333.34 4,433,333.31 assets Fund Project Related to finance 313,333.37 15,666.66 297,666.71 assets discount Grant of 71,668,666.7 68,411,000.0 Related to Industry 3,257,666.66 1 5 assets Revitalizatio 160 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 n and Technology Reconstructio n Project 2013 Provincial strategic Related to emerging 4,250,000.04 166,666.66 4,083,333.38 assets industries of special grant funds Technology reconstructi 28,822,333.3 27,744,333.3 Related to 1,078,000.00 on Special 2 2 assets funds Investment and Subsidies of “Double Hundred Plan” Project Related to 1,783,333.33 100,000.02 1,683,333.31 granted by assets the People's Government of Henan Province TFT glass substrate Related to 89,166.77 4,999.98 84,166.79 technology assets R& D fund TFT glass substrate Related to 5,944,444.43 333,333.36 5,611,111.07 project assets Subsidy Investment and Subsidies within Budget for Related to Technologica 8,322,222.23 466,666.68 7,855,555.55 assets l Transformati on Project by National 161 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Development and Reform Commission and the Ministry of Industry and Information Technology TFT glass substrate 11,888,888.9 11,222,222.2 Related to 666,666.66 project 1 5 assets Subsidy Subsidy Major Scientific and Technical Related to Projects by 594,444.43 33,333.36 561,111.07 assets Finance Bureau of Zhengzhou City Financial Supports for National Key Industry and Technical Transformati Related to 8,322,222.23 466,666.68 7,855,555.55 on on assets Projects Granted by the Municipal Finance Bureau Financial Supports for National Key Industry and Technical Related to 4,161,111.10 233,333.34 3,927,777.76 Transformati assets on on Projects Granted by the Municipal 162 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Finance Bureau Funds for Independent Innovation of Related to 3,566,666.71 199,999.98 3,366,666.73 Provincially assets Supported Enterprises Supporting Funds on Related to 1,188,888.91 66,666.66 1,122,222.25 Finance assets Discounts Funds for Education, Science and Related to Culture 891,666.71 49,999.98 841,666.73 assets Granted by the Finance Bureau Supporting Funds for Industrial Structure -adjusting Related to 1,742,222.16 93,333.36 1,648,888.80 Projects assets Granted by the Regional Finance Bureau Industry Related to discount and 1,004,444.42 53,333.34 951,111.08 assets expenses Financial Related to 3,194,444.50 166,666.68 3,027,777.82 discount assets Industrial restructuring Related to project 3,493,333.29 160,000.02 3,333,333.27 assets financial funds Special Related to Funds for 3,861,111.09 166,666.68 3,694,444.41 assets High-end 163 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Information Industry Chain Granted by the Finance Bureau of the Economic and Technologica ll Development Zone 2015 project equipment 29,981,766.6 28,835,966.0 Related to 1,145,800.56 investment 0 4 assets subsidies Zhengzhou C ity Finance B ureau in 2011 and 2012 has been the acc eptance of th Related to 2,412,222.08 86,666.64 2,325,555.44 e provincial i assets ndustrial stru cture adjustm ent project th e second batc h of funds Strategic emerging 25,500,000.0 24,500,000.0 Related to industry 1,000,000.00 0 0 assets Development project funds High-tech Zone Related to appropriated 5,866,666.65 213,333.34 5,653,333.31 assets substrate project The production 19,241,899.3 18,488,427.6 Related to line of 753,471.70 7 7 assets incentive funds 164 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Special funds for 2015 scientific and Related to technological 6,158,080.51 301,701.96 5,856,378.55 assets achievements transform project G8.5tft-lcd glass substrate manufacturin g precision 45,000,000.0 45,000,000.0 Related to intelligent 0 0 assets digital workshop construction project Investment in the Central Budget of Related to 3,933,333.41 399,999.96 3,533,333.45 Strategic assets emerging Industries 2011Key technical Related to transformatio 491,666.70 49,999.98 441,666.72 assets n project funds 2011Strategic emerging Related to industry 565,416.70 57,499.98 507,916.72 assets development funds 2012Electron ic Information Related to Industry 983,333.30 100,000.02 883,333.28 assets Development Assistance Project Subsidies Related to 9,399,999.99 400,000.02 8,999,999.97 from the assets 165 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Bureau of Finance of the Economic and technological Development Zone 2013Strategic emerging Related to 392,777.78 23,333.34 369,444.44 industry assets funds Mianyang Municipal Related to Bureau of 236,666.66 236,666.66 assets Finance Special funds Glass substrate finishing Related to 548,333.33 548,333.33 production assets Transformati on Project Special fund subsidy for industrial Related to development 433,888.86 16,666.68 417,222.18 assets of municipal financial bureau 2013 fund of Related to strategic new 3,944,444.44 28,333.38 3,916,111.06 assets industry 2014 Provincial Related to funds for 0.00 assets Science and Technology Sichuan Province 18,608,333.3 17,716,666.6 Related to Industrial 891,666.66 5 9 assets Transformati on and 166 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 upgrading Project 2015 Special funds for Industrial 39,852,753.5 38,251,660.9 Related to 1,601,092.62 Development 4 2 assets in 2016 Technical Reformation of key Green Related to Technology 8,400,000.00 8,400,000.00 assets for Glass substrate (840) Intelligent manufacturin g pilot Related to demonstratio 1,000,000.00 1,000,000.00 assets n project subsidy fund (100) Group transfer subsidy (National key R&D Program, key basic Related d to 915,400.00 915,400.00 Materials income Technology Promotion and industrializati on Project, 2016) Intelligent Manufacturin Related to g New Mode 3,990,000.00 3,990,000.00 assets Engineering Project Annual Related to production of 4,700,000.00 4,700,000.00 assets 10 million 167 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 square meters high aluminum ultra-thin display panel glass items 2017 funds for technological Transformati 30,000,000.0 30,000,000.0 Related to on of 0 0 assets Electronic Information Industry Subsidy fund for technical transformatio Related to n of 2,580,000.00 2,580,000.00 assets industrial enterprises in Fuzhou Technical Transformati on of Industrial Enterprises in Related to 1,290,000.00 1,290,000.00 Fuzhou and assets supporting subsidy funds in Fuqing City The Development Bureau of Economic and Trade Development 13,417,100.0 12,969,863.3 Related to 447,236.64 of Wuhu 0 6 assets Economic and technological Development Zone in 2017 168 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 "Triple creation" high-end equipment and new material Tunghsu group limited Related to transfer to 150,400.00 150,400.00 assets project five funds China National Building Material International Engineering Related to 496,000.00 496,000.00 Group Co., assets Ltd. transferred funds for 11-625 projects Bengbu Glass Industry Design and Research Institute Co., Related to Ltd., China 521,000.00 521,000.00 assets Building Materials Co., Ltd., transferred to indirect funds (subject 4) Factory building Related to construction 854,475.22 15,349.86 839,125.36 assets award 877,500 Special fund Related to 114,399.00 114,399.00 for assets 169 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 automobile development Project subsidy from the Bureau of Related to Finance of 6,966,547.39 294,478.50 6,672,068.89 assets the Economic Development Zone National key R&D Program key basic Related d to 2,280,000.00 2,280,000.00 Materials income Technical Project subsidy Financial subsidy for the major scientific and technological achievements Related to transformatio 1,000,000.00 1,000,000.00 assets n project of "High Aluminium cover Glass complete Technology" 017 Special Fund for Industrial Related to Development 5,000,000.00 72,463.76 4,927,536.24 assets in Economic Development Zone Key new Related to product 160,000.04 19,999.98 140,000.06 assets projects Financial Related to 3,366,000.00 153,000.00 3,213,000.00 allocation for assets 170 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Strategic emerging Industries in Sichuan Provinc Technical revamping items of 300,000 Related to 644,999.92 43,000.02 601,999.90 production assets Line of Pole-less Lights Ballast Intelligent Engineering Laboratory of Related to High 1,783,333.29 100,000.02 1,683,333.27 assets efficiency Lighting system Research and development Related d to 2,226,000.00 2,226,000.00 project funds income 159 District level technical Related d to reform 1,500,000.00 1,500,000.00 income project subsidy 150 17 year loan Related d to discount 1,127,484.71 910,455.00 217,029.71 income 4.871 million Science and Related d to education 1,787,595.41 1,787,595.41 income support fund Subsidies for Related d to fuel cell 4,000,000.00 4,000,000.00 income projects Loan Related d to 0.00 discount income Special funds 400,000.00 400,000.00 Related d to for scientific 171 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 research 40 income Glass substrate 86,971,803.6 86,313,607.3 Related d to 658,196.34 project 6 3 income subsidy fund 601,213,644. 10,500,000.0 21,384,592.0 589,418,597. Total 910,455.00 -- 42 0 4 39 52.Other Non-current liabilities In RMB Items Balance in year-end Balance in year-begin CDB financing 608,000,000.00 608,000,000.00 Total 608,000,000.00 608,000,000.00 Other notes: Notes:According to the investment contract signed by Tunghsu Optoelectronic Technology Co., Ltd, Wuhu Tunghsu optoelectronic Technology Co., Ltd., Fuzhou Tunghsu Investment Development Co., Ltd and China Development Fund Co., Ltd, China Development Fund Co., Ltd increased the capital of RMB 500,000,000.00 to Fuzhou Tunghsu Investment Development Co., Ltd, annually enjoying a fix rate of return. After the project is completed, Tunghsu Optoelectronic Technology Co., Ltd shall make the installment redemption to the stake held by China Development Fund Co., Ltd. According to Tunghsu Optoelectronic Technology Co., Ltd., after the completion of the project,Yingkou Coastal Development Construction Group Co., Ltd.and China Development Fund Co., Ltd, China Development Fund Co., Ltd increased the capital of RMB 108,000,000.00 to Tunghsu (Yingkou)OptoelectronicDisplay Co., Ltd., annually enjoying a fix rate of return. After the project is completed, Tunghsu Optoelectronic Technology Co., Ltd shall make the installment redemption to the stake held by China Development Fund Co., Ltd. 53.Stock capital In RMB Increase/decrease this time (+ , - ) Balance Balance Issuing of new Transferred Year-beginning Bonus shares Other Subtotal year-end share from reserves 5,730,250,118. 5,730,250,118. Capital share 00 00 54. Other equity instruments (1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-end 172 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-end 55. Capital reserves In RMB Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period Share premium 21,760,882,845.16 270,364.11 21,760,612,481.05 Other capital reserves 226,522,375.26 1,592,850.23 195,000,000.00 33,115,225.49 Total 21,987,405,220.42 1,592,850.23 195,270,364.11 21,793,727,706.54 Other exlanation, including changes and reasons for changes: The parent company acquired Tunghsu (Yingkou) Optoelectronic Display Co., Ltd. at the end of June 2018, which belongs to the merger of enterprises under the same control. According to the regulations of the standards, it needs to carry out retroactive adjustment of the previous data, and other retroactive adjustment of capital reserve at the beginning of the period will increase by 195 million yuan. The capital premium (equity premium) is the result of the merger of Tunghsu (Yingkou) in the current period. The increase of other capital reserves in this period is the increase of other capital reserves caused by the disposal of subsidiary Xuyou (Wuxi) company in this period. The decrease of other capital reserves is the adjustment of capital reserves caused by the merger of Tunghsu (Yingkou). 56.Treasury stock In RMB Decrease in the current Items Year-beginning balance Increase in the current Year-end balance period The obligation to repurchase equity 4,422,320.00 4,422,320.00 incentive Total 4,422,320.00 4,422,320.00 57. Other comprehensive income In RMB Amount of current period Less: Amount for Previously rec After - tax a After - tax a Year-beginni Year-end Items the period ognized in pro Less: ttributable t ttributable t ng balance balance before inco fit or loss in ot Income tax o the parent o minority s me tax her comprehen company hareholders sive income 173 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 2.Other comprehensive income reclassifiable to profit or loss in -4,518.45 16,582.62 2,487.39 7,752.38 6,342.85 3,233.93 subsequent periods Balance form the translation of -4,518.45 16,582.62 2,487.39 7,752.38 6,342.85 3,233.93 foreign currency financial statements Total of Other comprehensive income -4,518.45 16,582.62 2,487.39 7,752.38 6,342.85 3,233.93 58. Special reserves In RMB Decrease in the current Items Year-beginning balance Increase in the current Year-end balance period Safety production cost 1,983,921.21 6,552.46 1,990,473.67 Total 1,983,921.21 6,552.46 1,990,473.67 59. Surplus reserve In RMB Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period Statutory surplus reserve 224,133,824.86 224,133,824.86 Total 224,133,824.86 224,133,824.86 60. Retained profits In RMB Items Amount of current period Amount of previous period Retained earnings before adjustments at the year 3,010,372,296.37 1,823,695,278.31 beginning Total adjustment of retained earnings at the -157,612,768.10 beginning of the year Retained earnings after adjustments at the year 3,010,372,296.37 1,666,082,510.21 end Add: Net profit attributable to owners of the 858,296,089.08 1,733,201,682.30 Company for the period Less: Appropriation to statutory surplus reserve -36,089,754.38 Common stock dividend payable 401,117,508.27 352,822,141.76 Common stock dividends converted to shares 3,467,550,877.18 3,010,372,296.37 174 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 As regards the details of adjusted the beginning undistributed profits (1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning undistributed profits are RMB 0.00. (2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.00. (3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 . (4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits are RMB 0.00 (5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 . 