Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 August 2016 1 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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. All the directors attended the board meeting for reviewing the semi-annual Report. The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. Mr.Li Zhaoting, The Company leader, Mr. Zhou Bo, 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. 2 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Table of Contents 2016 Semi-Annual Report I.Important Notice, Table of contents and Definitions II. Basic Information of the Company III. Summary of Accounting Highlights and Business Highlights IV. Report of the Board of Directors 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. Financial Report X. Documents available for inspection 3 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Definition Terms to be defined Refers to Definition Company Law Refers to Company Law of the People’s Republic of China Securities Law Refers to Securities Law of the People’s Republic of China CSRC Refers to China Securities Regulatory Commission SZSE Refers to Shenzhen Stock Exchange Dongxu Group Refers to Dong Xu Group Co., Ltd. Baoshi Group Refers to Shijiazhuang Baoshi Electronics Group Co., Ltd Dongxu Optoelectronic , Company, The Refers to Dongxu Optoelectronic Technology Co., Ltd. Company Zhengzhou Xufei Refers to Zhengzhou Xufei Optoelectronic Technology Co., Ltd. Dongxu(Yingkou)Optoelectronic Refers to Dongxu(Yingkou)Optoelectronic Display Co., Ltd. Sichuan Xuhong Optoelectronic Refers to Sichuan Xuhong Optoelectronic Technology Co., Ltd. Shijiazhuang Xuxin Refers to Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. Wuhu Dongxu Optoelectronic Technology Co., Ltd., was the Wuhu Optoelectronic Refers to implementation unit of the non-public item to raise money for and invest in of “The Project of Production Line for Panel Display Plate” in 2013 Wuhu Equipment Refers to Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. Shijiazhuang Equipment Refers to Shijiazhuang Dongxu Optoelectronic Equipment Technology Co., Ltd. Dongxu(Kunshan)Display material Co., Ltd., In 2015, was the Dongxu (Kunshan ) Refers to implementation unit of the non-public item to raise money for and invest in “Project of Production Line for the 5th-generation CF for TFT-LCD”. Shanghai Tanyuan Huigu Refers to Shanghai Tanyuan Huigu New Material Technology Co., Ltd. Beijing Xutan Refers to Beijing Xutan New Material Technology Co., Ltd. Shenzhen Xuhui Refers to Shenzhen Xuhui Investment Holdings Co., Ltd. Beijing Dongxu Huaqing Refers to Beijing Dongxu Huaqing Investment Co., Ltd. Fuzhou Dongxu Optoelectronic Technology Co., Ltd.,In 2016, was the implementation unit of the non-public item to raise money for and invest Fuzhou Dongxu Refers to in “Project of Production Line for the 8.5th-generation Glass glass substrate for TFT-LCD”. BOE Refers to BOE Technology Group Co., Ltd. IVO Refers to Infovision Optoelectronics Co., Ltd. 4 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 CPT Refers to Chunchwa Picture Tubes Co., Ltd. CRT Refers to Cathode Ray Tube TFT-LCD Refers to Thin Film Transistor Liquid Crystal Display 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 Glass substrate Refers to materials in panel display industry. The glass sheet can be divided into various generations by its size, and the higher the generation is, the bigger the size will be. G5 glass substrate Refers to The size of the 5th-generation glass substrate is 1100 mm×1300 mm. G6 glass substrate Refers to The size of the 6th-generation glass substrate is 1500 mm×1850 mm. G8.5glass substrate Refers to The size of the 8.5th-generation glass substrate is 2200mm×2500mm CF Refers to Critical original materials of LCD panel for realizing colorization display A two-dimensional carbon material composed of carbon atoms closely Polaroid Refers to and cyclically packed by benzene ring structures (ie, hexagonal honeycomb structures) A two-dimensional carbon material composed of carbon atoms closely Single-layer grapheme Refers to and cyclically packed by benzene ring structures (ie, hexagonal honeycomb structures) Refers to two-dimensional carbon materials related to grapheme, with a Grapheme materials Refers to layer less than 10 carbon atoms 5 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 II. Basic Information of the Company 1. Company Information Stock abbreviation Dongxu Optoelectronic, Dongxu B Stock code: 000413、200413 Stock abbreviation after Dongxu Optoelectronic, Dongxu 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) Dongxu Optoelectronic Technology Co., Ltd. English abbreviation (If any) Dongxu Optoelectronic Legal Representative Li Zhaoting 2. 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 baoshixzb@126.com 3. 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 nore details in annual report 2015. (2). Information inquiry Whether information disclosure and preparation place changed in reporting period or not □ Applicable √ Not applicable None of the official presses, website, and place of enquiry has been changed in the semi report period. For details 6 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 please find the Annual Report 2015. (3). Change of business registration Whether the registration has changed during the report period Applicable √ Applicable □Not applicable Business license Tax registration Organization Registration date Registration place No. No. Code Shijiazhuang Registration at the beginning Administration for 911301001043959 January 7,2016 130111104395983 10439598-3 industry & 836 of the period Commerce Shijiazhuang Registration at the end of the Administration for 911301001043959 April 28,2016 130111104395983 10439598-3 industry & 836 period Commerce The date of the announcement of the designated website for February 17,2016 the interim announcement(If any) Internet website designated by CSRC for the interim http://www.cninfo.com.cn announcement of the Company(If any) 7 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 III. Summary of Accounting data and Financial index 1.Major accounting data and /Financial indexs May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to change of the accounting policy and correction of accounting errors. □ Yes √ No Increase/decrease over the Reporting period Same period of last year same period of last year(%) Operating income(RMB) 2,882,059,154.41 1,524,242,723.90 89.08% Net profit attributable to the shareholders 545,963,710.72 400,081,730.63 36.46% of the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 459,894,653.13 182,980,317.37 151.34% listed company(RMB) Cash flow generated by business operation, 1,281,108,942.94 54,777,798.87 2,238.74% net(RMB) Basic earning per share(RMB/Share) 0.14 0.15 -6.67% Diluted gains per 0.14 0.15 -6.67% share(RMB/Share)(RMB/Share) Weighted average income/asset ratio(%) 3.79% 5.14% -1.35% As at the end of the Changed (%)over end of As at the end of last year reporting period prev. year Gross assets(RMB) 33,483,031,894.59 28,798,623,253.33 16.27% Shareholders’ equity attributable to 14,568,550,417.60 14,319,481,941.28 1.74% shareholders of the listed company(RMB) II.The differences between domestic and international accounting standards 1. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard Not applicable 2. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard Not applicable III.Items and amount of non-current gains and losses √Applicable □Not applicable In RMB 8 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Items Amount Notes Fixed assets disposal of profits Gains/Losses on the disposal of non-current assets -4,430.74 and losses Government grants recognized in the current period, except forthose acquired in the ordinary course of business or granted at 103,218,866.64 Government grants certain quotas or amounts according to the country’s unified standards Gain/loss on loans obtained by entrusting others 1,500,000.00 Entrusted income Other non-operating income and expenditure beside for the above 282,354.44 items Less: Influenced amount of income tax 14,800,733.73 Amount of influence of minority interests 4,126,999.02 Total 86,069,057.59 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Compaines 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/itesm as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 9 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 IV. Report of the Board of Directors I. General 2016 is an important year for the implementation of Dongxu Optoelectronic strategy, the Company in the first half of 2016 mainly focuses on the construction of advanced generation substrate production lines, deepens the market layout of the existing products, and vigorously promotes the lateral extension of the new material filed and steadily promotes its production and business activities. In the first half of 2016, led by the Board of Directors and the management, as well as with the tireless efforts of all staff, the Company’s leading position in the liquid crystal glass substrate filed has been reinforced, with the smooth layout of the optoelectronic display materials and graphene business, forming good industrial collaboration and clustering effects. During the reporting period, the Company achieves an operating income of RMB 2.882 billion, an increase of 89.08 percent over the same period in 2015 of RMB 1.524 billion; the net profit attributable to the parent Company of RMB 546 million, an increase of 36.46 percent over the same period in 2015 of RMB 400 million. The Company’s business in the first half of 2016 focuses on the following five aspects: (1). Strengthen its leading position in the liquid crystal glass substrate, and fill in the localization vacancy of generation 8.5 As of the reporting period, the Company has respectively ignited six G6 and seven G5 liquid crystal glass substrate production lines, and five production lines of each are mass production. In the first half, the liquid crystal glass substrate market is stabilized and good, the Company achieving sales income of RMB 537 million, an increase of 22.25 percent, compared with the same period in 2015. With the pre-construction and the accumulation of the operating experience, the yields of the Company’s G5 and G6 liquid crystal glass substrate production lines continue to rise, up to over 90%. In the first quarter of 2016, Taiwan earthquake affected some panel makers’ process, but because the Company has comprehensively covered the of mainstream customers in mainland China and Taiwan, and it has higher industrial safety and stability, the earthquake didn’t affect the sales of the glass substrates, and the market in Taiwan went back to normal in the second quarter. In addition, in response to the upgrade pressure from the future display technology, the Company’s LTPS (low temperature poly-silicon) glass substrate product development achieves substantive results. Through years of technical reserves as well as ongoing research and development, drawing on the valuable experience in the successful operation of G5 and G6 liquid crystal glass substrate production lines, the Company has mastered the core production technology of generation 8.5 TFT-LCD glass substrates. To grasp the industry opportunities of the localization of liquid crystal glass substrates, closely follow the industry trend of the panel display products towards large-size and advanced generation, maintain its leading position in the domestic market, and strengthen the comprehensive competitiveness of the Company, in February 2016, the Company disclosed the nonpublic offering plan, intended to invest the generation 8.5 liquid crystal glass substrate production line, and this project was constructed to support the BOE generation 8.5 panel production line, situated in Rongqiao Development Zone, Fuzhou, and officially started construction in March of this year. (2). Continue to put forth the strength of high-end equipment business and expand intelligence manufacturing based on panel display 10 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Glass substrate High-End Equipment and technical service, control system and other special equipment are mostly customized products, as it involves the core technology, confidentiality of the production process, and market competition, prior to 2014, the Company mainly provides design, production, manufacture, installation and technical service of the outfit for its subordinate company TFT-LCD glass substrate production line and hosting company aluminous cover glass production line. With the basic completion of the construction of its own production line, based on years of experience in the field of electronic glass equipment manufacturing, its high-end equipment business began to turn to the in vitro market and the Company develops in depth in the The Company’s independent research and development (R & D) breaks through the foreign blockade and lays a solid foundation for the front equipment with the highest-tech among the electronic equipment, against the background of the equipment replaces the manual labor in the industry manufacture, and high- efficient production, the Company’s High-End Equipment and technical service business continued to expand, and gradually supplies products for the domestic high-end customers, but also gets involved in the panel industry equipment supply. During the reporting period, the Company’s High-End Equipment and technical service business achieved an operation income of RMB 1.68 billion, and it has developed and reserved a large number of large group customers in intelligent application filed. (3). Industrial cluster effects begins to show due to the core photoelectric display material layout For the realization of the strategic objective of being “China’s largest manufacturer of optoelectronic display materials”, closely follow the world trend of display technology and innovation, the Company, based on continuously consolidating and enhancing the foundation of the principal industry of liquid crystal glass substrate, combined with the main industry, continues to extend new business areas, and now it has successfully distributed three high-end display materials including sapphire, color filter and polaroid. During the reporting period, the Company carried out a partial sapphire business expansion and its market expansion is smooth, achieving an operating income of RMB 220 million, an increase of 400% over the same period in 2015, and the current products include large-size sapphire ingots, 2-6 inch sapphire crystal rods, 2 -6 inch sapphire substrates, optical window materials, and it has the stable customers such as Xuzhou GAPSS OE Technology Co., Ltd., North Microelectronics, and Sino Nitride Semiconductor Co., Ltd. The Company’s 5th generation TFT-LCD color filter production line is under construction, and when achieving the production target it will effectively increase the added value of the existing G5 liquid crystal glass substrate products, and become a new profit growth point of the Company. In addition, in order to quickly seize the domestic large-size liquid crystal panel business’ demand for polarizing plates, and effectively fill in the domestic vacancy of original volume production of polaroid, in February 2016, the Company, cooperating with the Sumitomo Chemical Company, one of the world’s top three polaroid production companies, jointly march towards the polaroid industry, proposed to register a joint venture company, Wuxi Xuyou Material and Technology Co., Ltd., the Company invested about RMB 500 million, holding 51%, and now the antitrust review on the concentration of operations is conducted by the Commerce Department. (4). Fit the trend of new urbanization construction, and maintain the stability of the construction and installation services As the Company’s traditional business, the construction and installation business plays an important role in helping the production line construction, and contracting external projects, effectively reducing the Company’s operating costs and enhancing the efficiency of the production line construction. With increasingly clear development strategy of the Company, the main task of the construction and installation business is to serve the existing core business, and play a role in production line construction and maintenance of factory buildings, and 11 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 on the other hand, against the background of the current new urbanization policies, the construction and installation business shall use its advantages to maintain steady growth. The Company’s construction and installation business is mainly done by Hebei Xubao and Sichuan Ruiyi, and achieved total operation income of RMB 435 million during the reporting period, essentially flat with a year earlier. (5). Parallel the asset acquisition and industrial fund, and complete the multi-point distribution of graphene business Based on graphene’s excellent performance in heat conduction and electrical conduction and transparency, the Company, as a leader in the field of optoelectronic display, is particularly concerned about its development and application in the field of flexible display, with the continuous progress of graphene business, the Company began to do a broader strategic layout of the graphene industry. In March 2016, the Company completed the acquisition of Shanghai Tanyuan Huigu Co., Ltd. through acquisition and capital increase, which is a company focusing on the mass production and application of grapheme, owing grapheme production technology, grapheme -based lithium-ion material and battery production technology, and this acquisition is significant for the Company to promote the industrialization of graphene. Currently, Shanghai Tanyuan Huigu and Beijing Xutan jointly become the promotion platform for the Company’s industrial development and research and industrialization. In addition to the development and research and industrialization platform, in March 2016, the Company incorporated a wholly owned subsidiary, Shenzhen Xuhui Investment, together with the Beijing Dongxu Huaqing, become the Company’s graphene industry consolidation and investment and financing platform. During the reporting period, the Company set up the graphene industry development funds of a scale of RMB 100 million and of a scale of RMB 200 million respectively with the Administrative Committee of the New Energy Industrial Park in Taizhou and the People’s Government of Jingyang District, Deyang, and the establishment of the industry funds contributes to accelerating the Company’s layout of graphene industry. In addition, the Company signed the Strategic Cooperation Agreement respectively with Tianjin Dongli, China Innovation Alliance of the Graphene Industry (CGIA), Beijing Institute of Collaborative Innovation (BICI) to practice the global development strategy, and signed Strategic Framework Agreement with the Catalan Institute of Nanoscience and Nano Technology (ICN2) in Spain to develop the technical exploration, industrial application development, product promotion and information sharing and cooperation on graphene and other materials. 2.Main business analysis Year-on-year changes in major financial statistics In RMB This report period Same period last year YOY change(%) Cause change Mainly due to the large year-on-year increase in Operating income 2,882,059,154.41 1,524,242,723.90 89.08% sales of high-end equipment and technical services. Mainly due to the corresponding costs Operating cost 1,938,309,643.65 882,046,270.04 119.75% increased as the revenue increased 12 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Mainly due to the sales increased which led to Sale expenses 31,577,716.56 15,959,542.69 97.86% the increase of freight and labor costs. Mainly due to the increase over the same Administrative expenses 236,706,264.85 164,106,222.01 44.24% period last year in wages and welfare, research and development expenses Mainly due to the increase of labor costs Financial expenses 94,439,392.61 150,308,723.11 -37.17% and R&D expenses compared to the last period Income tax expenses 90,283,601.51 81,096,961.02 11.33% R & D Investment 45,720,772.21 41,430,754.32 10.35% Mainly due to the Cash flow generated by 1,281,108,942.94 54,777,798.87 2,238.74% increase in collection of business operation, net sales payment Mainly due to the payment paid for Net cash flow generated -607,815,301.45 -411,058,599.42 47.87% purchasing the equity of by investment Xuxin Company and Xufei Company Net cash flow generated Mainly due to the 3,091,864,784.09 1,690,487,611.80 82.90% by financing increase in borrowing. Net increasing of cash 3,774,917,627.41 1,334,219,848.90 182.93% and cash equivalents Major changes in profit composition or cources during the report period □ Applicable √ Not applicable The profit composition or sources of the Company have remained largely unchanged during the report period. Delay of future development and plan disclosed in Company’s IPO prospectus, fund raising prospectus and capital reorganization report into this report period.\ □ Applicable √ Not applicable No future development and plan disclosed in Company’s IPO prospectus, fund raising prospectus and capital reorganization report into this report period.\ Implementation of business plans disclosed in previous periods in this period. During the reporting period, the Company efficiently operates the existing G5 and G6 glass substrate production line and maintains the production and sales of medium-and-low generation glass substrates, and at the same time, actively promotes the construction schedule of each raising investment projects. The Company’s non-public offering equity investment projects in 2013- 6th generation TFT-LCD crystal glass substrate 13 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 production line, 1-5 line achieves mass production, the yield of line 6 rises steadily, and the overall production line yield is rising; one of the Company’s non-public offering of equity investment projects in 2015, “the 5th generation TFT-LCD using color filter production line project” construction is actively promoted, upon achieving the production target, it will enhance the Company’s added-value of G5 glass substrate products, and promote the Company’s business growth; the Company’s non-public offering raising investment project in 2016, “the advanced generation including generation 8.5 glass substrate production line,” also enters the preparation stage. As of the disclosure of this report, the Company’s non-public offering funds in 2016 is in place, and completes the registration and listing of new shares, and in the future it will accelerate the construction of raising investment projects. 3. Business composition In RMB Increase/decrease Increase/decrease Increase/decrease of rincipal of gross profit of reverue in the Gross profit business cost over rate over the Turnover Operation cost same period of rate(%) the same period same period of the previous of previous year the previous year year(%) (%) (%) Industry High-end equipment and 1,679,753,266.20 980,987,330.23 41.60% 190.28% 404.37% -24.79% Technology serves Glass substrate 536,992,475.55 359,694,368.28 33.02% 22.25% 34.39% -6.05% Sapphire materia 220,217,237.68 186,587,859.61 15.27% 406.97% 407.44% -0.08% Construction 435,478,796.37 408,310,315.97 6.24% 0.63% 9.96% -7.95% Installation Electric vacuum glass devices and -100.00% -100.00% supporting electronic device Other 6,157.72 54,490.31 -784.91% Total 2,872,447,933.52 1,935,634,364.40 32.61% 91.95% 121.65% -9.03% Products High-end equipment and 1,679,753,266.20 980,987,330.23 41.60% 190.28% 404.37% -24.79% Technology serves Glass substrate 536,992,475.55 359,694,368.28 33.02% 22.25% 34.39% -6.05% 14 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Sapphire materia 220,217,237.68 186,587,859.61 15.27% 406.97% 407.44% -0.08% Construction 435,478,796.37 408,310,315.97 6.24% 0.63% 9.96% -7.95% Installation Electric vacuum glass devices and -100.00% -100.00% supporting electronic device Other 6,157.72 54,490.31 -784.91% Total 2,872,447,933.52 1,935,634,364.40 32.61% 91.95% 121.65% -9.03% Area China mainland 2,660,048,543.83 1,748,410,018.96 34.27% 91.28% 118.29% -8.13% Hongkong, Macao and 212,399,389.69 187,224,345.44 11.85% 100.77% 158.92% -19.80% Taiwan Total 2,872,447,933.52 1,935,634,364.40 32.61% 91.95% 121.65% -9.03% 4. Analysis On core Competitiveness The Company has disclosed four core competencies in 2015 Annual Report, and they are respectively “strong independent innovation and R & D strength”, “domestic industry leading position advantage”, “significant geographical and cost advantages” and “flexible and efficient management and incentive mechanism”, in the first half of 2016, the Company’s core competencies is further consolidated and deepened, without other significant changes. 5. Analysis on investment Status 1. External Equity investment (1)External investment √Applicable □ Not applicable External investment Investment amount (January-June Investment Amount (January-June Change rate(%) 2016)(RMB) 2015)(RMB) 1,102,954,500.00 319,845,300.00 244.84% Particulars of investees Name Principal business Proportion in the investees’ equity(%) Technology research and development, Shanghai Tanyuan Huigu New Material technology transfer, technical service and 50.50% Technology Co., Ltd. technical consultation for new material and 15 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 equipment areas, and sales of nanometer materials Investment, construction and operation of photoelectric display glass substrate industry, relevant technology development, technical Fuzhou Dongxu Optoelectronic consultation, technical service and technology 100.00% Technology Co., Ltd. transfer; design and sales of mechanical equipment and electronic products; import and export of various self-run and agent products and technologies Constructional engineering, hydraulic and hydro-power engineering, municipal public works, highway engineering, urban and roadway lighting engineering, electric power engineering, water-proof, anti-corrosion and insulation engineering, highway traffic engineering, highway pavement engineering, highway subgrade engineering, building mechanical and electrical installation works, special engineering, curtain wall engineering, steel structure engineering, river and lake Sichuan Ruiyi Construction Engineering regulation engineering, fire-fighting equipment 100.00% Co., Ltd. engineering, bridge engineering, architectural decoration and finishing engineering, electronic and intelligent engineering, landscape engineering, ancient architectural engineering, environmental protection engineering, communication engineering, transmission and transformation project, electromechanical engineering and petrochemical engineering; engineering survey design; project management service; import and export; commodity wholesale and retail. Sales of optoelectronic device and other Dongxu (Kunshan )Display Material Co., electronic devices; import and export of goods 80.00% Ltd. and technology. Investment management, project investment; Shenzhen Xuhui Investment Holdings Co. management consultation; asset management; 100.00% Ltd. equity investment management. Processing and sales of GG8.5TFT-LCD glass Fuzhou Xufu Optoelectronics Technology substrate; import and export of various self-run 100.00% Co., Ltd and agent products and technologies 16 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Investment in photoelectric display Fuzhou Dongxu Investment Co., Ltd. glass substrate industry and investment 100.00% management Taizhou Dongxu Graphene Industry External investment with self-owned assets, Investment Fund Management Center investment management and 25.74% (limited partnership) informationconsultation for graphene industry. Dongxu(DeYang)Graphene Industry Equity investment of private companies, Development Fund Of The Partnership investment management and related consulting 20.80% (limited partnership) services (2)Holding of the equipty in financial enterprises □Applicable√Not applicable (3)Investment in Securities □ Applicable √ Not applicable The Company had no investment in securities in period. (4) Statement of holding equities in other PLCs The Company was not holding shares of any other PLC as of the end of report period. 2.Entrusted Financing , investment in derivative products and entrusted loan (1)Trust financing □ Applicable √ Not applicable The company had no trust financing in the reporting period. (2)Derivative investment □ Applicable √ Not applicable The company had no derivative investment in the reporting period. (3) Trusted loans □ Applicable √ Not applicable No trusted loans in the report period. 3.Application of the raised capital √ Applicable □ Not applicable 17 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (1)General application of the raised funds √ Applicable □ Not applicable In RMB Total amount of the raised capital 1,403,880 Total raised capital invested in the report period 21,211.35 Total accumulative raised capital invested 1,078,681.19 Amount of raised capital of which the purpose was 0 changed in the report period Accumulative amount of raised capital of which the 0 purpose has been changed Proportion of raised capital of which the purpose has 0.00% been changed (%) Notes to use of raised capital (I) The amount of funds raised and credited into account 1. In 2015, the China Securities Regulatory Commission (CSRC) issued the [2015] No. 2270 text on the Approval of the Non-Public Offerings of Dongxu Optoelectronic Technology Co., Ltd. and approved that the number of the Company’s new non-public offerings should be less than 1186.9436 million. As of November 13, 2015, the Company has actually issued shares of 1173.0205 million, the face value is RMB 1 per share and the issue price is RMB 6.82 per share, a total of RMB 8000 million. Deducting the distribution-related fee (excluding tax) of RMB 59.4767 million, the actual net proceeds are RMB 794.5232. Zhongxingcai Guanghua Certified Public Accountants LLP issued the Zhongxingcai Guanghua verification Zi (2015) No. 05007 capital verification report in November 26, 2015. 2. In 2013, the China Securities Regulatory Commission (CSRC) issued the [2012] No. 1661 text on the Approval of the Non-Public Offerings of Shijiazhuang Gem Electronic Glass Co., Ltd. to approve the non-public offering in 2013, the Company, through the non-public offerings, issued towards eight specific investors including TUNGHSU GROUP, 520 million shares at an issue price of RMB 9.69 per share, and the total raise funds is RMB 5038.80 million, and deducting the distribution-related fee of RMB 77.736 million, the net proceeds is RMB 4961.064 million. The above-mentioned funds are all in place on April 3, 2013, and have been verified by the Zhongxingcai Guanghua verification Zi (2013) No. 5003 Verification Report issued by the Zhongxingcai Guanghua Certified Public Accountants LLP (formerly known as “Zhongxingcai Guanghua Certified Public Accountants Co., Ltd.”). 3. 15 Dongxu Bonds approved according to the approval of the [2015] No. 635 text on the Approval of Public Offering of Corporate Bonds of Dongxu Optoelectronic Technology Co., Ltd. issued by the China Securities Regulatory Commission (CSRC), that the Company issues public corporate bonds of RMB 1 billion (the number is ten million), the face value is RMB 100 each, and the issue price is the face value. The bond is 5-year fixed rate (Attached with by the end of the third year, the option of the Company raising the coupon rate and investors recover). The coupon rate is 6.00%, the total fund raised is RMB 10 million, after deducting underwriting fees, the amount is RMB 987 million. It has been verified by the Zhongxingcai Guanghua verification Zi (2015) No. 05004 Verification Report issued by the Zhongxingcai Guanghua Certified Public Accountants LLP. (II) The balance of the raise funds: as of June 30, 2016, the balance of the account for the non-public offering raise funds of the Company in 2015 is RMB 2919.3518 million (including interest income of RMB 27.3066 million); the balance of the account for the non-public offering raise funds of the Company in 2013 is RMB 251.2072 million (including interest income of RMB 18 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 1.2072 million); the balance of the account for the raise funds of 15 Dongxu Bonds is RMB0.3376 million . (2)Promised projects of raised capital √ Applicable □ Not applicable In RMB’0000 Date Accumul Investme when the Total ated nt Has any Project Total Amount project Benefit raised amount progress Has the material changed(i investme inested in has realized Committed investment capital invested ended the predicted change ncluding nt after the reached in the projects and investment invested at the end reporting result be taken partial adjustme reporting the reporting as of the period(% realized place in change) nt (1) period predicted period commited reporting )(3)=(2)( feasibility applicabl period(2) 1) e status Committed investment projects Project of Production Line for the Decembe No 300,000 300,000 10,708.42 3.57% No No 5th-generation CF for r 31,2017 TFT-LCD Xufei Optoelectronic Decembe 100% equity No 177,000 177,000 7,408.33 177,000 100.00% 6,008.07 Yes No r 31,2015 acquisition Xuxin Optoelectronic Decembe 100% equity No 198,000 198,000 13,803.02 198,000 100.00% 1,261.88 \Yes No r 31,2015 acquisition Supplement current Decembe No 125,000 125,000 121,537 97.23% Yes No capital r 31,2015 Panel display galass substrate project of 471,469.5 Decembe Wuhu Dongxu No 496,106.4 496,106.4 95.03% No No 3 r 31,2016 Optoelectronic Technology Co., Ltd. Supplement current captial(Corporation No 100,000 100,000 99,966.29 99.97% Yes No Bond) Subtotal of promised 1,396,106 1,396,106 1,078,681 -- 21,211.35 -- -- 7,269.94 -- -- investment projects .4 .4 .24 Investment of excessive raised capital None No 19 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 1,396,106 1,396,106 1,078,681 Total -- 21,211.35 -- -- 7,269.94 -- -- .4 .4 .19 Wuhu Optoelectronic panel display glass substrate production line project adopts the mode of stage Reason or situation construction, stage production and achieves benefits by stages, and the project is not fully put into thatnot on schedule production, so it isn’t applicable. Some production lines of the 5th Generation TFT-LCD Color filters (CF) (on specific project) production line project are under construction, so they are not applicable. Notes to major changesin project None feasibility Amount, application Not applicable and application progress of the unbooked proceeds About the change of Not applicable the implementation site of the projects invested with the proceeds Adjustment of the Not applicable implementation way of investment funded by raised capital Applicable (1) On April 17, 2013,The 36th Meeting of the sixth Board of Directors of the Company has examined andapproved the “Proposal on the Replacement of the Self-funancing Funds pre-put into Investment Project with the RAISED Funds”, and agreed the company to make arrangement for the funds-raising on the replacement of the pre-investment based on the plan of non-public issuance of stocks, with the pre-invested self-financing funds of RMB 2,077,426,324.50 replaced by the raised funds. The company's About the initial independent directors, the board of supervisors and the sponsor of Guangzhou Securities all investment in the issued the clear consent.A special audit report- No.5002-Zhongxin Cai Guan Hua specially Certified projects planned to be (2013) pertain to the item of replacing the funds pre-invested in the project which should be invested by the invested with the funds raised was issued by Zhongxincai Guanhua Certified Public Accountants (LLP). proceeds and the (2)On December 29, 2015, the 46th meeting of the 7th board of directors and the 18th meeting of the 7th replacement board of supervisors of the Company examined and adopted “Proposal on Using the Raised Fund to Replace the Self-raised Fund of the Advanced Invested Item to Raise Money for and Invest ”, The amount of RMB 107.0842 million of self-collected funds, used by the company, which was in advance put into the project of “The 5th generation TFT-LCD color filter (CF) production line” that was set to be invested by the raised funds. which had been audited and certified by by Zhongxincai Guanhua Certified Public Accountants (special general partnership) with the report of No.5037 Zhongxincai Guanhua specially Certified (2015) provided. Using the idle Applicable 20 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 proceeds to On May 29, 2015, the 37th Meeting of the 7th Board of Directors of the company deliberated and supplement the approved Proposal of Using Partial Idle Raised Fund to Supplement Circulating Fund, which agreed the working capital on company to use the idle raised fund valuing 250 million yuan (taking 5.04% of the actual net raised fund) temporary basis to temporarily supplement the circulating fund of the company. Service life lasts for 12 months since the approval date by the Board of Directors. The company will return to the special account for fund-raising in time when the fund used to supplement the circulation is due. The above-mentioned funds raised are returned and stored in the company’s dedicated account for the funds raised on May 26, 2016. Balance of the Notes proceeds in process of project implementation and the cause About application and As of the end of the reporting period, there was no change for the investment purpose of the raised funds status of the proceeds and the raised funds that have not yet been used were all in the special account unused Problems existing in The company strictly accordance with "use of funds raised management system" and "raise funds tripartite application of the regulatory agreement" to raise funds and special accounts storage use, and timely, truely, accurately and proceeds and the completely disclosure of the deposit and use of proceeds, there is no violation circumstances. information disclosure or other issues (3)Changes of raised funds projects □ Applicable√ Not applicable There is no change in raised funds in company reporting period. (4)Fund-raising project Fund-raising project overview Disclosure date Disclosure index Special report on the depositing and use information of the raised funds in 2015 by February 6,2016 http://www.cninfo.com.cn the board of directors Special report on the depositing and use information of the raised funds in the first August 30,2016 http://www.cninfo.com.cn half year of 2016 by the board of directors 4. Analysis on principal subsidiaries and Mutual Shareholding Companies √Applicable □Not applicable Particulars about the principal subsidiaries and Mutual shareholding companies In RMB Company Company Sectors Leading Registered Operating Total assets Net assets Tumover Net Profit Name type engaged in products capital profit 21 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 and services Zhengzhou Xufei Optoelectro Manufactur Glass 1,650,000,0 4,792,834,1 1,858,384,8 419,879,11 63,438,76 60,080,656.3 Subsidiary nic ing substrate 00.00 49.57 38.44 1.71 3.63 4 Technology Co., Ltd. Wuhu Dongxu High-End Optoelectro Equipment Manufactur 98,000,000. 