61. Business income, Business cost (1)Business income, Business cost In RMB Amount of current period Amount of previous period Items Income Cost Income Cost Main business 9,999,123,145.77 8,447,438,316.36 4,868,274,147.73 3,472,556,236.95 Other business 1,130,728,645.11 574,551,580.73 8,164,456.37 1,406,573.27 Total 11,129,851,790.88 9,021,989,897.09 4,876,438,604.10 3,473,962,810.22 62. Business tax and subjoin In RMB Items Amount of current period Amount of previous period Urban construction tax 13,771,482.99 15,039,190.71 Education surcharge 10,156,508.49 10,925,884.41 Property tax 6,512,792.08 6,283,183.73 Land use tax 10,858,460.78 9,674,304.80 vehicle and vessel usage tax 39,819.43 10,822.44 Stamp tax 4,395,608.94 6,119,241.19 Land VAT 140,193,026.84 Environmental protection Tax 168,421.15 Other 876,060.45 Total 186,096,120.70 48,928,687.73 63.Sales expenses In RMB Items Amount of current period Amount of previous period 175 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Wage and welfare insurance 32,420,959.74 9,574,777.77 Shipment 25,834,245.26 18,933,927.82 Travel 7,538,832.95 1,598,038.88 Business expenses 8,817,205.59 1,896,338.87 Office fee 3,923,420.20 410,144.17 Consumables and repairs 562,745.82 283,143.75 Depreciation 730,676.07 266,676.23 Advertising 963,064.93 874,528.43 Consultancy services 6,399,309.05 5,103,982.43 \Technology Services 3,967,469.34 Other 2,734,763.47 3,514,694.22 Total 93,892,692.42 42,456,252.57 64. Administrative expenses In RMB Items Amount of current period Amount of previous period Wages and benefits 141,992,567.21 83,952,482.53 Business expenses 7,359,258.97 1,993,042.89 Labor protect fee 1,128,621.91 1,218,523.31 Office fees 6,110,342.22 4,516,755.75 Travel fees 8,120,703.11 3,055,829.14 Publicize Fees 3,787,328.88 2,256,407.59 Miscellaneous charges 7,514,986.97 1,855,091.84 Depreciation accumulative 39,025,365.01 28,206,344.83 Low value consumables and repair costs 3,471,887.09 1,292,268.34 Test expenses 125,698,218.19 62,869,570.14 Consultation fees 21,680,834.70 12,630,531.96 Rent, water, electricity and property 17,785,438.11 8,564,803.02 charges Communication expenses 674,807.32 206,798.13 Equity incentive cost 796,800.00 Other 5,627,343.07 15,963,423.86 Total 389,977,702.76 229,378,673.33 176 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 65. Financial expenses In RMB Items Amount of current period Amount of previous period Interest expenses 595,740,917.45 572,259,300.47 Less:Interest income 198,162,232.24 196,711,767.79 Net interest expenses 397,578,685.21 375,547,532.68 Exchange gains and losses -11,686,449.38 -12,691,241.36 Financial institution 2,132,029.71 1,966,716.26 Note discount rate 4,213,453.93 0.00 Financing 2,829,302.85 3,353,312.92 Other 160,093.98 15,607.13 Total 395,227,116.30 368,191,927.63 Other notes: 66. Asset impairment loss In RMB Items Amount of current period Amount of previous period I. Bad debt loss -5,903,665.15 -703,581.80 II.Losses for falling price of inventory 6,962,254.46 205,619.77 Total 1,058,589.31 -497,962.03 67. Gains from changes in fair value 68. Investment income In RMB Items Amount of this period Amount of last period Long-term equity investment income by equity 11,836,624.48 -15,506,492.83 method Disposal of investment income from long-term -2,053,558.36 equity investments Financing income 13,923,452.07 22,183,417.04 Total 23,706,518.19 6,676,924.21 69. Assets disposal income In RMB 177 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Source Amount of current period Amount of previous period Non-current assets disposal gains and -664,826.45 losses 70.Other income In RMB Source Amount of current period Amount of previous period Government Subsidy 108,362,056.52 86,680,000.00 71. Non-Operation income In RMB Items Amount of current period Amount of previous period Recorded in the amount of the non-recurring gains and losses Debt restructuring gains 484,207.00 484,207.00 Government Subsidy 320,000.00 69,887,507.52 320,000.00 Other 95,955.07 95,955.07 Other Non-Operation income 5,045,734.86 621,007.17 5,045,734.86 Total 5,945,896.93 70,508,514.69 5,945,896.93 (1)Government subsidy reckoned into current gains/losses In RMB Whether the impact of Whhether Amount of Amount of Assets-relate Subsidy Issuing subsidies on Issuing body Nature special current previous d/income items reason the current subsidies period period –related profit and loss Grants obtained due to Special funds conforming for the use of Fuqing City to the local Subsidy Related to foreign Finance supporting Yes No 300,000.00 income capital in Bureau policies such 2017 as local government’s investment attraction 178 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 policy Grants obtained due to conforming to the local Huzhou Listing Subsidy supporting Related to Finance Yes No 20,000.00 subsidy policies such income Bureau as local government’s investment attraction policy A subsidy obtained due to undertaking the state’s 2015 safeguarding Depreciation Provincial for protection of equipment Science and Subsidy for a certain Related to for provincial No No 301,701.96 Technology utility or income achievements Bureau socially transformatio necessary n project product supply or price control function. A subsidy obtained due to undertaking 1.24 Youfang the state’s government safeguarding Zhenjiang Yangzhong Subsidy for protection Related to Jinshan City Finance No No 600,000.00 for a certain income talents Bureau utility or scheme socially funding necessary product supply or price control 179 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 function. Grants obtained due Zhenjiang to research Science and 3.14 The 5th and Technology Zhenjiang Subsidy development, Related to Bureau, No No 20,000.00 Excellent technical income Zhenjiang Patent Award renovation Finance and Bureau transformatio n, etc. Grants obtained due to research 3.24 and Science and Technology Subsidy development, Related to Technology No No 15,000.00 Innovation technical income Bureau, Award. renovation and transformatio n, etc. Grants obtained due Investment to the country and Subsidies encourage of “Double and support Hundred Henan Office specific Plan” Project of industry Subsidy Related to industries No No 100,000.02 granted by and assets (Obtained in the People's information accordance Government with the of Henan national Province policies and regulations) Grants obtained due TFT glass Zhengzho u to the country substrate Science & Subsidy encourage Related to No No 4,999.98 technology Technology and support assets R& D fund Bureau specific industries (Obtained in 180 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 accordance with the national policies and regulations) Grants obtained due to the country encourage and support TFT glass Zhengzho u specific substrate Municipal Subsidy Related to industries No No 333,333.36 project Finance assets (Obtained in Subsidy Bureau accordance with the national policies and regulations) Investment and Subsidies within Grants Budget for obtained due Technologica to the country l encourage Transformati and support National on Project by specific Development Subsidy Related to National industries No No 466,666.68 & Reform assets Development (Obtained in Commission and Reform accordance Commission with the and the national Ministry of policies and Industry and regulations) Information Technology Grants obtained due TFT glass Zhengzhou to the country substrate Municipal Subsidy encourage Related to No No 666,666.66 project Finance and support assets Subsidy Bureau specific industries (Obtained in 181 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 accordance with the national policies and regulations) Grants obtained due Special to the country Funds for encourage Major and support Scientific and Zhengzho u specific Technical Subsidy Related to Technology industries No No 33,333.36 Projects by assets Bureau (Obtained in Finance accordance Bureau of with the Zhengzhou national City policies and regulations) Grants Financial obtained due Supports for to the country National Key Zhengzho u encourage Industry and Economic and support Technical and specific Subsidy Related to Transformati Technology industries No No 466,666.68 assets on Projects Development (Obtained in Granted by Zone Finance accordance the Municipal Bureau with the Finance national Bureau policies and regulations) Financial Grants Supports for obtained due Industrial to the country Development encourage Granted by Zhengzhou and support the Finance Municipal Subsidy specific Related to No No 233,333.34 Bureau of the Finance industries assets Economic Bureau (Obtained in and accordance Technologica with the l national Development policies and 182 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Zone regulations) Grants obtained due to the country encourage Funds for and support Independent Henan specific Innovation of provincial Subsidy Related to industries No No 199,999.98 Provincially finance assets (Obtained in Supported department accordance Enterprises with the national policies and regulations) Grants obtained due to the country encourage and support Supporting Henan specific Funds on provincial Subsidy Related to industries No No 66,666.66 Finance finance assets (Obtained in Discounts department accordance with the national policies and regulations) Grants obtained due to the country Funds for encourage Education, and support Zhengzho u Science and specific Municipal Subsidy Related to Culture industries No No 49,999.98 Finance assets Granted by (Obtained in Bureau the Finance accordance Bureau with the national policies and regulations) Supporting Zhengzho u Grants Subsidy Related to Funds for Economic obtained due No No 93,333.36 assets Industrial and to the country 183 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Structure Technology encourage -adjusting Development and support Projects Zone Finance specific Granted by Bureau industries the Regional (Obtained in Finance accordance Bureau with the national policies and regulations) Grants obtained due to the country encourage and support Zhengzhou Industry specific Municipal Subsidy Related to discount and industries No No 53,333.34 Finance assets expenses (Obtained in Bureau accordance with the national policies and regulations) Grants obtained due to the country Financial encourage discount of and support Henan Department specific State-owned of Finance of Subsidy Related to industries No No 166,666.68 assets Henan assets (Obtained in holding Province accordance Operation with the Co., Ltd. national policies and regulations) Zhengzhou Grants 2013 Economic obtained due Industrial and to the country restructuring Subsidy Related to Technology encourage No No 160,000.02 project assets Development and support financial Zone Finance specific funds Bureau industries 184 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (Obtained in accordance with the national policies and regulations) Special Grants Funds for obtained due High-end to the country Information encourage Industry and support Henan Office Chain specific of industry Subsidy Related to Granted by industries No No 166,666.68 and assets thFinance (Obtained in information Bureau of the accordance Economic with the and national Technologica policies and l Develop regulations) Grants obtained due to the country encourage Zhengzho u and support 2015 project Municipal specific equipment Commission Subsidy Related to industries No No 1,145,800.02 investment of industry assets (Obtained in subsidies and accordance information with the national policies and regulations) Zhengzhou Grants City Finance Henan obtained due Bureau in Provincial to the country 2011 and Department encourage 2012 has of Finance and support Subsidy Related to been the and specific No No 86,666.64 assets acceptance of Zhengzhou industries the provincial Municipal (Obtained in industrial Bureau of accordance structure Finance with the adjustment national 185 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 project the policies and second batch regulations) of funds Grants obtained due Zhengzhou to the country Economic encourage and and support Director of Technologica specific the year Subsidy Related to l industries No No 200,000.00 quality Award assets Development (Obtained in 2016 Zone accordance Management with the Committee national policies and regulations) Grants obtained due to the country Henan encourage College Provincial and support graduate Department specific Subsidy Related to employment of Human industries No No 492,000.00 assets apprenticeshi Resources (Obtained in p subsidy and Social accordance Security with the national policies and regulations) Grants obtained due to the country Zhengzhou encourage Municipal and support Introducing Bureau of specific foreign Subsidy Related to Human industries No No 50,000.00 intellectual assets Resources (Obtained in work funds and Social accordance Security with the national policies and regulations) The first National Award Grants Yes No 399,999.97 Related to 186 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 batch of Development obtained due assets central and Reform to research budgetary Commission and investment in development, strategic technical emerging renovation industry and projects transformatio n, etc. Grants obtained due Mianyang Mianyang to research City's 2011 City and key Economic Subsidy development, Related to technology Yes No 50,000.00 and technical assets renovation Information renovation completion Committee and project funds transformatio n, etc. Grants obtained due 2011 to research Suchuan Strategic and Economic Industry Subsidy development, Related to and Yes No 57,500.00 Development technical assets Information Promotion renovation Committee Fund and transformatio n, etc. Ministry of Grants Industry and obtained due 2012 Information to research Electronic Technology and Information Electronic Subsidy development, Related to Yes No 100,000.02 Industry Information technical assets Development Industry renovation Fund Project Fund and Management transformatio Office n, etc. Economic Economic Grants and Development Subsidy obtained due Related to Yes No 400,000.00 Technologica Zone to the country assets l Government encourage 187 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Development and support Zone Finance specific Bureau industries subsidy (Obtained in accordance with the national policies and regulations) Grants obtained due PDP glass to research substrate Provincial and finishing Economic Subsidy development, Related to technology and Yes No 23,333.33 technical assets achievements Information renovation transformatio Committee and n project transformatio n, etc. Grants obtained due The first to research batch of Mianyang and provincial Science and Subsidy development, Related to Yes No 111,111.12 science and Technology technical assets technology Bureau renovation funds in 2014 and transformatio n, etc. Grants obtained due 2015 Sichuan to research Province Ministry of and Industrial Industry and Subsidy development, Related to Transformati Yes No 725,000.00 Information technical assets on and Technology renovation upgrading and Project transformatio n, etc. 2013 Provincial Grants Strategic Economic Subsidy obtained due Related to Yes No 16,666.66 Emerging and to research assets Industry Information and 188 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Funds Committee development, Disbursed by technical the Economic renovation Development and Zone transformatio Government n, etc. on behalf of the Provincial Department of Finance Grants obtained due Special funds to research Provincial funded by the and Economic Mianyang Subsidy development, Related to and Yes No 10,000.00 Municipal technical assets Information Finance renovation Committee Bureau and transformatio n, etc. Grants obtained due Special fund to research Provincial for industrial and Economic development Subsidy development, Related to and Yes No 18,333.33 of the technical assets Information Finance renovation Committee Bureau and transformatio n, etc. 2013 Strategic Grants Emerging obtained due Industry to research Funds Provincial and Disbursed by Economic Subsidy development, Related to the Economic and Yes No 166,666.67 technical assets Development Information renovation Zone Committee and Government transformatio on behalf of n, etc. the Provincial Department 189 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 of Finance Grants obtained due Economic to research Development and Zone 2016 Municipal Subsidy development, Related to Yes No 980,113.64 Industrial government technical assets Development renovation Special Fund and transformatio n, etc. Grants Economic obtained due and to research Technologica Economic and l Development Subsidy development, Related to Yes No 294,478.53 Development Zone technical assets Zone Finance Government renovation Bureau and subsidy transformatio n, etc. Production of Grants high-strength obtained due and ultra-thin to research aluminosilica Mianyang and te touch Science and Award development, Related to screen glass Yes No 150,000.00 Technology technical income achievement Bureau renovation conversion and project based transformatio on float n, etc. process Grants obtained due December of Mianyang to research 2016 Economic and High-tech Development Award development, Related to Yes No 100,000.00 enterprises Bureau technical income recognize Finance renovation subsidies Bureau and transformatio n, etc. 3D Provincial Award Grants Yes No 300,000.00 Related to 190 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 High-Permea Science and obtained due income bility Super Technology to research Ultra High Department and Strength development, Al-Si technical (advanced) renovation and transformatio n, etc. Grants obtained due to the country encourage Finance and support Bureau's Chenzhou specific Subsidy Related to subsidy to Finance industries Yes No 153,000.00 income urban public Bureau (Obtained in transport accordance with the national policies and regulations) Grants obtained due to the country encourage and support Provincial Key new specific Science and Subsidy Related to product industries Yes No 19,999.98 Technology assets projects (Obtained in Departmen accordance with the national policies and regulations) Grants Financial obtained due allocation for Provincial to the country Strategic Development Subsidy encourage Related to emerging Yes No 18,200.00 and Reform and support assets Industries in Commission specific Sichuan industries Province (Obtained in 191 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 accordance with the national policies and regulations) Grants obtained due to the country Technical encourage revamping and support items of Provincial specific 300,000 Subsidy Related to Economic industries Yes No 43,000.02 production assets Commission (Obtained in Line of accordance Pole-less with the Lights Ballast national policies and regulations) Grants obtained due to the country Intelligent encourage Engineering and support Provincial Laboratory of specific Development Subsidy Related to High industries Yes No 90,000.00 and Reform assets efficiency (Obtained in Commission Lighting accordance system with the national policies and regulations) Foreign trade SMEs Subsidy Related to develop Yes No 28,000.00 income market subsidies Grants Shijiazhuang obtained due Technical Developme to research Subsidy Related to reconstructio nt and and Yes No 133,333.34 assets n Reform development, Commission technical renovation 192 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 and transformatio n, etc. Grants obtained due to conforming Shijiazhuang Grant of to the local High-tech Glass Subsidy supporting Related to Zone Yes No 713,333.34 Substrate policies such assets Management Project as local Committee government’s investment attraction policy Grants obtained due to conforming Shijiazhuang to the local Industry High-tech Subsidy supporting Related to Development Zone Yes No 233,333.34 policies such assets Fund Management as local Committee government’s investment attraction policy Grants obtained due to research and Project Shijiazhuang Subsidy development, Related to finance Finance Yes No 15,666.66 technical assets discount Bureau renovation and transformatio n, etc. Grant of Grants Industry obtained due Shijiazhuang Revitalizatio Subsidy to the country Related to Finance Yes No 3,257,666.66 n and encourage assets Bureau Technology and support Reconstructio specific 193 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 n Project industries (Obtained in accordance with the national policies and regulations) Grants obtained due to Provincial conforming strategic Shijiazhuang to the local emerging Development Subsidy supporting Related to Yes No 166,666.66 industries of and Reform policies such assets special grant Commission as local funds government’s investment attraction policy Grants obtained due to research Technology and Shijiazhuang reconstructi Subsidy development, Related to Finance Yes No 1,078,000.00 on Special technical assets Bureau funds renovation and transformatio n, etc. Grants obtained due to Provincial conforming strategic Shijiazhuang to the local emerging Development Subsidy supporting Related to Yes No 1,000,000.00 industries of and Reform policies such assets special grant Commission as local funds government’s investment attraction policy Production Shijiazhuang Subsidy Grants Related to Yes No 753,471.70 line reward High-tech obtained due assets 194 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 fund Zone to conforming to the local supporting policies such as local government’s investment attraction policy Grants Wuhu obtained due Grant of Economic to research Industry and and Revitalizatio Technologica Subsidy development, Related to n and Yes No 116,666.64 l technical assets Technology Development renovation Reconstructio Zone Finance and n Project Bureau transformatio n, etc. Grants obtained due Wuhu to Economic conforming Grant of and to the local Government Technologica Subsidy supporting Related to Infrastructure Yes No 1,122,300.00 l policies such assets (Land Development as local repaymen) Zone Finance government’s Bureau investment attraction policy Grants obtained due to research Yangzhong Equipment and City investment Award development, Related to Development Yes No 109,100.00 incentive technical income and Reform funds renovation Commission and transformatio n, etc. Center Wuhu City Award Grants Yes No 100,000.00 Related to 195 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Innovation Finance obtained due income Team to the country Support Fund encourage and support specific industries (Obtained in accordance with the national policies and regulations) Grants obtained due to conforming Jiangsu to the local Taizhou New supporting Technology Award 36,497,930.5 Related to Energy policies such Yes No reward 0 income Management as local Committe government’s investment attraction policy Wuhu Grants Economic obtained due and to the country Technologica encourage l Development and support Development Zone specific Zone Economic Award Related to industries Yes No 114,800.00 Economic and Trade income (Obtained in and Trade Development accordance Development Bureau with the Bureau national Export policies and Increase regulations) Award Development Development Grants Zone Zone Award obtained due 13,312,000.0 Related to Yes No Economic Economic to 0 income and Trade and Trade conforming 196 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Development Development to the local Bureau Bureau supporting (2012-2016) policies such Income Tax as local Refund government’s investment attraction policy Grants obtained due to the country Wuhu Central Party encourage Economic Committee and support and Organization specific Technologica Related to Department Subsidy industries Yes No 500,000.00 l income allocates the (Obtained in Development third batch of accordance Zone Finance support funds with the Bureau national policies and regulations) Grants obtained due to Suqian conforming Economic Suqian to the local Development Economic supporting Related to Zone Finance Development Subsidy Yes No 230,000.00 policies such income Bureau talent Zone Finance as local introduction Bureau government’s special funds investment attraction policy Grants obtained due Grant of to research Shiijiazhuang Glass-tube and Municipal Secondary development, Related to Finance Subsidy Yes No 5,000.01 Environment technical assets Bureau al Protection renovation and transformatio n, etc. 197 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 69,887,507.5 Total -- -- -- -- -- 320,000.00 -- 2 72.Non-Operation expense In RMB Amount of current period Amount of previous period The amount of non-operating Items gains & lossed Donation expense 268,500.00 268,500.00 Liquidated damages 2,038,214.22 472,448.13 2,038,214.22 Other 461,097.79 130,049.52 461,097.79 Total 2,767,812.01 602,497.65 2,767,812.01 73. Income tax (1) Details of income tax In RMB Items Amount of current period Amount of previous period Current Income tax 266,217,607.40 180,288,675.05 Deferred income tax 15,913,168.84 11,225,209.48 Total 282,130,776.24 191,513,884.53 (2)Accounting profit and tax expense adjustment process In RMB Items Amount of current period Total profit 1,176,191,505.48 Income tax expense at statutory / applicable tax rates 176,428,725.82 Effect of different tax rates applicable to subsidiaries 59,083,388.27 Income tax adjustments on prior periods -4,817,305.09 Effect of non-taxable income 311,512.14 Affect the use of deferred tax assets early unconfirmed -1,513,452.40 deductible losses The current period does not affect the deferred tax assets 52,637,907.50 recognized deductible temporary differences or deductible loss Income tax expense 282,130,776.24 198 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 74 .Other comprehensive income Seen in Note 75.Items of Cash flow statement (1)Other cash received from business operation In RMB Items Amount of current period Amount of previous period Interest income 2,562,489.64 47,314,940.12 Government subsidy 61,907,216.56 58,468,830.50 Deposits income 638,622,319.42 97,933,974.36 Other 27,459,273.74 29,668.70 Total 730,551,299.36 203,747,413.68 Explanation on other cash received in relation to operation activities: (2)Other cash paid related to operation activities In RMB Items Amount of current period Amount of previous period Deposits income 1,021,839,493.62 752,985,658.23 Consultation Services fee 30,513,337.97 13,031,790.06 Business expenses 17,688,855.86 3,187,285.00 Transportation fees 4,166,872.76 2,301,143.56 Advertising expenses 5,182,114.95 3,069,680.35 Travel expenses 20,052,329.77 4,359,728.53 Office expenses 24,347,292.88 20,222,253.34 Bank fees 25,958.40 4,791.60 Shipping fee 13,487,314.75 2,608,089.38 Petty cash 9,329,418.54 1,242,892.54 Security service charge 862,988.91 72,000.00 Vehicle charge 193,216.07 3,120.00 Communication expense 1,542,212.42 199,286.59 Rent water and electricity property 60,663,860.42 8,317,828.86 Residual insurance 1,204,391.96 199 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Labour protection fee 2,939,306.44 1,472,973.11 conference fee 2,145,102.71 664,731.28 Traffic expenses 44,596,072.72 1,546,078.81 Recruitment fees 138,443.69 1,037.74 Low-value consumables and repair costs 8,087,098.53 386,017.64 Research and development fee 37,388,611.51 25,648,041.28 Information system fee 455,883.63 2,414.71 Customs and agency fees 616,441.07 36,410.00 Other financial expenses 6,296,589.32 22,588.12 Other expenses 22,417,945.63 9,290,478.07 Total 1,336,181,154.53 850,676,318.80 Explanation on other cash paid in relation to operation activities: (3)Cash received related to other investment activities In RMB Items Amount of current period Amount of previous period Fixed deposit 200,000,000.00 190,962.49 Total 200,000,000.00 190,962.49 Explanation on cash received from other investment activities: Notes (4)Cash paid related to other investment activities In RMB Items Amount of current period Amount of previous period Cash flow 317,956,820.99 50,000,000.00 Other 280,256.00 Total 318,237,076.99 50,000,000.00 Explanation on cash payable from other investment activities: (5)Other cash received in relation to financing activities In RMB Items Amount of current period Amount of previous period 200 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Interest received 210,076,517.70 