6,837,412,2 1,958,604,5 1,423,880,4 461,670,0 473,976,590. nic Subsidiary and ing 00 92.77 72.19 84.78 90.88 50 Equipment Technology Technology serves Co., Ltd 5. Major projects invested by non-raised fund □ Applicable√ Not applicable The company had no major projects invested by non-raised fund in the reporting period. VI. Prediction of business performance for January –September 2016. 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 VII. Explanation of the Board of Directors and the Supervisor Committee concerning the “Non-standard audit report ” issued by the CPAs firm for the reporting period □ Applicable √ Not applicable VIII.Explanation by the Board of Directors about the “ non-standard audit report “ for last year. □ Applicable √ Not applicable IX. Profit distribution carried out in the report period Execution or adjustment of profit distribution, especially cash dividend, and capitalizing of reserves in the report period. √ Applicable □Not applicable On February 29, 2016, the company held the 2015 annual general shareholder meeting in which the 2015 annual profit distribution plan was examined and approved. The company's 2015 annual profit distribution plan 22 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 was: based on the company’s total share capital of 3,835,000,526 shares on the date of January 31, 2016, the company will distribute cash dividends of RMB 0.70 per 10 shares (Tax inclusive) to all the shareholders by using the undistributed profits, with no share-increasing by converting capital reserve into share capital. The date of record of A-shares of this profits distribution is: April 25, 2016; the ex-dividend and ex-right date is: April 26, 2016; the last trading day of B shares: April 25, 2016, the date of record is: April 28, 2016, the ex-dividend and ex-right date is: April 26, 2016 This profits distribution plan had been completed on April 28, 2016. Special explanation on cash dividend policy Comply with the Articles of Association or resolution made at Yes the General Shareholders' Meeting Clear and definite distribution standard and proportion Yes Decision-making procedure and mechanism Yes Independent directors fulfill their duties Yes Middle and small shareholders express their opinions and Yes daims.There rights are well protected Cash dividend distribution policies are adjusted or revised Until the end of the reporting period, the company has not accoring to law. adjusted or changed the cash-dividend policy. X. Preplan for profit distribution and turning capital reserve into share capital in the reporting period □ Applicable √ Not applicable The Company planed that no to distribute cash dividend, bonus shares and there was no turning of capital reserve into share capital. XI. Particulars about researches, visits and interviews received in this reporting period √Applicable □ Not applicable Discussion topics and Reception time Reception place Way of reception Types of visitors Vistors rece3ived provision of materials The summary of operations of 2015, the application February 18,2016 Beijing By phone Organization Organization direction and industrial prospects of graphene, etc Onsite Overall profile of the March 10,2016 Beijing investigation Organization Organization company, overview of graphene business, etc. Fundamentals of the January 1 ,2016-- company, the main Beijing By phone Individual Individual June 30,2016 business, the information of graphene battery, etc. 23 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 V. Important Events I、Administrative position The company has, strictly in accordance with The Company Law, The Securities Law, Standardize Operational Guidelines for Listed Companies on the Main Board of Shenzhen Stock Exchange and the requirements of relevant laws and regulations, continued to improve the corporate governance structure and the internal control system, carry out in-depth activities of corporate governance, raise the level of standardized operation and soundly safeguard the legitimate rights and interests of all shareholders. As of the end of the reporting period, the company's internal governance structure was complete, sound and clear, which is in line with The Company Law, the Articles of Association of the Company and other relevant laws, regulations and regulatory documents. During the reporting period, the company was honest in operations and utilized standardized operations, timely performed the obligation of information disclosure. The general shareholder meeting, board meeting of board of directors and meeting of board of supervisors had been convened with in accordance with relevant t rules and regulations, and all directors and supervisors have seriously performed their duties with due diligence. There was no difference between the actual situation of company’s management and the requirements of "Company Law" and the relevant provisions of China Securities Regulatory Commission. II. Lawsuits affairs Major lawsuits and Arbitration affairs □ Applicable √ Not applicable The Company has no major lawsuit or arbitration in the report period. Other Lawsuits affairs □ Applicable √ Not applicable III. Query form media □ Applicable √ Not applicable In the reporting year, the Company had no query from media IV. Bankruptcy or Reorganization Events □ Applicable √ Not applicable There Company was not involved in any bankruptcy or reorganization events in the reporting period. 24 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 V. Assets transaction 1. Purchase of assets √Applicable □ Not applicable Ratio of Relation the Net with Influence Income Counter-pa Counter-pa Acquired Transactio Impact on on the Caused by rty or Connected rty Date of or n Price (10 Progress Company's Profit and the Asset Disclosure Ultimate Transactio (applicab Disclosure Purchased thousand (Note 2) Business Loss of the Contributi Index Controllin n le to (Note 5) Assets yuan) (Note 3) Company ng to the g Party associated (Note 4) Listed business Company situation) in Total he net profits contribute Guo d to the Shanghai The Shouwu, listed Tanyuan change of Ma company Temporary Huigu business Shengjie, Adding from the Annoonce New registratio March Wu 7,345.45 new purchase 0.00% No ment. Material n had been 9,2016 Haixia, product date to the No.2016-0 Technolo completed Shen end of the 31 gy Co., on March Wenzhuo, reporting Ltd. 31 Shen Li period were RMB -1.1063 million 2. Sale of assets □ Applicable √ Not applicable There is no sale of assets in the Company during the reporting period 3. Business combination √Applicable □ Not applicable 1.Enterprise consolidation not under the same control (1)Enterprise consolidation not under the same control in reporting period In RMB’0000 Time-poi Obtained Ratio of Method Purchasin Determination Income of Net Profit of Name nt of Cost of Obtained of g Date Basis on the Acquire from Acquire from the 25 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Obtained Equity Equity Obtaine Purchasing Date the Purchasing Purchasing Date Equity (100%) d Date to the to the End of the Equity End of the Period Period Shanghai Tanyuan March 7,345.45 50.50 Purchas March Obtain a business 0.62 -110.63 Huigu New 2016 e and 31,2016 license Material add Technology Co., share Ltd. (2) Consolidation Cost and Goodwill Items Shanghai Tanyuan Huigu New Material Technology Co., Ltd. Consolidation cost —Cash 73,454,500.00 Total Consolidation cost 73,454,500.00 Less:Reduction: Obtained Definable Net Assets Fair Proportion 39,763,137.22 Goodwill/ The Consolidation Cost is Less Than the Obtained Definable Net Assets 33,691,362.78 Fair Proportion (3) The identifiable assets and liabilities of acquiree at purchase date Items Shanghai Tanyuan Huigu New Material Technology Co., Ltd. Fair value on purchase date Book value on purchase date Assets: Monetary fund 65,834,772.59 65,834,772.59 Account receivable 1,600.00 1,600.00 Prepayments 2,006,750.00 2,006,750.00 Other account receivable 457,262.00 457,262.00 Inventories 1,243,387.97 802,979.59 Other current assets 198,033.10 198,033.10 Fixed assets 1,847,248.70 1,939,350.28 Intangible assets 7,317,795.33 4,444,692.24 Amortisation of long-term prepaid 303,253.20 303,253.20 expenses Liabilities: Account payable 362,292.10 362,292.10 26 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Employees’ wage payable 37,656.00 37,656.00 Other account payable 71,269.20 71,269.20 Net assets 78,738,885.59 75,517,475.70 Less:Minority equity Net assets acquired 78,738,885.59 75,517,475.70 2. Due to new subsidiaries set up in the current period On March 8, 2016, Wuhu Dongxu Optoelectronic Technology Co.,Ltd set up Fuzhou Dongxu Investment Development Co., Ltd and holds 100% stake of Fuzhou Dongxu Investment Development Co., Ltd, of which the registered capital was RMB 10 million and the paid-in capital was RMB 0.00. On March 17, 2016, Beijing Dongxu Huaqing Investment Co., Ltd as a general partner, Dongxu Optoelectronic Technology Co.,Ltd as a limited partner and Taizhou Golden Sun Energy Co., Ltd as a limited partner together set up Taizhou Dongxu Graphene Industry Investment Fund Management Center(Limited partnership). Such limited partnership company was incorporated in May 4, 2016, and the total amount of capital contribution agreed in the agreement was RMB 101 million, but as of June 30, 2016, the actual received amount of capital contribution was RMB 0.00. For the capital contribution, Taizhou Golden Sun Energy Co., Ltd subscribed the amount of capital contribution of RMB 75 million, Dongxu Optoelectronic Technology Co.,Ltd subscribed the amount of capital contribution of RMB 25 million, Beijing Dongxu Huaqing Investment Co., Ltd subscribed the amount of capital contribution of RMB 1 million which was agreed in the agreement by using the labor service as capital contribution, and meanwhile, upon the agreement, the three parties all agreed that they shall complete the capital contribution before December 30, 2016. On March 31, 2016, Dongxu Optoelectronic Technology Co.,Ltd set up Shenzhen XuHui Investment Holdings Co.,Ltd, of which the registered capital was RMB 100 million and the paid-in capital was RMB 0.00. On June 24, 2016, Fuzhou Dongxu Optoelectronic Technology Co.,Ltd and Dongxu Optoelectronic Technology Co.,Ltd together set up a new company of Fuzhou Xufu Optoelectronic Technology Co.,Ltd, of which the registered capital is RMB 65.40 million, among which, Fuzhou Dongxu Optoelectronic Technology Co.,Ltd shall contribute RMB 54.50 million, Dongxu Optoelectronic Technology Co.,Ltd shall contribute RMB 10.90 million, and the paid-in capital was RMB 0.00. VI. Implementation and Influence of Equity Incentive Plan of the Company √Applicable □ Not applicable On October 29, 2015, the Proposal on Buying-back and Writing-off Part of the Restricted Shares was approved in the 43rd board meeting of the 7th session board of directors. The total restricted 100,000 shares which were granted to the incentive object of Chenyin but still being locked were bought-back, thus the total shares of this buy-back was 100,000 shares. On January 26, 2016, the above-mentioned restricted shares have been completed the procedure of writing-off in China Securities Depository and Clearing Co., Ltd. Shenzhen Branch. 27 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 VII. 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 approve Amount price of of of the pricing Ratio in approve Date of Related Relation Type of Price of of trade Way of similar inform related the similar d disclosu parties ship trade trade RMB0’ payment trade ation transacti related trades d re 000 availabl disclos ons transacti limited e ure ons (RMB or not ’0000) (Y/N) Shijiazh uang Controll Commo Dongxu ed by dity Referen Mechani the same purchas Machini 18.5682 18.5682 ce price 1,856.82 4,000 No Currency cal actual ed/labor ng parts million million setting Equipm controll service ent Co., er received Ltd. Cheng du Zhong General Sales Optoel manager Goods/L glass Referen 3.1062 3.1062 ectroni for Li abor substrat ce price 310.62 311 No Currency million million c Zhaotin service e setting Techno g received logy Co., Ltd. Dongxu Controll ( Yingko Related ed by u) manage Manage Referen the same 0.5 0.5 Optoele d ment ce price 50 100 No Currency actual million million ctronic /Contrac right setting controll Display t er Co., Ltd Controll Related Manage Referen Dongxu ed by manage 0.5 0.5 ment ce price 50 100 No Currency Group the same d million million right setting parent /Contrac 28 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 compan t yActual Controll er Sichuan Controll Xuhong Related ed by Optoele manage Manage Referen the same 0.5 0.5 ctronic d ment ce price 50 100 No Currency actual million million Technol /Contrac right setting controll ogy Co., t er Ltd. Total -- -- 2,317.44 -- 4,611 -- -- -- -- -- Details of any sales return of a large None amount Give the actual situation in the report period where a forecast had been made for the total amounts of routine None related-party transactions by type to occur in the current period(if any) Reason for any significant difference between the transaction price and the None market refernce price (if applicable) 2. Related-party transactions arising from asset acquisition or sale □Applicable √ Not applicable There is no any related-party transactions arising from asset acquisition or sale during the reporting period. 3. Related-party transitions with joint investments □ Applicable √ Not applicable The Company was not involved in any related-party transaction with joint investments during the reporting period. 4. Credits and debt with related parties □ Applicable √ Not applicable There is no any credit and debt with related parties of the Company of the reporting period. Whether there is non operating related credits and deb □ Yes √No There is no any non perating related credit and debt with related parties of the Company. 5. Other significant related-party transactions □ Applicable √ Not applicable The Company was not Other significant related-party transactions during the reporting period. 29 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 VIII. 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.. IX. Particulars about significant contracts and their fulfillment 1. Particulars about trusteeship, contract and lease (1) Trusteeship √ Applicable □Not applicable Description of custodies During the reporting period, the Company continued entrusted with the management of Dongxu( Yingkou) Optoelectronic Display Co., Ltd.and Sichuan Xuhong Optoelectronic Technology Co., Ltd. In December 2011, Dongxu Group, Dongxu Optoelectronic Investment Co., Ltd. and Shijiazhuang Baoshi Electronic Group Co., Ltd signed the Equity Trusteeship Agreement with the Company , of which 60% share rights of Dongxu (Yingkou) Optoelectronic Display Co., Ltd., 51% share rights of Sichuan Xuhong Optoelectronic Technology 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. See details in the table below: Name of Clients/Contractee Name of Type of Entrusting Starting Date Expiration Confirmed Trustee/Cont Asset/Contracting Asset of Entrusting Date of Entrusting ractee /Contracting Entrusting /Contracting Fee /Contracti at the Current ng Period Dongxu Group, Yingkou Coastal Dongxu Management Right of January 2012 Notes 1 750,000.00 Development Construction Co., Optoelectron Dongxu(Yingkou) Ltd.Minmetals (Yingkou) Industrial Park ic Optoelectroric Display Development Co., Ltd. Technology Co., Ltd. Dongxu Group, Mianyang Investment City Co., Ltd. Management Right of March 2012 Notes 2 750,000.00 Development (Group ) Co., Ltd., Sichuan Sichuan Xuhong Changhong Electric Co., Ltd. Optoelectronic Technology Co., Ltd. Total 1,500,000.00 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 1 million RMB/year, the incentive management fee is counted by 5% of the after-tax net profit yearly achieved by the trustee company(the base of the incentive management fee deducts the loss of the previous year.) Note 2: 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 1 million RMB/year, the incentive management fee is counted by 5% of the after-tax net profit yearly achieved by the trustee company Items which resulted in profit or loss achieving over 10% of the total profit for the Company 30 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 □ Applicable √ Not applicable (2) Contract □ Applicable √ Not applicable There was no any contract of the Company in the reporting period. (3) Lease √Applicable□Not applicable There was no any lease of the Company in the reporting period. 2.Guarantees √Applicable □ Not applicable In RMB’0000 External Guarantee (Exclude controlled subsidiaries) Guarante Relevant e Date of disclosure Complete for happening Actual Name of the date/No. of Amount of Guarantee Guarantee implemen associate (Date of mount of Company the Guarantee type term tation d signing guarantee guaranteed or not parties agreement) amount (Yes or no) Total of external guarantee Total of actual external 0 0 approved in Period(A1) guarantee in Period(A2) Total balance of actual Total of external guarantee 0 external guarantee at 0 approved at Period-end(A3) Period-end(A4) Guarantee of the Company for the controlling Company 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) Zhengzhou Xufei May The joint 10,000 May 30,2016 10,000 1 year No No Optoelectronic 27,2016 liability 31 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Technology Co., guaranty Ltd. Wuhu Dongxu The joint Optoelectronic June November 220,000 192,000 liability 8 years No No Technology Co., 20,2013 12,2013 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic April 20,000 June 22,2016 15,000 liability 1 year No No Technology Co., 21,2016 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic September September 24,000 20,000 liability 1 year No No Technology Co., 28,2015 29,2015 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic October November 10,000 5,000 liability 1 year No No Technology Co., 19,2015 30,2015 guaranty Ltd Wuhu Dongxu The joint Optoelectronic September December 4,000 4,000 liability 1 year No No Technology Co., 28,2015 22,2015 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic October 20,000 April 25,2016 20,000 liability 1 year No No Technology Co., 19,2015 guaranty Ltd. Wuhu Dongxu The joint Optoelectronic March 7,500 June 23,2016 7,500 liability 1 year No No Technology Co., 31,2016 guaranty Ltd. Wuhu Dongxu Optoelectronic The joint April Equipment 75,000 October 30,2014 30,000 liability 8 years No No 12,2014 Technology Co., guaranty Ltd. Wuhu Dongxu Optoelectronic The joint April November Equipment 75,000 20,000 liability 8 years No No 12,2014 27,2014 Technology Co., guaranty Ltd. Jiangsu Jixing New August 12,500 August 26,2015 3,000 The joint 1 year No No 32 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Material Co., Ltd. 14,2015 liability guaranty The joint Jiangsu Jixing New March 5,500 March 17,2016 5,500 liability 1 year No No Material Co., Ltd 3,2016 guaranty Beijing Xufeng The joint October November Realestate Co., 60,000 60,000 liability 5 years No No 19,2015 26,2015 Ltd. guaranty Beijing Xufeng The joint October December Realestate Co., 60,000 60,000 liability 5 years No No 19,2015 22,2015 Ltd. guaranty Total of guarantee for Total of actual guarantee subsidiaries 43,000 for subsidiaries in the 58,000 approved in the Period (B1) Period (B2) Total of guarantee for Total of actual guarantee subsidiaries 603,500 for subsidiaries at 452,000 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 amount of guarantee to Total guarantee quota to the the subsidiaries actually subsidiaries approved in the 0 0 incurred in the reporting reporting period (C1) period (C2) Total balance of actual Total guarantee quota to the guarantee to the subsidiaries at subsidiaries approved at the end 0 0 the end of the reporting period of the reporting period (C3) (C4) Total of Company’s guarantee(namely total of the large three aforementioned) Total of guarantee in the Period Total of actual guarantee in 43,000 58,000 (A1+B1+C1) the Period(A2+B2+C2) Total of guarantee at Period-end Total of actual guarantee at 603,500 452,000 (A3+B3+C3) Period-end 33 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (A4+B4+C4) The proportion of the total amount of actually guarantee in 31.03% thenet assets of the company(A4+B4+C4) Including : Amount of guarantee for shareholders, actual controller and its 0 associated parties(D) The debts guarantee amount provided for the Guaranteed parties whose assets-liability ratio exceed 170,000 70% directly or indirectly(E) Proportion of total amount of guarantee in net assets of the 0 company exceed 50%(F) Total guarantee Amount of the abovementioned guarantees 170,000 (D+E+F) Description of the guarantee with complex method (1)Illegal providing of external guarantees □ Applicable √Not applicable No illegal providing of external guarantees in the report period. 3. Other significant transactions □ Applicable √ Not applicable No Other significant transactions in the report period.4. Other significant transactions □ Applicable √ Not applicable There was no other significant transaction of the Company in the reporting period. X. Commitments made by the Company or shareholders holding over 5% of the Company’s shares in the reporting period or such commitments carried down into the reporting period √Applicable □ Not applicable Commitment Time of making Period of Commitment Contents Fulfillment maker commitment commitment If listed companies plans to sell tradable stocks through the bid Shijiazhuang Commitment on share trading system of Shenzhen Stock Long-term Under Baoshi Electronics March 29, 2007 reform Exchange and sell greater than effective Fulfillment Group Co., Ltd 5% of shares within six months after the first sales, will disclose 34 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 the contents specified by the Form Guide to Prompt Announcement of Removing Restriction on Sales of Non-tradable Stocks of Listed Companies through the prompt announcement of disclosing sales of listed companies. Commitment in the acquisition report or the report on equity changes Commitment made upon the assets replacement 1.From the date of commitment letter issued, except the managed hosting company for Dongxue Optoelectronic , this company and majority-owned subsidiaries do not in any way, directly or indirectly engaged in business and Dongxue Optoelectronic and its subsidiaries are the same, or similar, future Dongxue Optoelectronic shares and its subsidiaries are not engaged in the same or similar businesses. Commitments made Baoshi Group, 2.The company assurances Long-term Under April 1, 2012 upon issuance Dongxu Group against the use of precious stones effective Fulfillment share any act prejudicial to the control relationship of Dongxu Optoelectronic interests and its wholly-owned subsidiaries, holding, or causing Dongxue Optoelectronic shares and its wholly-owned subsidiaries, holding form business competition decisions. 3. The company will not directly invest, purchase and Dongxu Optoelectronic identical or similar business enterprises and 35 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 projects. 4.If the assets owned by the Dongxu Optoelectronic . compete with , the company will adopt effective measures and give up the same business. 5. If the company has horizontal competition with Dongxu Optoelectronic and lead to lose to it, the company will bear all the responsibilities. 6. Before December 31, 2015, by way of designated placement, the company will transfer all the shares that Dongxu Optoelectronic Investment, entrusted to Zhengzhou Xufei company and all the shares that are entrusted to Baoshi Group, to Dongxu Optoelectronics; Before December 31, 2016, by way of designated placement, the company will transfer all the shares that Dongxu Group entrusted to Dongxu Yingkou and Sichuan Xuhong to Dongxu Optoelectronics. Within the time limit mentioned above, if there were the external factors such as a depression of industry as a whole, or the changes in regulatory requirements, which lead to the result that the shares of hosting company can not meet the requirements of capital investment, Li Zhaoting, the actual controller, Dongxu Optoelectronic Investment , Dongxu Group and Baoshi Group as well as the company will actively negotiate with related parties, continue to entrust the above mentioned shares and the power of management to Dongxu 36 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Optoelectronics. Within the period when the company is still the controlling shareholder of Dongxu Optoelectronics, the commitments are in effect. In view of: The main business of Dongxu Optoelectronic is the production of TFT-LCD glass substrate, and the company now is applying for non-public offering of ,bonds (2) Dongxu Group is the controlling shareholder of Dongxu Optoelectronic; and during the period of holding, Dongxu Group has signed patent license contracts separately with Dongxu Optoelectronic and its subsidiaries including Wuhu Dongxu Optoelectronic Science and Technology Co., Ltd. (hereinafter referred to as Wuhu Optoelectronic), Wuhu Dongxu Optoelectronic Equipment Under Dong Xu Group Technology Co., Ltd. (hereinafter February 8,2015 Valid for 5 years Fulfillment referred to as Wuhu Equipment) and Shijiazhuang Dongxu Optoelectronic Equipment Technology Co., Ltd. (hereinafter referred to as Shijiazhuang Equipment). For this purpose, Dongxu Group has made following promises: Any patents related to panel display glass substrate not included in the aforesaid Contract on the Licensing of Patent Exploitation obtained by Dongxu group in the future, Dongxu group shall sign a free contract of licensing the new pertinent patents with the company and the company’s subsidiaries (Wuhu Optoelectronic Technology 37 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Co.,Ltd, Wuhu Equipment Company and Shijiazhuang Equipment Company) with the same articles of the former patent licensing contract. After the company successfully completed the issuance of corporate bonds, whether Dongxu group control the company during the duration of the bonds, Dongxu group shall renew the patent licensing contract unreserved with the company and the company’s subsidiaries (Wuhu Optoelectronic Technology Co.,Ltd, Wuhu Equipment Company and Shijiazhuang Equipment Company) under the company’s requirement until the bonds expired. In view of: Dongxu Optoelectronic Technology Co., Ltd. is applying for public offering of corporate bonds, and the total scale of bonds will not exceed 1 billion yuan. After the deduction of issue expenses, all the funds raised are planed to be used to supplement the liquidity and support the R&D, production Dongxu and material purchase of glass Optoelectronic substrate and the equipment. February 10, Under Valid for 5 years Technology Co., Thus, the demands of business 2015 Fulfillment Ltd. operation and expansion in the company will be satisfied. The company promises: 1. The funds raised through the public offering of corporate bonds will not be directly or indirectly invested in real estate development business, or used to increase the capital fund or as loans in subsidiaries engaged in real estate business; 2. the funds raised through the 38 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 public offering of corporate bonds will not be used for real estate development business in any form. The term of validity of the promises is consistent with the duration of the corporate bonds issued in the company this time. In view of: (1) The main business of Dongxu Optoelectronic is the production of TFT-LCD glass substrate, and the company now is applying for non-public offering of stock; (2) Dongxu Group is the controlling shareholder of Dongxu Optoelectronic; and during the period of holding, Dongxu Group has signed patent license contracts separately with Dongxu Optoelectronic and its subsidiaries including Wuhu Dongxu Optoelectronic Science and Technology Co., Ltd. (hereinafter referred to as Wuhu June 17, Long-term Under Dong Xu Group Optoelectronic), Wuhu Dongxu 2015 effective Fulfillment Optoelectronic Equipment Technology Co., Ltd. (hereinafter referred to as Wuhu Equipment) and Shijiazhuang Dongxu Optoelectronic Equipment Technology Co., Ltd. (hereinafter referred to as Shijiazhuang Equipment). For this purpose, Dongxu Group has made following promises: within the term of validity involving patent right stated in patent license contracts, whether Dongxu Optoelectronic is in the control of Dongxu Group or not, Dongxu Group promises that when the above mentioned patent license 39 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 contracts expire, the group will unconditionally renew the contracts with Dongxu Optoelectronic and its subsidiaries (Wuhu Optoelectronic, Wuhu Equipment, Shijiazhuang Equipment and etc) according to the terms of original contracts based on the requirements of Dongxu Optoelectronic. To avoid the horizontal competition with the issuer, the company’s actual controller-Zhaoting, Li and the holding company-Dongxu group promised: 1. As of this declaration and from the date of commitment letter issued, except the managed hosting companies, the other companies directly or indirectly controlled by the controller or holding company have no horizontal competitions with Dongxu Optoelectronic Technology Co., Ltd. 2. Any other companies controlled by the Decembert 16, Long-term Under Dong Xu Group actual controller or holding 2015 effective Fulfillment company shall avoid businesses identical or similar to the company may lead to a competitive relation and cannot do any harm activities to Dongxu Optoelectronic Technology Co., Ltd and companies controlled by Dongxu Optoelectronic Technology Co., Ltd as long as there are no alterations of the actual controller and the holding company. Any businesses opportunities under the main business scope of Dongxu Optoelectronic Technology Co., 40 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Ltd and its controlled companies shall not take by the companies controlled by the actual controller or the holding company, and the business opportunities shall be given to Dongxu Optoelectronic Technology Co., Ltd and its controlled companies.3. As long as the actual controller and the holding company are the same, the actual controller and the holding company shall continue to strictly performance the relevant declarations and commitments of avoiding horizontal competition. Dongxu investment/Baoshi group promised the net profit level of the next three years and profit compensation scheme in respective to Xufei Optoelectronic Technology Co., Ltd and Xuxin Optoelectronic Technology Co., Ltd as follows: The Net profits after deducting non-recurring gain or loss that are attributable to Xufei Optoelectronic Technology Co., Ltd in year 2015, year 2016, year Valid period to 2017, year 2018 shall accordingly March 2, Under Baoshi Group December be not less than RMB 36.6698 2015 Fulfillment 31,2018 million, RMB 84.5628 million, RMB 156.5311 million, RMB 225.4052 million;The Net profits after deducting non-recurring gain or loss that are attributable to Xuxin Optoelectronic Technology Co., Ltd in year 2015, year 2016, year 2017, year 2018 shall accordingly be not less than RMB23.3488million, RMB55.4205million, RMB 86.6277million, RMB 158.345 million. If any year’s actual net 41 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 profits are less than the estimated profits as aforesaid within the compensation period, Dongxu investment/Baoshi group shall make up the difference in accordance with the aforesaid principles in cash to Dongxu Optoelectronic Technology Co., Ltd; If the actual net profits are not less than the estimated profits, there is no need for Dongxu investment / Baoshi group to carry out the compensation. The compensation period includes the year contained the date on which the transaction completed and the subsequent two consecutive accounting years. Not act in excess of authority to interfere the company’s Long-term Under Dongxu Group management and operating February 6,2016 effective fulfillment activities, not encroach on the interests of the company. Other commitments made to minority shareholders Executed timely or not? Yes XI. Particulars about engagement and disengagement of CPAs firm Whether the semi-annual financial report had been audited? √ Yes □No Name Zhongxingcai Guanghua Certified Public Accountants (LLP) The Remuneration of auditing the semi annual financial 65 report by the domestic accounting firm(RMB’0000) Whether to change the accounting firm? □ Yes √No 42 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 XII. Punishment and Rectification □ Applicable √ Not applicable There was no any punishment and rectification of the Company in the reporting period. XIII. Reveal of the delisting risks of illegal or violation □ Applicable √ Not applicable There was no any delisting risk of illegal or violation of the Company in the reporting period. XIV. Explanation about other significant matters √Applicable□ Not applicable The company completed the 2016 non-public share-issuing work: 1. The Proposal of the company’s 2016 non-public share-issuance and the relevant items were examined and approved in the 48th board meeting of the company’s 7th board of directors and the 2016 first extraordinary general shareholder meeting, convened respectively on February 5, 2016 and February 22, 2016. It was determined that the company would non-publicly issue no more than 1,092,767,295 shares and raise no more than RMB 6,950,000,000 which after deducting the issuing expenses will be all used for the construction of the 8.5-generation TFT-LCD glass substrate production line project. 2. On April 28, 2016, the company implemented the 215 annual profit distribution plan, so the quantity and price of the non-public share issuance were adjusted accordingly. The quantity of the non-public share issuance was adjusted to being no more than 1,104,928,457 shares, and the raised funds were expected to be no more than RMB 6950 million. 3. On May 18, 2016, the company’s 2016 non-public share-issuance plan was unconditionally approved by the audit committee of CSRC. 4. On July 28, 2016, the company received the Approval on the Non-public Share-issuance of Dongxu Optoelectronic Technology Co.,Ltd-No.1322-2016 Commission License from CSRC, approved the company’s non-public share-issuance of issuing no more than 1,104,928,457 new shares. 5. On August 12, 2016, Zhongxin Cai Guan Hua Certified Public Accountants LLP issued the Capital Verification Report-No.105007-2016 Zhongxin Cai Guan Hua Audited. By the end date of August 11, 2016 of the verification, the company has non-publicly issued 1,104,928,457 RMB ordinary shares (A shares)(par value per share is RMB 1.00) with the issuing price of 6.29 yuan / share, and the company has totally raised RMB 6,949,999,994.53, after deducting the issuing expenses of RMB 41,926,397.00, the net raised funds were RMB 6,908,073,597.53. 6. On August 18, 2015, the company has completed the registration and trusteeship procedure of the shares issued in the non-public share-issuance in China Securities Depository and Clearing Co., Ltd Shenzhen Branch. 7. On August 26, 2016, the newly increased 1,104,928,457 shares from the company’s 2016-non-public share issuance have been listed on Shenzhen Stock Exchange. XV. Issuance of corporate bonds 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 43 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 Dongxu 15 Dongxu be repaid with 112243 May 19,2015 May 19,2020 100,000 6.00% 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’s puttable right eligibility Information about interest paid On May 19, 2016, the company has implemented the 2016 annual interest payment for and bonds honored during the “15-Dongxu bond”, i.e. the company has paid the interest of RMB 6.0 per bond for “15-Dongxu reporting period bond” for the period from May 19, 2015 to May 18, 2016. Implementation of relevant special clauses(if applicable) such as option clause for the None happened in the reporting period bond issuer or investors and exchangeable clause 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: Name United Rating Co.,Ltd Business Room 508 Ailiyuan Apartment, No.38 Water 44 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Address Park North Road, Nankai District, Tianjin City 3.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(RMB’0000) 33.76 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 4. Information about the rating of the corporate bonds On April 1, 2016, United Rating Co.,Ltd has issued the tracking and rating report according to the company’s 2015 annual report. United Rating Co.,Ltd raised the main-body rating of the company to “AA+”, with an outlook of “stable”, meanwhile, the debt credit rating of “15-Dongxu bond” was raised to “AA+”. 5. 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. 45 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 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 46 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 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. 6. Information about the bond-holder meeting during the reporting period There was no bond-holder meeting convened in the reporting period. 7. 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, and paid a visit to the company in June 2016, checking the bank statement of the designated account for the raised funds. Also, the trustee has been continuously supervising the use of the raised funds. 8. The key accounting data and financial indicators of the latest two years to the end of the reporting period In RMB’0000 Items June 30, 2016 June 30,2015 At the same time rate of change Current ratio 252.41% 259.46% -7.05% Debt ratio 55.34% 49.44% 5.90% Quick ratio 211.60% 208.76% 2.84% This report term Same period last year Increase/decrease (%) EBITDA interest coverage ratio 2.9984 2.6384 13.64% 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 9. Information about restrictions on asset right by the end of the reporting period Items Borrowing amount/Limited amount Reason Monetary funds 543,648,071.60 Pledge of deposit and loan Inventory 987,961,264.39 Obtain loans as collateral 47 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Fixed assets 7,155,678,632.78 Obtain loans as collateral Intangible assets 239,609,353.58 Obtain loans as collateral Construction in process 2,870,717,465.40 Obtain loans as collateral Total 11,797,614,787.75 10. Overdue debt □ Applicable √ Not applicable There was no overdue debt in the reporting period. 11. Information about the repayment of interest and principal for other bonds or debt financing instruments None 12 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 12,708,412,000, increased RMB1,826,727,500 compared with the end of year 2015, 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. 13. 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. 14. Major events occurred during the reporting period During the reporting period, excluding that company’s newly increased borrowings and the newly increased guarantee provided for the company’s subsidiaries and share-controlling subsidiaries were exceed the 20% of the audited net assets at the end of 2015, there was no other major item which conformed to the 45th article of Measures for the Issuance and Management of Corporate Bonds occurred. 15. Whether the corporate bonds have a guarantor □ Yes √No 48 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 VI. Change of share capital and shareholding of Principal Shareholders (I)Changes in share capital In Shares Before the change Increase/decrease(+,-) After the Change Amount Proportion Capitalizat ion of Share Bonus Proportio common Other Subtotal Quantity allotment shares n reserve fund 1.Shares with conditional 1,565,845, -390,223,0 -390,223,0 1,175,622 40.83% 30.66% subscription 404 00 00 ,404 1,565,845, -390,223,0 -390,223,0 1,175,622 3.Other domestic shares 40.83% 30.66% 404 00 00 ,404 Incl:Domestic legal 1,563,314, -390,093,0 -390,093,0 1,173,221 40.76% 30.59% person shares 525 00 00 ,525 Domestic Natural Person 2,530,879 0.07% -130,000 -130,000 2,400,879 0.06% shares II.Shares with 2,269,255, 390,123,0 390,123,0 2,659,378 59.17% 69.34% unconditional subscription 122 00 00 ,122 2,019,255, 390,123,0 390,123,0 2,409,378 1.Common shares in RMB 52.65% 62.83% 121 00 00 ,121 2.Foreign shares in 250,000,0 250,000,0 6.52% 6.52% domestic market 01 01 3,835,100, 3,835,000 III. Total of capital shares 100.00% -100,000 -100,000 100.00% 526 ,526 Reasons for share changed: √ Applicable □ Not applicable 1. On October 29, 2015, the Proposal on Buying-back and Writing-off Part of the Restricted Shares was approved in the 43rd board meeting of the 7th session board of directors. The total restricted 100,000 shares which were granted to the incentive object of Chenyin but still being locked were bought-back, thus the total shares of this buy-back were 100,000 shares. 49 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 2.As of January 26, 2016, the above-mentioned restricted shares have been completed the procedure of writing-off in China Securities Depository and Clearing Co., Ltd Shenzhen Branch. 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 √Applicable □ Not applicable Financial indicators and the recent one year, the latest issue of basic earnings per share and net assets per share affected by changes in shares, please refer to the accounting data and financial indicators summary III. Other information necessary to disclose for the company or need to disclosed under requirement from security regulators □ Applicable √ Not applicable Explanation on changes in aspect of total shares, shareholders structures as well as structure of assets and liability of the Company √Applicable□ Not applicable During the reporting period, the company had completed the buy-back and writing-off of 100,000 restricted shares which had been granted by the share-incentive plan, resulted in the reduction of the company’s total share capital and led to the reduction of the company’s total assets and the shareholders' equity. II. Number of shares and shares held In shares Total number of preferred 218,235(Including 199,516 Total number of common shareholders that had restored shareholders holding A shares shareholders at the end of the the 0 and 18,719 shareholders holding reporting period voting right at the end of the B shares) reporting period (if any) (note 8 Particulars about shares held above 5% by shareholders or top ten shareholders Changes Number os share Proportion Number of Amount of Amount of Nuture of in pledged/frozen Shareholders of shares shares held at restricted un-restricted shareholder reportin State of held(%) period -end shares held shares held Amount g period share Domestic Non Dongxu Group -State-owned legal 21.64% 829,975,697 459,882,697 Pledge 780,730,272 person Shijiazhuang Domestic Non Baoshi -State-owned legal 8.67% 332,382,171 332,382,171 Pledge 329,776,648 Electronic person Group Co., Ltd. 50 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Minsheng Royal Fund Management Co., Ltd.-Ping An Bank-Ping 0ther 4.78% 183,284,457 183,284,457 An Trust-Ping An Wealth* Huitai No.163 Single Fund Trust Bosera Capital-Ping An Bank- Ping An Trust-Ping An Other 4.36% 167,155,426 167,155,426 Wealth* Huitai No.164 Single Fund Trust Guangzhou Securities-Chin a Guangfa Bank-Guangzho u Securities No.2 Collective Other 3.44% 131,964,809 131,964,809 Asset Management Plan of Kunpeng Dingcheng HuaAn Future Asset-ICBC-No .1 Asset Management Other 2.52% 96,774,193 96,774,193 Plan of Dongxu Optoelectronic’ s Private Placement Dongxu Optoelectronic Technology Co., Ltd-Phase Other 1.89% 72,639,296 72,639,296 1 for Employee Stock Ownership Plan 51 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 China Securities State-owned legal Finance Co., 1.80% 69,151,271 69,151,271 person Ltd. Kunshan Development Zone State-owned legal 1.15% 43,988,269 43,988,269 State-invested person Holding Co., Ltd. Bank of China -Huaxia New Economic Mixed Other 0.95% 36,608,098 36,608,098 Securities Investment Funds Strategy investors or general legal Before the country's top ten shareholders of Kunshan Development Zone Investment Holdings person becomes top 10 shareholders Limited was involved in the company in 2015 non-public offering to subscribe, became the due to rights issued (if applicable) top 10 shareholders. The sub-holding restricted period of 36 months, ie December 17, 2015 to (See Notes 3) December 16, 2018. Among the top ten shareholders , Dongxu Group and Baoshi Group, Dongxu Optoelectronic – Notes to the related relationship I Employee stock ownership plan have relationship and constitute persons taking concerted between the top ten shareholders or action. The company does not know whether there is relationship between other 7 their concerted action shareholders or whether they are persons taking concerted action 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 Share type Name of the shareholder of the reporting period (Note 4) Share type Quantity Dongxu Group 390,093,000 RMB Common shares 390,093,000 Shijiazhuang Baoshi Electronic 332,382,171 RMB Common shares 332,382,171 Group Co., Ltd. China Securities Finance Co., Ltd. 69,151,271 RMB Common shares 69,151,271 Bank of China-Huaxia New Economic Mixed Securities 36,608,098 RMB Common shares 36,608,098 Investment Funds Central Huijin Investment Ltd. 24,205,500 RMB Common shares 24,205,500 Wang Wenxue 15,300,592 RMB Common shares 15,300,592 CMS-Fuguo CSI Mobile Internetindex classification 8,983,555 RMB Common shares 8,983,555 Securities investment fund 52 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 National social security fund 412 8,870,976 RMB Common shares 8,870,976 Zhang Qingjie 7,227,822 RMB Common shares 7,227,822 CCB-Huabao Industry selected 7,100,200 RMB Common shares 7,100,200 hybrid secutities investment fund Among the top ten shareholders , Dongxu Group and Baoshi Group, Dongxu Optoelectronic – Action-in-concert among top 10 I Employee stock ownership plan have relationship and constitute persons taking concerted non-restricted current share holders, action. The company does not know whether there is relationship between other 7 top 10 non-restricted current share holders and top 10 shareholders shareholders or whether they are persons taking concerted action defined in Administrative Measures Relating to Acquisitions of Listed Companies. The top 10 tradable common shareholders Wang Wenxue, Zhangqing Jie by CSC Securities Shareholders among the top 10 Co., Ltd. customer credit-backed securities trading account Securities Co., Ltd. customer participating in securities margin credit-backed securities trading account were holding 15,300,592 shares, 7,227,822 shares, trading (if any) (see Note 4) accounting for 0.4% and 0.19% of the total shares respectively. 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. III. 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. IV. Share holding increasing plan proposed or implemented in reporting period from shareholder of the Company and its concerted action person √ Applicable □Not applicable Name of Initial disclosure Disclosure date of shareholder or its Number of shares As a percentage Number of shares As a percentage date of the the completion of act-in-concert to be increased in the total shares actually increased in the total shares shareholding the shareholding party increase plan increase Dongxu Technology 4,392,057 0.12% July 11,2015 March 1,2016 Group Co., Ltd. Other notes Dongxu group and its share-controlling subsidiary of Dongxu Technology Group Co., Ltd had increased the 53 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 share-holding of the company through Shenzhen Stock Exchange by the directional asset management plan. VII. Situation of the Preferred Shares □Applicable √Not applicable The Company had no preferred shares in the reporting period 54 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 VIII. Information about Directors, Supervisors and Senior Executives I. Change in shares held by directors, supervisors and senior executives √ Applicable □Not applicable Amount of Amount of Shares Number of Number of shares shares Number of Shares held at restricted restricted increased decreased restricted stock Office held at the the stock granted stock granted Name Position at the at the granted at the status year-begin year-endi at the at the reporting reporting year-ending(shar (share) ng year-begin . reporting period(sha period(sha e) (share) share) period(share) re) re) Board Li Zhaoting In office chairman Wang Lipeng Director,GM In office Director, Gong Xin Board In office 100,000 100,000 100,000 100,000 secretary Director, Zhou Bo In office CFO Independent Lu Guihua In office director Independent Han Zhiguo In office director Zhang Independent In office Shuangcai director Chairman of the Guo Chunlin In office supervisory committee Chen Dewei Supervisor In office Xu Lingzhi Supervisor In office Xie Juwen Supervisor In office Wang Supervisor In office Huanhuan Wang Depurty GM In office Jianqiang 55 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Wang Depurty GM In office Zhonghui Wang Depurty GM In office Junming Liu Wentai Depurty GM In office 150,000 25,000 125,000 150,000 125,000 Dimissio Niu Jianlin Director 150,000 18,000 132,000 150,000 132,000 n Dimissio Zhou Bo Director 129,172 129,172 100,000 100,000 n Independent Dimissio Mu Tiehu director n Chairman of the Dimissio Guo Zhisheng supervisory n committee Xie Supervisor Dimissio Mengxiong Dimissio Shi Zhiqiang GM 200,000 200,000 200,000 200,000 n Xiao Dimissio Deputy GM Zhaoxiong n Total -- -- 729,172 0 43,000 686,172 700,000 0 657,000 II. Change in shares held by directors, supervisors and senior executives √ Applicable □Not applicable Name Positions Types Date Reason Li Zhaoting Board chairman Elected July 28,2016 Eighth Board election Wang Lipeng Director,GM Elected July 28,2016 Eighth Board election Director, Gong Xin Elected July 28,2016 Eighth Board election Board secretary Zhou Bo Director, CFO Elected July 28,2016 Eighth Board election Independent Lu Guihua Elected July 28,2016 Eighth Board election director Independent Han Zhiguo Elected July 28,2016 Eighth Board election director Independent Zhang Shuangcai Elected July 28,2016 Eighth Board election director 56 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Chairman of the Guo Chunling supervisory Elected July 28,2016 Eighth Board of Supervisors election committee Chen Dewei Supervisor Elected July 28,2016 Eighth Board of Supervisors election Xu Lingzhi Supervisor Elected July 28,2016 Eighth Board of Supervisors election Xie Juwen Supervisor Elected July 28,2016 Eighth Board of Supervisors election Wan Huanhuan Supervisor Elected July 28,2016 Eighth Board of Supervisors election Eighth session of the Board of Directors hired a new Wang Jianqiang Depurty GM Elected July 28,2016 senior management Eighth session of the Board of Directors hired a new Wang Zhonghui Depurty GM Elected July 28,2016 senior management Eighth session of the Board of Directors hired a new Wang Junming Depurty GM Elected July 28,2016 senior management Eighth session of the Board of Directors hired a new Liu Wentai Depurty GM Elected July 28,2016 senior management Term expires Expiry of the outgoing Board of the seventh term of Niu Jianlin Director July 28,2016 outgoing office Term expires Expiry of the outgoing Board of the seventh term of Zhou Bo Director July 28,2016 outgoing office Independent Term expires Expiry of the outgoing Board of the seventh term of Mu Tiehu July 28,2016 director outgoing office Chairman of the Term expires Guo Zhisheng supervisory July 28,2016 Expiry of outgoing seventh Supervisory Committee outgoing committee Term expires Xie Mengxiong Supervisor July 28,2016 Expiry of outgoing seventh Supervisory Committee outgoing Term expires Expiry of the outgoing Board of Directors appointed the Shi Zhiqiang Supervisor July 28,2016 outgoing seventh term of office management Term expires Expiry of the outgoing Board of Directors appointed the Xiao Zhaoxiong Deputy GM July 28,2016 outgoing seventh term of office management 57 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 IX. Financial Report 1. Audit report Has this semi-annual report been audited? √Yes□No Type of audit opinion Unqualified audit opinion Date for signing the auditor’s report August 29,2016 Name of audit firm Zhongxingcai Guanghua Ceritified Public Accountants LLP Number ZXCGHSHZD No.(2016)105063 Certified public accountant’s name Wang Fengqi, Meng Xiaoguang Whether this semi-annual audit report is a non-standard audot report? □ Yes √ No II. Financial statements Currency unit for the statements in the notes to these financial statements:RMB 1.Consolidated Balance sheet Prepared by: Dongxu Optoelectronic Technology Co., Ltd. June 30,2016 In RMB Items Year-end balance Year-beginning balance Current asset: Monetary fund 16,283,335,103.74 12,409,510,170.26 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 84,062,091.14 51,014,152.00 Account receivable 1,145,967,700.43 1,042,538,312.51 Prepayments 459,979,413.73 418,910,587.57 Insurance receivable 58 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other account receivable 91,589,365.05 55,197,871.28 Repurchasing of financial assets Inventories 2,274,629,243.84 2,177,979,684.06 Assets held for sales Non-current asset due in 1 year 139,395.72 Other current asset 1,209,257,892.65 1,216,401,769.76 Total of current assets 21,548,820,810.58 17,371,691,943.16 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset Expired investment in possess Long-term receivable Long term share equity investment 72,508,010.72 72,426,252.41 Property investment Fixed assets 6,751,017,887.80 6,900,189,927.76 Construction in progress 3,923,630,367.42 3,433,016,388.90 Engineering material 248,838.11 38,214.99 Fixed asset disposal Production physical assets Gas & petrol Intangible assets 476,672,181.41 462,291,286.50 R & D petrol Goodwill 33,691,362.78 Long-germ expenses to be amortized 14,700,608.68 16,560,387.39 Differed income tax asset 305,387,722.59 299,129,677.91 Other non-current asset 356,354,104.50 243,279,174.31 Total of non-current assets 11,934,211,084.01 11,426,931,310.17 Total of assets 33,483,031,894.59 28,798,623,253.33 Current liabilities 59 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Short-term loans 4,475,400,000.00 3,783,300,000.00 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 Derivative financial liabilities Bill payable 645,445,687.96 410,594,929.94 Account payable 747,312,359.29 675,736,226.62 Advance payment 470,661,941.44 97,920,689.41 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 39,951,609.02 36,856,257.86 Tax payable 93,036,607.64 105,451,423.67 Interest payable 28,954,527.52 55,405,608.76 Dividend payable 101,365,050.76 20,000,000.00 Other account payable 274,279,621.41 539,796,113.78 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 1,556,995,643.93 876,987,200.00 Other current liability 103,788,202.91 93,402,963.08 Total of current liability 8,538,746,754.88 6,695,451,413.12 Non-current liabilities: Long-term loan 7,158,749,600.00 6,249,397,300.00 Bond payable 989,562,229.32 988,400,388.00 Including:preferred stock Sustainable debt Long-term payable 1,026,266,756.12 57,000,000.00 Long-term payable employees’s remuneration Special payable 60 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Expected liabilities Differed income 316,687,050.48 246,925,387.61 Differed income tax liability Other non-current liabilities 500,000,000.00 Total non-current liabilities 9,991,265,635.92 7,541,723,075.61 Total of liability 18,528,456,887.80 14,237,174,488.73 Owners’ equity Share capital 3,835,000,526.00 3,835,000,526.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 9,393,659,601.53 9,391,388,905.89 Less:Shares in stock 9,011,520.00 9,011,520.00 Other comprehensive income Special reserves Surplus reserves 132,723,528.42 132,723,528.42 Common risk provision Undistributed profit 1,216,178,281.65 969,380,500.97 Total of owner’s equity belong to the 14,568,550,417.60 14,319,481,941.28 parent company Minority shareholders’ equity 386,024,589.19 241,966,823.32 Total of owners’ equity 14,954,575,006.79 14,561,448,764.60 Total of liabilities and owners’ equity 33,483,031,894.59 28,798,623,253.33 Legal representative :Li Zhaoting Person-in-charge of the accounting work:Zhou Bo 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: Monetary fund 9,074,453,927.55 9,835,157,652.41 Financial assets measured at fair value 61 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 with variations accounted into current income account Derivative financial assets Bill receivable 2,737,440.00 611,200.00 Account receivable 67,254,294.95 25,928,808.63 Prepayments 189,313,665.36 5,148,881.09 Interest receivable Dividend receivable 380,000,000.00 380,000,000.00 Other account receivable 1,722,336,079.09 1,257,350,098.69 Inventories 455,838,449.44 337,875,634.06 Assets held for sales Non-current asset due in 1 year Other current asset 19,211.84 19,211.84 Total of current assets 11,891,953,068.23 11,842,091,486.72 Non-current assets: Disposable financial asset Expired investment in possess Long-term receivable Long term share equity investment 10,941,092,638.23 9,838,056,379.92 Property investment Fixed assets 52,051,431.07 54,559,265.28 Construction in progress Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 10,033,269.21 10,196,051.07 R & D petrol Goodwill Long-germ expenses to be amortized Differed income tax asset 358,983.31 784,271.45 Other non-current asset Total of non-current assets 11,003,536,321.82 9,903,595,967.72 Total of assets 22,895,489,390.05 21,745,687,454.44 Current liabilities 62 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Short-term loans 2,925,000,000.00 2,630,000,000.00 Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable 364,265,108.00 69,458,800.00 Account payable 143,713,129.33 131,278,936.59 Advance payment 421,587.90 115,587.90 Employees’ wage payable 3,704,924.43 3,725,606.27 Tax payable 22,276,579.57 15,710,028.19 Interest payable 17,692,788.73 42,908,777.78 Dividend payable 81,365,050.76 Other account payable 2,691,481,911.74 3,495,678,670.89 Liabilities held for sales Non-current liability due in 1 year 200,000,000.00 Other current liability 15,000.00 20,000.00 Total of current liability 6,449,936,080.46 6,388,896,407.62 Non-current liabilities: Long-term loan 1,987,700,000.00 640,000,000.00 Bond payable 989,562,229.32 988,400,388.00 Including:preferred stock Sustainable debt Long-term payable Employees’ wage payable Special payable Expected liabilities Differed income 5,000.00 Differed income tax liability Other non-current liabilities Total of Non-current liabilities 2,977,262,229.32 1,628,405,388.00 Total of liability 9,427,198,309.78 8,017,301,795.62 Owners’ equity Share capital 3,835,000,526.00 3,835,000,526.00 Other equity instrument Including:preferred stock 63 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Sustainable debt Capital reserves 9,323,090,967.43 9,321,098,967.43 Less:Shares in stock 9,011,520.00 9,011,520.00 Other comprehensive income Special reserves Surplus reserves 113,734,304.09 113,734,304.09 Undistributed profit 205,476,802.75 467,563,381.30 Total of owners’ equity 13,468,291,080.27 13,728,385,658.82 Total of liabilities and owners’ equity 22,895,489,390.05 21,745,687,454.44 3.Consolidated Income statement In RMB Item Report period Same period of the previous year I. Income from the key business 2,882,059,154.41 1,524,242,723.90 Incl:Business income 2,882,059,154.41 1,524,242,723.90 Interest income Insurance fee earned Fee and commission received II. Total business cost 2,325,029,677.70 1,225,343,496.78 Incl:Business cost 1,938,309,643.65 882,046,270.04 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 20,441,727.88 21,212,922.26 Sales expense 31,577,716.56 15,959,542.69 Administrative expense 236,706,264.85 164,106,222.01 Financial expenses 94,439,392.61 150,308,723.11 Asset impairment loss 3,554,932.15 -8,290,183.33 Add:Gains from change of fir value (“-”for loss) 64 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Investment gain(“-”for loss) 81,758.31 2,348,908.58 Incl: investment gains from affiliates 81,758.31 -28,077.74 Gains from currency exchange (“-”for loss) III. Operational profit(“-”for loss) 557,111,235.02 301,248,135.70 Add :Non-operational income 103,509,279.68 217,297,637.96 Including:Income from disposal of non-current assets Less:Non business expenses 12,489.34 297,985.77 Incl:Loss from disposal of non-current 4,430.74 35,050.57 assets IV.Total profit(“-”for loss) 660,608,025.36 518,247,787.89 Less:Income tax expenses 90,283,601.51 81,096,961.02 V. Net profit 570,324,423.85 437,150,826.87 Net profit attributable to the owners of 545,963,710.72 400,081,730.63 parent company Minority shareholders’ equity 24,360,713.13 37,069,096.24 VI. Other comprehensive income Net of profit of other comprehensive inco me attributable to owners of the parent co 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 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 65 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 ncial statements 6.Other 7.Net of profit of other comprehensive in come attributable to Minority shareholders’ equity VII. Total comprehensive income 570,324,423.85 437,150,826.87 Total comprehensive income attributable 545,963,710.72 400,081,730.63 to the owner of the parent company Total comprehensive income 24,360,713.13 37,069,096.24 attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share 0.14 0.15 (II)Diluted earnings per share 0.14 0.15 The current business combination under common control, the net profits of the combined party before achieved ne t profit of RMB 0, last period the combined party realized RMB 0. Legal representative :Li Zhaoting Person-in-charge of the accounting work:Zhou Bo 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 383,847,821.44 7,294,837.62 Incl:Business cost 236,140,885.06 3,468,388.61 Business tax and surcharge 521,358.24 355,504.32 Sales expense 684,247.25 99.00 Administrative expense 27,351,438.20 35,929,891.65 Financial expenses 75,426,926.67 95,587,876.47 66 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Asset impairment loss 230,615.03 -6,573,921.23 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 81,758.31 -28,077.74 Incl: investment gains from affiliates 81,758.31 -28,077.74 II. Operational profit(“-”for loss) 43,574,109.30 -121,501,078.94 Add :Non-operational income 51,255.93 13,924.00 Including:Income from disposal of non-current assets Less:Non business expenses 33,708.44 Incl:Loss from disposal of non-current assets III.Total profit(“-”for loss) 43,625,365.23 -121,520,863.38 Less:Income tax expenses 6,546,013.74 -14,255,586.87 IV. Net profit(“-”for net loss) 37,079,351.49 -107,265,276.51 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 ale financial assets 4.The effective portion of cash flow hed 67 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 ges and losses 5.Translation differences in currency fin ancial statements 6.Other VI. Total comprehensive income 37,079,351.49 -107,265,276.51 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 3,428,041,704.57 1,032,598,843.36 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 Tax returned 121,533,678.40 59,257,281.50 Other cash received from business 160,131,838.12 757,718,305.39 operation 68 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Sub-total of cash inflow 3,709,707,221.09 1,849,574,430.25 Cash paid for purchasing of 1,610,664,099.74 1,256,218,858.42 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 292,568,158.80 174,518,232.89 Taxes paid 313,119,724.25 231,796,691.70 Other cash paid for business activities 212,246,295.36 132,262,848.37 Sub-total of cash outflow from business 2,428,598,278.15 1,794,796,631.38 activities Cash flow generated by business 1,281,108,942.94 54,777,798.87 operation, net II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 2,376,986.32 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 6,120,000.00 64,574,268.94 Sub-total of cash inflow due to 6,120,000.00 66,951,255.26 investment activities Cash paid for construction of fixed assets, intangible assets 306,468,934.04 156,009,854.68 and other long-term assets Cash paid as investment 299,846,640.00 252,000,000.00 Net increase of loan against pledge Net cash received from subsidiaries and 7,619,727.41 other operational units Other cash paid for investment 70,000,000.00 69 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 activities Sub-total of cash outflow due to 613,935,301.45 478,009,854.68 investment activities Net cash flow generated by investment -607,815,301.45 -411,058,599.42 III.Cash flow generated by financing Cash received as investment 81,000,000.00 19,500,000.00 Incl: Cash received as investment from 81,000,000.00 19,500,000.00 minor shareholders Cash received as loans 4,077,100,000.00 2,208,000,000.00 Cash received from bond placing 987,000,000.00 Other financing –related ash received 1,878,688,941.32 95,471,030.31 Sub-total of cash inflow from financing 6,036,788,941.32 3,309,971,030.31 activities Cash to repay debts 2,251,801,800.00 808,133,000.00 Cash paid as dividend, profit, or 598,359,752.63 594,350,418.51 interests Incl: Dividend and profit paid by 30,000,000.00 subsidiaries to minor shareholders Other cash paid for financing activities 94,762,604.60 217,000,000.00 Sub-total of cash outflow due to 2,944,924,157.23 1,619,483,418.51 financing activities Net cash flow generated by financing 3,091,864,784.09 1,690,487,611.80 IV. Influence of exchange rate 9,759,201.83 13,037.65 alternation on cash and cash equivalents V.Net increase of cash and cash 3,774,917,627.41 1,334,219,848.90 equivalents Add: balance of cash and cash 11,964,769,404.73 3,349,892,384.04 equivalents at the beginning of term VI ..Balance of cash and cash 15,739,687,032.14 4,684,112,232.94 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 I.Cash flows from operating activities Cash received from sales of goods or 404,441,782.23 3,599,404.67 rending of services 70 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Tax returned Other cash received from business 200,000,000.00 105,518,118.53 operation Sub-total of cash inflow 604,441,782.23 109,117,523.20 Cash paid for purchasing of 363,482,385.72 492,650.00 merchandise and services Cash paid to staffs or paid for staffs 5,700,415.82 6,239,025.41 Taxes paid 9,832,273.74 3,301,210.63 Other cash paid for business activities 878,044,549.66 197,654,360.86 Sub-total of cash outflow from business 1,257,059,624.94 207,687,246.90 activities Cash flow generated by business -652,617,842.71 -98,569,723.70 operation, net II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 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 6,120,000.00 Sub-total of cash inflow due to 6,120,000.00 investment activities Cash paid for construction of fixed assets, intangible assets 7,800.00 and other long-term assets Cash paid as investment 1,392,801,140.00 314,845,300.00 Net cash received from subsidiaries and other operational units Other cash paid for investment 70,000,000.00 activities Sub-total of cash outflow due to 1,392,808,940.00 384,845,300.00 investment activities Net cash flow generated by investment -1,386,688,940.00 -384,845,300.00 III.Cash flow generated by financing 71 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Cash received as investment Cash received as loans 3,062,700,000.00 1,420,000,000.00 Cash received from bond placing 987,000,000.00 Other financing –related ash received 70,281,601.36 377,205.49 Sub-total of cash inflow from 3,132,981,601.36 2,407,377,205.49 financing activities Cash to repay debts 1,220,000,000.00 100,000,000.00 Cash paid as dividend, profit, or 389,290,594.79 349,970,759.92 interests Other cash paid for financing activities 245,087,948.72 14,000,000.00 Sub-total of cash outflow due to 1,854,378,543.51 463,970,759.92 financing activities Net cash flow generated by financing 1,278,603,057.85 1,943,406,445.57 IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash -760,703,724.86 1,459,991,421.87 equivalents Add: balance of cash and cash 9,835,157,652.41 1,736,774,243.99 equivalents at the beginning of term VI ..Balance of cash and cash 9,074,453,927.55 3,196,765,665.86 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 instrusment Other Commo Total of Items Share Less: Speciali Attribut shareho Capital Compre Surplus n risk owners’ Capita prefer Shares zed able lders’ Sustai reserves hensive reserves provisio equity l red Other in stock reserve profit equity nable Income n stock debt I.Balance at the 3,835, 9,391,3 9,011,5 132,723 969,380 241,966 14,561, end of last year 000,52 88,905. 20.00 ,528.42 ,500.97 ,823.32 448,764 72 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 6.00 89 .60 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the 3,835, 9,391,3 14,561, 9,011,5 132,723 969,380 241,966 beginning of 000,52 88,905. 