133,596,848.85 Financing lease 280,000,000.00 103,800,000.00 Cash flow 75,708,760.40 224,500,000.00 Total 565,785,278.10 461,896,848.85 Explanation on other cash received in relation to financing activities: (6)Cash paid related with financing activities IIn RMB Items Amount of current period Amount of previous period Bank commission 2,106,071.31 1,937,116.55 Credit guarantee 4,076,591.14 27,620,596.86 Bank financing 1,900,000.00 1,130,000.00 Financial lease rent 299,742,705.14 419,037,111.72 Cash flow 332,177,258.30 50,000,000.00 Total 640,002,625.89 499,724,825.13 Explanation on cash paid related with financing activities: 76. Supplement Information for cash flow statement (1)Supplement Information for cash flow statement In RMB Supplement Information Amount of current period Amount of previous period I. Adjusting net profit to cash flow from -- -- operating activities Net profit 894,060,729.24 685,767,271.37 Add: Impairment loss provision of assets 1,058,589.31 -497,492.48 Depreciation of fixed assets, oil and gas 475,906,123.13 399,428,761.84 assets and consumable biological assets Amortization of intangible assets 42,850,991.09 9,559,826.81 Amortization of long-term deferred expenses 10,182,574.85 4,155,040.09 Loss on disposals of fixed assets, intangible 664,826.45 30,537.14 assets and other long-term assets ("-" for 201 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 gains) Financial cost 588,837,294.67 415,537,608.52 Investment losses -23,706,518.19 -6,676,924.21 Decrease in deferred income tax assets 23,648,059.15 11,776,372.44 Increased in deferred income tax liabilities 2,146,288.22 -11,805.12 Decrease in inventories 703,598,779.36 -1,025,419,094.41 Decease in operating receivables -16,508,886,465.22 -2,261,677,453.88 Increase in operating payables 13,873,256,015.60 403,077,538.11 Cash flows from operating activities 83,617,287.66 -1,364,949,813.78 2.Significant investment and financing -- -- activities not affecting cash flows 3.Changes in cash and cash equivalents: -- -- Ending balance of cash 21,442,933,365.47 22,463,648,543.19 Less: Beginning balance of cash equivalents 25,114,660,756.25 25,537,802,101.80 Net increase of cash and cash equivalents -3,671,727,390.78 -3,074,153,558.61 (2) Net Cash paid of obtaining the subsidiary In RMB Amount Cash or Cash Equivalent of Enterprise consolidation that Occurred 111,799,996.00 in the Current Period Paid in the Current Period Including: -- Huaxi Nanchong Automobile Co., Ltd. 44,800,000.00 Zhongcheng national construction co., Ltd. 39,999,996.00 Shenzhen Sanbao Innovation Intelligent Co., Ltd. 27,000,000.00 Less:Cash or Cash Equivalent Owned by Subsidiary on the 4,037,901.86 Purchasing Date Including: -- Huaxi Nanchong Automobile Co., Ltd. 3,265.51 Zhongcheng national construction co., Ltd. 959,251.79 Shenzhen Sanbao Innovation Intelligent Co., Ltd. 3,075,384.56 Including: -- Received Net Cash Paid by Subsidiary 107,762,094.14 Other notes: 202 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (3) Net Cash receive of disposal of the subsidiary In RMB Amount Cash or cash equivalents received by the disposal company in the 550,000,000.00 current year Including: -- Xuyou Electronic Materials Technology (Wuxi) Co., Ltd. 550,000,000.00 Less:Cash and cash equivalents held by a controlling subsidiary 156,272,347.41 Including: -- Xuyou Electronic Materials Technology (Wuxi) Co., Ltd. 156,272,347.41 Including: -- Net cash received from disposal subsidiaries 393,727,652.59 (4)Composition of cash and cash equivalents In RMB Items Balance in year-end Balance in year-beginning 21,442,933,365.47 25,114,660,756.25 I. Cash 460,584.36 2,461,658.94 Including: cash in treasury Bank savings could be used at any time 21,287,528,272.13 24,971,467,452.68 Other monetary capital could be used at any 154,944,508.98 140,731,644.63 time III. Balance of cash and cash equivalents at 21,442,933,365.47 25,114,660,756.25 the period end 77. Note of statement of changes in the owner's equity Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.: 78. The assets with the ownership or use right restricted In RMB Items Closing book value Causation of limitation Mainly term deposits, deposits and partial Monetary funds 2,351,663,690.33 litigation freezes Set up the mortgage and the fixed assets of Fixed assets 10,433,568,773.50 the financial lease Intangible assets 350,282,096.92 Pledge loans 203 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Construction in progress 1,210,207,009.84 Pledge loans Investment property 66,930,130.01 Pledge loans Total 14,412,651,700.60 -- Other notes : 79. Foreign currency monetary items (1) Foreign currency monetary items In RMB Closing foreign currency Closing convert to RMB Items Exchange rate balance balance Cash and bank balances Including:USD 5,389,780.01 6.6166 35,662,018.41 Euro 38,868.80 7.6515 297,404.62 HKD 18,233.84 0.8431 15,372.95 JPY 251,464,500.95 0.0599 15,066,244.11 GBP 2,277.81 8.6551 19,714.67 Account receivable Including:USD 1,170.41 6.6166 7,744.13 Euro HKD 9,694.95 0.8431 8,173.81 JPY 1,726,840,023.03 0.0599 103,461,893.14 Account payable Including:USD 3,625,065.37 6.6166 23,985,607.53 Euro 2,989.00 7.6515 22,870.33 HKD 906,750.01 0.8431 764,480.93 JPY 223,302,422.00 0.0599 13,378,941.31 Short-term loans Including:USD 3,807,370.00 6.6166 25,191,844.34 (2) Note to overseas operating entities, including important overseas operating entities, wich should be disclosed about its principal business place, function currency for bookkeeping and basis for the choice. In case of any change in function currency, the cause should be disclosed. □ Applicable √ Not applicable 204 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 80. Hedging 81.Other VIII. Changes of consolidation scope 1. Enterprise consolidation not under the same control (1)Business combinations not under common control in the reporting period In RMB Income of Net Profit of Determinatio Acquire from Acquire from Ratio of Time-point of Obtained Method of n Basis on the the Name of Obtained Purchasing Obtained Cost of Obtained the Purchasing Purchasing Acquiree Equity Date Equity Equity Equity Purchasing Date to the Date to the (100%) Date End of the End of the Period Period Shenzhen Merger of Sanbao 157,750,000. non-identical Acquisition Chuangxin May 30,2018 67.00% May 30,2018 736,964.91 -1,227,519.10 00 controlled of contro Intelligent enterprises Co., Ltd. Zhongcheng Merger of national March 140,000,000. non-identical March Acquisition 70.00% -665,082.13 construction 30,2018 00 controlled 30,2018 of contro co., Ltd. enterprises Merger of Huaxi Bus 56,000,000.0 non-identical Acquisition April 4,2018 100.00% April 4,2018 4,251,788.55 773,846.32 Co., Ltd. 0 controlled of contro enterprises (2) Consolidation Cost and Goodwill In RMB Shenzhen Sanbao Chuangxin Zhongcheng national Consolidation Cost Huaxi Bus Co., Ltd. Intelligent Co., Ltd. construction co., Ltd. --Cash 157,750,000.00 140,000,000.00 56,000,000.00 Consolidation Cost 157,750,000.00 140,000,000.00 56,000,000.00 Less:Reduction: 91,548,329.84 9,830,031.87 -773,762.72 Obtained Definable Net Assets Fair Proportion 205 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Goodwill/ The 66,201,670.16 130,169,968.13 56,773,762.72 Consolidation Cost is Less Than the Obtained Definable Net Assets Fair Proportion (3) The identifiable assets and liabilities of acquiree at purchase date In RMB Shenzhen Sanbao Chuangxin Zhongcheng national construction Huaxi Bus Co., Ltd. Intelligent Co., Ltd. co., Ltd. Fair value on Book value on Fair value on Book value on Fair value on Book value on purchase date purchase date purchase date purchase date purchase date purchase date Monetary 127,075,384.55 127,075,384.55 959,251.79 959,251.79 3,265.51 3,265.51 fund Account 203,360.00 203,360.00 receivable Inventory 31,984,526.65 18,724,138.92 3,275,246.59 3,280,573.26 Fixed assets 11,192,806.79 9,391,876.78 24,866.48 24,888.64 Intangible 53,241,307.46 53,849,371.07 19,486,104.61 5,402,067.11 asset Disposal of 19,499.99 19,499.99 fixed assets 318,723.00 318,723.00 Prepayment 227,138.68 227,138.68 585,871.75 585,871.75 s Other 5,297.05 5,297.05 350,323.23 350,323.23 386,428.00 386,428.00 receivable Other 7,989,998.57 7,989,998.57 current 44,193.14 44,193.14 assets Deferred 154,125.90 2,110.00 Income tax 1,331.67 assets Account 4,200.64 4,200.64 4,839,563.18 4,839,563.18 payable Deferred 3,765,329.44 Income tax 3,522,014.92 Liabilities 206 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Advance 412,420.94 412,420.94 176,000.00 176,000.00 Payments Employees’ 59,926.94 59,926.94 wage 1,258,965.67 1,258,965.67 payable Tax payable 8,067.95 8,067.95 23,898.68 23,898.68 10,343.06 10,343.06 Other 91,280,486.44 91,280,486.44 account 2,259,395.34 2,259,395.34 payable Net assets 136,639,298.26 125,799,357.67 14,042,902.67 3,480,902.25 -773,762.72 -769,767.72 Less: Minority 45,090,968.43 41,513,788.03 4,212,870.80 1,044,270.68 shareholders ' equity Acquire net -773,762.72 -769,767.72 91,548,329.83 84,285,569.64 9,830,031.87 2,436,631.57 assets Determination method for fair value of the identifiable assets and liabilities: The acquired company Shenzhen Sanbao Chuangxin Intelligent Co., Ltd. can identify the fair value of net assets and liabilities based on the evaluation company Wanlong (Shanghai) Asset Appraisal Co., Ltd. issued an evaluation report. Contingent liability of the acquiree bear during combination: Nil Other explanation: (4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured again Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the controlduring the reporting period □ Yes √ No (5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities of the acquiree at acquisition date or closing period of the merge (6)Other notes 2. Business combination under the same control (1) Business combination under the same control during the reporting period In RMB Recognition Income of the Net profit of Income of the Net profit of Combined Proportion of Combination basis of combined the combined merged party the combined Basis party the profits date combination party from party from during the party during date the beginning the beginning comparison the period of 207 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 of the year to of the year to period comparison the date of the date of the merger the merger Tunghsu Pay (Yingkou) Same parent consideration 27,289,664.9 Optoelectroni 65.00% June 30,2018 -9,555,668.76 -5,213,532.93 company , control 9 c Display operation Co., Ltd. (2) Consolidation Cost In RMB Consolidation Cost Tunghsu(Yingkou)Optoelectronic Display Co., Ltd. Cash 195,525,500.00 (3) The identifiable assets and liabilities of acquiree at purchase date In RMB Tunghsu(Yingkou)Optoelectronic Display Co., Ltd. End of previous period Merger date Cash and bank balances 49,876,382.38 85,581,351.01 Account receivable 26,247,411.94 27,508,065.58 27,104,233.68 23,963,131.18 Fixed assets 330,341,703.53 335,451,284.12 Intangible assets 24,988,633.63 25,314,850.99 Prepayments 2,483,530.03 858,504.05 Other receivable 32,000.00 2,000.00 Other current assets 75,603,084.09 74,056,644.01 Construction in process 586,201,554.22 570,609,032.67 Deferred Income tax assets 5,334,663.88 5,334,663.88 Other non-current assets 1,985,104.15 Account payable 28,970,435.09 101,667,530.90 Notes payable 1,164,100.00 Advance Payments 11,593.50 9,537.00 Employees’ wage payable 296,037.13 249,318.39 Tax payable 1,840,851.65 280,315.37 Interest payable 589,174.98 1,075,377.78 Other payable 187,575,741.76 124,403,423.83 208 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Non-current liabilities due 1 year 36,316,392.68 36,316,392.68 Long-term loans 420,000,000.00 425,000,000.00 Deferred Income 84,997,214.64 85,655,410.98 Other non- current liabilities 108,000,000.00 108,000,000.00 Net assets 258,451,655.95 268,007,324.71 Less:Minority shareholders' equity 90,458,079.58 93,802,563.65 Acquire net assets 167,993,576.40 174,204,761.10 3. Counter purchase Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of the listed companies whether constituted a business and its basis, the determination of the combination costs, the amount and calculation of adjusted rights and interests in accordance with the equity transaction process. 4. The disposal of subsidiary Whether there is a single disposal of the investment to subsidiary and lost control √ Yes □No In RMB The differenc The e Determin amount between ation of of other the Regainin the fair compreh disposal The g gains value of ensive price and The fair Proporti book or losses the income the share value of Determi on of value of arising remainin related to of the the ning the remainin the from g equity the Equity Equity Loss of subsidiar remainin Disposal basis for g stocks remainin re-measu at the atomic Name disposal disposal control y's net g equity of equity the loss at the g equity rement date of company price ratio point assets at at the of date of at the of the loss of 's equity the level date of control loss of date of remainin control investme of the loss of control loss of g equity rights nt consolid control control at fair and its transferr ated value main ed to financial assumpti investme statemen ons nt profit t and loss correspo nding to 209 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 the disposal of the investme nt Xuyou Electro nic Received Materia consider ls 550,000, April -2,053,5 51.00% Sell ation and 0.00% 0.00 0.00 0.00 0.00 Technol 000.00 28,2018 58.36 lost ogy control (Wuxi) Co., Ltd. Other notes: Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in reporting period □ Yes √ No 5. Other reasons for the changes in combination scope Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant information: 6.Other IX. Equity in other entity 1. Equity in subsidiary (1)Constitute of enterprise group Share-holding ratio Subsidiary Main operation Registered place Business nature Acquired way Directly Indirectly 9 Huanghe Road, Shijiazhuang High-tech Shijiazhuang Industrial Photoelectric Colour Bulb Co., Shijiazhuang 81.26% Establish Development display material Ltd. Area, Shijiazhuang, Hebei Province 210 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 No.36, Daowei 2 Road, Wanchun Wuhu Tunghsu Street , Wuhu Optoelectronic Photoelectric Wuhu Economy 100.00% Establish Technology Co., display material Technology Ltd. Development Zone 1/F, No.2 Business tower, Huazhong Wuhan Tunghsu Shuguang Optoelectronic Photoelectric Wuhan Software park, 100.00% Establish Technology Co., display material No.1Guanshan Ltd. Road,Donghu Development Zone, Wuhan Room C17, Building 1, Beijing Xufeng No.10, Xinghuo Real estate Real Estate Co., Beijing 100.00% Establish Road, Technology Development Ltd. City, Fengtai District, Beijing No.500, Pengxi Tunghsu North Road, (Kunshan) Photoelectric Kunshan Economic 88.89% Establish Display Material display material Development Co., Ltd. Area,Kunshan 66,No 3 Zhengzhou Xufei Jingnan Road, Optoelectronic Econornic & Photoelectric Control Zhengzhou 100.00% Technology Co., Technology display material combination Ltd. Development Zone, Zhengzhou Shijiazhuang No.377,Zhujiang Xuxin Road, High-tech Photoelectric Control Optoelectronic Shijiazhuang Area, 100.00% display material combination Technology Shijiazhuang, Co.,Ltd. Hebei Beijing Xutan 206, 2/F, Building Industrial New Material 2B,No.80, application of Beijing 70.00% Establish Technology Co., Xingshikou Road, graphene Ltd. Haidian District, 211 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Beijing New Material Jiangsu Jixing Industry Zone, Photoelectric Non control New Material Jiangsu 100.00% Youfang Town, display material combination Co., Ltd. Yangzhong City 1201-E18(Area)1 2/F,No.1, 6-3 Beijing Tunghsu Building, Huaqing Beijng Autornobile Investment 70.00% Establish Investment Co., Museum East Ltd. Road, Fengtai District, Beijing (072) Room 109,Supervision Building, Fuzhou Tunghsu Processing trade Optoelectronic Free zone, Photoelectric Fuzhou 87.25% 12.75% Establish Technology Co., Fuzhou, display material Ltd. Fujian.