448,764 20.00 ,528.42 ,500.97 ,823.32 current year 6.00 89 .60 III.Changed in the 2,270,6 246,797 144,057 393,126 current year 95.64 ,780.68 ,765.87 ,242.19 (1)Total 545,963 24,360, 570,324 comprehensive ,710.72 713.13 ,423.85 income (II)Investment 2,270,6 81,000, 83,270, or decreasing of 95.64 000.00 695.64 capital by owners 1.Ordinary Share 81,000, 81,000, s invested by hare 000.00 000.00 holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 2,270,6 2,270,6 4.Other 95.64 95.64 -299,16 -299,16 (III)Profit 5,930.0 5,930.0 allotment 4 4 1.Providing of surplus reserves 2.Providing of common risk 73 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 provisions 3.Allotment to the -299,16 -299,16 owners (or 5,930.0 5,930.0 shareholders) 4 4 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 reserves 1. Provided this year 2.Used this term 38,697, 38,697, (VI)Other 052.74 052.74 3,835, 9,393,6 1,216,1 14,954, IV. Balance at the 9,011,5 132,723 386,024 000,52 59,601. 78,281. 575,006 end of this term 20.00 ,528.42 ,589.19 6.00 53 65 .79 Amount in last year In RMB Amount in last year Owner’s equity Attributable to the Parent Company Other Equity Minor Other Commo Total of Items Share instrusment Less: Speciali Attribut shareho Capital Compre Surplus n risk owners’ Capita prefer Shares zed able lders’ reserves hensive reserves provisio equity l red Sustai Other in stock reserve profit equity Income n stock nable 74 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 debt 2,662, 4,972,9 1,633,1 9,310,2 I.Balance at the 82,025, -39,946, 080,00 66,918. 64,105. 89,380. end of last year 280.68 925.56 1.00 24 99 35 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the 2,662, 4,972,9 1,633,1 9,310,2 82,025, -39,946, beginning of 080,00 66,918. 64,105. 89,380. 280.68 925.56 current year 1.00 24 99 35 1,172, 4,418,4 1,009,3 -1,391, 5,251,1 III.Changed in the 9,011,5 50,698, 920,52 21,987. 27,426. 197,282 59,384. current year 20.00 247.74 5.00 65 53 .67 25 (1)Total 1,326,2 1,392,5 66,290, comprehensive 33,674. 23,686. 011.81 income 37 18 (II)Investment 1,172, 6,538,4 7,727,3 9,011,5 25,000, or decreasing of 920,52 06,824. 15,829. 20.00 000.00 capital by owners 5.00 45 45 1.Ordinary Share 1,173, 6,767,5 7,965,5 25,000, s invested by hare 020,52 02,719. 23,244. 000.00 holders 5.00 49 49 2 . Holders of oth er equity instrume nts invested capital 3.Allotment to the 9,011,5 -9,011,5 owners (or 20.00 20.00 shareholders) -229,09 -229,19 -100,0 4.Other 5,895.0 5,895.0 00.00 4 4 (IV) Internal -316,90 -286,20 50,698, -20,000 transferring of 6,247.8 8,000.1 247.74 ,000.00 owners’ equity 4 0 75 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 1. Capitalizing of 50,698, -50,698, capital reserves (or 247.74 247.74 to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up -266,20 -286,20 -20,000 losses by surplus 8,000.1 8,000.1 ,000.00 reserves. 0 0 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 reserves 1. Provided this year 2.Used this term -2,119,9 -1,462, -3,582,4 (VI)Other 84,836. 487,294 72,131. 80 .48 28 3,835, 9,391,3 14,561, IV. Balance at the 9,011,5 132,723 969,380 241,966 000,52 88,905. 448,764 end of this term 20.00 ,528.42 ,500.97 ,823.32 6.00 89 .60 8.Statement of change in owner’s Equity of the Parent Company Amount in this period In RMB Amount in this period Items Share Other Equity instrusment Capital Less: Other Surplus Common Attribut Total of Capital preferre Other reserves Shares in Compreh reserves risk able owners’ 76 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 d stock Sustain stock ensive provision profit equity able Income debt I.Balance at the 3,835,00 9,321,098 113,734,3 467,563 13,737,39 end of last year 0,526.00 ,967.43 04.09 ,381.30 7,178.82 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the 3,835,00 9,321,098 113,734,3 467,563 13,737,39 beginning of 0,526.00 ,967.43 04.09 ,381.30 7,178.82 current year -262,08 III.Changed in the 1,992,000 9,011,520 -269,106, 6,578.5 current year .00 .00 098.55 5 (I)Total 37,079, 37,079,35 comprehensive 351.49 1.49 income (II) Investment or 1,992,000 9,011,520 -7,019,52 decreasing of .00 .00 0.00 capital by owners 1.Ordinary Share s invested by hareh olders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and 9,011,520 -9,011,52 accounted as .00 0.00 owners’ equity 1,992,000 1,992,000 4.Other .00 .00 -299,16 (III)Profit -299,165, 5,930.0 allotment 930.04 4 1.Providing of surplus reserves 77 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 2.Allotment to the -299,16 -299,165, owners (or 5,930.0 930.04 shareholders) 4 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 3,835,00 9,323,090 9,011,520 113,734,3 205,476 13,468,29 end of this term 0,526.00 ,967.43 .00 04.09 ,802.75 1,080.27 Amount in last year In RMB Amount in last year Other Equity instrusment Other Less: Common Attribut Total of Items Share Capital Compreh Surplus preferre Sustain Shares in risk able owners’ Capital Other reserves ensive reserves d stock able stock provision profit equity Income debt I.Balance at the 2,662,08 2,782,714 70,907,47 348,329 5,864,031 end of last year 0,001.00 ,603.79 1.36 ,886.80 ,962.95 Add: Change of accounting 78 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 policy Correcting of previous errors Other II.Balance at the 2,662,08 2,782,714 70,907,47 348,329 5,864,031 beginning of 0,001.00 ,603.79 1.36 ,886.80 ,962.95 current year III.Changed in the 1,172,92 6,538,384 9,011,520 42,826,83 119,233 7,864,353 current year 0,525.00 ,363.64 .00 2.73 ,494.50 ,695.87 (I)Total 428,268 428,268,3 comprehensive ,327.33 27.33 income (II) Investment or 1,172,92 6,538,384 9,011,520 7,702,293 decreasing of 0,525.00 ,363.64 .00 ,368.64 capital by owners 1.Ordinary Share 1,173,02 6,767,502 7,940,523 s invested by hareh 0,525.00 ,719.49 ,244.49 olders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and 9,011,520 -9,011,52 accounted as .00 0.00 owners’ equity -100,00 -229,118, -229,218, 4.Other 0.00 355.85 355.85 -309,03 (III)Profit 42,826,83 -266,208, 4,832.8 allotment 2.73 000.10 3 1.Providing of 42,826,83 -42,826, surplus reserves 2.73 832.73 2.Allotment to the -266,20 -266,208, owners (or 8,000.1 000.10 shareholders) 0 3.Other (IV)Internal transferring of owners’ equity 79 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 3,835,00 9,321,098 9,011,520 113,734,3 467,563 13,728,38 end of this term 0,526.00 ,967.43 .00 04.09 ,381.30 5,658.82 III.Brief introduction of the Company: Approved by Hebei Economic System Reform Commission with the Approval of Establishment of Dongxu Optoelectronic Technology Co., Ltd.(Hereinafter referred to as “The Company”or “Dongxu 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 company jointly established by Shijiazhuang Kinescope General Factory (transformed into Shijiazhuang Baoshi Electronics Group Co., Ltd.later), China Electronic Import and export Corporaqtion 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 Xu Ke (2012) No. 1661 Document) issued by China Securities Regulatory Commission ("CSRC"), the Company 80 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 Do ngxu 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 Dongxu 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 ,and the registered capital is RMB2709 million after changed. As per the provisions of “Restricted Stock Incentive Plan of Dongxu 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 Dongxu 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. As of June 30, 2016, Registered capital :RMB 3,835,000,526.00, Legal representative: Li Zhaoting, Enterprise unified social credit code : 911301001043959836 ,Registered Address: No.9, Huanghe Road, Shijiazhuang High-tech Industrial Development Area, Shijiazhuang, Hebei Province. Dongxu Optoelectronic Parent Company is the Dongxu Group,Uitimate controller is Li Zhaoting. In2015, 14 subsidiaries and 4 sub-subsidiaries were included in the consolidation scope by the company, see details at Note 7 “Rights and Interests in Other Subjects ”. The consolidation scope of the company increased by 6 companies year on year at this reporting period, see details at Note 6“Change of Consolidation Scope” Business scope: electronic vacuum glass devices and supporting electronic components, automotive parts production and sales and after-sales services; management of the enterprise's own products export business and the business of mechanical equipment, spare parts, raw materials imports business (except the goods and 81 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 technology that the country limit or prohibit to import and export), flat panel display glass substrate industry, investment, construction and operation and related technology development, technology consulting, technology services, technology transfer; hydrogen (52.23 tons / year) of production (valid until June 30, 2015 (can not operate the laws, regulations and the State Council decided to ban or restrict, ; can operate after get approval from other departments). Financial statements and notes to the financial statements approved at the 3rd meeting of the Eighth Board of of Directors on August 29, 2016. In the reporting period, 16 subsidiaries and 7 sub-subsidiaries were included in the consolidation scope by the company, see details at Note 7 “Rights and Interests in Other Subjects ”. The consolidation scope of the company increased by 5 companies year on year at this reporting period, see details at Note 6“Change of Consolidation Scope” IV.Basis for the preparation of financial statements 1.Basis for the preparation 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 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 relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to relevant requirements. 2. Going-concern 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.Principal accounting policies and accounting estimates 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, 2016 , operational results, cash flow, and other relevant information of January to June 2016. 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. Operating Cycle The normal business cycle refers to the period from the assets used for processing after purchased by the company to the cash or cash equivalents achieved. 12 months are regarded as one operating cycle in the company, and which is as the division criterion for the liquidity of assets and liabilities. The parent company and the subsidiay- Shijiazhuang Colour Bulb Co., Ltd., which is engaged in manufacturing industry, with normal operating cycle that is one 82 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 year;The Subsidiary-Wuhu Dongxu Optoelectronic Equipment Co., Ltd., Which is engaged in Manufacturing industry, with normal operating cycle that is more than one year; The subsidiarys-Wuhu Dongxu Optoelectronic Technology Co., Ltd., Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. , Zhenzhou Xufei Optoelectronic Technology Technology Co., Ltd, Jiangsu Jixing New Material Co., Ltd., Dongxu(Kunshan) Display Material Co., Ltd.and Wuhan Dongxu Optoelectronc Technology Co., Ltd., Which are engaged in Manufacturing industry, with normal operating cycle that is shorter than one year ; The Subsidiary-Sichuan Ruiyi Construction Engineering Co., Ltd. And Hebei Xubao Construction installation engineering Co., Ltd., which are engaged in Construction installation, with normal that is more than one year; The Subsidiary-Beijing Xufeng Real estate, which is engaged in real estate Development industry, with normal operating cycle that is more than one year; The Subsidiary-Beijing Xutan New Material Co., Ltd., which is engaged in Technology service industry, with normal operating cycle that is shorter than one year; The Subsidiary-Beijing Dongxu Huaqing Investment Co., Ltd., which is engaged in Investment Management Industry, with normal operating cycle that is shorter than one year; The Sub-Subsidiary,Jiangsu Dongxu Yitai Intelligent Equipment Co.,Ltd, is engaged in manufacturing industry but with uncertain operating cycle; The Sub-Subsidiary,Shijiazhuang Dongxu Optoelectronic Euqipment Technology Co., Ltd, which is engaged in Manufacturing industry, with normal operating cycle that is one year; The Sub-Subsidiary,Beijing Dongxu Investment Development Co., Ltd., which is engaged in Investment industry, with normal operating cycle that is one year; The sub-subsidiary, Wuhu Ruiyi Service Co.,Ltd, is engaged in labor dispatch, with normal operating cycle that is one year. 4.Standard currency for bookkeeping The Company takes RMB as the standard currency for bookkeeping. 5. Accounting treatment methods of the merger of enterprises under the control of the same company and different companies Business combination refers to the transactions or items with one reporting entity formed by the combination of two or more separate enterprises. The business combination shall be divided into the business combination under common control and the business combination under non-common control. (1) Business Combination under Common Control The business combination under common control refers to the 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. Of which, the combining party is that acquiring the control right to other combining enterprises at combining date, and the combining date means the date that the combining party actually acquires the control right of the combined party. The assets and liabilities acquired by the combining party are measured in accordance with the book value of the combined party at the combining date. For the balance between the book value of net assets acquired by the combining party and the book value of the combining valuable consideration (or the nominal amount of issued shares), the capital reserves (stock premium) shall be adjusted, or the retained earnings shall be adjusted when the capital reserves (stock premium) are insufficient. All the costs directly incurred for the business combination by the combining party shall be recorded into the current profits and losses when occurred. (2)Business Combination under Non-common Control The business combination under non-common control refers to the business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the combination. Of which, the acquirer is that obtaining the control right to other combining enterprises at acquisition date, and other combining enterprises refers to the acquiree. The acquisition date means the date that the acquirer actually obtains the control right of the acquiree. For the business combination under non-common control, the merger costs include the assets paid for obtaining the control right of acquiree by the acquirer, the 83 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 liabilities occurred or borne and the fair value of equity securities issued, the intermediary fees for audit, legal services, evaluation and consultation when the business combination issued, and other management costs shall be recorded into the current profits and losses when occurred. The transaction costs of equity securities or debt securities issued for the merger consideration by the acquirer shall be included into the initially recognized amount of the equity securities or the debt securities. The contingent consideration involved shall be recorded into the merger cost as per the fair value at the acquisition date. Within 12 months after the acquisition date, the combining business reputation should be adjusted correspondingly if the contingent consideration is required to adjust because of new or further evidence for the existed situation on the acquisition date. The merger cost issued by the acquirer and the identifiable net assets acquired in the combination are measured as per the fair value on the acquisition date. The difference of the merger cost minus the fair value shares of identifiable net assets obtained by the acquiree during the merger on the acquisition date, is recognized as the business reputation. While the merger cost is less than the fair value shares of identifiable net assets obtained by the acquiree during the merger, all the measurement on the identifiable assets, the liabilities, the fair value of liabilities and the merger cost obtained by the acquiree should firstly be rechecked, and the difference shall be recorded into the current profits and costs if the merger cost is still less than the fair value shares of identifiable net assets obtained by the acquiree during the merger after rechecking. If the deductible temporary difference of acquiree obtained by the acquirer is not recognized due to the recognition condition of the deferred income tax assets unmet on the acquisition date. Within 12 months after the acquisition date, the relevant deferred income tax assets shall be recognized and the business reputation shall be reduced if the acquired new or further evidence shows that the relevant situation has already existed and the economic benefit gained by the acquiree from the deductible temporary difference is expected to achieve, and the differences are recognized as the current profits and losses if the business reputation is insufficient to offset. With the exception of the above, the deferred income tax assets related to the business combination are recorded into the current profits and losses. For the business combination under non-common control realized step-by-step through multiple transactions, the multiple transactions shall be judged if belong to “the package deal” according to the “Notice on Issuance of Interpretation of Accounting Standards for Business Enterprises from Ministry of Finance” (Finance and Accounting [2012] No.19) and the judgment standards on “the package deal” in Article 51 of “Accounting Standards for Business Enterprises No.33 – Consolidated Financial Statement” (please see 5 (2) in Notes 3). For the package deal, please refer to above description of this section and Notes 3, 12 “Long-term Equity Investment” to conduction the accounting treatment. For the non-package deal, the relevant accounting treatment should be respectively conducted for the individual financial statement and the consolidated financial statements: For the individual financial statements, the sum of the book value of equity investment from the purchased party held before the purchase date and the new investment cost at the purchase date shall be as the initial investment cost of the investment. For the other comprehensive incomes involved in the equity of the acquiree held before the acquisition date, the investment and the relevant other comprehensive incomes shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquiree (Namely, the rest is transferred into the current investment incomes with the exception of the corresponding shares of changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the acquiree as per the equity method). In the consolidated financial statements, the equity of the acquiree held before the acquisition date shall be measured again as per the fair value of the equity on the acquisition date, and the difference between the fair value and the book value is recorded into the current investment income. For the other comprehensive incomes involved in the equity of the acquire held before the acquisition date, the relevant other comprehensive incomes shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquire (Namely, the rest is transferred into the current investment incomes on the acquisition 84 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 date, with the exception of the corresponding shares of changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the acquire as per the equity method). 6. Compiling method of consolidated accounting statements (1) Compiling method of consolidated accounting 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 the preparation of 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. 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 3, 12 “Long-term Equity Investment” or Notes 3, 9 “Financial Instruments”. For the equity investment in the subsidiary through the step-by-step disposal of multiple transactions till the 85 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 12, (2) ④ in Notes 3,) 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. Recognition Standard of Cash & Cash Equivalents The cash stated in cash flow statement refers to cash in hand and bank deposits usable for payment at any time. Cash equivalent refers to the investments with holding period of less than three months that are readily convertible to known amount of cash and subject to insignificant risk of changes in value. 8. Accounting and Translation Method of Foreign Currency Transaction (1) Translation Method of Foreign Currency Transaction The shot exchange rate (usually refers to the middle rate at the date of currency exchange published by the People’s Bank of China, hereinafter inclusive) on the transaction date is adopted to convert to the amount of functional currency when the foreign currency transaction issued in the company is initially recognized. However, the foreign currency exchanges or the transactions relative to the foreign currency exchanges occurred in the company shall be translated into the amount of functional currency as per the actually adopted exchange rate. (2) Translation Method for Monetary Items of Foreign Currency and Non-monetary Items of Foreign Currency On the balance sheet date, the monetary items of foreign currency are translated as per the shot exchange rate on the balance sheet date, and the foreign exchange conversion gap arising from which shall be recorded into the profits and losses of the current period, except for ① the balance of exchange arising from special foreign currency borrowings for the purchase and construction of qualified assets subject to the principle of borrowing costs. ② the exchange balance generated from other book balances in the foreign currency monetary items available for sale with the exception of the post-amortization costs shall be recorded into other comprehensive incomes. The non-monetary items of foreign currency measured at the historical cost shall still be measured by the amount of functional currency translated at the spot exchange rate on the transaction date. The non-monetary items of foreign currency measured at the fair value shall be translated at the spot exchange rate on the fair value recognized date, and the gap of the translated amount of functional currency and the original the amount of functional currency shall be as the fair value variation (change in exchange rate included) to make treatment and 86 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 recorded into the current profits and losses or recognized as other comprehensive incomes. (1) Translation Method of Foreign Currency Financial Statement For the overseas business operation involved in the preparation of the consolidated financial statement, the exchange balance arising from the change in exchange rate for the foreign currency monetary items of the net investment in the overseas business, shall be as “translation reserve of foreign currency statement” and recognized as other comprehensive incomes. The profits and losses of the current disposal period shall be recorded when disposal of the overseas business operations. The foreign currency financial statement of the overseas business operation shall be translated as RMB statement as per the following methods: the assets and liabilities in the balance sheet shall be translated at a spot exchange rate on the balance sheet date. For the shareholders’ equity items, other items shall be translated at a spot exchange rate when occurring, except for the “undistributed profit” items. The earnings and expenses items in the profit statement shall be translated at a spot exchange rate on the transaction date. Moreover, the undistributed profits at the beginning of this year are the profits translated at the end of last year which shall be distributed and listed all the items measurement as per the translated profits. The difference between the translated assets items and the sum of the liabilities items and the shareholders’ equity items shall be as the translation reserve of foreign currency statement and recognized as other comprehensive incomes. When disposing the overseas business operation and losing the control right, the translation reserves of foreign currency statement related to the overseas business operation which listed in the shareholders’ equity items in the balance sheet, are all recorded into the current disposal profits and losses or shifted as per the disposal proportion of the overseas business operation. The cash flows of foreign currency and overseas subsidiary shall be translated at the spot exchange rate on the cash flow date. The influence amount of the change in exchange rate on the cash shall be individually listed and reported as the adjustment items in the cash flow statement. The amount at the beginning of this year and the actual amount of last year shall be listed according to the translated amount of the financial statement. If the control on the overseas business operation lost due to the disposal of partial equity investment or other reasons when disposing all the owners’ equity of the overseas business operation of the company, the translation reserves of foreign currency statement belong to the owners’ equity of the parent company related to the overseas business operation which listed in the shareholders’ equity items in the balance sheet, are all recorded into the current disposal profits and losses. If the held equity proportion of the overseas business operation reduced due to the disposal of partial equity investment or other reasons, but the control on the overseas business operation not lost, the translation reserves of foreign currency statement related to the partial disposal of the overseas business operation shall be belong to the minority equity and not recorded into the current profits and losses. When disposing partial equity of the joint ventures or the cooperative enterprises of the overseas business operations, the translation reserves of foreign currency statement related to the overseas business operations shall be recorded into the current disposal profits and losses as per the disposal proportion of the overseas business operations. 9.Financial instruments One financial asset or financial liability shall be recognized when the company becomes the party in the financial instrument contract. The financial assets and the financial liabilities are measured at the fair value in the initial recognition. For the financial assets and liabilities that measured at the fair values and the variation included in the current profits and losses, the relative transaction expenses shall be directly recorded into the profits and losses. For the financial assets and liabilities of other categories, the expenses related to transactions are recognized as initial amount. 87 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (1) Determination Method for the Fair Value of Financial Assets and Liabilities The fair value refers to the price that receivable for the sale of one asset or paid for the transfer of one liability in the orderly transactions occurring on the measurement date for the market participants. If there exists the active market for the financial instrument, the company shall recognize the fair value according to the quotation in the active market which refers to the price that easy to periodically acquire from Exchanges, Commission Brokers, Guilds and Pricing Services, and stands for the price of the market transactions actually occurred in the fair dealing. For there isn’t the active market for the financial instrument, the company shall recognize the fair value with adopting the valuation technique which includes the price used in the market transactions recently conducted by the parities with voluntary trade and under the consideration and acquainting of the situation, the current fair value in reference to other same financial instruments, the discount cash flow method and the option pricing model. (2) Classification, Recognition and Measurement of Financial Assets The accounting recognition and de-recognition shall be conducted at the transaction date in the conventional way for the financial assets dealing. The financial assets are divided into the financial assets, the held-to-maturity investment, the loans, the receivables and the sellable financial assets which are measured at their fair values and of which the variation are recorded into the current profits and losses when recognized initially. ① The financial assets measured at the fair value and of which the variation recorded into the current profits and losses Including the tradable financial assets and the financial assets designated at their fair values and of which the variation is recorded into the current profits and losses. The tradable financial assets refer to the financial assets meeting any of the following requirements: A. the purpose to acquire the financial assets is for selling in the short-term. B. forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which there are objective evidences proving that the company may manage the combination by way of short-term profit making in the near feature. C. being a derivative instrument, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments belong to financial guarantee contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quotation in the active market and whose fair value cannot be reliably measured, and which shall be settled by the delivery of the equity instruments. The financial assets meeting any of the following requirements can be designated when they are initially recognized as financial assets measured at their fair values and of which the variation is recorded into 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 arisen from the different basis of measurement of the financial assets. B. the official written documents on risk management or investment strategies of the company have recorded that the combination of the financial assets, or the combination of the financial assets and liabilities will be managed and evaluated on the basis of the fair value and reported to the key management personnel. The financial assets measured at their fair values and of which the variation is recorded into the current profits and losses shall be made the subsequent measurement as per the fair value, and the gains or losses formed from the variation of the fair value as well as the dividend and interest incomes related to the financial assets shall be recorded into the current profits and losses. ②The investments of held-to-maturity The held-to-maturity investment refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and the company holds for a definite purpose or is able to hold until its maturity. The held-to-maturity investments shall be made the subsequent measurement on the basis of the actual interest 88 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 rate and the post-amortization costs, and the gains or losses arising from de-recognition, impairment or amortization shall recorded into the current profits and losses. The actual interest rate method is the way to calculate the post-amortization costs and the interest incomes or expenditure at each period as per the actual interest rate of the financial assets or liabilities (a group of financial assets or liabilities included). The actual interest rate means that the future cash flow of the financial assets or liabilities within the predicted term of existence or within a shorter applicable term shall be discounted as the rate used for the current book value of the financial assets or liabilities. When calculating the actual interest rate, the company should consider all the contract terms of the financial assets or liabilities to estimate the future cash flow (without regard to the future credit loss), and take account of all the charges, transaction expenses and discounts or premium belong to the actual interest rate and paid or received between all the parties of the financial assets or liabilities contracts. ③Loans and Receivables The loans and the receivables refer to a non-derivative financial asset without the quotation, a fixed or determinable amount of repo price in the active market. The financial assets divided into loans and receivables of the company shall include the bill receivable, the accounts receivable, the interest receivable, the dividends receivable and other receivables The loans and the receivables shall be made the subsequent measurement on the basis of the actual interest rate and the post-amortization costs, and the gains or losses arising from de-recognition, impairment or amortization shall recorded into the current profits and losses. ④ The financial assets available for sale The sellable financial assets refer to the non-derivative financial assets which are designated as sellable when they are initially recognized as well as the financial assets other than the financial assets, the loans, the receivables and the held-to-maturity investments measured at the fair value and of which the variation recorded into the current profits and losses. The costs of the sellable liability instrument investments at the end of period shall be recognized as per the post-amortization cost method, which is the amount that the accumulated amortization amount, formed after the amortization for the initially recognized amount with the compensated capital deducted plus or minus the difference between the initially recognized amount and the amount at the maturity date with use of the actual interest rate method, with deduction of the impairment losses occurred. The costs of the sellable equity instrument investments at the end of period are the initially acquired costs. The sellable financial assets shall be conducted the subsequent measurement at the fair value, the balance The gains or losses arising from the change in the fair value, except that the impairment losses and the exchange balance related to the monetary financial assets of foreign currency and the post-amortization costs are recorded into the current profits and losses, shall be recognized as other comprehensive incomes, transferred out and recorded into the current profits and losses when the de-recognition of the financial assets. However, The equity instrument investment which has no quotation in the active market and whose fair value cannot be reliably measured, and the derivative financial assets which are connected with the equity instrument and required to settle by the delivery of the equity instrument shall be conducted the subsequent measurement by costs. The interests acquired from the sellable financial assets during the holding period and the cash dividends declared to deliver by the investee shall be recognized as the investment returns. The financial assets impairment available for sale The decline for the fair value of the sellable equity instrument investments can be judged as serious or non-transient depreciation by the relevant comprehensive factors, which shows that the sellable equity instrument investments have the impairment. Of which, the “serious depreciation” refers to the decline range of the fair value 89 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 accumulatively over 20%, and the “non-transient depreciation” is the decline period of the fair value continuously beyond 12 months. When the sellable financial assets impair, the accumulated losses formed due to the depreciation of the fair value for other comprehensive incomes originally recorded shall be transferred out and recognized as the current profits and losses, and the transferred accumulative losses are the balances of the costs of the assets initially acquired with deduction of the withdrawn capitals, the amortized amount, the current fair value and the impairment losses initially recorded into profits and losses. After the impairment losses recognized and if there are objective evidences proving that the financial assets values have resumed after the period and have objectively involved in the matters occurred after the losses recognized, the impairment losses originally recognized shall be switched back, the reverse of the impairment losses for the sellable equity instrument investments shall be recognized as other comprehensive incomes and the reverse of the impairment losses for the sellable liability instrument shall be recorded into the current profits and losses. The equity instrument investment which has no quotation in the active market and whose fair value cannot be reliably measured, or the impairment losses of the derivative financial assets which are connected with the equity instrument and required to settle by the delivery of the equity instrument shall not be reversed. (3) Recognition criteria and measurement methods of transferred financial assert For financial asset that satisfies the following criteria, it shall stop recognizing the financial asset: 1) the contract rights to collect the cash flow of the financial assert has been terminated; 2) the financial assert has been transferred with nearly all of the risks and rewards related to the ownership of the financial assert transferred to transferee; 3) the financial assert has been transferred with the control to such financial asserts waived, though this enterprise has not transferred or retained nearly all the risks and rewards related to the ownership of the financial assert. If this enterprise has neither transferred nor retained almost all the risks and rewards on the asset ownership, it shall, within the extent of its continuous involvement in the transferred financial asset and recognize the relevant liability. The term "continuous involvement in the transferred financial asset" shall refer to the risk level that this enterprise faces resulting from the change of the value of the financial asset. If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between the amounts of the book value of the transferred financial asset and the sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in the owner's equities of other comprehensive income, shall be recorded in the profits and losses of the current period. If the transfer of partial financial asset satisfies the conditions to stop the recognition, the 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 profits and losses of the current period: 1)sum of consideration the portion whose recognition has been stopped and the accumulative amount changes in fair value originally recorded owner’s equities which is corresponding to stopped, the book value of the portion whose recognition has been stopped; 2) the book value of the portion whose recognition has been stopped. For the financial asset sold with recourse attached, it is to transfer the financial asset held by endorsement, prior to confirmation that nearly all of the risks and rewards related to the ownership of the financial asset has been transferred to transferee. Where this enterprise has transferred nearly 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 nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset. Where this enterprise does not transfer or retain nearly all of the risks and rewards related to the ownership of a financial asset, it shall deal with it according to principles stipulated above. 90 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (4)Classification and Measurement of Financial Liability Financial liabilities shall be classified into the two categories when they are initially recognized: the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses; other financial liabilities. For the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses, the related transaction cost shall be included directly in the current profits and losses; for other financial liabilities, the related transaction cost included in the initially recognized amount. ① The condition for classifying the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses as transactional financial liabilities and the financial liabilities which are measured at their fair values at initial recognition and of which the variation is included in the current profits and losses is the same as these for classifying it as the transaction financial asset and the financial asset which are measured at their fair values and of which the variation is included in the current profits and losses. This enterprise shall make subsequent measurement on its financial liabilities according to their fair values. The profits and losses, arising from the change in the fair value of the financial asset, and the dividends and interests expenses associated with the financial asset, shall be recorded into the profits and losses of the current period. ② Other Financial Liability And are not quoted in an active market,for which there is no quoted price in the active market and whose fair value cannot be reliably measured, this enterprise shall make subsequent measurement according to its cost. For other financial liabilities, this enterprise shall make subsequent measurement on the basis of the post-amortization costs by adopting the actual interest rate method, with profits or losses resulting from stopping recognition or amortization recorded into the profits and losses of the current period. (5) Termination from Recognition of Financial Liability Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly. Where this enterprise (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it shall terminate the recognition of the existing financial liability, and shall at the same time recognize the new financial liability. Where the recognition of a financial liability is totally or partially terminated, this enterprise shall include into the profits and losses of the current period the gap between the carrying amount which has been terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed). (6) Offset of Financial Asset and Financial Liability Where this enterprise has the legal right to offset its recognized financial asset and financial liability, and it is able to perform this legal right, and if it plans to settle with the net amount of and cash the financial asset and liquidate the financial liability, it shall itemize and show in the balance sheet the amounts after the financial asset and the financial liability offset each other. For any other circumstances, the financial asset and financial liability shall not offset each other, and shall be itemized and shown separately in the balance sheet (7) Equity Instruments The "equity instruments" refers to the contracts which can prove that this enterprise holds the surplus equities of the assets after the deduction of all the debts. This enterprise deal the equity instruments issued (including refinancing), repurchased, sold or cancelled as changes of equity. It shall not recognize the changes of fair value of equity instruments. The transaction expenses associated with equity transactions shall be deducted from the 91 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 equity. This enterprise shall deduct the shareholders' equity for various kinds of distributions (not including stock dividends) to the holders of equity instruments. It shall not recognize the amount of changes in the fair value of equity instruments. 10.Account receivable (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 Impairment test shall be separately conducted. If the test proves the occurrence of impairment, impairment loss shall be 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 The method of separate provision for bad debts for the accounts impairment is not proved by separate test, such accounts receivable with significant single-item amount 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% 92 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 (3) Accounts receivable that are individually insignificant but with bad debt provision provided on an 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. 11. Inventories (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. (5) Cost of Development Cost of development includes completed development product, development product under construction, leasing development product and simulated development land. Completed development product means the estate which has been built and up for sale; Development product under construction means the estate which hasn’t been built and in the purpose of sale; Leasing development product means the estate which is temporarily leased under business mode for which the company’s intents to sell, which the leasing development product amortizes by stages within the estimated available years; Simulated development land means the land which has been purchased and determined to be developed as Sales or Leasing Estate. 93 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 12. Long-term Equity Investment The long-term equity investment in this section refers to the long-term equity investment of this enterprise that is able to control to or does joint control with or significant influences over the invested enterprise. For the long-term equity investment of this enterprise that is not able to control to or does not do joint control with or have significant influences over the invested enterprise, this enterprise shall record it as available-for-sale financial asset or the financial asset measured by its fair value with its changes in fair value recorded into the profits or losses of current period as the changes. For details of its accounting policy, please refer to Note III.9 "Financing Instruments" The term "joint control" refers to the joint control over an arrangement of this enterprise in accordance with the contracts and agreements, and decisions over relevant activity of such arrangement shall not be unless the assent on sharing the control power. The term "significant influences" refers to this enterprise's power to participate in making decisions on the financial and operating policies of the invested enterprise, but not to control or do joint control together with other parties over the formulation of these policies. (1)Ascertaining of Investment Cost For the merger of enterprises under the same control, it shall, on the date of merger, 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 payment in cash, no-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reverse. If the capital reserve is insufficient 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 merger, regard the share of book value of the owner’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. For the merger of enterprises under the same control through gaining the shares of the combined enterprise by multiple steps of deals, it shall deal with it in the following two ways depending on that if it belongs to "a package deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control power; if it does not belong to "a package deal", it shall, on the date of merger, regard the share of book value of the owner’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. The equity investment held by this enterprise before the date of merger shall be accounted for by equity method, or shall be recorded as the other comprehensive income recognized as available-for-sale financial asset and not accounted for. For the merger of enterprises not under the same control, it shall, on the date of merger, 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 merger costs include the assets paid, liabilities occurred or borne and sum of the fair value of the equity securities issued by the purchaser. For the merger of enterprises not under the same control through gaining the shares of the combined enterprise by multiple steps of deals, it shall deal with it in the following two ways depending on that if it belongs to "a package deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control power; if it does not belong to "a package deal", it shall, on the date of merger, regard the sum of book value of the owner’s original equity of the merged enterprise and the newly increased investment cost as the initial cost of the long-term equity investment. For the shares originally held by this enterprise accounted for by weighted equity method, the relevant other comprehensive income shall not be accounted for 94 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 temporarily. For the equity investment accounted for as available-for-sale financial asset, the difference of its fair value and its face value and the accumulated changes in its fair value originally recorded as other comprehensive income shall be switched to the profits or losses of the current period. The audit cost, law service cost, evaluation and consultation fees and agent commissions as well as other related administration costs occurred and borne by the merging or purchasing enterprise for the purpose of merger, shall be recorded into the profits or losses of current period at the time when the costs occurred. Other equity investments except the long-term equity investment formed by merger of enterprises shall be initially ascertained by their costs which, depending on the different ways in acquiring the long-term equity investments, shall be recognized separately as cash purchasing prices actually paid by this enterprise, fair value of the equity securities issued by this enterprise, agreed value of the investment contracts or agreements, fair value or original book value of the assets obtained by exchange of no-monetary assets, the fair value of the long-term equity investment itself, etc. The relevant expenses, tax payments as well as other necessary expenses directly associated with obtaining the long-term equity investment shall be recorded into the investment costs as well. If this enterprise is able to do joint control or significant influence, which does not constitute control, over the invested entity as a result of additional investment, the long-term equity investment cost shall be the sum of the fair value of the equity investment ascertained in accordance with the Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instrument and the cost of the increased investment. (2) Subsequent Measurement and Recognition Method A long-term equity investment of this enterprise that does joint control (not including joint venture) or significant influences over the invested entity shall be measured by employing the equity method. Besides, the cost method is employed in this enterprise's financial reports to measure the long-term equity investment that could form control over the invested entity. ①Long-term equity investment measured by employing the cost method The price of a long-term equity investment measured by employing the cost method shall be included at its initial investment cost. If there are additional investments, the cost of the long-term equity investment shall be adjusted. Except the prices actually paid when obtaining the investment or cash dividends or profits being approved in the consideration but not yet issued, the investment income of the current period shall be recognized in accordance with the cash dividends or profits being approved by the invested entity. ②Long-term equity investment measured by employing the equity method If the initial cost of a long-term equity investment is more than the investing enterprise's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the investing enterprise's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of long-term equity investment shall be adjusted simultaneously. When employing the equity method, this enterprise shall, in accordance with the attributable share of the net profits or losses of the invested entity, recognize the investment profits or losses and adjust the book value of the long-term equity investment. This enterprise shall, in the light of the profits or cash dividends declared to distribute by the invested entity, calculate the proportion it shall obtain, and shall reduce the book value of the long-term equity investment correspondingly. Where any change is made to the owner's equity other than the net profits and losses of the invested entity, the book value of the long-term equity investment shall be adjusted and included in the capital reserves. This enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by the invested entity are different from those adopted by this enterprise, an adjustment shall be 95 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 made to the financial statements of the invested entity in accordance with the accounting policies and accounting periods of this enterprise and recognize the investment profits or losses and other comprehensive incomes. For the transactions between this enterprise and its joint ventures and associated entities, where the assets invested or sold do not constitute a business, the unrealized internal transaction profits or losses shall be calculated in accordance with proportion shared, with the proportion shared by this enterprise offset and recognize the investment profits or losses based thereof. However, if losses occurred in the internal transaction between the invested entities is the impairment loss of transferred assets, they shall not be offset. When the assets invested by this enterprise to its joint ventures or associated entities constitute a business, and the investing party obtains long-term equity but without control power, the fair value of the invested business shall be recognized as the initial investment cost of the additional long-term equity investment. The total difference between the original investment cost and the book face of the invested business shall be recorded into the profits or losses of the current period. If the assets purchased from the joint ventures or associated entities constitute a business, this enterprise shall account for the business in accordance with this enterprise Accounting Standard No. 20 - Business Combinations, with the total profits or losses associated with the transaction recognized. The Company bears the net losses of its invested business to the limit of the book value of its long-term equity investment and other long-term equity that in real terms constitutes investment on the business. For additional loss of its invested business, if the Company is obligated to undertake, it shall be recognized as estimated liabilities accordingly and recorded in current investment losses. If the invested business earns profits afterwards, the Company shall reinstate and recognize its share of gains after compensating its unrecognized share of losses. ③Purchase of minority interest While compiling consolidated financial statements, the Company adjusts its capital reserve in terms of the difference between the increase of long-term equity investments due to purchase of minority interest and its share of the subsidiaries’ net assets since the purchase (or combination) date or dates. If its capital reserve is not sufficient to write down the difference, then the Company adjusts its retained income. ④Disposal of long-term equity investments In consolidated financial statements, the Company records in shareholders’ equity the difference between partial disposals of its long-term equity investments in its subsidiaries and its share of the subsidiaries’ net assets if it does not lose control of the subsidiaries; and if such partial disposals result in loss of its control of the subsidiaries, the difference shall be treated in accordance with the accounting policies related and specified in “Compiling Principles for Consolidated Financial Statements”, Note III.6.(2). For disposals of long-term equity investments under other circumstances, the difference between the book value and the actual received consideration is recorded in current profit and loss. For the long-term equity investments calculated by equity method, the same method applies to the remaining equity after disposal. Meanwhile, the other comprehensive gains originally recorded in shareholders’ equity is treated pro rata by the same method how the invested businesses handle the accounts while directly disposing the related assets or liabilities. The investor recognizes the ownership interest due to equity changes except net profit and loss, other comprehensive gains and profit distribution, and carries it over pro rata to current profit and loss. For long-term equity investments calculated by costs method, the same method applies to the remaining equity after disposal. Other comprehensive gains calculated and recognized by equity method or recognition and measurement principles for financial instruments before the Company obtains control of the invested businesses are treated on the same basis that the invested businesses directly dispose the related assets or liabilities, and it will be carried over pro rata to current profit and loss; and among the invested businesses’ net assets that are calculated and recognized by equity method are all other equity changes than net profit and loss, other comprehensive gains and profit distribution carried over pro rata to current profit and loss. For disposals of long-term investment equity resulting in loss of control over the invested businesses, when 96 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 compiling individual financial statements, the Company changes to adopt equity method to calculate the remaining equity that is still sufficient to exert joint control or significant influence, and to make adjustments as since it was acquired; and if the remaining equity is not sufficient, it will be handled in accordance with the relevant recognition and measurement principles for financial instruments and the difference between its fair value and book value will be recorded in current profit and loss since the Company loses control of the invested businesses. For other comprehensive gains recognized by equity method or recognition and measurement principles for financial instruments before the Company obtains control over the invested businesses, the Company adopts the same basis to handle the accounts as the invested businesses directly dispose the related assets or liabilities, and among the invested businesses’ net assets that are calculated and recognized by equity method are all other equity changes than net profit and loss, other comprehensive gains and profit distribution carried over pro rata to current profit and loss. For the remaining equity calculated by equity method, other comprehensive gains and other ownership interests will be carried over pro rata while for those treated in accordance with the recognition and measurement principles for financial instruments, other comprehensive gains and other ownership interests will be carrier over entirely. Under the circumstances that the Company loses joint control over or has no significant influence on the invested businesses due to partial equity disposal, the remaining equity changes to be calculated in accordance with the recognition and measurement principles for financial instruments, and the difference between its fare value on the date that the Company loses the joint control and significant influence and the book value is recorded in current profit and loss. For other comprehensive gains recognized due to calculation of the original equity investments by equity method, the Company adopts the equity method no longer but the same basis to handle the accounts as the invested businesses directly dispose the related assets or liabilities while carrying over to current profit and loss all the ownership interest recognized due to other equity changes than net profit and loss, other comprehensive gains and profit distribution. If the Company gradually loses control of a subsidiary through multiple transactions, which is a package deal as a whole, then all these transactions will be treated as control losing equity disposal, and before loss of control, the difference between each transaction consideration and the book value of the corresponding long-term equity investment is recognized as other comprehensive gains and in the end, carried over to current profit and loss upon loss of control. 13. Investment real estate The measurement mode of investment property The measurement by the cost method Depreciation or amortization method 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. 14. Fixed assets (1) Recognition criteria of fixed assets1 Fixed assets refer to tangible assets that are held for production, services, leases or operations and the useful life of which are over one accounting year. Fixed assets are recognized if it produces economic benefit inflows and its 97 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 costs can be measured reliably. The Company makes initial measurements on fixed assets at the costs that they are acquired. (2)Depreciation method 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 certificate or land use 5 3.17 right certificate) or 30 years in case of no period of title Machinery equipment- Straight-line method 5 5 19 Kiln Machinery equipment- Straight-line method 3 95.50 1.5 Platinum passage Machinery equipment- Glass flat-panel and other Straight-line method 15 5 6.33 equipment Machinery equipment- Other Production Straight-line method 10 5 9.5 equipment Transportation Straight-line method 5 5 19 equipment Other equipment Straight-line method 5 5 19 (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. 15.Projects under construction 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. 16. Borrowing expenses Borrowing expenses include interest, amortization of discount or premium, auxiliary expenses, translation 98 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 differences arising from borrowings in foreign currency etc. The Company starts to capitalize the borrowing expenses in direct connection to purchase, construction or production of the assets that meet capitalization conditions when there are assets expenditures and borrowing expenses incurred and/or the Company starts all the necessary events to purchase, construct or produce such assets till the assets can be used and sold. Other borrowing expenses are recognized as costs when incurred. The Company capitalizes the actual interest expense incurred by use of special borrowings, minus the interest income from the remaining borrowing funds in bank or any investment income earned from the interim investment of those borrowings; and for general borrowings, the amount 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. During capitalization, all translation differences of special borrowings in foreign currency should be capitalized while those of general borrowings in foreign currency are recorded in current profit and loss. The assets to capitalize are fixed assets, investment properties, inventories etc., which can be used or sold after a certain period of time to purchase, construct or produce. The Company stops capitalization of borrowing costs if an abnormal interruption more than 3 consecutive months occurs during purchase, construction or production of the assets that are eligible to capitalization till all those restart. 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. 17.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 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, 99 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 the project will enter the development stage. 18. Impairment of the long-term assets On balance sheet dates, the Company determines whether there are impairments occurring to fixed assets, construction in progress, intangible assets of a limited life, investment properties measured in the cost model as well as non-current and non-financial assets like the long-term equity investments on subsidiaries, joint ventures and associated companies. If impaired, the Company estimates the retrievable amount and conducts an impairment test. Impairment tests need to be done on goodwill, intangible assets of an unlimited life and the intangible assets that are not yet to reach the usable status, no matter they are impaired or not. If the impairment test result shows the retrievable amount lower than the book value, impairment provisions will be set aside and recorded in impairment loss. The retrievable amount is the fair value of the assets minus the disposal expenses or the present value of the estimated future cash flows of the assets, whichever is higher. The fair value of the assets is determined in terms of the price specified in the selling agreement that is fair trade; if no selling agreement but there is an active assets market existing, it is determined in terms of the buyer’s offer; and if no selling agreement and active assets market, the fair value can be estimated based on the best available information. Disposal expenses include all related legal charges, taxes, delivery fees or the direct expenses incurred to have the assets reach the usable or sellable status. To determine the present value of the estimated future cash flows from the assets, the Company chooses an appropriate discount rate in the light of the continual usage of the assets and the estimated future cash flows occurring upon final disposal. Impairment provisions of the assets are calculated and recognized on the basis of individual assets. If unable to estimate the retrievable amount of individual assets, the Company determines the amount by reference to the asset group that includes the individual assets. Asset groups are the minimum assets combination that independently produces cash inflows. For the goodwill separately listed in financial statements, while an impairment test being conducted, the book value is apportioned to the asset groups or combination of asset groups expected to benefit from the synergy effects arising from business combinations. The Company recognizes impairment losses when the test result shows that the retrievable amount of the asset groups or combination of asset groups is lower than their book values. The impairment loss will be first used to write down the book values of the asset groups or combination of asset groups and then those of other assets pro rata. Once the aforesaid impairment losses are recognized, they cannot be reinstated in the future. 19.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 all in current profit and loss. 20. 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 100 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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. 21. 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. 22. 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. 23.Revenues 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 101 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 me, including revenue from selling goods, income of labor ,transferring assets use right and real estate development income.. (1)Recognition time for sales of goods After transferring the significant risks and compensation of the merchandise ownership to the buyer, the Company no longer holds the rights to manage and have control over the merchandise, and recognizes the revenue if the economic benefits arising from the related transactions can flow into the Company and all the costs and revenues related to such product sales can be measured reliably. (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 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. (3) Use Rights of Assets on Alienation Transfer of right to Use Rights of Assets on Alienation consists of interest income, fee income etc. If the related economic benefits can flow into the Company and the revenue can be measured reliably, the amount of usage revenue will be calculated and determined according to the payment time and terms of the related contract or agreement. (4) Construction Contracts A construction contract is a contract for the construction of one or more of the assets in terms of design, technolog y and features, end-use and other closely related and approved. Construction contracts are divided into fixed price contracts and cost-plus contracts. A fixed price contract is to determine the price of a construction contract works in accordance with a fixed price o r fixed unit price contract. Cost-plus contracts, refers to the contract or otherwise agreed cost basis, plus the cost of a fixed fee or a percentag e of the project to determine the price of a construction contract. At the balance sheet date, shall be multiplied by the total contract revenue before completion less the cumulative a mount of revenue recognized after the accounting period, recognized as the current contract revenue; at the same t ime, according to the contract multiplied by the estimated total cost of completion less accumulated previous acco 102 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 unting period after the amount recognized as an expense is recognized as current contract costs. Current period complete a construction contract, the contract shall be in accordance with the actual total income b efore deducting the cumulative amount of revenue recognized after the accounting period, recognized as the curre nt contract revenue; at the same time, according to the contract costs incurred for the deductible costs previously a ccumulated recognized after the accounting period recognized as current contract costs. If the results cannot be measured reliably but the costs can be retrieved, the revenue will be recognized at the retrievable amount of the actual construction contract costs and the costs treated as expenses when incurred; if not retrievable, the costs will also be treated as expenses and no revenue will be recognized. (5)Income of Real Estate Development The company’s real estate development products can confirm the income when meeting the follow conditions: The sales contract has been signed; the down-payment has been charged and the bank mortgage procedure has been completed or has obtained the rights to charge the purchase payment; the main-body of the house has been completed and has passed the acceptance and inspection; the costs of the sales of the item can be measured reliably. 24.Governmental subsidy (1)Basis and accounting methods for assets related government subsidies The government grants of monetary assets shall be measured in accordance with the received or receivable amount. Of which, the grants can be measured at the receivable amount if there exists exact evidence to prove they are allocated according to the fixed quota standard, otherwise they shall be measured at the amount actually received. The government grants of non-monetary assets shall be measured at the fair value. If the fair value cannot be reliably obtained, it shall be measured according to the nominal amount of RMB 1. The government grants related to assets are recognized as the deferred incomes, which are equally distributed within the service life of related assets and account into the current profit or loss. (2) Basis and accounting methods for incomes shall related government subsidies The government grants related to incomes shall be accounted into the current profit or loss if they are used to compensate for the correlative expenses or losses occurred, and shall be recognized as the deferred income and accounted into the current profit or loss during the expense confirmation period if they are used to compensate for the correlative expenses or losses occurred in the subsequent period. The government grants measured at the nominal amount shall be directly accounted into the current profit or loss. 25. 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 103 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 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. 26.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. 27. Other significant accounting policies and estimates 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 104 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 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). 28.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 VI.Taxation 1.Main categories and rates of taxes Taxes Tax references Applicable tax rates Sales revenue and VAT 11%、17%/6% Technical services revenue Business tax Income from labor service and lease 3%、5% Urban construction tax Turnover tax to be paid allowances 7% Enterprises income tax Taxable income 15%、25% Educational surtax Turnover tax to be paid allowances 5% The disclosure on the rate of income tax of taxpayers in different enterprises is stated below Name of Taxpayer Rate of Income Tax Dongxu Optoelectronic Technology Co., Ltd.(The Company) 15% Wuhu Dongxu Optoelectronic Technology Co., Ltd.