(No.9, Xinjiang Road, Xincuo Town, Fuqing City) Wuhu Tunghsu Room 302, A floo Optoelectronic r,Management Co Equipment and Equipment Wuhu mmittee of Jiangb 100.00% Establish technical services Technology Co., ei Industry Zone, Ltd. Anhui Prov Room 02, Shanghai 2/F,No.3 Tanyuan Huigu Industrial Building, No.28,, Non control New Material Shanghai application of 50.50% Jiangcchuan East combination Technology Co., graphene Road, Minhang Ltd. District ,Shanghai Room 201, A building, No.1, Shenzhen Xuhui Qianwan Road, Investment Co., Shenzhen Qianhai Investment 100.00% Establish Ltd. Shenzhen-Hongk ong Cooperation Zone, Shenzhen Tunghsu No.21, 15 Building Non control Sichuan 100.00% Construction Building, No.181, Installing combination 212 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Group Co., Ltd. Erhuan Road, Jinniu District, Chengdu A, No .2898, Shanghai Huaning Road, New Energy Non control Sunlong Bus Co., Shanghai 100.00% Minhang Autonobile combination Ltd. District ,Shanghai No.177, Fubin Sichuan Xuhong Nortth Road, Optoelectronic Photoelectric Control Mianyang Economic 100.00% Technology Co., display material combination Development Ltd. Zone, Mianyang 28/F, Shenye R&D and Shenzhen Sanbao Shangcheng , manufacturing of Innovation Huanggang Road, Non control Shenzhen robots and 67.00% Intelligent Co., Hufu Street, combination intelligent Ltd. Futian District, electronic devices Shenzhen Tunghsu No.19, Xincheng (Yingkou) Photoelectric Control Liaoning Street, Yingkou 65.00% Optoelectronic display material combination City, Liaoning Display Co., Ltd. Explanation on share-holding ratio in subsidiary different from ratio of voting right: Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over half and over voting rights: Controlling basis for the structuring entity included in consolidated range: Basis on determinning to be a agent or consignor: Other notes: Notes:According to the signed agreement, Taizhou Tunghsu Graphene Industry Investment Fund Management Center (limited partnership) sets up the investment decision committee as the highest decision-making organ, which is responsible for making decisions on project investment, disinvestment and other matters. The investment decision committee is made up of five committee memerein, the general partner Beijing Tunghsu Huaqing Investment Co., Ltd. appoints 2 members, the limited partner Tunghsu Photo-electricity Technology Co., Ltd. appoints 1 member and the other 2 members are appointed through social recruiting. The limited partner Taizhou Jintaiyang Energy Co., Ltd. doesn’t appoint members. And the chairman of committee shall be assumed by the representative of general partner. The decisions will be valid with the consent of the majority of committee members (4 votes and above), and the chairman of investment committee has the one-vote veto. As the executive partner, the general partner Beijing Tunghsu Huaqing Investment Co., ltd. assumes unlimited, joint liabilities for the limited partnership’s debts. As the posterity limited partner, Tunghsu Photo-electricity Technology Co., Ltd. bears responsibilities for the limited partnership’s debts with its subscribed investment. And Taizhou Jintaiyang Energy Co., Ltd., as the priority limited partner, assumes responsibilities for the limited partnership’s debts with its subscribed investment. 213 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (2)Significant not wholly-owned subsidiaries In RMB Profit or loss attributable Holding proportion of Dividend declared to Closing balance of Name to non-controlling non-controlling interest non-controlling interest non-controlling interest interest Fuzhou Xufu Optoelectronic 40.00% 6,454,615.67 119,029,434.07 Technology Co., Ltd.. Shanghai Tanyuan Huigu New Material 49.50% -3,276,208.31 48,922,792.83 Technology Co., Ltd. Shenzhen Sanbao Innovation Intelligent 33.00% -405,081.30 44,685,887.13 Co., Ltd. Tunghsu (Yingkou) Optoelectronic Display 11.11% -44,707.04 99,730,691.36 Co., Ltd. (3) The main financial information of significant not wholly owned subsidiary In RMB Year-end balance Year-beginning balance Non Current Non Non Current Non Name Current Total Total Current Total Total current Liabilitie current current Liabilitie current assets assets liabilities assets assets liabilities assets s liabilities assets s liabilities Fuzhou Xufu Optoelec 761,479, 443,418, 1,204,89 719,324, 188,000, 907,324, 646,709, 423,862, 1,070,57 601,135, 188,000, 789,135, tronic 050.29 584.41 7,634.70 049.52 000.00 049.52 574.39 686.32 2,260.71 214.70 000.00 214.70 Technolo gy Co., Ltd.. Shanghai Tanyuan Huigu New 24,391,6 81,670,8 106,062, 7,228,60 7,228,60 29,877,8 84,534,6 114,412, 6,477,59 389,647. 6,867,24 0.00 Material 45.13 85.30 530.43 5.53 5.53 54.31 00.13 454.44 8.47 55 6.02 Technolo gy Co., Ltd. 214 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Shenzhe n Sanbao Innovati 63,785,0 63,842,4 127,627, 2,930,16 2,930,16 30,316,9 63,243,3 93,560,2 91,760,9 91,760,9 on 0.00 0.00 58.35 66.68 525.03 4.51 4.51 02.09 57.85 59.94 02.27 02.27 Intellige nt Co., Ltd. Tunghsu (Yingko u) 795,994, 601,563, 1,397,55 219,891, 280,000, 499,891, 529,335, 506,767, 1,036,10 138,034, 138,034, Optoelec 0.00 353.63 285.70 7,639.33 650.51 000.00 650.51 649.08 622.38 3,271.46 919.30 919.30 tronic Display Co., Ltd. In RMB Amount of current period Amount of previous period Cash flows Cash flows Total Total Name Business from Business from Net profit Comprehensi Net profit Comprehensi income operating income operating ve income ve income activities activities Fuzhou Xufu Optoelectroni 632,696,266. 16,136,539.1 16,136,539.1 -15,703,750.7 46,983,656.1 -21,118,901.4 1,844,869.14 1,844,869.14 c Technology 30 7 7 6 8 8 Co., Ltd.. Shanghai Tanyuan Huigu New 12,587,728.4 20,745,934.2 20,745,934.2 488,093.83 -6,566,421.86 -6,566,421.86 194,829.10 8,580,349.37 Material 7 3 3 Technology Co., Ltd. Shenzhen Sanbao Innovation 736,964.91 -1,101,997.15 -1,101,997.15 -730,374.74 Intelligent Co., Ltd. Tunghsu (Yingkou) 16,409,299.1 -253,855,084. 2,968,413.54 Optoelectroni -402,363.34 -402,363.34 -360,330.51 -360,330.51 7 87 1 c Display Co., Ltd. (4) Significant restrictions of using enterprise group assets and pay off enterprise group debt (5) Provide financial support or other support for structure entities incorporate into the scope of 215 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary (1) Note to owner’s equity share changed in subsidiary (2) The transaction’s influence to equity of minority shareholders and attributable to the owner's equity of the parent company 3. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise Name of Main Places of Registration Nature of Shareholding Ratio (%) Obtaining Subsidiary Operation Place Business direct indirect Method Yudean Finance Guangzhou Guangzhou Finance 40.00% Equity method (2)Main financial information of Significant joint venture (3) Main financial information of significant associated enterprise In RMB Closing balance/This period Opening balance/Last period Current assets 2,440,811,321.54 2,682,394,584.48 Non-current assets 17,426,928,351.70 9,907,461,970.78 Total of assets 19,867,739,673.24 12,589,856,555.26 Current liabilities 14,841,406,072.32 7,579,701,042.91 Total liabilities 14,841,406,072.32 7,579,701,042.91 Attributable to shareholders of the parent 5,026,333,600.92 5,010,155,512.35 company Share of net assets calculated by stake 2,010,533,440.37 2,004,062,204.94 Book value of equity investment in 2,010,533,440.37 2,004,062,204.94 associates Business income 105,177,198.83 75,053,678.73 Net profit 16,178,088.57 -39,256,450.56 Total comprehensive income 16,178,088.57 -39,256,450.56 (4) Summary financial information of insignificant joint venture or associated enterprise Closing balance/This period Opening balance/Last period Joint venture: -- -- The total number of shares in each of the -- -- following shares Associated enterprise: -- -- Total investment book value 130,804,634.60 126,422,519.76 The total number of shares in each of the -- -- following shares 216 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 --Net 5,365,389.05 196,087.39 Total comprehensive income 5,365,389.05 196,087.39 (5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer funds to the Company (6) The excess loss of joint venture or associated enterprise (7) The unrecognized commitment related to joint venture investment (8) Contingent liabilities related to joint venture or associated enterprise investment 4. Significant common operation 5. Equity of structure entity not including in the scope of consolidated financial statements Related notes to structure entity not including in the scope of consolidated financial statements 6.Other X. The risk related financial instruments The Company faces a variety of financial risks in the course of operation: credit risk, market risk and liquidity risk. The Business Management Department of the Company management is fully responsible for the determination of risk management objectives and policies, and assumes the ultimate responsibility for the risk management objectives and policies. The Business Management Department of the Company reviews the effectiveness of the performed programs as well as the rationality of risk management objectives and policies through monthly work statement submitted by the Functional Department. The objective of the Company’s engagement in risk management is to obtain a proper balance between the risks and benefits, reduce the risks’ negative impact on the Company's operating performance to the lowest level and maximize the interests of shareholders and other equity investors. Based on the risk management objectives, the basic strategy of the Company's risk management is to identify and analyze the risks faced by the Company, establish appropriate baseline of risk tolerance, conduct risk management as well as timely and reliably supervise various risks to control the risks within a limited range. 1. Credit Risk Credit risk refers to the financial loss risk of the other Party if one Party of financial instruments fails to perform its obligations. The Company mainly faces customer credit risk caused by the credit sale. The Company would make an evaluation on new customers’ credit risk before signing new contracts, which includes external credit rating and bank reference letter (when available) under certain circumstances. The Company sets quota on credit sale for each customer and such quota is the maximum amount without additional approvals. The company ensures that the company's overall credit risk is within a manageable range through quarterly audits of existing customer credit ratings and monthly audits of accounts receivable aging analysis. In monitoring the customer's credit risk, according to the customer's credit characteristics of its grouping. Customers who are rated as "high risk" will be placed on the restricted customer list and the company will be able to credit it in the next period, subject to additional approval, otherwise it must be required to pay the corresponding payment in advance. 2. Market Risk The market risk of financial instruments refers to the risk that the fair value or future cash flow of the financial instruments would fluctuate due to the market price changes, which includes interest rate risk ,foreign exchange risk and other price risks. (1) Interest Rate Risk Interest rate risk refers to the risk that the fair value or future cash flow of the financial instruments would 217 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 fluctuate due to the market price changes. The interest rate risk faced by the Company mainly comes from short-term bank loans. The Company meets various short-term financing needs through establishing good bank-enterprise relationship as well as reasonably designing credit line, credit type and credit term to guarantee the sufficient bank credit line. In addition, the Company also reasonably reduces the fluctuation risk of interest rate by shortening the term of single loan and performing specially agreed prepayment term. (2) Foreign Exchange Risk Foreign exchange risk refers to the risk that the fair value or future cash flow of the financial instruments would fluctuate due to the market price changes. The Company would match the foreign currency incomes and expenses as far as possible to reduce the foreign exchange risk. On account of the small proportion of foreign financial assets and liabilities in the total assets, there’s no forward foreign exchange contract or currency swap contract signed by the Company in January 2018- 2017. The foreign exchange risk faced by the Company mainly comes from the financial assets and financial liabilities priced by US dollar, Yen, Euro and GBP . For the amount of foreign currency financial assets and foreign currency financial liabilities converted into RMB, please refer to Note 7. In the notes to the consolidated financial statements, 79 foreign currency monetary items. XI. Disclosure of fair value 1. Ending fair value of the assets and liabiliies measured by fair value 2.Recognized basis for the market price sustaining and non-persistent measured by fair value oon first-order 3. Valuation technique and qualitative and quantitative information on major parameters for the fair value measure sustaining and non-persistent on second-order 4. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 3 5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3 6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels 7. Changes in the valuation technique in the current period and the reason for change 8. Fair value of financial assets and liabilities not measured at fair value 9.Other XII.Related parties and related-party transactions 1. Parent company information of the enterprise Vote right ratio of Share ratio of parent Parent company parent company Registration place Nature Registered capital company against the name against the company(%) company(%) No.369, Zhujiang Investment , Tunghsu Group 31.8billion 15.97% 21.85% Road, High-tech production and R & 218 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 zone, Shijiazhuang D, etc. Explanation on parent company of the enterprise Ultimate controller of the Company is Li Zhaoting 2.Subsidiary of the Enterprise See details to Notes IX, Situation of the enterprise subsidiaries refer to the Notes. 3.Cooperative enterprise and joint venture See Notes IX. Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in pervious period: Name Relation of other Related parties with the company CUHK international business factoring co., Ltd Associated enterprise Tunghsu Group Finance Co., Ltd. Associated enterprise Tunghsu(Deyang) Graphene Industry Development Fund Associated enterprise Partnership (Limited Partnership) Zibo Bus Co., Ltd. Associated enterprise 4.Other related party Other related party Relationship with the Enterprisse Tunghsu Technology Group Co., Ltd. The shareholders of the company Tunghsu Optoelectronic Investment Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Electronic vacuum Glass Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Large-diameter plastic tube Co., ltd. Controlled by the same actual controller Shijiazhuang Baoshi Zhonghe Steel Plastic Shape Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Xuming Tube Co., Ltd. Controlled by the same actual controller Shijiazhuang Baodong Electronic Co.,Ltd. Controlled by the same actual controller Hebei Baoshi Lighting Co., Ltd. Controlled by the same actual controller Jinzhou Xulong New Material Technology Co., Ltd. Controlled by the same actual controller Hebei Decoration Printing Machine Co., Ltd. Controlled by the same actual controller Chengdu Optoelectronic Technology Co., Ltd. General Manager: Li Zhaotin Shijiazhuang Xuling Electronic Technology Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Electronic Group Co., Ltd. Controlled by the same actual controller 219 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Tibet Financial Leasing Co., Ltd. Controlled by the same actual controller Tunghsu Group Finance Co., Ltd. Joint venture of the company Yinchuan Fengxiang Street Underground integrated Management Controlled by the same actual controller Co., Ltd. Yixian Xuhua Park Construction Development Co., Ltd. Controlled by the same actual controller Guangdong Huakai Real estate Development Co., Ltd. Controlled by the same actual controller Li Qing The spouse of the actual controller Kunming Tunghsu Qiming Investment Development Co., Ltd. Controlled by the same actual controller Aahui Tunghsu Dabieshan Agricultural Technology Co., Ltd. Controlled by the same actual controller Dongguan Yijiu Real Estate Development Co., Ltd. Controlled by the same actual controller Tunghsu North Real Estate(Beijing)Co., Ltd. Controlled by the same actual controller Tunghsu Technology Development Co., Ltd. Controlled by the same actual controller Tunghsu Lantian New Energy Co., Ltd. Controlled by the same actual controller Fujian Hengda Investment Co., Ltd. Controlled by the same actual controller Hunan Baoan Hongji Real Estate Development Co., Ltd. Controlled by the same actual controller Huiyin Jinkong Asset Management Co.,Ltd. Controlled by the same actual controller Huidong Baoan Hongji Real Estate Development Co., Ltd. Controlled by the same actual controller Huidong Baoan Jinan Real Estate Development Co., Ltd. Controlled by the same actual controller Shenzhen Hongji Property Management Co., Ltd. Controlled by the same actual controller Chengzhou Zhexu Real Estate Co., Ltd. Controlled by the same actual controller Zhangzhou Shenghuawu Real Estate Development Co., Ltd. Controlled by the same actual controller Chongqing Tunghsu Qide Real Estate Co., Ltd. Controlled by the same actual controller Baoshi Group, Industry & Trade Company Mineral Water Controlled by the same actual controller Factory Shijiazhuang Tunghsu Machinery Co.,Ltd. Controlled by the same actual controller Shanghai Anxuan Autormation Technology Co., Ltd. Controlled by the same actual controller Tibet Xuri Asset Management Co., Ltd. Controlled by the same actual controller Beijing Hexie Guanglu Technology Co., Ltd. Controlled by the same actual controller Chengdu Taiyisi Technology Co., Ltd. Controlled by the same actual controller 5. Related transactions. (1)Related transactions on purchasing goods and receiving services In RMB Related party Content Current amount Approval trading limit Whether over the Last amount 220 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 trading limit(Y/N) Baoshi Group Security fees 360,500.00 Anhui Tunghsu Dabie Mountain Agricultural Tea oil 28,800.00 Technology Co., Ltd. Shijiazhuang Baoshi Zhonghe Material 4,000,000.00 Steel Plastic Shape Co., Ltd. Shijiazhuang Mechanical & Baoshi Electronic Electrical 980,000.00 vacuum Glass Co., Equipment Ltd. Related transactions on sale goods and receiving services In RMB Related parties Content of related transaction Amount of current period Amount of previous period Beijing Hexie Guanglu Efficient lightbulb 287,179.49 Technology Co., Ltd. Chengdu Taiyisi Technology Efficient lightbulb 23,131.62 Co., Ltd. Chengdu Optoelectronic Efficient lightbulb 13,203.41 Technology Co., Ltd. Chengdu Optoelectronic Traction roll project 611,459.82 504,871.80 Technology Co., Ltd. Dongguan Yijiu Real Estate Construction Engineering 431,182.25 Development Co., Ltd. Tunghsu North Real Estate Efficient lightbulb 40,528.38 (Beijing) Co., Ltd. Tunghsu North Real Estate Graphene 48,801.64 (Beijing) Co., Ltd. Tunghsu Group Efficient lightbulb 1,589,885.32 Tunghsu Technology Construction Engineering 3,794,623.64 Development Co.,, Ltd. Tunghsu Technology Group Efficient lightbulb 811.97 Co., Ltd. Tunghsu Technology Group Graphene 2,735.05 Co., Ltd. 221 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Tunghsu Lantian New Construction Engineering 2,719,618.11 EnergyCo., Ltd. Fujian Hengda Investment Construction Engineering 2,745,454.55 Co.,Ltd. Fujian Hengda Investment Graphene 15,404.96 Co.,Ltd. Guangdong Huakai Real Estate Construction Engineering 19,945,292.12 7,565,972.68 Development Co., Ltd. Hebei Baoshi Lighting Co., Ltd. Efficient lightbulb -37,264.96 Hunan Baoan Hongji Real Construction Engineering 229,566.55 Estate Development Co., Ltd. Huiyin Jinkong Asset Efficient lightbulb 270,305.10 Management Co., Ltd. Huidong Baoan Hongji Real Construction Engineering 46,614,031.74 Estate Development Co., Ltd. Huidong Baoan Jinan Real Construction Engineering 46,435,095.47 Estate Development Co., Ltd. Kunming Tunghsu Qiming Investment Development Co., Construction Engineering 140,707,948.79 ltd. Shenzhen Hongji Property Efficient lightbulb 263,333.34 Management Co., Ltd. Shengzhou Zhezhao Real Estate Construction Engineering 35,168,074.85 Co., Ltd. Shengzhou Zhezhao Real Estate Graphene 13,641.03 Co., Ltd. Shijiazhuang Baoshi Large-diameter plastic tube Co., Construction Engineering 594,000.00 ltd. Yixian Xuhua Park Construction Development Co., Construction Engineering 39,616,134.40 7,783,800.00 Ltd. Yinchuan Fengxiang Street Underground integrated Construction Engineering 45,273,158.21 97,789,036.93 Management Co., Ltd. Zhangzhou Huawu Real Estate Construction Engineering 22,413,913.92 Development Co., Ltd. Zhangzhou Huawu Real Estate Efficient lightbulb 6,974.36 Development Co., Ltd. 222 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Chongqing Tunghsu Qide Real Construction Engineering 18,348,758.40 Estate Co., Ltd. (2)Related trusteeship or contracting Related trusteeship or contracting in which the Company is the undertake In RMB Gains from the Name of the Name of the Asset situation of Start date Terminating date Pricing basis deal in report employer undertaker the undertaker period Tunghsu Group, Yingkou Coastal Development Tunghsu Tunghsu Construction Co., Optoelectronic (Yingkou) Ltd.Minmetals January 1,2012 June 30,2018 Notes1 250,000.00 Technology Co., Optoelectroric (Yingkou) Ltd. Display Co., Ltd. Industrial Park Development Co., Ltd. Notes 1:Trusteeship costs include basic management fees and incentive management fees(0.5 million/years), including basic management fee of 1 million per year, incentive management fees per year managed company with net operating profit after tax of 5% calculation(Base incentive management fees deduct prior years' losses) Notes 2: Trusteeship costs include basic management fees and incentive management fees(0.5 million/years), including basic management fee of 1 million per year, incentive management fees per year managed company with net operating profit after tax of 5% calculation. Notes 3 :On June 30, 2018, Tunghsu Optoelectronic Technology Co., Ltd. purchased a 65% stake in Tunghsu (Yingkou) Optoelectronic Display Co., Ltd. held by Tunghsu Group Co., Ltd., and the equity custody ended. Lists of entrust/contractee (3) Information of related lease (4)Status of related party guarantee As a secured party for the company In RMB Execution accomplished Guarantor Guarantee amount Start date End date or not Tunghsu Group , Li 200,000,000.00 March 15,2018 May 15,2019 No Zhaoting Tunghsu Group , Li 30,000,000.00 May 22,2018 May 22,2019 No Zhaoting 223 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Tunghsu Group 100,000,000.00 January 31,2018 December 31,2018 No Tunghsu Group , Li 200,000,000.00 June 26,2018 June 24,2019 No Zhaoting Tunghsu Group , Li 200,000,000.00 October 26,2017 October 26,2018 No Zhaoting Tunghsu Group , Li 200,000,000.00 November 30,2017 November 30,2018 No Zhaoting Tunghsu Group 100,000,000.00 July 31,2017 July 30,2018 No Tunghsu Group , Li 400,000,000.00 August 15,2017 August 14,2018 No Zhaoting Tunghsu Group , Li 50,000,000.00 August 3,2017 August 2,2018 No Zhaoting Li Zhaoting 400,000,000.00 October 19,2017 October 19,2018 No Li Zhaoting 560,000,000.00 December 15,2017 December 15,2018 No Tunghsu Group 200,000,000.00 December 22,2017 December 22,2018 No Tunghsu Group 50,000,000.00 November 1,2017 October 30,2018 No Tunghsu Group 20,000,000.00 Novermber 16,2017 November 25,2018 No Tunghsu Group 50,000,000.00 December 1,2017 November 30,2018 No Tunghsu Group 50,000,000.00 December 28,2017 December 27,2018 No Tunghsu Group 50,000,000.00 February 27,2018 February 27,2019 No Tunghsu Group 25,000,000.00 April 28,2018 April 27,2019 No Tunghsu Group 100,000,000.00 July 7,2017 July 6,2018 No Tunghsu Group 20,000,000.00 July 26,2017 July 6,2018 No Tunghsu Group 80,000,000.00 August 1,2017 August 1,2018 No Tunghsu Group 50,000,000.00 August 29,2017 August 28,2018 No Tunghsu Group 100,000,000.00 September 25,2017 September 24,2018 No Tunghsu Group 50,000,000.00 October 9,2017 October 8,2018 No Tunghsu Group 50,000,000.00 August 30,2017 August 29,2018 No Tunghsu Group 25,000,000.00 October 19,2017 October 19,2018 No Tunghsu Group 70,000,000.00 September 22,2017 September 21,2018 No Tunghsu Group 50,000,000.00 October 12,2017 October 11,2018 No Tunghsu Group 40,000,000.00 September 29,2017 September 27,2018 No Tunghsu Group 100,000,000.00 October 26,2017 October 25,2018 No Tunghsu Group , Li 100,000,000.00 December 29,2017 December 28,2018 No Zhaoting Tunghsu Group 200,000,000.00 June 11,2018 June 8,2019 No 224 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Tunghsu Group 50,000,000.00 August 24,2017 August 24,2018 No Tunghsu Group , Li 100,000,000.00 November 13,2017 November 12,2018 No Zhaoting Tunghsu Group , Li 70,000,000.00 January 11,2018 December 31,2018 No Zhaoting Tunghsu Group , Li 30,000,000.00 February 13,2018 February 12,2019 No Zhaoting Tunghsu Group , Li 42,000,000.00 April 10,2018 October 10,2018 No Zhaoting Tunghsu Group , Li 38,000,000.00 April 11,2018 October 11,2018 No Zhaoting Tunghsu Group 95,000,000.00 March 19,2018 March 12,2019 No Tunghsu Group 90,000,000.00 April 12,2018 April 2,2019 No Tunghsu Group 15,000,000.00 June 12,2018 May 7,2019 No Tunghsu Group 25,000,000.00 October 20,2017 October 19,2018 No Tunghsu Group, Li 299,650,000.00 June 7,2016 June 7,2019 No Zhaoting, Li Qing Tunghsu Group, Li 200,000,000.00 May 15,2017 May 15,2019 No Zhaoting, Li Qing Tunghsu Group, Li 300,000,000.00 June 2,2017 June 2,2019 No Zhaoting, Li Qing Tunghsu Group, Li 115,000,000.00 October 31,2017 October 31,2019 No Zhaoting, Li Qing Tunghsu Group, Li 200,000,000.00 December 27,2016 December 27,2018 No Zhaoting, Li Qing Tunghsu Group, Li 200,000,000.00 December 29,2016 December 29,2018 No Zhaoting, Li Qing Tunghsu Group, Li 100,000,000.00 December 23,2016 December 23,2018 No Zhaoting, Li Qing Tunghsu Group 194,000,000.00 December 15,2016 December 15,2018 No Tunghsu Group , Li 100,000,000.00 March 3,2017 March 2,2019 No Zhaoting Tunghsu Group , Li 204,000,000.00 March 29,2017 September 28,2018 No Zhaoting Tunghsu Group , Li 199,000,000.00 February 24,2017 August 23,2018 No Zhaoting Tunghsu Group , Li 97,000,000.00 April 27,2017 October 26,2018 No Zhaoting 225 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Tunghsu Group, Tunghsu Optoelectronic 400,000,000.00 November 30,2016 November 