(Subsidiary)15% Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd 15% (Subsidiary) Shijiazhuang Dongxu Optoelectronic Equipment Technology 15% Co., Ltd(Sub-subsidiary) Zhengzhou Xufei Optoelectronic Technology Co., Ltd 15% (Subsidiary) Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd 15% (Subsidiary) Hebei Xubao Construction Installation Engineering Co., Ltd 25% 105 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (Subsidiary) Shijiazhuang Baoshi Color Bulb Co., Ltd(Subsidiary) 25% Wuhan Dongxu Optoelectronic Technology Co., Ltd 25% (Subsidiary) Sichuan Ruiyi Construction Engineering Co., Ltd.(Subsidiary) 25% Beijing Xufeng Real Estate Co., Ltd.(Subsidiary) 25% Dongxu (Kunshan)Display Material Co., Ltd.(Subsidiary) 25% Beijing Dongxu Investment Developement Co., Ltd. 25% (Sub-subsidiary) Wuhu Ruiyi Labor Co., Ltd(Sub-subsidiary) 25% Jiangsu Jixing New Material Co., Ltd. (Subsidiary) 15% Beijing Xutan New Material Co., Ltd. (Subsidiary) 25% Beijing Dongxu Huuaqing Investment Co., Ltd. (Subsidiary) 25% Jiangsu Dongxu Yitai Intelligent Equipment Co., Ltd. 25% (Sub-subsidiary) Fuzhou Dongxu Optoelectronic Technology Co., 25% Ltd.(Subsidiary) Shenzhen Xuhui Investment Holdings Co., Ltd.(Subsidiary) 25% Shanghai Tanyuan Huigu New Material Technology Co., 25% Ltd.(Subsidiary) Fuzhou Dongxu Investment Development Co., 25% Ltd.(Sub-subsidiary) Fuzhou Xufu Optoelectronic Technology Co., 25% Ltd.(Sub-subsidiary) 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. ② On October 21, 2014,Wuhu Dongxu 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 2014. ③ On October 14, 2013, Wuhu Dongxu 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 2013. ④ On November 4, 2013, Shijiazhuang Dongxu 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 2013. ⑤ On August 3, 2015,Zhengzhou Xufei Optoelectronic Technology Co., Ltd. was rated as the national high-tech 106 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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. ⑥ In 2013, Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. was rated as the national high-tech enterprise. December 2014 for the record, 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 2014. ⑦ On December 3, 2013,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 2013. VII. Notes to the major items of consolidated financial statement 1.Monetary Capital In RMB Items Year-end balance Year-beginning balance Cash 246,291.07 245,781.01 Bank deposit 15,837,794,470.16 12,181,847,699.04 Other 445,294,342.51 227,416,690.21 Total 16,283,335,103.74 12,409,510,170.26 Other notes Notes 1:The material reasons for the increase of monetary funds at the end of the period compared with the beginning include the completion of the directional add-issuance for raising 8 billion RMB, collection of sales payment and increased financing. Notes 2:The amount of restricted monetary capital of the total monetary capital in the end of the period is RMB 543,648,071.60. Mainly for the draft earnest money and the fixed deposit receipt. 2.Bills receivable (1)Classification bill receivable In RMB Items Year-end balance Year-beginning balance Bank acceptance 79,562,091.14 51,014,152.00 Trade acceptance 4,500,000.00 Total 84,062,091.14 51,014,152.00 (2)Bills receivable pledged at period-end In RMB Items Year-end balance Year-beginning balance 107 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Bank acceptance 468,321,671.17 Total 468,321,671.17 3. Account receivable (1)Classification account receivables In RMB Amount in year-end Amount in year- begin Book Balance Bad debt provision Book Balance Bad debt provision Classification Book Proportio Proportio Proportio Proportion( Book value Amount Amount value Amount Amount n(%) n(%) n(%) %) Receivables subject 1,055,3 to provision for bad 1,162,33 16,369,1 1,145,967 12,853,98 1,042,538,3 100.00% 1.41% 92,294. 100.00% 1.22% debts on credit risk 6,850.48 50.05 ,700.43 2.43 12.51 94 characteristics basis 1,055,3 1,162,33 16,369,1 1,145,967 12,853,98 1,042,538,3 Total 100.00% 1.41% 92,294. 100.00% 1.22% 6,850.48 50.05 ,700.43 2.43 12.51 94 Receivable accounts with large amount individually and bad debt provisions were provided □ Applicable √ Not applicable Account receivable on which bad debt provisions are provided on age basis in the group √ Applicable □ Not applicable In RMB Balance in year-end Aging Receivable accounts Bad debt provision Proportion Subitem within 1 year Within credit period 874,411,047.76 Within 1 year after credit period 252,781,149.58 12,639,057.48 5.00% 1-2 years 14,520,154.14 1,452,015.41 10.00% 2-3 years 2,348,332.48 704,499.75 30.00% 3-4 years 2,617,965.40 1,308,982.70 50.00% Over 5 years 264,594.71 264,594.71 100.00% Total 1,146,943,244.07 16,369,150.05 1.43% Notes: In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision □Applicable √ Not applicable In the groups, accounts receivable adopting other methods to accrue bad debt provision 108 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Group Name Closing balance Bad debt provision Other group 15,393,606.41 Continued Group Name Opening balance Bad debt provision Other group 23,454,108.12 (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 7,054,229.44;The amount of the reversed or collected part during the reporting period was of RMB3,539,061.82. Where the current bad debts back or recover significant amounts: In RMB Name Back or withdraw money Method None (3)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 RMB480,467,933.20, which accounts for 41.34% of the total receivables. The total amount of closing balance for corresponding accrued bad-debt provision is RMB 3,151,584.57. 4. Payment in advance (1)Payment in advance: In RMB Amount in year-end Amount in year- begin Aging Amount Proportion(%) Amount Proportion(%) Within 1 year 388,588,032.31 80.50% 144,188,241.68 34.42% 1-2 years 35,912,154.54 9.81% 261,349,437.53 62.39% 2-3 years 26,925,134.67 7.35% 6,788,329.79 1.62% Over 3 years 8,554,092.21 2.34% 6,584,578.57 1.57% Total 459,979,413.73 -- 418,910,587.57 -- Notes: (2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target As of June 30,2016,The total prepayment amount of top five closing balances collected by the objects of prepayment in the current reporting period is RMB 180,457,628.00, which accounts for 39.23% of the total closing prepayment balance. Other notes: 109 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 5. 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 receivables subject to provision 93,501,5 1,912,14 91,589,36 57,070, 1,872,375 55,197,871. for bad debts on 100.00% 2.05% 100.00% 3.28% 05.57 0.52 5.05 247.27 .99 28 credit risk characteristics basis 93,501,5 1,912,14 91,589,36 57,070, 1,872,375 55,197,871. Total 100.00% 2.05% 100.00% 3.28% 05.57 0.52 5.05 247.27 .99 28 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 receivable Bad debt provision Rate of alloance(%) Within item 1 year Within credit period 4,705.44 Within 1 year after credit period 96,922.88 4,846.14 5.00% 1-2 years 485,541.91 48,554.19 10.00% 2-3 years 718,105.55 215,431.67 30.00% Over 5 yearsw 1,643,308.52 1,643,308.52 100.00% Total 2,948,584.30 1,912,140.52 64.85% Notes of the basis of recognizing the group: 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 Group Name Closing balance Bad debt provision Internal current account 349,905.00 Deposit 17,067,982.42 110 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Individual retirement insurance 2,299,985.14 Personal official loans 11,577,929.05 Cash deposit 57,302,783.28 Insurance 880,000.00 Export tax refunds 1,074,336.38 Total 90,552,921.27 Continued Group Name Opening balance Bad debt provision Internal current account 299,905.00 Deposit 7,709,572.64 Individual retirement insurance 2,812,157.82 Personal official loans 9,287,709.26 Deposit 33,980,966.75 Total 54,090,311.47 (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 RMB39,764.53;the amount of the reversed or collected part during the reporting period was of RMB 0.00. Significant amount of reversed or recovered bad debt provision: In RMB Name Amount Method (3)Other account receivable classified by account nature In RMB Nature Closing book value Opening book value Internal current account 349,905.00 299,905.00 Current account 1,205,904.65 Deposit 57,302,783.28 33,980,966.75 Personal official borrowing 11,577,929.05 9,287,709.26 Deposit 17,067,982.42 7,709,572.64 Persona Returnable Insurance 2,299,985.14 2,812,157.82 Insurance 880,000.00 111 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Export tax refunds 1,074,336.38 Other 2,948,584.30 1,774,031.15 Total 93,501,505.57 57,070,247.27 (4)The ending balance of other receivables owed by the imputation of the top five parties In RMB The closing balance Amount in Name Nature Aging Proportion of bad debts year-end Beijing Cultural Technology Deposit 15,000,000.00 Within 1 year 16.04% Financial Leasing Co., Ltd. Beijing State Owned Financial Leasing Deposit 12,500,000.00 Within 1 year 13.37% Co., Ltd. Wuhu Economic and Technological Deve Deposit 9,978,000.00 2-3 years 10.67% lopment Zone Finan ce Bureau Hebei Finance Deposit 5,100,000.00 1-2 years 5.45% Leasing Co., Ltd. Ligen Finance Leasing(Shanghai)Deposit 5,000,000.00 Within 1 year 5.35% Co., Ltd. Total -- 47,578,000.00 -- 50.88% 6.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 846,134,985.86 846,134,985.86 997,984,608.47 997,984,608.47 112 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Processing 73,145,478.69 73,145,478.69 55,124,671.25 55,124,671.25 products Stock goods 207,022,198.19 207,022,198.19 182,763,166.25 182,763,166.25 Construction cont ract has been com 171,986,917.63 171,986,917.63 27,390,555.01 27,390,555.01 pleted unsettled a ssets Development cost 976,339,663.47 976,339,663.47 914,716,683.08 914,716,683.08 Total 2,274,629,243.84 2,274,629,243.84 2,177,979,684.06 2,177,979,684.06 (2) Completed unsettled assets formed from the construction contact at the period-end In RMB Items Amount Accumulated Incurred Cost 117,018,749.29 Accumulated Confirmed Gross Profit 75,749,061.84 Settlement Amount 20,780,893.50 Unliquidated Completed Assets Formed in the Construction 171,986,917.63 Contract Other notes: Notes:Detaile of product development In Project Name Start Estimated time of Estimated total Beginning balance Ending balance RMBN Date(Planned) completion of first investment o. session 01 Dongxu 2015-12-29 2017-2-27 2.2 billion 914,716,683.08 976,339,663.47 International Center 7. Non-current assets due within 1 year In RMB Items Closing balance Opening balance Hydropower installation dormitory 139,395.72 renovation project Total 139,395.72 Other notes: 113 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 8. Other current assets In RMB Items Closing balance Opening balance USD exchange 58,000,000.00 58,000,000.00 Prepaid or pending certified taxes 1,151,257,892.65 1,158,401,769.76 Total 1,209,257,892.65 1,216,401,769.76 Other notes: In 1993,the Group signed the agreement on exchange of US dollars which agreed returning 10,000,000 US dollars to the Exchange Unit and repossess the RMB 58,000,000 exchanged in November 1998, As of June 30, 2016, the Group still consults with the Exchange Unit on the returning of the exchange. 9. Long-term equity investment In RMB Increase/decrease Closing Adjustme Withdraw balance Decrease Gain/loss nt of Declarati Opening Add Other n Closing of Investees 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 Chengxin Internatio nal 72,426,25 72,508,01 81,758.31 Commerc 2.41 0.72 ial Factoring Co., Ltd. 72,426,25 72,508,01 Subtotal 81,758.31 2.41 0.72 72,426,25 72,508,01 Total 81,758.31 2.41 0.72 Other notes 10. Fixed assets (1) List of fixed assets 114 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 In RMB Machinery Items House, building Transportations Other equipment Total eqiupment I. Original price 1. Balance at 1,099,869,204.05 6,565,156,510.66 39,358,222.50 49,655,303.76 7,754,039,240.97 period-beginning 2.Increase in the 1,259,541.79 1,664,985,811.42 1,451,034.45 3,667,184.99 1,671,363,572.65 current period (1) Purchase 923,550.12 12,810,564.71 1,451,034.45 3,533,559.61 18,718,708.89 (2)Inventory\Fixed assets\ Transferred 335,991.67 644,213.92 980,205.59 from construction in progress (3)Increased of 2,045,723.89 133,625.38 2,179,349.27 Enterprise Combination (4)leaseback 1,649,485,308.90 1,649,485,308.90 3.Decreased amount 1,824,502,514.55 3,461.54 1,824,505,976.09 of the period (1)Disposal 5,600.00 3,461.54 9,061.54 (2)leaseback 1,824,496,914.55 1,824,496,914.55 4. Balance at 1,101,128,745.84 6,405,639,807.53 40,809,256.95 53,319,027.21 7,600,896,837.53 period-end II. Accumulated depreciation 1.Opening balance 205,168,394.85 612,002,791.63 19,548,829.87 17,092,852.02 853,812,868.37 2.Increased amount 14,640,679.43 211,218,941.85 3,159,829.24 2,732,796.75 231,752,247.27 of the period (1) Withdrawal 14,640,679.43 208,071,367.40 3,159,829.24 2,701,365.35 228,573,241.42 (2)leaseback 2,970,185.65 2,970,185.65 (2)Increased of Enterprise 177,388.80 31,431.40 208,820.20 Combination 3.Decrease in the 235,721,021.68 1,589.07 235,722,610.75 reporting period (1)Disposal 2,936.73 1,589.07 4,525.80 (2)leaseback 235,718,084.95 235,718,084.95 115 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 4.Closing balance 219,809,074.28 587,500,711.80 22,708,659.11 19,824,059.70 849,842,504.89 III. Impairment provision 1.Opening balance 36,444.84 36,444.84 2.Increase in the reporting period (1)Withdrawal 3.Decrease in the reporting period (1)Disposal 4. Closing balance 36,444.84 36,444.84 IV. Book value 1.Book value of the 881,319,671.56 5,818,102,650.89 18,100,597.84 33,494,967.51 6,751,017,887.80 period-end 2.Book value of the 894,700,809.20 5,953,117,274.19 19,809,392.63 32,562,451.74 6,900,189,927.76 period-begin (2) Details of fixed assets failed to accomplish certification of property In RMB Items Book value Reason 102#Workshop 39,982,468.02 Processing Cullet warehouse 2,524,901.64 Processing Main entrance Guard room 158,484.32 Processing Bathroom 81,349.56 Processing East entrance Guard room 86,747.41 Processing Compressed air station, circulating water 814,185.12 Processing pump house, refrigeration station Dangerous goods warehouse 353,993.01 Processing Wastewater treatment plant 838,445.18 Processing Substation 346,950.06 Processing Boiler room 4,499,351.46 Processing Total 49,686,875.78 Processing Other notes 11. Project under construction 116 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (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 devaluation devaluation LCD glass substrate 2,258,005,973.28 2,258,005,973.28 1,874,688,280.97 1,874,688,280.97 production line project Xufei LCD glass substrate 1,058,813,729.04 1,058,813,729.04 1,013,527,351.59 1,013,527,351.59 production line II and supporting Xuxin LCD glass substrate 516,885,190.52 516,885,190.52 485,548,460.69 485,548,460.69 production line Kunshan Color 30,509,904.95 30,509,904.95 16,309,892.75 16,309,892.75 film project Sapphire crystal sultivation and processing of 48,882,489.80 48,882,489.80 42,942,402.90 42,942,402.90 production line equipment Project of Production Line for the 10,533,079.83 10,533,079.83 8.5th-generation Glass glass substrate Total 3,923,630,367.42 3,923,630,367.42 3,433,016,388.90 3,433,016,388.90 (2) Changes of significant construction in progress In RMB Includin Transferr g: Capitaliz Capitaliz Source Name of Opening ed to Other End Proporti Project capitaliz ation of Budget Increase ation of of project balance fixed decrease balance on % process ation of interest interest funding assets interest rate (%) this 117 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 period LCD glass substrate 7,576,52 1,874,68 383,317, 2,258,00 525,120, 74,738,7 Raise 84.26% 84.26% producti 0,000.00 8,280.97 692.31 5,973.28 866.03 64.46 funds on line project Xufei LCD glass Loans of substrate 2,500,00 1,013,52 45,286,3 1,058,81 198,137, 25,430,8 financial producti 100.00% 100% 0,000.00 7,351.59 77.45 3,729.04 862.86 24.44 institutio on line II ns and supporti ng Xuxin LCD Loans of glass 2,700,00 485,548, 31,336,7 516,885, 132,051, 16,651,0 financial 92.07% 92.07% substrate 0,000.00 460.69 29.83 190.52 312.19 45.32 institutio producti ns on line Kunshan Color 3,115,50 16,309,8 14,200,0 30,509,9 Raise 3.90% 3.90% film 0,000.00 92.75 12.20 04.95 funds project Sapphire crystal sultivatio n and processi 59,064,0 42,942,4 6,624,80 684,713. 48,882,4 83.92% 83.92% Other ng of 00.00 02.90 0.82 92 89.80 producti on line equipme nt Project of Producti 6,950,00 10,533,0 10,533,0 Raise 0.15% 0.15% on Line 0,000.00 79.83 79.83 funds for the 5th-gene 118 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 ration CF for TFT-LC D 295,491. 295,491. Other 67 67 22,901,0 3,433,01 491,594, 980,205. 3,923,63 855,310, 116,820, Total 84,000.0 -- -- -- 6,388.90 184.11 59 0,367.42 041.08 634.22 0 12. Engineering Material In RMB Items Closing balance Opening balance Special Equipment 238,096.56 31,267.87 Special material 10,741.55 6,947.12 Total 248,838.11 38,214.99 Other notes: 13. Intangible assets (1)Information In RMB Non patent Items Land use right Patent right Patent technology Total technology I. Original price 1. Balance at 452,895,904.31 1,558,843.24 46,984,667.98 4,500,000.00 505,939,415.53 period-beginning 2.Increase in the 4,418,760.50 28,581.20 38,469.24 17,581,840.99 22,067,651.93 current period (1) Purchase 4,418,760.50 28,581.20 38,469.24 12,581,840.99 17,067,651.93 (2)Internal Development (3)Increased of Enterprise 5,000,000.00 5,000,000.00 Combination 3.Decreased amount of the period 119 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (1)Disposal 4. Balance at 457,314,664.81 1,587,424.44 47,023,137.22 22,081,840.99 528,007,067.46 period-end II.Accumulated amortization 1. Balance at 34,002,566.91 476,690.66 9,000,121.46 168,750.00 43,648,129.03 period-beginning 2. Increase in the 4,539,375.74 80,545.71 2,268,293.22 798,542.35 7,686,757.02 current period (1) Withdrawal 4,539,375.74 80,545.71 2,268,293.22 374,813.54 7,263,028.21 (2)(Increased of Enterprise 423,728.81 423,728.81 Combination 3.Decreased amount of the period (1)Disposal 4. Balance at 38,541,942.65 557,236.37 11,268,414.68 967,292.35 51,334,886.05 period-end III. Impairment provision 1. Balance at period-beginning 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 at 418,772,722.16 1,030,188.07 35,754,722.54 21,114,548.64 476,672,181.41 period -end 120 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 2.Book value at 418,893,337.40 1,082,152.58 37,984,546.52 4,331,250.00 462,291,286.50 period-beginning The intangible assets formed by the company’s internal research and development accounts for 0.00% of the company’s total intangible assets. 14. Goodwill (1) Original book value of goodwill In RMB Name of the investees or the Opening balance Increase Decrease Closing balance events formed goodwill Shanghai Tanyuan Huigu 33,691,362.78 33,691,362.78 New Meterial Co., Ltd. Total 33,691,362.78 33,691,362.78 (2)Impairment tprovision of goodwill In RMB Name of the investees or the Opening balance Increase Decrease Closing balance events formed goodwill Shanghai Tanyuan Huigu 0.00 0.00 New Meterial Co., Ltd. 合计 0.00 0.00 Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill impairment losses: Notes:At the end of the final test, no impairment of goodwill. Other notes: 15.Long-term amortization expenses In RMB Items Balance in Increase at this Amortization at Decrease Balance in year-end 121 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 year-begin period this period Building renovation 16,560,387.39 1,414,842.73 3,274,621.44 14,700,608.68 Total 16,560,387.39 1,414,842.73 3,274,621.44 14,700,608.68 Other notes 16. Deferred income tax assets and deferred income tax liability (1) Details of the un-recognized deferred income tax assets In RMB Balance in year-end Balance in year-begin Items Temporarily Deductable Deferred Income Tax Temporarily Deductable Deferred Income Tax or Taxable Difference Assets or Taxable Difference Assets Assets devaluation 17,773,306.14 3,292,613.62 14,651,027.92 2,394,366.85 provision Not realized the internal 1,982,167,248.67 297,325,087.30 1,942,130,426.59 291,319,564.00 profit Deductible loss 3,065,869.27 459,880.39 Deferred income 31,800,144.52 4,770,021.67 33,039,111.11 4,955,866.67 difference Total 2,031,740,699.33 305,387,722.59 1,992,886,434.89 299,129,677.91 (2)Deferred income tax assets and liabilities are presented as net amount after neutralization In RMB Deferred Income Tax Temporarily Deductable Deferred Income Tax Temporarily Deductable Assets or Liabilities at or Taxable Difference at Items Assets or Liabilities at or Taxable Difference at the Beginning of Report the Beginning of Report the End of Report Period the End of Report Period Period Period Deferred income tax 305,387,722.59 299,129,677.91 assets (3) List of unrecognized deferred income tax assets In RMB Items Closing amount Opening amount Deductible losses 20,678,519.93 5,928,841.93 Bad debt provision 507,984.43 75,330.50 Impairment of fixed assets 36,444.84 36,444.84 Total 21,222,949.20 6,040,617.27 122 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (4) Deductible losses of unrecognized deferred income tax assets will due the following years In RMB Year Closing amount Opening amount Notes 2017 918,382.44 918,382.44 2018 15,649.80 15,649.80 2019 544,310.34 544,310.34 2020 4,450,499.35 4,450,499.35 2021 14,749,678.00 Total 20,678,519.93 5,928,841.93 -- Other notes: 17. Other non-current assets In RMB Items Closing balance Opening balance Prepaid engineering equipment 356,354,104.50 243,279,174.31 Total 356,354,104.50 243,279,174.31 Other notes: 18. Short-term loan (1)Categories of short-term loans In RMB Items Closing balance Opening balance Pledge loan 389,400,000.00 265,000,000.00 Mortgage loan 99,000,000.00 53,300,000.00 Guarantee loan 3,987,000,000.00 3,465,000,000.00 Total 4,475,400,000.00 3,783,300,000.00 Notes : 1. There is no mature but unredeemed short-term borrowing in the company during the accounting period. 2. The increase of short-term borrowings at the end compared to the beginning is mainly due to the production, business operation ,which jointly cause borrowing increase. 3. The mortgage loan at the end is 99 million yuan,,Subsidiary of Jiangsu Jixing loans, in which 85 million yuan is used as mortgage and guarantee, the guarantor is Zhenjiang Huantai Silicon Technology Co., Ltd. and Dongxu Optoelectronic Technology Co., Ltd., The pledge for the 30 million yuan is the land usage right of Yangguoyong (2011) No. 10482 Land owned by the subsidiary Iiangsu Jixing New Material Co., Ltd.,The pledge for the 55 million yuan is 110 set Machinery Equipment by the subsidiary Iiangsu Jixing New Material Co., Ltd.; 123 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 The pledge for the 14 million yuan is the land usage right of Yangguoyong (2011) No. 10485 Land owned by the subsidiary Iiangsu Jixing New Material Co., Ltd., the self-owned house property and the land usage right owned by Gaozhao Solar Energy Science and Technology Co., Ltd. and Jiangsu Secco Silicon Energy Co., Ltd., The certificate numbers are: No. 81801320 of Gaozhao Property Ownership Certificate, Yangfangzi No. 81801321, No. (2014) 1508 of Yangguoyong Industrial Land and No. (2013) 3231 of Yangguoyong Meike Land Use Right. 4. The guaranteed loan amount at the end of the period is RMB 3987 million, of which: Dongxu Group Co., Ltd. provides joint guarantee of RMB150 million to the subsidiary Zhengzhou Xufei Optoelectronic Technology Co., Ltd.,Dongxu Optoelectronic Investment Co., Ltd., Shijiazhuang Baoshi Group and Li Zhaoting provides joint guarantee of RMB 80 million to the subsidiary Zhengzhou Xufei Optoelectronic Technology Co., Ltd.,The company provides joint guarantee of 100 million to the subsidiary Zhengzhou Xufei Optoelectronic Technology Co., Ltd.,Dongxu Grouop Provides joint guarantee of RMB 990 million to the Company, Li Zhaoting Provides joint guarantee of RMB 700 million to the Company, Dongxu Group and Li Zhaoting provides joint guarantee of RMB 1135 million to the Company, Dongxu Group , Li Zhaoting and Li Qing Provides joint guarantee of RMB 100 million to the Company,The company Provides guarantee of RMB 275 million for the subsidiary Wuhu Dongxu Optoelectronic Technology Co., Ltd, The Company and Dongxu Group provides joint guarantee of RMB 200 million for the subsidiary Wuhu Dongxu Optoelectronic Technology Co., Ltd,The Company and Li Zhaoting Provides joint guarantee of RMB 40 million for the subsidiary Wuhu Dongxu Optoelectronic Technology Co., Ltd,, lI Zhaoting provides joint guarantee of RMB 60 million for the subsidiary Wuhu Dongxu Optoelectronic Technology Co., Ltd. and The company provides guarantee of RMB 157 million for the subsidiary Wuhu Dongxu Optoelectronic Technology Co., Ltd 5.The pledged loans 389.4 million of collateral for the RMB 407 milllion of bank deposits. 19. Bills payable In RMB Type At end of term At beginning of term Commercial acceptance 364,265,108.00 69,458,800.00 Bank acceptance 281,180,579.96 341,136,129.94 Total 645,445,687.96 410,594,929.94 Amount due in next fiscal period is RMB 0.00. 20.Account payable (1)Account payable In RMB Items Closing balance Opening balance Engineering fund 316,027,787.87 253,090,961.95 Material fund 412,775,350.59 388,295,104.60 Transportation expenses 576,897.58 4,086,308.99 Other 17,932,323.25 30,263,851.08 124 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Total 747,312,359.29 675,736,226.62 (2)Significant accounts payable that aged over one year In RMB Items Balance in year-end The reason for not repaid or carried forward Sichuan Yilong Construction Co., Ltd. Kezhou 44,986,200.00 Not reached the agreed payment terms and deadlines Branch Sichuan Tianzun Construction Services Co., 37,186,200.00 Not reached the agreed payment terms and deadlines Ltd. Ningxia Tianshun Electric Power Engineering 14,623,170.34 Not reached the agreed payment terms and deadlines Co., Ltd. Ningxia Tianshun Electric Power Engineering 10,780,000.00 Not reached the agreed payment terms and deadlines Co., Ltd. Total 107,575,570.34 -- Other notes:The increase of the accounts payable of the period are mainly due to the increase of material payment payable and freight payable. 21.Advance account (1)Advance account In RMB Items Closing balance Opening balance Goods 447,285,694.23 70,046,067.70 Engineering fund 23,376,247.21 27,874,621.71 Total 470,661,941.44 97,920,689.41 (2)Information of unliquidated completed assets formed in the construction contract at the end of the period In RMB Items Amount Accumulated Incurred Cost 117,018,749.29 Accumulated Confirmed Gross Profit 75,749,061.84 Settlement Amount 20,780,893.50 Unliquidated Completed Assets Formed in the Construction Contract 171,986,917.63 Other notes: 125 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 22. Payroll payable (1) List of Payroll payable In RMB Balance in Items Increase at this period Decrease at this period Balance in year-end year-begin I. Short-term remuneration 36,631,509.99 275,228,673.79 273,307,13.70 38,553,080.08 II. Post-employment benefits - 224,747.87 21,447,178.29 20,273,397.22 1,398,528.94 defined contribution plans Total 36,856,257.86 296,675,852.08 293,580,500.92 39,951,609.02 (2)Short-term remuneration In RMB Items Balance in year-begin Increase at this period Decrease at this period Balance in year-end 1.Wages, bonuses, 23,161,895.76 224,744,624.98 228,348,974.03 19,557,546.71 allowances and subsidies 2.Employee welfare 23,837,856.76 23,837,856.76 3. Social insurance 9,523.21 11,563,694.02 10,910,312.24 662,904.99 premiums Including:Medical 344.40 10,360,066.37 9,765,683.39 594,727.38 insurance Work injury insurance 9,130.81 583,302.68 571,209.74 21,223.75 Maternity insurance 48.00 620,324.97 573,419.11 46,953.86 4. Public reserves for 318,104.05 9,337,533.26 8,635,593.05 1,020,044.26 housing 5.Union funds and staff 13,067,214.57 5,513,059.84 1,267,690.29 17,312,584.12 education fee Other 74,772.40 231,904.93 306,677.33 Total 36,631,509.99 275,228,673.79 275,307,003.70 38,553,080.08 (3)Defined contribution plans listed In RMB Items Balance in year-begin Increase at this period Decrease at this period Balance in year-end 1. Basic old-age 224,687.87 20,129,643.89 19,005,859.07 1,348,472.69 insurance premiums 126 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 2.Unemployment 60.00 1,317,534.40 1,267,538.15 50,056.25 insurance Total 224,747.87 21,447,178.29 20,273,397.22 1,398,528.94 Other notes: Note :Employee benefits payable has no arrears of wages. 23. Taxes payable In RMB Items Closing balance Opening balance VAT 22,998,269.69 4,699,249.82 Business Tax 11,062,210.75 11,761,731.75 Enterprise Income tax 33,257,462.99 67,526,265.91 Individual income tax 13,662,970.06 13,798,236.93 City Construction tax 2,579,999.10 1,179,317.86 House property tax 5,525,236.15 4,088,234.58 Land use tax 1,557,189.44 1,273,515.66 Educational surtax 1,772,190.85 767,574.48 Stamp Tax 135,024.92 70,532.82 Other 486,053.69 286,763.86 Total 93,036,607.64 105,451,423.67 Other notes: 24. Interest payable In RMB Items Closing balance Opening balance Interest on long-term borrowings payable 22,287,860.85 18,738,942.09 Enterprise bond interest 6,666,666.67 36,666,666.67 Total 28,954,527.52 55,405,608.76 Particulars of significant overdue unpaid interest: In RMB Name Overdue amount Overdue reason None Other notes: 127 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 25. Dividends payable In RMB Items Closing balance Opening balance Common stock dividend 101,365,050.76 20,000,000.00 Total 101,365,050.76 20,000,000.00 Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed: 26. Other accounts payable (1) Other accounts payable listed by nature of the account In RMB Items Closing balance Opening balance Current account 52,453,327.48 414,964,454.37 Deposit 90,841,355.21 19,010,735.95 Individual official borrowing 602,773.68 786,231.71 official borrowing 45,000,000.00 15,000,000.00 Deposit 590,625.87 605,520.16 Social security withholding 281,924.93 778,586.04 Engineering fund 1,829,473.81 1,829,473.81 Equipment fund 6,065,857.97 6,065,857.97 Material fund 823,298.53 685,725.31 Petty cash 7,525,948.38 3,272,874.81 Equity section 58,889,712.93 58,889,712.93 Restricted stock repurchase obligations 9,011,520.00 9,011,520.00 Other 363,802.62 8,895,420.72 Total 274,279,621.41 539,796,113.78 27.Non-current liabilities due within 1 year In RMB Items Closing balance Opening balance Long-term loans due 1 year 1,074,262,400.00 848,987,200.00 Long-term payable due 1 year 482,733,243.93 28,000,000.00 Total 1,556,995,643.93 876,987,200.00 Other notes: 128 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 28.Other current liabilities In RMB Items Closing balance Opening balance USD exchange 66,312,000.00 64,936,000.00 Government grants projects 22,743,866.66 20,457,266.66 Not realized after sale rental return 14,732,336.25 8,009,696.42 Total 103,788,202.91 93,402,963.08 Increase or decrease in short-term bonds payable: In RMB Premium Amount This and Balance Issuing Issuing in period for Name Par value Term This issue Interest discount in date amount year-beg repaymen amortiatio year-end in t n Other explanation : Notes 1: Government subsidies are all related to assets Notes2 :In 1993,the Group signed the agreement on exchange of US dollars which agreed returning 10,000,000 US dollars to the Exchange Unit and repossess the RMB 58,000,000 exchanged in November 1998, As of June 30, 2016, the Group still consults with the Exchange Unit on the returning of the exchange. 29. Long-term loan (1) Category of long-term loan In RMB Items Closing balance Opening balance Mortagage loans 6,505,312,000.00 6,638,384,500.00 Guarantee loans 1,327,700,000.00 60,000,000.00 Credit loans 400,000,000.00 400,000,000.00 Less :Long-term loan due 1 year -1,074,262,400.00 -848,987,200.00 Total 7,158,749,600.00 6,249,397,300.00 Notes: Note 1: The mortgage of RMB 6,505,312,000.00 is both the mortgage loan and the guarantee loan, reclassified into the non-current liabilities due within one year RMB 834,262,400.00. (1) Among the loan of RMB 544,000,000.00, due within one year is RMB 136,000,000.00, the collateral and guarantor of the loan: a. Wuhu Dongxu Optoelectronic Technology Co. Ltd mortgages 202 acres of state-owned land use rights and the factory after the completion of the project, and two precious metal platinum channels to provide the collateral; b. the loan guarantor is Wuhu Construction Investment Co., Ltd. 129 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (2) Among the loan of RMB 1,920,000,000.00, due within one year is RMB 280,000,000.00, the collateral and guarantor of the loan: a. Wuhu Dongxu Optoelectronic Technology Co. Ltd mortgages 8 precious metal platinum channel assets to provide the collateral; b. Dongxu Optoelectronic Technology Co., Ltd. provide full joint liability guarantee for its subsidiary Wuhu Dongxu Optoelectronic Technology Co., Ltd. (3) Among the loan of RMB 500,000,000.00, due within one year is RMB 50,000,000.00, the collateral and guarantor of the loan: a. Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. mortgages the Wukai (construction) state-owned 2013 No. 020, Wukai (construction) state-owned 2013 No. 021, Wukai (construction) state-owned 2014 No. 008 land use rights and the fixed assets after the completion of the project; b. Dongxu optoelectronic Technology Co., Ltd. provide full joint liability guarantee for its subsidiary Wuhu Dongxu Optoelectronic Equipment Technology Co., Ltd. (4) The collateral and guarantor for the loan of RMB 500,000,000.00: a. Li Zhaoting holds 10% stake of Dongxu Technology Group Co., Ltd, and TUNGHSU GROUP holds 90% stake of Dongxu Technology Group Co., Ltd; b. TUNGHSU GROUP, Li Zhaoting, Li Qing provide a guarantee for Dongxu Optoelectronic Technology Co., Ltd. (5) Among the loan of RMB 951,312,000.00, due within one year is RMB 173,262,400.00, the collateral and guarantor: a. the collateral is the land use rights, buildings, machinery and equipment (including four precious metal platinum channels) of Zhengzhou Xufei Optoelectronic Technology Co., Ltd.; the guarantor is Henan Energy and Chemical Industry Group Co., Ltd., TUNGHSU GROUP, and Henan Energy and Chemical Industry Group Co., Ltd. provides the joint liability guarantee for the loan principal equivalent to RMB 200 million under the project and its interest, penalty interest, compound interest, compensation, liquidated damages, compensation for damage and the cost of debt to the lender; the guarantor TUNGHSU GROUP provides the joint liability guarantee for the loan principal equivalent to RMB 450 million under the project and its interest, penalty interest, compound interest, compensation, liquidated damages, compensation for damage and the cost of debt to the lender. (6) Among the loan of RMB 890,000,000.00, due within one year is RMB 195,000,000.00, and the loan is both the mortgage loan and the guarantee loan: the guarantor Shijiazhuang Xuxin Optoelectronic Technology Co., Ltd. mortgages the assets owned by itself according to the law and formed by this project, including land use rights, factories and other buildings, machinery and equipment (including three precious metal platinum channels) to provide the collateral; b. TUNGHSU GROUP and Li Zhaoting and Li Qing provide the guarantee. (7) The collateral and guarantor for the loan of RMB 1,200,000,000.00: a. the guarantor is Dongxu Optoelectronic Technology Co., Ltd; b. the collateral is the state-owned land use rights and construction in progress (Foundation pit) of the business and financial land of No. Beijing (2015) Fengtai District real estate rights No. 0000016. Note 2: Among the credit loan of RMB 400,000,000.00, due within one year is RMB 200,000,000.00. Note 3: Among the guarantee loan of RMB 1,327,700,000.00, due within one year is RMB 40,000,000.00, of which: TUNGHSU GROUP, Li Zhaoting, Li Qing provide the joint liability guarantee for the Company’s loan of RMB 987,700,000.00, TUNGHSU GROUP provides the joint liability guarantee for the Company’s loan of RMB 300,000,000.00; the loan of the subsidiary Zhengzhou Xufei Optoelectronic Technology Co., Ltd. is RMB 40,000,000.00, due within one year is RMB 40,000,000.00, the joint liability guarantee for which is provided by the Henan Energy and Chemical Industry Group Co., Ltd. Notes 4: The company has no overdue long-term loans. 130 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 30. Bonds payable (1) Bonds payable In RMB Items Closing balance Opening balance 15 Dongxu Bonds 989,562,229.32 988,400,388.00 Total 989,562,229.32 988,400,388.00 (2) Changes on bonds payable (not including other financial instrument classified as preferred stock andperpetual capital securities of financial liabilities) In RMB Overflow The Withdraw Pay in Name of Book Issue Opening discount Interest Closing Issue date Period current interest at current the bond value amount bslance amortizati payable period issue par period on 15 1,000,000 1,000,000 988,400,3 30,000,00 1,161,841 60,000,00 989,562,2 Dongxu 2015.5.19 5 years ,000.00 ,000.00 88.00 0.00 .32 0.00 29.32 Bond 1,000,000 988,400,3 30,000,00 1,161,841 60,000,00 989,562,2 Total ,000.00 88.00 0.00 .32 0.00 29.32 31. Long-term payable (1) Long-term payable listed by nature of the account In RMB Items Closing balance Opening balance Long-term payable 1,728,747,686.18 93,426,666.67 Less:Unconfirmed financing costs 219,747,686.13 8,426,666.67 Less:Port due Within 1 year 482,733,243.93 28,000,000.00 Total 1,026,266,756.12 57,000,000.00 Other notes: Notes 1: Long-term payables all finance lease, in which: 212,000,000.00 RMB lessor is Wuxi Holding Financial Leasing Co., Ltd., guaranteed by Dongxu Group, Dongxu Optoelectronic Technology Co., Ltd. and Li Zhaoting; 248,000,000.00 RMB lessor is Jiangsu Runxing Financial Leasing Co., Ltd., guaranteed by Dongxu Group,Li Zhaoting and Li Qing; 288,865,691.80 RMB lessor is Beijing State Asset Financial Leasing Co., Ltd., guaranteed by Dongxu Group and Li Zhaoting; 108,899,568.29 RMB lessor is Ligen Financial Leasing (Shanghai) Co., Ltd., guaranteed by Dongxu Group and Li Zhaoting; 33,964,121.76 RMB lessor is Beijing Cultural Technology Financial Leasing Co., Ltd., guaranteed by Dongxu Group; 460,307,696.00 RMB lessor is Haitong Hengxin 131 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 International Leasing Co., Ltd., 76,710,608.33 RMB LESSOR IS Hebei Finance Leasing Co., Ltd., guaranteed by Dongxu Group and Li Zhaoting. Notes 2: Increase in long-term payables is due to a subsidiary of Wuhu Dongxu Optoelectronic Technology Co., Ltd. new leaseback in the reporting period. 32.Deferred income In RMB Balance in Increase at this Decrease at this Items Balance in year-end Reason year-begin period period Govemment Subsidy 270,528,455.69 36,374,000.00 13,470,066.64 293,432,389.05 Not realized after -23,603,068.08 46,857,729.51 23,254,661.43 sale rental return Total 246,925,387.61 83,231,729.51 13,470,066.64 316,687,050.48 -- Details of government subsidies In RMB Amount Beginning of New subsidy in transferred to Asset-related or Items Other changes End of term term current period non-operational income-related income Grant of Government 27,683,400.00 1,122,300.00 26,561,100.00 Related to assets Infrastructure Grant of Industry Revitalization and Technology 2,877,777.83 116,666.64 2,761,111.19 Related to assets Reconstruction Project Grant of Glass-tube Secondary 5,000.00 5,000.00 Related to assets Environmental Protection Technology 2,933,333.32 133,333.34 2,799,999.98 Related to assets Reform Glass substrate 11,000,000.00 500,000.00 10,500,000.00 Related to assets project subsidy 132 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 funds Industry Development 5,133,333.32 233,333.34 4,899,999.98 Related to assets Fund Finance discount 344,666.68 15,666.66 329,000.02 Related to assets interest Production line te chnology researc 78,184,000.01 3,257,666.66 74,926,333.35 Related to assets h and developme nt granted funds Special funds grant of 2013 provincial 4,583,333.34 166,666.66 4,416,666.68 Related to assets strategic new industries Special funds for technical 31,311,666.66 411,333.34 30,900,333.32 Related to assets transformation Investment and Subsidies of “Double Hundred Plan” Project 1,983,333.33 100,000.00 1,883,333.33 Related to assets granted by the People's Government of Henan Province TFTglass substrate technology 99,166.67 5,000.00 94,166.67 Related to assets research and development funds TFT glass substrate Project 6,611,111.10 333,333.33 6,277,777.77 Related to income Subsidy Investment and Subsidies within Budget for Technological 9,255,555.57 466,666.67 8,788,888.90 Related to assets Transformation Project by National 133 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Development and Reform Commission and the Ministry of Industry and Information Technology TFT glass substrate Project 13,222,222.23 666,666.67 12,555,555.56 Related to assets Subsidy Special Funds for Major Scientific and Technical Projects by 661,111.10 33,333.33 627,777.77 Related to assets Finance Bureau of Zhengzhou City Financial Supports for National Key Industry and Technical 9,255,555.57 466,666.67 8,788,888.90 Related to assets Transformation Projects Granted by the Municipal Finance Bureau Financial Supports for Industrial Development Granted by the Finance Bureau 4,627,777.77 233,333.33 4,394,444.44 Related to assets of the Economic and Technological Development Zone Funds for Independent Innovation of 3,966,666.67 200,000.00 3,766,666.67 Related to assets Provincially Supported Enterprises 134 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Supporting Funds on Finance 1,322,222.23 66,666.67 1,255,555.56 Related to assets Discounts Funds for Education, Science and 991,666.67 50,000.00 941,666.67 Related to assets Culture Granted by the Finance Bureau Supporting Funds for Industrial Structure -adjusting 1,928,888.88 93,333.33 1,835,555.55 Related to assets Projects Granted by the Regional Finance Bureau Industrial and 1,111,111.10 53,333.33 1,057,777.77 Related to assets financial discount Finance discount 3,527,777.86 166,666.67 3,361,111.19 Related to assets Financial capitalof industrial 3,813,333.33 160,000.00 3,653,333.33 Related to assets structure adjustment project Special Funds for High-end Information Industry Chain Granted by the Finance Bureau 4,194,444.45 166,666.67 4,027,777.78 Related to assets of the Economic and Technological Development Zone 2015 project equipment 34,374,000.00 954,833.33 2,291,600.00 31,127,566.67 Related to assets investment subsidies Strategic new 27,500,000.00 1,000,000.00 26,500,000.00 Related to assets industry 135 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 development project funds High-tech Zone appropriated 6,400,000.00 6,400,000.00 Related to assets substrate project 2015 scientific and technological 6,000,000.00 6,000,000.00 Related to assets achievements into special funds 6.30 receive scientific and technological 2,000,000.00 2,000,000.00 Related to assets achievements into special funds Total 270,528,455.69 36,374,000.00 954,833.33 12,515,233.31 293,432,389.05 -- 0ther notes: 33.Other Non-current liabilities In RMB Items Closing balance Opening balance CDB financing 500,000,000.00 Total 500,000,000.00 Other notes: Notes:According to the investment contract signed by Dongxu Optoelectronic Technology Co., Ltd, Wuhu Dongxu Photoelectric Technology Co., Ltd., Fuzhou Dongxu 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 Dongxu Investment Development Co., Ltd, annually enjoying a fix rate of return. After the project is completed, Dongxu Optoelectronic Technology Co., Ltd shall make the installment redemption to the stake held by China Development Fund Co., Ltd. 34.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 136 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Total of capital 3,835,000,526. 3,835,000,526. shares 00 00 Other notes: 35. Capital reserves In RMB Items Year-beginning balance Increase in current Decrease in current Year-end balance Share premium 9,359,866,530.63 2,270,725.58 29.94 9,362,137,226.27 Other 31,522,375.26 31,522,375.26 Total 9,391,388,905.89 2,270,725.58 29.94 9,393,659,601.53 Other notes, including changes and reason of change: Notes:Change of capital reserve: Owning to the equity incentive, the amortized expense increased RMB1,992,000.00 of capital reserve;The company provided capital increase to the subsidiary Dongxu(Kunshan) Display Materials Co., Ltd. at the current period, which resulted in the increase of RMB 278,725.58 of capital reserve. The company provided capital increase to the subsidiary Beijing Dongxu Huaqing Investment Co., Ltd. at the current period, which resulted in the decrease of RMB 29.94of capital reserve. 37.Treasury stock In RMB Decrease in the current Items Year-beginning balance Increase in the current Year-end balance period Share repurchases 9,011,520.00 9,011,520.00 obligations Total 9,011,520.00 9,011,520.00 Other notes, including changes and reason of change: 38. Surplus reserve In RMB Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period Statutory surplus reserve 132,723,528.42 132,723,528.42 Total 132,723,528.42 132,723,528.42 Notes: 137 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 39. Retained profits In RMB Items Amount of current period Amount of previous period Before adjustments: Retained profits at the period 969,380,500.97 -39,946,925.56 end After adjustments: Retained profits at the period 969,380,500.97 -39,946,925.56 beginning Add:Net profit belonging to the owner of the 545,963,710.72 1,326,233,674.37 parent company Less: Withdrawal Statutory surplus reserve 50,698,247.74 Dividend of common stock payable 299,165,930.04 266,208,000.10 Retained profits at the period end 1,216,178,281.65 969,380,500.97 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 . 39. Business income, Business cost In RMB Amount of current period Amount of previous period Items Income Cost Income Cost Main business 2,872,447,933.52 1,935,634,364.40 1,496,448,802.04 873,265,244.50 Other business 9,611,220.89 2,675,279.25 27,793,921.86 8,781,025.54 Total 2,882,059,154.41 1,938,309,643.65 1,524,242,723.90 882,046,270.04 138 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 40. Business tax and subjoin In RMB Items Amount of current period Amount of previous period Business tax 761,365.31 7,650,289.96 Urban construction tax 11,474,361.56 7,909,969.41 Education surcharg 8,203,130.71 5,651,190.88 Other 2,870.30 1,472.01 Total 20,441,727.88 21,212,922.26 Other notes 41.Sales expenses In RMB Items Amount of current period Amount of previous period Wage and welfare insurance 8,043,637.06 4,116,284.37 Shipment 10,518,390.78 5,786,329.35 Travel 1,564,588.04 1,275,919.27 Business expenses 889,762.89 1,409,725.83 Consumables and repairs 35,298.52 19,329.70 Office fee 693,969.53 1,453,720.65 Depreciation 115,233.72 194,569.47 Advertising 9,039,375.46 476,376.42 Other 677,460.56 1,227,287.63 Total 31,577,716.56 15,959,542.69 Other notes: Notes:The increase of selling expenses of this period compared with the last period is mainly due to the increase of freight caused by increased sales, and the increase of advertising and publicity expenses. 42. Administrative expenses In RMB Items Amount of current period Amount of previous period Wage and welfare 68,805,600.28 51,875,880.88 Business expenses 1,479,520.63 4,891,964.76 Labor protect fee 3,529,985.13 2,550,514.97 139 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Office fees 20,578,493.71 20,214,543.79 Travel fees 3,054,740.65 2,807,284.45 Publicize Fees 1,393,515.31 3,909,665.61 Miscellaneous charges 319,840.58 1,348,478.94 Tax 14,572,906.28 12,597,896.80 Depreciation accumulative 23,481,335.52 14,406,896.17 Consumables and repairs 1,090,291.06 114,675.04 Research expenses 45,720,772.21 5,360,985.06 Consultation fees 12,360,432.61 13,423,952.60 Rental fees 19,769,433.60 15,060,065.75 Communication fees 625,548.95 92,074.73 Transportation feed 2,920,583.91 491,747.83 Equity incentive cost 1,992,000.00 3,186,600.00 Other 15,011,264.42 11,772,994.63 Total 236,706,264.85 164,106,222.01 Other notes The main reason for the management costs increase over the previous period was the wages and welfare expenses and the expenses of R & D increased over the previous period. 43. Financial expenses In RMB Items Amount of current period Amount of previous period Interest expenses 193,938,482.48 142,372,368.05 Less:Interest income 83,547,417.93 4,200,227.65 Net interest expenses 110,391,064.55 138,172,140.40 Exchange gains and losses -18,221,357.21 2,830,183.97 Financial institution 649,340.38 989,093.65 Bill discount rate 1,519,815.05 8,309,638.69 Other 100,529.84 7,666.40 Total 94,439,392.61 150,308,723.11 Other notes 44. Asset impairment loss In RMB 140 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Items Amount of current period Amount of previous period 1. Bad debt loss 3,554,932.15 -8,290,183.33 Total 3,554,932.15 -8,290,183.33 Other notes 45.Investment income In RMB Items Amount of current period Amount of previous period Long-term equity investment income by equity 81,758.31 -28,077.74 method Other investment incom 2,376,986.32 Total 81,758.31 2,348,908.58 Other notes 46. Non-operating income In RMB The amount of non-operating Items Amount of current period Amount of previous period gains & losses Govemment Subsidy 103,218,866.64 195,856,633.31 103,218,866.64 The deductible input tax income 2,439,717.82 Enterprise merger 18,763,137.14 Other 290,413.04 238,149.69 290,413.04 Total 103,509,279.68 217,297,637.96 103,509,279.68 Government subsidy reckoned into current gains/losses In RMB Whether the impact of Amount of Amount of Whhether Assets-relate Issuing subsidies on Items Issuing body Nature special current previous d/income Reason the current subsidies -related profit and period period loss Grant of Wuhu Econo Grants Related to Government mic and Tech Subsidy obtained due No No 1,122,300.00 1,122,300.00 assets Infrastructure nological De to 141 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 velopment Zo conforming ne Finance B to the local ureau supporting policies such as local government’s investment attraction policy Grants obtained due Grant of Wuhu Econo to research Industry mic and Tech and Revitalizatio nological De development, Related to n and Subsidy No No 116,666.64 116,666.64 velopment Zo technical assets Technology ne Finance B renovation Reconstructio ureau and n Project transformatio n, etc. Grants obtained due to conforming Grant of Shiijiazhuang to the local Glass-tube Municipal supporting Related to Secondary Subsidy No No 10,000.00 10,000.00 Finance policies such assets Environment Bureau as local al Protection government’s investment attraction policy Grants obtained due to research Shijiazhuang and Technical Municipal development, Related to reconstructi Development Subsidy No No 133,333.34 133,333.33 technical assets on and deform renovation Commission and transformatio n, etc. Grant of Shijiazhuang Grants Related to Subsidy No No 500,000.00 500,000.00 Glass High-tech obtained due assets 142 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Substrate Management to Project Committee conforming to the local supporting policies such as local government’s investment attraction policy Grants obtained due to conforming Shijiazhuang to the local Industry High-tech supporting Related to Development Subsidy No No 233,333.34 233,333.33 Management policies such assets Fund Committee as local government’s investment attraction policy Grants obtained due to research Shiijiazhuang and Project Municipal development, Related to finance Subsidy No No 15,666.66 15,666.67 Finance technical assets discount Bureau renovation and transformatio n, etc. Grants obtained due Production li to research ne technolog Shiijiazhuang and y research an Municipal development, Related to Subsidy No No 3,257,666.66 3,257,666.67 d developme Finance technical assets nt granted fu Bureau renovation nds and transformatio n, etc. 2013 Shijiazhuang Subsidy Grants No No 166,666.66 Related to 143 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Provincial Municipal obtained due assets strategic Development to emerging and deform conforming industries of Commission to the local special grant supporting funds policies such as local government’s investment attraction policy Grants obtained due to research Technology Shiijiazhuang and reconstructi Municipal development, Related to No No 411,333.34 on Special Finance technical assets funds Bureau renovation and transformatio n, etc. Grants Investment obtained due and Subsidies to of “Double conforming Hundred Henan to the local Plan” Project Provincial supporting Related to Subsidy No No 100,000.00 100,000.00 granted by People’s policies such assets the People's Government as local Government government’s of Henan investment Province attraction policy Grants obtained due to research TFT glass Zhengzhou and substrate Municipal development, Related to Subsidy No No 5,000.00 5,000.00 technology Finance technical assets R& D fund Bureau renovation and transformatio n, etc. 144 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Grants obtained due to conforming TFT glass Zhengzhou to the local substrate Municipal supporting Related to Subsidy No No 333,333.33 333,333.33 project Finance policies such assets Subsidy Bureau as local government’s investment attraction policy Investment and Subsidies within Budget for Grants Technologica obtained due l Zhengzhou to research Transformati Economic and on Project by and development, Related to National Technology Subsidy No No 466,666.67 466,666.67 technical assets Development Development renovation and Reform Zone Finance and Commission Bureau transformatio and the n, etc. Ministry of Industry and Information Technology Grants obtained due to conforming TFT glass Zhengzhou to the local substrate Municipal supporting Related to Subsidy No No 666,666.67 666,666.67 project Finance policies such assets Subsidy Bureau as local government’s investment attraction policy Special Zhengzhou Grants Related to Subsidy No No 33,333.33 33,333.33 Funds for Municipal obtained due assets 145 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Major Finance to Scientific and Bureau conforming Technical to the local Projects by supporting Finance policies such Bureau of as local Zhengzhou government’s City investment attraction policy Grants Financial obtained due Supports for to the country National Key Zhengzhou encourage Industry and Economic and support Technical and specific Related to Transformati Technology Subsidy industries No No 466,666.67 466,666.67 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 Development conforming Granted by Zhengzhou to the local the Finance Municipal supporting Related to Bureau of the Subsidy No No 233,333.33 233,333.33 Finance policies such assets Economic Bureau as local and government’s Technologica investment l attraction Development policy Zone Zhengzhou Grants Funds for Economic obtained due Independent and to Innovation of Related to Technology Subsidy conforming No No 200,000.00 200,000.00 Provincially assets Development to the local Supported Zone Finance supporting Enterprises Bureau policies such 146 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 as local government’s investment attraction policy Grants obtained due to conforming Supporting Zhengzhou to the local Funds on Municipal supporting Related to Subsidy No No 66,666.67 66,666.67 Finance Finance policies such assets Discounts Bureau as local government’s investment attraction policy Grants obtained due to Funds for conforming Education, Zhengzhou to the local Science and Municipal supporting Related to Culture Subsidy No No 50,000.00 50,000.00 Finance policies such assets Granted by Bureau as local the Finance government’s Bureau investment attraction policy Grants Supporting obtained due Funds for to Zhengzhou Industrial conforming Economic Structure to the local and -adjusting supporting Related to Technology Subsidy No No 93,333.33 93,333.33 Projects policies such assets Development Granted by as local Zone Finance the Regional government’s Bureau Finance investment Bureau attraction policy Industry Zhengzhou Grants Related to Subsidy No No 53,333.33 53,333.33 discount and Municipal obtained due assets 147 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 expenses Finance to Bureau conforming to the local supporting policies such as local government’s investment attraction policy Grants obtained due to Zhengzhou conforming Economic to the local and Financial supporting Related to Technology Subsidy No No 166,666.67 166,666.67 discount policies such assets Development as local Zone Finance government’s Bureau investment attraction policy Grants obtained due to conforming Industrial Zhengzhou to the local restructuting Municipal supporting Related to project Subsidy No No 160,000.00 160,000.00 Finance policies such assets financial Bureau as local funds government’s investment attraction policy Special Grants Funds for Zhengzhou obtained due High-end Economic to the country Information and encourage Related to Industry Technology Subsidy and support No No 166,666.67 166,666.67 assets Chain Development specific Granted by Zone Finance industries the Finance Bureau (Obtained in Bureau of the accordance 148 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Economic with the and national Technologica policies and l regulations) Development Zone Grants obtained due to the country Zhengzhou encourage Economic and support 2015 project and specific equipment Related to Technology Subsidy industries No No 954,833.33 investment assets Development (Obtained in subsidie Zone Finance accordance Bureau with the national policies and regulations) Grants obtained due to conforming Strategic Shijiazhuang to the local emerging city supporting Related to industry development Subsidy No No 1,000,000.00 policies such assets Development and Reform as local project funds Commission government’s investment attraction policy Financial Exconomic Grants Grant of and trade obtained due Bureau of development to research Finance in Bureau of and Wuhu Wuhu development, 60,000,000.0 Related to Economic Subsidy No No Economic technical 0 inoome and and renovation Technologica technology and l Development transformatio Development Zone n, etc. Zone Grant of fifth Wuhu Subsidy Grants No No 30,000,000.0 Related to 149 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 G6TFT-LCD Economic obtained due 0 income glass and to substrate Technology conforming production Development to the local line Ignition Zone Finance supporting operation Bureau policies such as local government’s investment attraction policy Grants obtained due to Anhui conforming Jiangbei to the local Industrial supporting 90,342,000.0 45,000,000.0 Related to Tax Returns Concentratio Subsidy No No policies such 0 0 income n Zone as local Administrativ government’s e Committee investment attraction policy Grants obtained due to conforming to the local Wuhu Social Stable job supporting Related to Security Subsidy No No 108,000.00 subsidy policies such inoome Center as local government’s investment attraction policy Wuhu Human Grants Resources obtained Service Wuhu due to Center Human conforming Related to Subsidy No No 99,200.00 College Resources to the local income Graduates service center supporting trainee policies subsidies such as 150 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 local government ’s investment attraction policy Grants obtained due to Zhengzhou conforming Human to the local Resources Zhengzhou supporting Service Human policies Related to Center Subsidy No No 478,800.00 226,800.00 Resources such as inoome College service center local Graduates government trainee ’s subsidies investment attraction policy Grants The 1st Batch obtained due of Funds for to Science and conforming Technology Zhengzhou to the local Projects in Municipal supporting Related to 2015 Granted Subsidy No No 1,000,000.00 Finance policies such income by the Bureau as local Finance government’s Bureau of investment Zhengzhou attraction City policy Grants Subsidies for obtained due the 1st Batch to of Major conforming Investment Henan to the local Projects in Province Related to Subsidy supporting No No 750,000.00 2014 Granted Finance inoome policies such by the Department as local Provincial government’s Finance investment Department attraction 151 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 policy Grants obtained due to research Yangzhong and Finance Municipal development, Related to innovation Science and Award No No 70,000.00 technical income award funds Technology renovation Bureau and transformatio n, etc. Grants obtained due Economic to and Trade conforming Development Foreign trade to the local Bureau of promotion supporting Related to Wuhu Award No No 40,000.00 innovation policies such inoome economic and award fund as local Trade government’s Development investment Zone attraction policy Grants Financial obtained due Grant of to Bureau of Wuhu conforming Finance in economic and to the local Wuhu Technologica supporting 50,000,000.0 Related to Economic l Subsidy No No policies such 0 income and Development as local Technologica Zone Finance government’s l Bureau investment Development attraction Zone policy Grants obtained due Shijiazhuang to High-tech Municipal conforming Related to Award No No 20,000.00 Zone prizes Finance to the local inoome Bureau supporting policies such as local 152 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 government’s investment attraction policy Economic Grants R&D and Trade obtained due equipment Development to research grant of Bureau of and Wuhu Wuhu development, Related to economic and Subsidy No No 519,000.00 economic and technical income Technologica Technologica renovation l l and Development Development transformatio Zone Zone n, etc. The 2nd Batch of Grants Funds for obtained due Science and to research Technology Zhengzhou and Projects in Municipal development, Related to Subsidy No No 10,400.00 2015 Granted Finance technical inoome by the Bureau renovation Finance and Bureau of transformatio Zhengzhou n, etc. City Grants obtained due to conforming Yangzhong to the local The talent Municipal supporting Related to project grants Subsidy No No 240,000.00 Finance policies such income you Fang Bureau as local government’s investment attraction policy 15 science Yangzhong Grants and Municipal obtained due Related to technology Science and Award to research No No 10,000.00 inoome innovation Technology and award funds Bureau development, 153 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 technical renovation and transformatio n, etc. Grants obtained due Yangzhong to research Municipal 15 and Commission Industrial development, Related to of Subsidy No No 298,200.00 Development technical income development Award Fund renovation and Reform and Commission transformatio n, etc. Grants obtained due Science and to research Technology Yangzhong and Bureau 15 Municipal development, Related to Subsidy No No 9,000.00 years of Finance technical inoome patent special Bureau renovation funds and transformatio n, etc. Grants obtained due 2015 Suqian Suqian to economic and economic and conforming Technologica Technologica to the local l l supporting Related to Development Subsidy No No 20,000.00 Development policies such income Zone, the Zone as local introduction Administrativ government’s of Talent e Committee investment Awards attraction policy 103,218,866. 195,856,633. Total -- -- -- -- -- -- 64 31 Other notes 154 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 47.Non-Operation expense In RMB Amount of current period Amount of previous period The amount of non-operating Items gains & lossed Total of Non-current assets 4,430.74 35,050.57 4,430.74 Disposition Including:Disposal of fixed 4,430.74 35,050.57 4,430.74 assets Other 8,058.60 262,935.20 8,058.60 Total 12,489.34 297,985.77 12,489.34 48.Income tax expense (1) Lists of income tax expense In RMB Items Amount of current period Amount of previous period Income tax at current period 96,541,646.19 137,608,892.95 Deferred income tax -6,258,044.68 -56,511,931.93 Total 90,283,601.51 81,096,961.02 (2)Accounting profit and income tax expense adjustment process In RMB Items Amount of current period Total profit 660,608,025.36 Income tax expense at statutory / applicable tax rates 99,091,203.80 Effect of different tax rates applicable to subsidiaries 1,864,380.16 Income tax adjustments on prior periods -6,731,316.61 Effect of non-taxable income -2,070,486.53 Impact of non-deductible costs, expenses and losses 1,989,891.71 Affect the use of deferred tax assets early unconfirmed -7,442,829.54 deductible losses The current period does not affect the deferred tax assets 3,582,758.52 recognized deductible temporary differences or deductible loss Income tax expense 90,283,601.51 155 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 49. Notes to cash flow statement (1) Other cash received relevant to operating activities In RMB Items Amount of current period Amount of previous period Interest income 834,422.60 814,590.70 Government subsidy 37,959,400.00 142,206,000.00 Deposits income 87,399,022.47 6,259,879.12 Fine income 149,451.17 Current account 3,450,177.56 608,030,371.58 Other 30,339,364.32 233,837.99 Petty cash 173,626.00 Total 160,131,838.12 757,718,305.39 (2)Other cash paid related to oprating activities In RMB Items Amount of current period Amount of previous period Consultation Services fee 32,247,294.56 13,904,038.83 Business expenses 2,127,609.09 6,227,438.66 Current account 91,000,000.00 33,838,692.99 Labour insurance expenses 1,782,256.94 2,595,558.52 Advertising fees 9,282,425.84 4,364,912.60 Water and electricity expense 18,775,746.81 14,707,781.35 Travel expenses 4,427,379.48 6,677,421.50 Petty cash 549,954.75 3,662,906.00 Office expenses 16,145,841.08 14,573,810.75 Deposit 2,900,000.00 10,271,678.55 Meeting expenses 82,754.80 2,000.00 Communication fees 625,548.95 92,915.73 Traffic fees 10,179,140.76 1,918,656.99 R& D 12,716,824.11 1,648,271.03 Auto Fees 136,936.54 644,916.19 Other 9,266,581.65 17,131,848.68 Total 212,246,295.36 132,262,848.37 156 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (3)Other Cash received related to investment activities In RMB Items Amount of current period Amount of previous period Investment 6,120,000.00 The post-money balance of the cash and cash equivalents of Jiangsu Jixing’s 64,574,268.94 acquisition date which deducted the currency paid for the acquisition. Total 6,120,000.00 64,574,268.94 (4)Other Cash payable related to investment activities In RMB Items Amount of current period Amount of previous period Investment 70,000,000.00 Total 70,000,000.00 (5)Other Cash received related to Financing activities In RMB Items Amount of current period Amount of previous period Interest income 82,859,831.69 3,494,985.64 Finance lease 1,237,280,000.00 Bill finance 58,549,109.63 91,976,044.67 CDB financing 500,000,000.00 Total 1,878,688,941.32 95,471,030.31 (6)Other Cash payable related to Financing activities In RMB Items Amount of current period Amount of previous period Bank charges 702,462.93 Bill financing 77,900,000.00 203,000,000.00 Finance lease 16,160,141.67 Financing expenses 14,000,000.00 Total 94,762,604.60 217,000,000.00 157 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 50. 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 570,324,423.85 437,150,826.87 Add: Impairment loss provision of assets 3,554,932.15 -8,290,183.33 Depreciation of fixed assets, oil and gas 228,573,241.42 139,602,340.44 assets and consumable biological assets Amortization of intangible assets 7,533,311.24 5,835,965.25 Amortization of long-term deferred 3,393,264.63 2,772,005.51 fexpenses Loss on disposals of fixed assets, intangible assets and other long-term assets ("-" for 4,430.74 35,050.57 gains) Financial expenses 104,180,049.74 140,958,575.83 Investment loss -81,758.31 -2,348,908.58 Decrease of deferred income tax assets -6,258,044.68 -56,516,593.38 Decrease of inventories -41,358,720.57 -766,063,723.70 Decease of operating receivables -548,903,925.81 1,759,610,744.94 Increased of operating Payable 960,147,738.54 -1,597,968,301.55 Net cash flows arising from operating 1,281,108,942.94 54,777,798.87 activities 2.Significant investment and financing -- -- activities that without cash flows: Fixed assets acquired under finance leases 1,652,037,077.85 3.Changes Balance of cash and cash -- -- equivalents Ending balance of cash 15,739,687,032.14 4,684,112,232.94 Less: Beginning balance of cash 11,964,769,404.73 3,349,892,384.04 Net increase of cash and cash equivalents 3,774,917,627.41 1,334,219,848.90 (2) Net Cash paid of obtaining the subsidiary In RMB 158 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Amount Cash or Cash Equivalent of Enterprise consolidation that Occurred 8,000,000.00 in the Current Period Paid in the Current Period Inclluding: -- Shanghai Tanhuiyuan Huigu New Material Technology Co., Ltd. 8,000,000.00 Less:Cash or Cash Equivalent Owned by Subsidiary on the 380,272.59 Purchasing Date Including: -- Shanghai Tanhuiyuan Huigu New Material Technology Co., Ltd. 380,272.59 Including: -- Received Net Cash Paid by Subsidiary 7,619,727.41 (3)Composition of cash and cash equivalents In RMB Items Balance in year-end Balance in year-Beginning 15,739,687,032.14 11,964,769,404.73 I. Cash 246,291.07 245,781.01 Of which: Cash in stock Bank savings could be used at any time 15,530,794,470.16 11,897,196,843.45 Other monetary capital could be used at any 208,646,270.91 67,326,78.27 time III. Balance of cash and cash equivalents at 15,739,687,032.14 11,964,769,404.73 the period end 51. The assets with the ownership or use right restricted In RMB Items Book value in year-end Reason Monetary funds 543,648,071.60 Pledge of collateral Inventory 987,961,264.39 Pledge loans Fixed assets 7,155,678,632.78 Pledge loans Intangible asset 239,609,353.58 Pledge loans Construction in progress 2,870,717,465.40 Pledge loans Total 11,797,614,787.75 -- 52. Foreign currency monetary items (1) Foreign currency monetary items 159 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 In RMB Closing foreign currency Closing convert to RMB Items Exclange rate balance balance Monetary funds Including:USD 248,402.74 6.6312 1,647,208.25 Euro 135,575.62 7.375 999,869.28 HKD 4,666.70 0.85467 3,988.49 JPY 93,883,290.00 0.06449 6,054,539.90 GBP 2,277.81 8.9212 20,320.80 Account receivable Indluding :USD 11,958,394.30 6.6312 79,298,504.28 JPY 1,808,689,645.00 0.06449 116,642,623.74 Account payble Including:USD 338,809.40 6.6312 2,246,712.89 Euro 853,325.00 7.375 6,293,271.88 JPY 10,689,877.00 0.06449 689,497.08 Long –term loan Including:USD 10,000,000.00 6.6312 66,312,000.00 VIII.Changes of consolidation scope 1.Enterprise consolidation ont under the same control (1)Enterprise consolidation not under the same control in reporting period In RMB Income of Net Profit of Determinatio Acquire Acquire from Ratio of Time-point of Obtained Method of n Basis on from 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 Shanghai Tanyuan Obtain a Huigu New March 73,454,500.0 Purchase and March 50.50% business 6,157.72 -1,106,271.37 Material 31,2016 0 add share 31,2016 license Technology Co., Ltd. 160 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (2) Consolidation Cost and Goodwill In RMB Combined cost Shanghai Tanyuan Huigu New Meaterial Technology Co., Ltd. --Cash 73,454,500.00 Total Consolidation cost 73,454,500.00 Less:Reduction: Obtained Definable Net Assets Fair Proportion 39,763,137.22 Goodwill/ The Consolidation Cost is Less Than the Obtained 33,691,362.78 Definable Net Assets Fair Proportion Notes to determination method, consideration and changes of fair value of combined cost: The main formation reason for the large goodwill: Other notes: (3) The identifiable assets and liabilities of acquiree at purchase date In RMB Shanghai Tanyuan Huigu New Meaterial Technology Co., Ltd Fair value on purchase date Book value on purchase date Monetary fund 65,834,772.59 65,834,772.59 Account receivable 1,600.00 1,600.00 Inventories 1,243,387.97 802,979.59 Fixed assets 1,847,248.70 1,939,350.28 Intangible assets 7,317,795.33 4,444,692.24 Prepayments 2,006,750.00 2,006,750.00 Other account receivable 457,262.00 457,262.00 Other current assets 198,033.10 198,033.10 Long-term prepaid expenses 303,253.20 303,253.20 Account payable 362,292.10 362,292.10 Employees’ wage payable 37,656.00 37,656.00 Other payable 71,269.20 71,269.20 Net assets 78,738,885.59 75,517,475.70 Acquire net assets 78,738,885.59 75,517,475.70 Determination method for fair value of the identifiable assets and liabilities: Contingent liability of the acquiree bear during combination: Other explanation: 2.Other reasons for the merger scope change Other causes of the consolidation scope changes (e.g., the new subsidiary, liquidation subsidiary, etc.) and its related conditions: On March 8, 2016, Wuhu Dongxu Optoelectronic Technology Co.,Ltd set up Fuzhou Dongxu Investment Development Co., Ltd and holds 100% stake of Fuzhou Dongxu Investment Development Co., Ltd, of which the 161 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 registered capital was RMB 10 million and the paid-in capital was RMB 0.00. On March 17, 2016, Beijing Dongxu Huaqing Investment Co., Ltd as a general partner, Dongxu Optoelectronic Technology Co.,Ltd as a limited partner and Taizhou Golden Sun Energy Co., Ltd as a limited partner together set up Taizhou Dongxu Graphene Industry Investment Fund Management Center(Limited partnership). Such limited partnership company was incorporated in May 4, 2016, and the total amount of capital contribution agreed in the agreement was RMB 101 million, but as of June 30, 2016, the actual received amount of capital contribution was RMB 0.00. For the capital contribution, Taizhou Golden Sun Energy Co., Ltd subscribed the amount of capital contribution of RMB 75 million, Dongxu Optoelectronic Technology Co.,Ltd subscribed the amount of capital contribution of RMB 25 million, Beijing Dongxu Huaqing Investment Co., Ltd subscribed the amount of capital contribution of RMB 1 million which was agreed in the agreement by using the labor service as capital contribution, and meanwhile, upon the agreement, the three parties all agreed that they shall complete the capital contribution before December 30, 2016. On March 31, 2016, Dongxu Optoelectronic Technology Co.,Ltd set up Shenzhen XuHui Investment Holdings Co.,Ltd, of which the registered capital was RMB 100 million and the paid-in capital was RMB 0.00. On June 24, 2016, Fuzhou Dongxu Optoelectronic Technology Co.,Ltd and Dongxu Optoelectronic Technology Co.,Ltd together set up a new company of Fuzhou Xufu Optoelectronic Technology Co.,Ltd, of which the registered capital is RMB 65.40 million, among which, Fuzhou Dongxu Optoelectronic Technology Co.,Ltd shall contribute RMB 54.50 million, Dongxu Optoelectronic Technology Co.,Ltd shall contribute RMB 10.90 million, and the paid-in capital was RMB 0.00. IX. Equity in other entities 1. Equity in subsidiary (1) The structure of the enterprise group Name of Main Places of Registration Nature of Shareholding Ratio (%) Obtaining Subsidiary Operation Place Business direct indirect Method 9 Huanghe Road, Shijiazhuang Hebei Xubao High-tech Construction Industrial Construction Installation Shijiazhuang 100.00% Establish Development Installation Engineering Co., Area, Ltd. Shijiazhuang, Hebei Province 9 Huanghe Road, Shijiazhuang High-tech Shijiazhuang Industrial Colour Bulb Co., Shijiazhuang Manufacturing 81.26% Establish Development Ltd. Area, Shijiazhuang, Hebei Province 162 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Wuhu Dongxu Room 302, A floo Optoelectronic r,Management Co Equipment Wuhu mmittee of Jiangb Manufacturing 95.00% Establish Technology Co., ei Industry Zone, Ltd. Anhui Prov No.36, Daowei 2 Road, Wanchun Wuhu Dongxu Street , Wuhu Optoelectronic Wuhu Economy Manufacturing 100.00% Establish Technology Co., Technology Ltd. Development Zone 1/F, No.2 Business tower, Huazhong Wuhan Dongxu Shuguang Optoelectronic Wuhan Software park, Manufacturing 62.50% Establish Technology Co., No.1Guanshan Ltd. Road,Donghu Development Zone, Wuhan Building 15, No. Sichuan Ruiyi 21, Ring Road 18 Construction 1 West Third Sect Non control Sichuan Manufacturing 100.00% Engineering Co., ion,Jinniu District combination Ltd. , Chengdu Room C17, Building 1, Beijing Xufeng No.10, Xinghuo Real estate Real Estate Co., Beijing Road, 100.00% Establish Development Ltd. Technology City, Fengtai District, Beijing Room 1517, Building 1 Dongxu (International (Kunshan) Building), No. Kunshan Manufacturing 80.00% Establish Display Material 167, Qianjin Co., Ltd. Middle Road, Suzhou City, Jiangsu Province Zhengzhou Xufei 66,No 3 Zhengzhou Manufacturing 100.00% Non control Optoelectronic Jingnan Road, 163 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Technology Co., Econornic & combination Ltd. Technology Development Zone, Zhengzhou No.69,Tianshan Shijiazhuang Street, Xuxin High-tech Non control Optoelectronic Shijiazhuang Manufacturing 100.00% Area, combination Technology Shijiazhuang, Co.,Ltd. Hebei N0.1198, 689 Beijing Xutan Builing, No.5, New Material Zhongguan Technology Beijing 70.00% Establish Technology Co., Village South Service Ltd. Street, Haiding District, Beijing New Material Jiangsu Jixing Industry Zone, Non control New Material Jiangsu Manufacturing 50.50% Youfang Town, combination Co., Ltd. Yangzhong City 1201-E18(Area)1 2/F,No.1, 6-3 Beijing Dongxu Building, Huaqing Investment Beijng Autornobile 70.00% Establish Investment Co., Management Museum East Ltd. Road, Fengtai District, Beijing (072) Room 109,Supervision Building, Fuzhou Dongxu Processing trade Optoelectronic Free zone, Fuzhou Manufacturing 100.00% Establish Technology Co., Fuzhou, Ltd. Fujian.