30,2019 No Investment Co., Ltd., Li Zhaoting Tunghsu Group , Li 41,666,666.62 January 6,2017 January 6,2019 No Zhaoting Tunghsu Group , Li 99,000,000.00 July 7,2017 July 6,2019 No Zhaoting Tunghsu Group, Li 75,000,000.00 September 26,2013 April 11,2022 No Zhaoting, Li Qing. Tunghsu Group, Li 300,000,000.00 April 1,2014 April 11,2022 No Zhaoting, Li Qing. Tunghsu Group, Li 150,000,000.00 April 22,2015 April 11,2022 No Zhaoting, Li Qing. Tunghsu Group , Li 450,000,000.00 September 30,2016 September 29,2021 No Zhaoting Tunghsu Group 545,000,000.00 January 28,2013 January 27,2021 No Tunghsu Group 39,699,600.00 January 28,2013 January 27,2021 No Tunghsu Group 455,000,000.00 November 7,2016 June 20,2024 No Tunghsu Group 95,000,000.00 September 18,2017 September 15,2022 No Tunghsu Group 190,000,000.00 September 18,2017 September 15,2022 No Tunghsu Group 190,000,000.00 September 18,2017 September 15,2022 No Tunghsu Group 95,000,000.00 September 18,2017 September 15,2022 No Tunghsu Group 190,000,000.00 October 31,2017 September 15,2022 No Tunghsu Group 190,000,000.00 October 31,2017 September 15,2022 No Tunghsu Group , Li 300,000,000.00 November 6,2017 November 6,2020 No Zhaoting Tunghsu Group , Li 199,000,000.00 November 7,2017 November 7,2020 No Zhaoting Tunghsu Group , Li 200,000,000.00 November 10,2017 November 15,2022 No Zhaoting Tunghsu Group 106,813,432.82 May 25,2016 May 20,2019 No Tunghsu Group , Li 158,352,857.29 May 31,2016 May 30,2021 No Zhaoting Tunghsu Group , Li 35,118,543.68 June 16,2016 June 16,2019 No Zhaoting Tunghsu Group, Li 200,000,000.00 May 27,2016 May 26,2019 No Zhaoting, Li Qing. 226 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Tunghsu Group , Li 15,000,000.00 October 20,2015 October 15,2018 No Zhaoting Tunghsu Group 220,000,000.00 March 17,2016 March 17,2028 No Tunghsu Group 280,000,000.00 June 16,2016 June 16,2028 No Tunghsu Group 106,000,000.00 September 3,2016 September 2,2024 No Tunghsu Group 45,000,000.00 May 28,2018 May 28,2019 No Tunghsu Group 135,000,000.00 June 27,2018 June 27,2019 No (5) Inter-bank lending of capital of related parties: (6) Related party asset transfer and debt restructuring (7) Rewards for the key management personnel (8)Other related transactions 6. Payables and receivables of the related party (1)Receivables In RMB Amount at year end Amount at year begiing Name Related party Balance of Book Bad debt provision Balance of Book Bad debt provision Chengdu Zhong Account receivable Optoelectronic 1,310,860.00 629,722.60 Technology Co., Ltd Hebei Baoshi Energy Account receivable saving lighting 43,600.00 technology Co., Ltd. Guangdong Huakai Real Estate Account receivable 10,549,142.58 19,184,644.15 Development Co., Ltd. Jinzhou Xulong New Account receivable 2,449,198.07 2,449,198.07 Material Co., Ltd. Kunming Tunghsu Qiming Investment Account receivable 61,056,762.56 29,110,261.39 Development Co., Ltd. Yinchuan Fengxiang Account receivable Street 181,832,540.69 173,363,844.40 Comprehensive 227 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Construction Management Co., Ltd. Huidong Baoan Jinan Real Estate Account receivable 22,079,177.86 Development Co., Ltd. Zhangzhou Shenghua Real Account receivable 19,886,092.23 Estate Development Co., Ltd. Shengzxhou Zhexu Account receivable Real Estate Co., 19,316,896.10 Ltd. Huidong Baoan Hongji Real Estate Account receivable 14,107,754.19 Development Co., Ltd. Chongqing Tunghsu Account receivable Real Estate Co., 4,701,058.91 Ltd. Tunghsu Technology Account receivable Development Co., 4,174,086.00 Ltd. Fujian Hengda Account receivable 3,020,000.00 Investment Co., Ltd. Tunghsu Lantian Account receivable New Energy Co., 903,222.06 Ltd. Guangdong Huakai Real Estate Account receivable 10,549,142.58 Development Co., Ltd. Huiyin Jinkong Account receivable Asset Management 221,379.90 Co., Ltd. Beijing Hexie Account receivable Guanglu Technology 138,000.00 Co., Ltd. Shenzhen Hongji Account receivable 15,405.00 Property 228 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Management Co., Ltd. Hunan Baoan Hongji Real Estate Account receivable 12,626.16 Development Co., Ltd. Hebei Baoshi Energy Prepayments saving lighting 60,000.00 60,000.00 technology Co., Ltd. Hebei Decoration Prepayments Printing Machinery 848,396.00 835,680.87 Co., Ltd. Shijiazhuang Baoshi Other non-current Electronic vacuum 420,000.00 assets Glass Co., Ltd. Other non-current Tunghsu Group 132,132,857.44 132,132,857.44 assets (2)Payables In RMB Name Related party Book balance at year end Book balance at year beginning Shijiazhuang XumingTube Co., Account payable 14,948.00 14,948.00 Ltd. Shijiazhuang Baoshi Electronic Account payable 986,344.16 6,344.16 vacuum Glass Co., Ltd. Shijiazhuang Baoshi Account payable Large-diameter plastic tube Co., 533,942.80 533,942.80 ltd Shijiazhuang Baoshi Account payable Zhonghe Steel Plastic Shape 4,030,296.40 30,296.40 Co., Ltd. Shijiazhuang Xuling Electronic Account payable 1,320,164.09 1,320,164.09 Technology Co., Ltd. Shijiazhuang Tunghsu Account payable 14,381.92 14,381.92 Machinery Equipment Co., Ltd. Advance revenue Tunghsu Group 46,176,000.00 46,176,000.00 Chengdu Zhong Optoelectronic Advance revenue 38,692.80 38,692.80 Technology Co., Ltd Advance revenue Yixian Xuhua Park 45,562,318.00 3,852,318.00 229 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Construction Development Co., Ltd. Huidong Baoan Hongji Real Advance revenue 61,371,921.90 Estate Development Co., Ltd. Other payable Baoshi Group 722,000.00 Other payable Tunghsu Group 198,526,185.51 470,099,941.55 Shijiazhuang Baoshi Electronic Other payable 4,739,613.30 4,700,985.30 vacuum Glass Co., Ltd. Tibet Xuri Capital Management Other payable 8,000,000.00 Co., Ltd. Huidong Baoan Jinan Real Other payable 8,400.00 Estate Development Co., Ltd. Chengdu Zhong Optoelectronic Other payable 6,850.92 Technology Co., Ltd Shijiazhuang XumingTube Co., Other payable 97,031.00 97,031.00 Ltd. 7. Related party commitment 8.Other XIII. Stock payment 1. The Stock payment overall situation 230 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 □ Applicable √ Not applicable 2. The Stock payment settled by equity □ Applicable √ Not applicable 3. The Stock payment settled by cash □ Applicable √ Not applicable 4. Modification and termination of the stock payment 5.Other XIV. Commitments 1.Importance commitment events Important commitments of existence of balance sheet date As of June 30,2018, there was no significant commitment or contingency in the Group. 2. Contingency (1) Significant contingency at balance sheet date 1.Chengdu Tongxing Micro-credit Co., Ltd. sued Sichuan Shangwei Construction and Decoration Engineering Co., Ltd., Wang Shaoqing, Lin Suqiong, Yang Jianzhong, Tunnel Group Engineering Co., Ltd. for the loan contract, and requested a loan amount of RMB 6,500,000, interest of RMB 87,7500 , penalty interest of 1,395,333.33 yuan, a total of 8,772,833.33 yuan,among them, the company bears the guarantee responsibility. Chuan 0191 Minchu No. 10209 of the People’s Court of Chengdu High-tech Industrial Development Zone (2016). It is first notified to hold the court session on October 11, 2016, and later the judge telephoned the lawyer to postpone the court session. As of the reporting date, no judgment has yet been made, and the court sentenced that the 7377500 yuan is to be borne by Shangwei Company, Wang Shaoqing, Lin Suqiong, Yang Jianzhong, and R&B Group Engineering Co., Ltd. are jointly and severally liable for the guarantee. The court froze the amount and interest of 7,441,788 yuan. 2. Liupanshui Jiuxiang Blasting Engineering Co., Ltd. sued the company due to project construction and requested the company to pay the project amount of RMB341,198.25 and the interest since April 30, 2014 (calculated at 6% per annum), The No. 1929 case of (2017) QIAN 0524 MIN CHU of Zhijin County Court, Guizhou Province was held on June 20, 2017. At present, the appeal against jurisdiction objection to the Bijie County Intermediate People’s Court is currently being heard. 3Construction project contract disputes. The plaintiff Xu Wenhua requested amount: 1. Construction and guarantee funds of RMB 3 million and the calculation of interest losses on the basis of the People's Bank loan interest rate for the same period from August 10, 2013 to the time of payment; 2. The defendant will bear the legal costs. The No. 992 case of (2017) E 2823, MINCHU of the People's Court of Badong County, Hubei Province was held at 14:40 on June 12, 2017. and the appeal against jurisdiction objection to the People’s Court of Enshi Tujia and Miao Autonomous Prefecture of Hubei Province is currently being heard. 4. Construction project contract disputes. Plaintiff (counterclaim defendant) Zhou Jihong, defendant (counterclaim 231 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 plaintiff) Daosui Group Engineering Co., Ltd., defendant (counterclaim third party) Road&bridge International Co., Ltd., defendant (counterclaim third party) Chengdu Beixin Construction Engineering Co., Ltd. The Nanchong Intermediate People's Court made the No. 29 civil judgment (2013) Nanzhongfaminchuzi on April 21, 2017, ruling: Daosui Group paid Zhou Jihong 167,034.97 yuan of various amount and interest, and the interest should be accounted from May 16, 2013; reject the counter-claims of Daosui Group. After the verdict of first instance, Road&bridge International Co., Ltd. and Bridge Construction Co., Ltd. and Daosui Group Engineering Co., Ltd. both filed an appeal. 5. Labor contract dispute, plaintiff: Yang Zaibing, who requesting an amount of 333,874.00 yuan. Chuan 3330 Minchu No. 16 case of Sichuan Province Dege County People’s Court (2017) was opened at 9: 00 on July 20, 2017. On July 25, 2017, Chuan 3330 Minchu No. 16 Judgment of Sichuan Province Dege County People’s Court (2017) ruled that Luo Zhicong paid the plaintiff 333,874.00 yuan, and Sichuan province Jinkun Labor Company and R&B Group Guang’an Engineering Co., Ltd. were jointly and severally liable. A second instance appeal has been filed. 6. Construction project contract disputes. The plaintiff Chongqing Mingyi Labor Service Co., Ltd. requested the amount of 5 million yuan in project compensation and the interest from August 1, 2011. The No. 2370 Case of (2017) CHUAN 1130 MINCHU of the People's Court of Shunqing District of Nanchong City was held at 15:30 on July 26th, 2017, and the case was transferred to the Intermediate People's Court of Chengdu for railway transportation. 7. Construction project contract disputes. Plaintiff: Chongqing Minyi Labor Service Co., Ltd., Defendant: Daosui Group Engineering Co., Ltd., Road&bridge International Co., Ltd., Third Party: Earth and Rock Engineering Branch of Sichuan Nanchong Hongcheng Construction Engineering Co., Ltd., Litigation Request: Litigation request: Daosui Group Engineering Co., Ltd. pays 4,260,061 yuan for on-site material equipment and interest on January 23, 2011; Road&bridge International Co., Ltd. and the third party bear joint responsibility for payment within the scope of 2,750,721.63 yuan of on-site materials and equipment received. The No. 2371 case of (2017) CHUAN 1302 MINCHU of People's Court of Shunqing District of Nanchong City was held at 15:30 on July 27th, 2017, and the case was transferred to the Intermediate People’s Court of Chengdu for railway transportation. 8. Private lending disputes. Plaintiff: Ye Pingyuan, defendant: He Yuanyuan, Daosui Group, plaintiff's request: immediate repayment of the loan principal amount of 3.3 million yuan and interests of 726,000 yuan during the period, overdue interests and penalty interests, etc.; a total of 80,000 yuan for lawyers’ fees, travel expenses, property preservation guarantees, etc. The plaintiff's request: immediate repayment of the loan principal of 2.7 million yuan and interest of 972,000 yuan during the period, overdue interest and penalty interest, etc.; payment of legal fees, travel expenses, property preservation guarantee fees, etc., totaling 50,000 yuan. The People’s Court of Nanan District, Chongqing City accepted and issued the No. 5009 and No.5010 notice of respondence to action of (2017)YU 0108 ZI to Daosui Group on August 3, 2018. 9. Dispute on sales contract, plaintiff: Building Materials Management Department of Xiaoren Yangliuping Sand Field, Zishi Township, Tianquan County, who requesting the payment of 2,262,194.00 yuan for sand and gravel materials and interest calculated from the date of prosecution to the date of actual payment based on the bank interest rate for the same period. In the case of Chuan 1825 Minchu No. 668 of Sichuan Tianquan County People’s Court (2017), R&B group filed a jurisdictional objection. The case is scheduled to open at 9: 00 on August 18, 2017. The appeal for jurisdictional objection is currently being heard. 10.Disputes over compensation for property damages, plaintiff: Yan Kaiyuan, defendant: Project Management 232 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Department of A2-1 bid of R&B Group Engineering Co., Ltd., Xie Wanyou and Yin Xiuchao, the plaintiffs request an compensation for damages to electromechanical wells, water pumps and other losses totaling 182,900.00 yuan. No. 01292 case of Helingeer County People's Court (2015) is scheduled to open on December 29, 2015. 11.Dispute on construction contract, plaintiff: Nanchong Jianan Labor Co., Ltd., defendant: CCCC Road and Bridge Construction Co., Ltd., third party: R&B Group Engineering Co., Ltd., the plaintiff requests a lawsuit related to R&B Group: the defendant was ordered to pay 3,850,838.84 yuan of creditor’s rights and interest transferred by the third party, and the third party was jointly and severally liable. The case of Chuan 1302 Minchu No. 1489 of Nanchong Shunqing District People’s Court (2017) will open at 15: 30 on June 6, 2017. CCCC Road and Bridge Construction Co., Ltd. raised a jurisdictional objection which is currently being heard. 12.Dispute over right of recourse, plaintiff: Liang Honglin, requesting 234,000.00 yuan, i.e. overdue interest, Chuan 1681 Minchu No. 225 case of Huaying Municipal People's Court (2016) was on court on July 21, 2017. On August 8, 2017, Chuan 1681 Minchu No. 225 judgment of Huaying Municipal People's Court (2016) ruled that R&B should return 100,000 yuan to plaintiff and calculate interest based on loan interest for the same period starting from (September 20, 2016). (2)The Company have no significant contingency to disclose, also should be stated The was no significant contingency in the Company. 233 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 3.Other XV. Post-balance-sheet events 1. Significant events had not adjusted 2. Profit distribution 3. Sales return 4.Notes of ohter significant events XVI. Other signifiant enents 1.The accounting errors correction in previous period (1)Retrospective restatement (2)Prospective application 2. Debt restructuring 3. Replacement of assets (1)Non-monetary assets exchange (2)Other assets replacement 4.Pension plan 5.Discontinuing operation 6. Segment information (1) Recognition basis and accounting policies of reportable segment (2)Reporting Segment Financial Information (3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable segment, shall disclose the reason. (4)Other notes 7. Other important transactions and events have an impact on investors’ decision-making 234 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 8.Other XVII. Notes s of main items in financial reports of parent company (1)Account receivable 1.Classification account receivables. In RMB Amount in year-end Amount in year-beginning Book Balance Bad debt provision Book Balance Bad debt provision Category Book Amount Proportio Amount Proportio Amount Proportio Amount Proportion( Book value value n(%) n(%) n(%) %) Account receivables provided bad debt 24,066,8 333,978. 23,732,86 24,456, 619,428.9 23,837,262. 100.00% 1.39% 100.00% 2.53% provision in credit 41.50 91 2.59 691.50 1 59 risk groups 24,066,8 333,978. 23,732,86 24,456, 619,428.9 23,837,262. Total 100.00% 1.39% 100.00% 2.53% 41.50 91 2.59 691.50 1 59 Receivable accounts with large amount individually and bad debt provisions were provided. □ Applicable √ Not applicable Account reveivable on which bad debt proisions are provided on age basis in the group √ Applicable □Not applicable In RMB Amount in year-end Aging Account reivable Provision for bad debts Proportion% Within item 1 year Within credit period 900.00 Subtotal 1 year 900.00 3-4 years 138,768.39 69,384.20 50.00% Over 5 years 264,594.71 264,594.71 100.00% Total 403,363.10 333,978.91 Notes: Receivable accounts on which had debt provisions are provided on percentage analyze basis in a portfolio □Applicable √Not applicable Receivable accounts on which had debt provisions are provided by other ways in the portfolio Name Amount in year-end Amount in year- begin Other group 23,663,478.40 235 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 (2)Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB 0.00;The amount of the reversed or collected part during the reporting period was of RMB285,450.0. Where the current bad debts back or recover significant amounts: In RMB Name Back or withdraw money Method Hebei Shengshi Machinery tools Group Co., 285,450.00 Ltd. Total 285,450.00 -- (3)The current accounts receivable written-offs situation (4)The ending balance of other receivable owed by the imputation of the top five parties The total receivable amount of top five closing balances collected by the debtors in the current reporting period is RMB20,069,912.24, which accounts for 83.39% of the total receivables. The total amount of closing balance for corresponding accrued bad-debt provision is RMB0.00. (5) Account receivable which terminate the recognition owning to the transfer of the financial assets (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable 2. Other accounts receivable (1) Other accounts receivable disclosed by category In RMB Amount in year-end Amount in year- begin Book Balance Bad debt provision Book Balance Bad debt provision Category Book Proportio Proportio Proportio Proportion( Book value Amount Amount value Amount Amount n(%) n(%) n(%) %) Other account 4,792,3 receivables provided 7,277,65 1,590,10 7,276,060 1,590,109 4,790,712,6 100.00% 0.02% 02,782. 100.00% 0.03% bad debt provision in 0,814.21 9.46 ,704.75 .46 72.70 16 credit risk groups 4,792,3 7,277,65 1,590,10 7,276,060 1,590,109 4,790,712,6 Total 100.00% 0.02% 02,782. 100.00% 0.03% 0,814.21 9.46 ,704.75 .46 72.70 16 Other Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: □Applicable √Not applicable Other receivable of combinational withdrawing bad debt provision by aging analysis method 236 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 √Applicable□ Not applicable In RMB Amount in year-end Aging Other receivable Provision for bad debts Proportion(%) WithinItem 1 year Within credit period 12,411,147.86 Within 1 year after credit period 96,550.70 4,827.54 5.00% Subtotal 1 year 12,507,698.56 4,827.54 3-4 years 200,000.00 100,000.00 50.00% Over 5 years 1,485,281.92 1,485,281.92 100.00% Total 14,192,980.48 1,590,109.46 Notes: Other receivable account in Group on which bad debt provisions were provided on percentage basis: □Applicable √Not applicable Other Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: √Applicable□ Not applicable Closing Balance Name Other account reivable Bad debt provision Proportion Related current account 7,235,364,183.36 Deposit 26,693,666.66 676,970.63 Personal official borrowing 576,360.09 Persona Returnable Insurance Export tax refunds 146,652.99 Total 7,263,457,833.73 (2)Bad debt provision accrual collected or switch back Bad debt provision accrual was RMB0.00, the acount collected or switches back amounting to RMB 0.00. Significant amount of reversed or recovered bad debt provision: (3) Other account receivables actually cancel after wtite-off (4) Other account receivables category by nature of money In RMB Naature Ending book balance Beginning book balance Related current account 7,235,364,183.36 4,728,633,349.92 current account 14,192,980.48 28,846,088.84 237 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Deposit 26,693,666.66 31,693,666.66 Personal official borrowing 676,970.63 159,109.89 Persona Returnable Insurance 576,360.09 446,555.34 Other 146,652.99 2,524,011.51 Total 7,277,650,814.21 4,792,302,782.16 (5)The ending balance of other receivables owed by the imputation of the top five parties In RMB Portion in total other Bad debt provision Name Nature Year-end balance Age receivables(%) of year-end balance Wuhu Tunghsu Optoelectronic Current account 2,830,661,471.94 Within credit period 38.90% Technology Co., Ltd. Wuhu Tunghsu Optoelectronic Within credit period Current account 2,503,648,360.33 34.40% Equipment Technology Co., Ltd. Shanghai Sunlong Current account 745,000,000.00 Within credit period 10.24% Bus Co., Ltd. Beijing Xufeng Real Current account 455,852,347.30 Within credit period 6.26% Estate Co., Ltd. Fuzhou Xufu Within credit period Optoelectronic Current account 282,500,616.65 3.88% Technology Co., Ltd. Total -- 6,817,662,796.22 -- 93.68% (6) Accounts receivable involved with government subsidies 3.Long-term equity investment In RMB End of term Beginning of term Items Impairment Impairment Book Balance Book value Book Balance Book value provision provision Investment in 23,295,190,195.2 22,917,017,545.3 21,269,035,359.7 20,890,862,709.8 378,172,649.84 378,172,649.84 subsidiaries 1 7 1 7 Investment in joint ventures and 2,141,338,074.97 2,141,338,074.97 2,129,502,187.30 2,129,502,187.30 associates 238 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 25,436,528,270.1 25,058,355,620.3 23,398,537,547.0 23,020,364,897.1 Total 378,172,649.84 378,172,649.84 8 4 1 7 (1)Investment to the subsidiary In RMB Withdrawn Closing balance impairment Name Opening balance Increase Decrease Closing balance of impairment provision in the provision reporting period Wuhu Tunghsu Optoelectronic Equipment 290,900,000.00 290,900,000.00 Technology Co., Ltd. Shijiazhuang Xuxin Optoelectronic 1,966,568,609.92 1,966,568,609.92 Technology Co., Ltd Zhengzhou Xufei Optoelectronic 1,791,853,741.58 1,791,853,741.58 Technology Co., Ltd. Sichuan Xuhong Optoelectronic 1,221,178,272.58 800,000,000.00 2,021,178,272.58 Technology Co., Ltd. Wuhu Tunghsu Optoelectronic 4,711,064,000.00 4,711,064,000.00 Technology Co., Ltd. Fuzhou Tunghsu Optoelectronic 1,745,000,000.00 1,745,000,000.00 Technology Co., Ltd. Wuhan Tunghsu Optoelectronic 3,247,200.00 690.57 3,246,509.43 Technology Co., Ltd. Fuzhou Xufu 24,000,000.00 24,000,000.00 239 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Optoelectronic Technology Co., Ltd. Shenzhen Xuhui Investment Co., 100,000,000.00 100,000,000.00 Ltd. Xuyou Electric Material 570,628,050.30 570,628,050.30 Technology (Wuxi)Co., Ltd. Tunghsu (Yingkou) 167,993,576.37 167,993,576.37 Optoelectroinc Display Co., Ltd. Shijiazhuang Colour Bulb 439,341,956.80 439,341,956.80 378,172,649.84 Co., Ltd Jiangsu Jixing New Material Co., 222,345,300.00 71,040,000.00 293,385,300.00 Ltd. Tunghsu (Kunshan) 800,000,000.00 800,000,000.00 Display Material Co., Ltd. Beijing Xutan New Material 10,500,000.00 10,500,000.00 Technology Co., Ltd. Beijing Xufeng Real Estate Co., 470,000,000.00 470,000,000.00 Ltd. Tunghsu Construction 3,000,453,728.53 3,000,453,728.53 Group Co.,Ltd. Shanghai Sunlong 3,800,000,000.00 1,400,000,000.00 5,200,000,000.00 Bus Co., Ltd. Shenzhen Sanbao Chuangxin 157,750,000.00 157,750,000.00 Inteligent Co., Ltd. Beijing Tunghsu 3,500,000.00 3,500,000.00 Huaqing 240 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Investment Co., Ltd. anghai Tanyuan Huigu New Material 73,454,500.00 73,454,500.00 Technology Co., Ltd. Taizhou Tunghsu graphene Industry Investment Fund 25,000,000.00 25,000,000.00 Management Cente 21,269,035,359.7 23,295,190,195.2 Total 2,596,783,576.37 570,628,740.87 378,172,649.84 1 1 (2)Investment to joint ventures and associated enterprises In RMB Increase /decrease in reporting period Closing Adjustme Withdraw balance Decrease Gain/loss nt of Declarati Opening Add Other n Closing of Name d of other on of cash balance investmen equity impairme Other balance impairme investmen Investme comprehe dividends t changes nt nt t nt nsive or profit provision provision income I. Joint ventures II. Associated enterprises Zhongda Chengx in Internat ional 73,306,96 2,886,186 76,193,15 Comm 8.08 .76 4.84 ercial Factori ng Co., Ltd. Tunghsu( Deyang) 19,454,20 19,483,72 29,527.77 Graphen 0.71 8.48 e 241 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 Develop ment Fund Partners hip(LP) Tunghsu 2,004,062 6,471,235 2,010,533 Finance ,204.94 .43 ,440.37 Group Zibo Bus 32,678,81 2,448,937 35,127,75 Co., Ltd. 3.57 .71 1.28 2,129,502 11,835,88 2,141,338 Subtotal ,187.30 7.67 ,074.97 2,129,502 11,835,88 2,141,338 Total ,187.30 7.67 ,074.97 (3)Other notes Long term equity investment impairment Opening balance Increase Decrease Closing balance Name Shijiazhuang Colour 378,172,649.84 378,172,649.84 Bulb Co., Ltd Total 378,172,649.84 378,172,649.84 4.Business income and Business cost In RMB Amount of current period Amount of previous period Items Income Cost Income Cost Main business 54,602,917.98 38,492,540.23 11,006,532.52 6,941,391.49 Other business 713,064.42 27,591,148.66 21,150,871.79 Total 55,315,982.40 38,492,540.23 38,597,681.18 28,092,263.28 Other notes: 5. Investment income In RMB Items Amount of current period Amount of previous period Investment loss through disposal of 11,835,887.67 -15,507,683.03 long-term equity investment 242 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 -20,628,050.30 Disposal of investment income from long-term equity investments Other Investment income 13,923,452.07 22,183,417.04 Total 5,131,289.44 6,675,734.01 6.Other XVIII. Supplementary Information 1.Current non-recurring gains/losses √ Applicable □Not applicable In RMB Items Amount Notes Gains/Losses on the disposal of non-current -664,826.45 assets Government grants recognized in the current period, except for those acquired in the ordinary course of business or granted at 44,668,918.09 certain quotas or amounts according to the country’s unified standards Gains and losses from assets under trusted 13,923,452.07 Investment Financing income investment or Management Gain/loss from debt reorganization 484,207.00 Net gain/loss of current term from consolidation of subsidiaries under common Business combination under the same -9,555,668.76 control from beginning of term to the control. Retroactive adjustment consolidation date Entrusted with the operating of the trust to 235,849.06 obtain fee income Net amount of non-operating income and 2,694,248.35 expense except the aforesaid items Less: .Amount of influence of income tax 6,987,734.04 Amount of influence of minority interests -2,152,164.99 Total 46,950,610.31 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as 243 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 recurring gains and losses, it is necessary to explain the reason. □ Applicable √ Not applicable 2 Return on net assets and earnings per share Earnings per share Profit of the report period Return on net assets . Weighted(%) Basic earnings per share Diluted gains per share Net profit attributable to the Common stock shareholders of 2.74% 0.15 0.15 Company. Net profit attributable to the Common stock shareholders of 2.59% 0.140 0.120 Company after deducting of non-recurring gain/loss. 3. Differences between accounting data under domestic and overseas accounting standards (1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards □ Applicable √Not applicable (2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards □ Applicable √Not applicable (3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards, for audit data adjusting differences had been foreign audited, should indicate the name of the foreign institutions 4.Other 244 Tunghsu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2018 XI. Documents available for inspection 1.The original semi-annual report bearing the signature of the Chairman of the Board of Directors of the Company; 2.The text of the financial report bearing the seal and signature of the person in charge of the Company, financial controller and the person in charge of accounting organ 3. Originals of all documents and manuscripts of public Notices of the Company Disclosed in public in the newspapers as designated by China Securities Regulatory Commission. 4.【Notes】This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail. Tunghsu Optoelectronic Technology Co., Ltd. Chairman:Wang Lipeng Issue day approved by the Board of Directors:August 30,2018 245