(No.9, Xinjiang Road, Xincuo Town, Fuqing City) Shijiazhuang 9 Huanghe Road, Dongxu Shijiazhuang Optoelectronic Shijiazhuang High-tech Manufacturing 95.00% Establish Equipment Industrial Technology Co., Development 164 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Ltd. Area, Shijiazhuang, Hebei Province Room 267, 2/F, No. 2 ,Building, Beijing Dongxu No.9 Haiying Investment Beijing Road, Investment 100.00% Establish Development Co., Technology City, Ltd. Fengtai District, Beijing. Room 311-D, B Building, Jiangbei Industrial Wuhu Ruiyi Anhui Concentration Labor dispatch 100.00% Establish Service Co., Ltd. Zone Administrative Committee, Anhui Room 2369, No.888, CBD, Jiangsu Dongxu Renmin Road, Yitai Intelligent Suqian Economic Manufacturing 100.00% Establish Equipment Co., Technology Ltd. Development Zone, Suqian Room 02, 2/F,No.3 Shanghai Building, Tanyuan Huigu No.28,, Non control New Material Shanghai Jiangcchuan Manufacturing 50.50% combination Technology Co., East Road, Ltd. Minhang District ,Shang hai Room 201, A unit, No.1 Shenzhen Xuhui Qianwan Road, Investment Co., Shenzhen Qianhai Investnebt 100.00% Establish Ltd. Shengang Cioeration Area, Shenzhen. 165 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 297, Room Fuzhou Xufu 109,Supervision Optoelectronic Building, Fuzhou Manufacturing 83.33% 16.67% Establish Technology Co., Processing trade Ltd. Free zone, Fuzhou, Fujian 230, Room Fuzhou Dongxu 109,Supervision Investment Building, Fuzhou Investment 100.00% Establish Development Processing trade Co., Ltd. Free zone, Fuzhou, Fujian Dongxu Taizhou Graphene Room 205, 2/F, 7 Industry Building , Investment No.818 , Fund Taizhou Longfeng Road, Investment 24.75% 0.99% Establish Management New Energy Center Industry Zone , (limited Taizhou partnership) Notes: holding proportion in subsidiary different from voting proportion: According to the signed agreement, Taizhou Dongxu 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 members. Wherein, the general partner Beijing Dongxu Huaqing Investment Co., Ltd. appoints 2 members, the limited partner Dongxu 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 Dongxu Huaqing Investment Co., ltd. assumes unlimited, joint liabilities for the limited partnership’s debts. As the posterity limited partner, Dongxu 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. The executive partner of Taizhou Dongxu Graphene Industry Investment Fund Management Center (limited partnership) is actually Beijing Dongxu Huaqiang Investment Co., Ltd. Due to the staff’s negligence, the executive partner registered on Business License is Wang Zhonghui, the legal representative of Beijing Dongxu Huaqiang Investment Co., Ltd., and the company is changing its business license. Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee: 166 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 According to the signed agreement, Taizhou Dongxu 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 members. Wherein, the general partner Beijing Dongxu Huaqing Investment Co., Ltd. appoints 2 members, the limited partner Dongxu 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 Dongxu Huaqing Investment Co., ltd. assumes unlimited, joint liabilities for the limited partnership’s debts. As the posterity limited partner, Dongxu 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. The executive partner of Taizhou Dongxu Graphene Industry Investment Fund Management Center (limited partnership) is actually Beijing Dongxu Huaqiang Investment Co., Ltd. Due to the staff’s negligence, the executive partner registered on Business License is Wang Zhonghui, the legal representative of Beijing Dongxu Huaqiang Investment Co., Ltd., and the company is changing its business license. Significant structure entities and controlling basis in the scope of combination: Basis of determine whether the Company is the agent or the principal: Other notes: On December 25, 2015, Wuhu Dongxu Optoelectronic Technology Co.,Ltd set up a wholly-owned subsidiary of Fuzhou Dongxu Optoelectronic Technology Co.,Ltd, of which the registered capital is RMB 10 million and the paid-in capital is RMB 0.00. On May 26, 2016, Wuhu Dongxu Optoelectronic Technology Co.,Ltd transferred its 100.00% stake of Fuzhou Dongxu Optoelectronic Technology Co.,Ltd to Dongxu Optoelectronic Technology Co.,Ltd, with the registered capital of Fuzhou Dongxu Optoelectronic Technology Co.,Ltd is RMB 10 million and the paid-in capital is RMB 10 million. (2) Significant not wholly owned subsidiary In RMB Profit or Loss Owned by Dividends Distributed to Shareholding Ratio of Equity Balance of the the Minority the Minority Name of Subsidiary Minority Shareholders Minority Shareholders in Shareholders in the Shareholders in the (%) the End of the Period Current Period Current Period Wuhu Dongxu Optoelectronic 5.00% 23,701,446.62 97,552,665.21 Equipment Technology Co., Ltd. Jiangsu Jixing New 49.50% 8,057,709.51 205,477,973.45 Material Co., Ltd. Holding proportion of minority shareholder in subsidiary different from voting proportion: Other notes: 167 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (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 Wuhu Dongxu Optoelec tronic 6,651,93 185,477, 6,837,41 4,428,80 450,000, 4,878,80 5,047,42 191,953, 5,239,37 3,254,74 500,000, 3,754,74 Equipme 4,982.20 310.57 2,292.77 7,720.58 000.00 7,720.58 3,350.95 488.35 6,839.30 8,857.61 000.00 8,857.61 nt Technolo gy Co., Ltd. Jiangsu Jixing 326,380, 357,645, 684,026, 260,919, 8,000,00 268,919, 250,572, 366,026, 616,599, 211,770, 6,000,00 217,770, New 234.61 997.43 232.04 214.96 0.00 214.96 836.25 457.66 293.91 477.86 0.00 477.86 Material 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 Wuhu Dongxu Optoelectroni 1,423,880,48 479,358,368. 479,358,368. 1,081,984,21 113,978,620. 486,729,800. 486,729,800. -281,784,096. c Equipment 4.78 65 65 2.37 00 00 00 00 Technology Co., Ltd. Jiangsu Jixing New 223,976,847. 16,278,201.0 16,278,201.0 43,535,555.9 -36,549,817.0 6,352,806.87 154,379.23 154,379.23 Material Co., 42 3 3 3 5 Ltd. 2. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise 168 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Proportion Accounting treatment of the Main operating investment of Name Registration place Business nature place Directly Indirectly joint venture or associated enterprise ZhongdaChengxi No.601, Luoyang n International Road, ,FTA(Dong Equity method Commercial Tianjing Factoring 24% jiang free Zone,) accounting Factoring Co., Tianjing Ltd. Notes to holding proportion of joint venture or associated enterprise different from voting proportion: Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does not have a significant impact: (2) Main financial information of significant associated enterpriseo In RMB Cloding balance/This period Opening balance/Last period ZhongdaChengxin International ZhongdaChengxin International Commercial Factoring Co., Ltd. Commercial Factoring Co., Ltd. Current assets 308,120,164.53 308,104,397.93 Total assets 308,120,164.53 308,104,397.93 Current liabilities 6,003,453.21 6,328,346.23 Total liabilities 6,003,453.21 6,328,346.23 Attributable to shareholders of the parent 302,116,711.32 301,776,051.70 company Share of net assets calculated by stake 72,508,010.72 72,426,252.41 Book value of equity investment in 72,508,010.72 72,426,252.41 associates Business income 6,924,222.63 10,849,777.77 Net profit 340,659.62 1,776,051.70 Total comprehensive income 340,659.62 1,776,051.70 Other notes: On March 10, 2016, Beijing Dongxu Huaqing Investment Co., Ltd as a general partner, Dongxu Optoelectronic Technology Co.,Ltd as a limited partner and Deyang Jinghua Carbon Materials Science & Technology Development Co.,Ltd as a limited partner together co-funded and set up Dongxu(Deyang) Graphene Industry Development Fund Partnership Company(Limited partnership). Such limited partnership company was incorporated in April 17, 2016, and the total amount of capital contribution agreed in the agreement was RMB 200,000,000, but as of June 30, 2016, the actual received amount of capital contribution was RMB 0.00. For the capital contribution, Beijing Dongxu Huaqing Investment Co., Ltd subscribed the amount of capital contribution of RMB 2 million which accounts for 1.00% of the total amount of capital contribution; Deyang Jinghua Carbon 169 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Materials Science & Technology Development Co.,Ltd subscribed the amount of capital contribution of RMB 158,400,000 which accounts for 79.20% of the total amount of capital contribution; Dongxu Optoelectronic Technology Co.,Ltd subscribed the amount of capital contribution of RMB 39,600,000 which accounts for 19.80% of the total amount of capital contribution. Meanwhile, the agreement stipulated that the limited partners shall respectively complete 50% of their totally subscribed capital contribution within 30 days commenced from the date of the fund incorporation date, the general partner shall complete 50% of the totally subscribed capital contribution within 30 days commenced from the date of the fund incorporation date and the rest capital contribution by all parties shall be completed before December 30, 2017. otes At the same time, all the parties agreed to set up an investment decision-making committee as the highest decision-making body for the limited partnership company. The investment committee is consisted by 5 members, among which, Beijing Dongxu Huaqing Investment Co., Ltd appoints 1 member, Dongxu Optoelectronic Technology Co.,Ltd appoints 1 member, Deyang Jinghua Carbon Materials Science & Technology Development Co.,Ltd appoints 1 member and the remaining 1 member will be jointly determined by Dongxu party and Deyang party. Any decision shall be passed by winning not less than 3 votes in the decision-making committee. The general partner of Beijing Dongxu Huaqing Investment Co., Ltd as a managing partner shall bear unlimited joint and several liability for the liabilities of the limited partnership company, Dongxu Optoelectronic Technology Co.,Ltd as a posterior limited partner shall assume the limited partnership company’s liability no more than the subscribed capital contribution and Deyang Jinghua Carbon Materials Science & Technology Development Co.,Ltd as a prior limited partner shall assume the limited partnership company’s liability no more than the subscribed capital contribution. 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. 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 170 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 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 2015 and 2016. The foreign exchange risk faced by the Company mainly comes from the financial assets and financial liabilities priced by US dollar, Yen and Euro. The exchanged RMB amounts of foreign financial assets and foreign financial liabilities are presented as below: Items Ending balance of fo Exchange r End balance of Beginning balanve Beginning reign currency ate RMB Conversion of foreign currency Exchange rate balance of RMB Conversion Monetary fund Including:USD 248,402.74 6.6312 1,647,208.25 3,021,138.38 6.4936 19,618,040.36 Euro 135,575.62 7.375 999,869.28 1,000,555.35 7.0952 7,099,140.32 HKD 4,666.70 0.85467 3,988.49 4,666.70 0.8377 3,909.67 JPY 93,883,290.00 0.06449 6,054,539.90 243,319,365.00 0.0539 13,108,830.79 GBP 2,277.81 8.9212 20,320.80 2,277.81 9.6159 21,903.19 Account receivable Including:USD 11,958,394.30 6.6312 79,298,504.28 4,999,315.30 6.4936 32,463,588.59 JPY 1,808,689,645.00 0.06449 116,642,623.74 1,388,800,750.24 0.053875 74,822,443.56 Account payable Including: JPY 10,689,877.00 0.06449 689,497.08 27,292,000.00 0.053875 1,470,475.56 USD 338,809.40 6.6312 2,246,712.89 240,880.00 6.4936 1,564,178.37 Euro 853,325.00 7.375 6,293,271.88 923,325.00 7.0952 6,551,175.54 Long-term loans Including:USD 10,000,000.00 6.6312 66,312,000.00 11,000,000.00 6.4936 71,429,600.00 171 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 XI. Related party and related party transactions 1. Parent company information of the enterprise The parent company The parent company Name Registered address Natrue Regisrated capital of the Company's of the Company’s shareholding ratio vote ratio No.369, Zhujiang Investment , Dongxu Group Road, High-tech production and R & RMB 11.07 billion 30.42% 30.42% zone, Shijiazhuang D, etc. Notes During the reporting period, the following changes in the real-up capital of the parent company: In RM Items Beginning of term Increase Decrease End of term Paid in capital 11,070,000,000.00 11,070,000,000.00 The finial control of the company was Li Zhaoting. Other notes: 2. Subsidiaries of the Company See details to Notes VII.. 3. Information on the joint ventures and associated enterprises of the Company The details to notes XVII of significant joint venture and associated enterprise of the Company Information on other joint venture and associated enterprise of occurring related party transactions with the Company in reporting period, or form balance due to related party transactions in previous period: Name Relationship Other notes 4.Other Related parties information of the enterprise Other Related parties name Relation of other Related parties with the company Dongxu 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., Controlled by the same actual controller Ltd. Shijiazhuang Baoshi Xuming Tube Co., Ltd. Controlled by the same actual controller 172 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Shijiazhuang Baodong Electronic Co.,Ltd. Controlled by the same actual controller Hebei Baoshi Lighting Co., Ltd. Controlled by the same actual controller Dongxu(Yingkou)Optoelectronic Display Co., Ltd. Controlled by the same actual controller Jinhou Xulong Solar energy Technology Co., Ltd. Controlled by the same actual controller Sichuan Xuhong Optoelectrnic Technology Co., Ltd Controlled by the same actual controller Shijiazhuang Dongxu Machine Equipment Co., Ltd. Controlled by the same actual controller Hebei Decoration Printing Machine Co., Ltd. Controlled by the same actual controller Chengdu Zhong Optoelectronic Technology Co., Ltd. General Manager: Li Zhaotin Chengdu Dongxu Energy saving Technology Co., Ltd. Controlled by the same actual controller Shijiazhuang Xuling Electronic Technology Co., Ltd. Controlled by the same actual controller Shijiazhuang Baoshi Electronic Group Co., Ltd. Controlled by the same actual controller Chengdu Taiyisi Technology Co., Ltd. Controlled by the same actual controller Li Qing The spouse of the actual controller Other notes 5. Related transactions.(1)Related transactions on purchasing goods and receiving services Acquisition of goods and reception of labor service In RMB Content of related Amount of current Amount of previous Over the trading limit Related parties Amount of last period transaction or not? period period Baoshi Group Energy 574,553.06 471,876.50 Baoshi Group Security fees 1,500,000.00 Chengdu Dongxu Energy Saving ESL 1,787.18 15,384.62 Technology Co., Ltd. Shijiazhuang Baoshi Zhonghe Door 259,246.66 Steel Plastic Shape Co., Ltd. Shijiazhuang Dongxu Mechanical Machining parts 18,568,179.46 834,427.33 Equipment Co., Ltd Shijiazhuang Dongxu Mechanical Packing equipment 10,221,794.87 Equipment Co., Ltd 173 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Total 20,903,766.36 11,543,483.32 Related transactions on sale goods and receiving services In RMB Related parties Content of related transaction Amount of current period Amount of previous period Shijiazhuang Dongxu Packing equipment 1,378,205.13 Mechanical Equipment Co., Ltd. Shijiazhuang Dongxu Detection eqiupment 36,412,136.76 Mechanical Equipment Co., Ltd. Sichuan Xuhong Line technological Optoelectronic Technology 142,948,113.21 transformation Co., Ltd. Jinzhou Xulong New Material tester 223,076.93 Technology Co., Ltd. National Engineering Dongxu Group 82,115,384.62 laboratory test equipment Chengdu Zhong Optoelectronic Semi-manufacture 3,106,153.76 2,685,888.57 Technology Co., Ltd. Chengdu Zhong Optoelectronic Traction roll project 188,888.89 Technology Co., Ltd. Sichuan Xuhong Optoelectronic Technology Service 11,909,433.96 Technology Co., Ltd. Dongxu ( Yingkou ) Technology Service Optoelectronic Display Co., 9,135,849.06 Ltd. Total 3,295,042.65 286,808,088.24 Notes (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 Dongxu Group, The trustee fee Yingkou Coastal Dongxu Dongxu includes share Development Optoelectronic (Yingkou) right trustee January 1,2012 750,000.00 Construction Co., Technology Co., Optoelectronic fee(500 thousand ltd., Wukuang Ltd. Display Co., Ltd. RMB/year) and (Yingkou ) operation trustee 174 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Industrial Park fee. The Development operation trustee Co., Ltd. fee is basic management fee and incentive management fee, of which the basic management fee is 1 million RMB/year, the incentive management fee is counted by 5% of the after-tax net profit yearly achieved by the trustee company The trustee fee includes share right trustee fee(500 thousand RMB/year) and operation trustee fee. The operation trustee Dongxu Group, fee is basic Mianyang The right to management fee Investment Dongxu operate of and incentive (Group) Co., Optoelectronic Sichuan management fee, March 1,2012 750,000.00 Ltd,Sichuan Technology Co., Changhong of which the Changhong Ltd. Electrical Co., basic Electrical Co., Ltd. management fee Ltd. is 1 million RMB/year, the incentive management fee is counted by 5% of the after-tax net profit yearly achieved by the trustee company Total 1,500,000.00 Notes 175 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 During the reporting period, the Company continued entrusted with the management of Dongxu( Yingkou) Optoelectronic Display Co., Ltd., Sichuan Xuhong Optoelectronic Technology Co., Ltd. In December 2011, Dongxu Group, Dongxu Optoelectronic Investment Co., Ltd. and Shijiazhuang Baoshi Electronic Group Co., Ltd signed the Equity Trusteeship Agreement with the Company , of which 60% share rights of Dongxu (Yingkou) Optoelectronic Display Co., Ltd., 51% share rights of Sichuan Xuhong Optoelectronic Technology 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. Lists of entrust/contractee In RMB Name of the Name of the Clarge entruster/contract entrustee/ Type Initial date Due date Pricing basis recognized in the ee contractor reporting period Notes (3)Related guarantee condition The Company as a guarantor Execution accomplished Secured party Guarantee amount Start date End date or not The Company was secured party In RMB Guarantor Guarantee Amount Starting date Stop date If completed or not Dongxu Group, Li 200,000,000.00 September 11,2015 Sptember 11,2016 No Zhaoting Dongxu Group, Li 100,000,000.00 March 25,2016 February 28,2017 No Zhaoting Dongxu Group, Li 350,000,000.00 August 31,2015 August 16,2016 No Zhaoting Dongxu Group, Li 200,000,000.00 October 23,2015 October 23,2016 No Zhaoting Dongxu Group, Li 200,000,000.00 December 30,2015 December 30,2016 No Zhaoting Dongxu Group, Li 85,000,000.00 April 15,2016 April 14,2017 No Zhaoting Dongxu Group, Li 20,000,000.00 May 12,2015 April 7,2016 Yes Zhaoting, Li Qing Dongxu Group, Li 30,000,000.00 April 23,2015 April 7,2016 Yes Zhaoting, Li Qing Dongxu Group, Li 50,000,000.00 May 4,2015 April 7,2016 Yes Zhaoting, Li Qing 176 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Dongxu Group, Li 60,000,000.00 June 24,2015 April 7,2016 Yes Zhaoting, Li Qing Dongxu Group, Li 80,000,000.00 March 25,2015 March 25,2016 Yes Zhaoting, Li Qing Dongxu Group, Li 100,000,000.00 April 14,2016 April 13,2017 No Zhaoting, Li Qing Dongxu Group 80,000,000.00 January 23,2015 January 23,2016 Yes Dongxu Group 100,000,000.00 April 23,2015 March 22,2016 Yes Dongxu Group 200,000,000.00 September 23,2015 September 23,2016 No Dongxu Group 100,000,000.00 January 22,2015 January 22,2016 Yes Dongxu Group 200,000,000.00 June 3,2016 June 3,2017 No Dongxu Group 100,000,000.00 March 25,2016 March 25,2017 No Dongxu Group 30,000,000.00 March 31,2016 March 30,2017 No Dongxu Group 60,000,000.00 June 30,2016 June 29,2017 No Dongxu Group 200,000,000.00 January 15,2016 January 15,2017 No Dongxu Group 200,000,000.00 July 22, 2015 July 22,2016 No Li Zhaoting 400,000,000.00 April 15,2016 April 14,2017 No Dongxu Group, Li Zhaoting, Li Qing, and Li Zhaoting holds 10% of the shares of Dongxu Technology Group, 150,000,000.00 May 19,2016 May 18,2018 No Dongxu Group holds 90% of the shares of Dongxu Technology Group, Dongxu Group, Li Zhaoting, Li Qing, and Li Zhaoting holds 10% of the shares of Dongxu Technology Group, 150,000,000.00 May 26,2016 May 25,2018 No Dongxu Group holds 90% of the shares of Dongxu Technology Group, Dongxu Group, Li Zhaoting, Li Qing, and 159,000,049.50 June 8,2016 April 7,2018 No Li Zhaoting holds 10% of the shares of Dongxu 177 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Technology Group, Dongxu Group holds 90% of the shares of Dongxu Technology Group, Dongxu Group, Li Zhaoting, Li Qing, and Li Zhaoting holds 10% of the shares of Dongxu Technology Group, 40,999,950.50 June 21,2016 April 20,2018 No Dongxu Group holds 90% of the shares of Dongxu Technology Group, Dongxu Group, Li 387,700,000.00 April 29,2016 April 29,2018 No Zhaoting, Li Qing. Dongxu Group, Li 300,000,000.00 June 7,2016 June 7,2018 No Zhaoting, Li Qing. Dongxu Group, Li 300,000,000.00 June 7,2016 June 7,2019 No Zhaoting, Li Qing. Dongxu Group 100,000,000.00 May 17,2016 May 17,2018 No Dongxu Group 100,000,000.00 May 20,2016 May 20,2018 No Dongxu Group 81,500,000.00 May 26,2016 May 26,2018 No Dongxu Group 18,500,000.00 June 13,2016 June 13,2018 No Li Zhaoting 40,000,000.00 December 22,2015 December 22,2016 No Li Zhaoting 60,000,000.00 May 17,2016 May 17,2017 No Dongxu Group 200,000,000.00 September 29,2015 September 29,2016 No Dongxu Group 450,000,000.00 January 28,2013 January 27,2021 No Dongxu Group, Li 76,710,608.33 October 20,2015 October 15,2018 No Zhaoting Dongxu Group 45,000,000.00 November 30,2015 November 30,2016 No Dongxu Group 50,000,000.00 April 23,2015 March 22,2016 Yes Dongxu Group 45,000,000.00 February 29,2016 February 28,2017 No Dongxu Group 45,000,000.00 January 29,2016 January 29,2017 No Dongxu Group 15,000,000.00 April 5,2016 April 5,2017 No Dongxu Group , Li 20,000,000.00 December 22,2015 June 22,2016 Yes Zhaoting Dongxu Optoelectronic 80,000,000.00 July 24,2015 July 24,2016 No 178 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Investment Co., Ltd., Shijiazhuang Baoshi Group, Li Zhaoting Dongxu Group, Li Zhaoting, Li Qing, Shijiazhuang Baoshi 200,000,000.00 January 4,2015 January 4,2016 Yes Group holds shares of the company Dongxu Group , Li 200,000,000.00 January 4,2015 January 4,2016 Yes Zhaoting, Li Qing Dongxu Group , Li 100,000,000.00 April 12,2013 May 20,2016 Yes Zhaoting, Li Qing Dongxu Group , Li 100,000,000.00 April 12,2013 October 20,2016 No Zhaoting, Li Qing Dongxu Group , Li 90,000,000.00 April 12,2013 April 11,2022 No Zhaoting, Li Qing Dongxu Group , Li 150,000,000.00 May 2,2013 April 11,2022 No Zhaoting, Li Qing Dongxu Group , Li 100,000,000.00 September 26,2013 April 11, 2022 No Zhaoting, Li Qing Dongxu Group , Li 300,000,000.00 April 1, 2014 April 11,2022 No Zhaoting, Li Qing Dongxu Group , Li 150,000,000.00 April 10,2015 April 12,2022 No Zhaoting, Li Qing Li Zhaoting 200,000,000.00 May 19,2015 May 19,2016 Yes Li Zhaoting 100,000,000.00 February 13,2015 February 13,2016 Yes Dongxu Group, Li 212,000,000.00 April 25,2016 April 24,2017 No Zhaoting Dongxu Group, Li 288,865,691.80 May 31,2016 May 30,2021 No Zhaoting Dongxu Group 333,964,121.74 May 25,2016 May 24,2019 No Dongxu Group, Li 248,000,000.00 May 27,2016 May 26,2019 No Zhaoting, Li Qing Dongxu Group, Li 108,899,568.29 June 16,2016 June 19,2919 No Zhaoting Li Zhaoting 300,000,000.00 February 13,2015 February 13,2016 Yes Li Zhaoting 300,000,000.00 February 14,2016 October 10,2016 No Notes 179 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 (4) Rewards for the key management personnel In RMB Items Amount of current period Amount of previous period Rewards for the key management 2,479,100.00 2,038,300.00 personnel 6.Payables and receivables of the related party (1)Receivable In RMB Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision Shijiazhuang Account receivable Dongxu Mechanical 1,242,750.00 3,756,250.00 Equipment Co., Ltd. Chengdu Zhong Account receivable Optoelectronic 6,502,630.67 13,872,414.13 Technology Co., Ltd Dongxu (Yingkou) Account receivable Optoelectronic 500,000.00 Display Co., Ltd. Hebei Baoshi Energy saving Account receivable 10,000.00 10,000.00 lighting technology Co., Ltd. Sichuan Xuhong Account receivable Optoelectronic 250,000.00 914,000.00 Technology Co., Ltd. Sichuan Xuhong Bill receivable Optoelectronic 21,500,000.00 Technology Co., Ltd. Hebei Baoshi Energy saving Prepayments 60,000.00 60,000.00 lighting technology Co., Ltd. Hebei Decoration Prepayments Printing Machinery 825,680.87 775,680.87 Co., Ltd. 180 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Shijiazhuang Prepayments XumingTube Co., 335,052.00 335,052.00 Ltd. Shijiazhuang Prepayments Dongxu Mechanical 8,521,569.97 Equipment Co., Ltd. Prepayments Baoshi Group 1,536,946.00 Shijiazhuang Other Account Baodong Electrinic 299,905.00 299,905.00 receivable Co., Ltd. Hebei Baoshi Other Account Energy saving 50,000.00 receivable lighting technology Co., Ltd. Other non-current Dongxu Group 155,505,869.52 155,505,869.52 assets (2)Payables In RMB Name Related party Book balance at year end Book balanc at year beginning Chengdu Dongxu Energy Account payable 1,787.18 Technology Co., Ltd. Shijiazhuang Baoshi Electronic Other payable 4,301,471.46 5,755,158.95 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 441,578.40 152,978.40 Co., Ltd. Shijiazhuang Xuling Electronic Account payable 1,335,136.31 1,335,136.31 Technology Co., Ltd. Shijiazhuang Dongxu Account payable Mechanical Equipment Co., 2,190,882.64 Ltd. Advance revenue Dongxu Group 72,625,716.06 73,125,716.06 Jinzhou Xulong Solar energy Other payable 1,500,000.00 1,500,000.00 Technology Co., Ltd. Other payable Baoshi Group 5,301,153.26 165,815,170.48 181 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Shijiazhuang XumingTube Co., Other payable 97,031.00 Ltd. Other payable Dongxu Group 10,408,303.77 88,910,757.77 Dongxu Optoelectronic Other payable 146,229,180.00 Investment Co., Ltd. Shijiazhuang Baoshi Electronic Other payable 264,000.00 264,000.00 vacuum Glass Co., Ltd. Sichuan Xuhong Optoelectronic Other payable 100,000.00 100,000.00 Technology Co., Ltd. XII. Stock payment 1. The Stock payment overall situation √ Applicable □Not applicable In RMB The current total equity instruments granted to the company 0.00 Amount of the equity instruments company right of this line 0.00 Company current total failure of the equity instruments 0.00 Other notes 2. The Stock payment settled by equity √ Applicable □Not applicable In RMB The determined methods of the fair value of the equity instruments The 20 trading days prior to the announcement of the stock granted to date incentive plan average stock trading company 《Unlock the first phase of the company restricted stock Determine the number of vested equity instruments incentive plan period can unlock the object list》 This estimate and it is estimated that there are significant N/A differences of the previous period Equity-settled share-based payment included in the total amount of 9,029,400.00 capital reserves This period of equity-settled share-based payment confirmation 1,992,000.00 total costs 182 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 XIII. Enents after balance sheet date 1.Notes of ohter significant events On July 28, 2016, the China Securities Regulatory Commission approved the company’s non-public share issuance of issuing no more than 1,104,928,457 new shares. XIV. Notes s of main items in financial reports of parent company 1Account receivable (1).Classification accojunt receivables In RMB Amount in year-end Amount in year-beginning Book Balance Bad debt provision Book Proportion(%) Bad debt provision Classification value Amount Proportio Amount Proportio Amount Proportio Amount Proportion( Book value n(%) n(%) n(%) %) Account receivables provided bad debt 67,821,7 567,495. 67,254,29 26,294, 365,561.5 25,928,808. 100.00% 0.84% 100.00% 1.39% provision in credit 90.18 23 4.95 370.18 5 63 risk groups 67,821,7 567,495. 67,254,29 26,294, 365,561.5 25,928,808. Ttotal 100.00% 0.84% 100.00% 1.39% 90.18 23 4.95 370.18 5 63 Accounts receivable of individual significance and subject to individual impairment assessment. □ Applicable√ Not applicable Account reveivable on which bad debt proisions are provided on age basis in the group √ Applicable □ Not applicable In RMB Year-end balance Aging Account receivable Bad debt provision Proportion Subitem within 1 year Credit period 54,000,000.00 Credit external within 1 year Within 1 year 54,000,000.00 2-3 years 1,009,668.39 302,900.52 30.00% Over 5 years 264,594.71 264,594.71 100.00% Total 55,274,263.10 567,495.23 1.03% 183 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Notes: Receivable account in Group on which bad debt provisions were provided on percentage basis: □ Applicable √ Not applicable Receivable account in Group on which bad debt provisions were provided on other basis: In RMB Name Closing balance Bad debt provision Related party Group 12,547,527.08 Continue: Name Opening balance Bad debt provision Related party Group 25,020,107.08 Notes :There is no verification of accounts receivable during this reporting period. (2) Bad debt provision withdrawal, reversed or recovered in the report period The current amount of provision for bad debts is RMB201,933.68; recovery or payback for bad debts Amount is RMB0.00. Significant amount of reversed or recovered bad debt profision: In RMB Name Amount Method (3) Top five of account receivable of closing balance collected by arrears party The total receivable amount of top five closing balances collected by the debtors in the current reporting period is RMB 57,252,418.39 , which accounts for 84.42% of the total other receivables. The total amount of balances in the end of the period for corresponding accrued bad-debt provision is RMB 302,900.52. 2.Other receivable (1)Category of Other receivable In RMB Amount in year-end Amount in year-beginng 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(%) %) Other account 1,259,1 receivables provided 1,724,16 1,825,72 1,722,336 1,797,045 1,257,350,0 100.00% 0.11% 47,144. 100.00% 0.14% bad debt provision in 1,805.93 6.84 ,079.09 .49 98.69 18 credit risk groups 1,259,1 1,724,16 1,825,72 1,722,336 1,797,045 1,257,350,0 Ttotal 100.00% 0.11% 47,144. 100.00% 0.14% 1,805.93 6.84 ,079.09 .49 98.69 18 184 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Other Receivable accounts on which bad debt provisions are provided by other ways in the portfolio: □Applicable √Not applicable Other receivable accounts in Group on which bad debt provisions were provided on age analyze basis: √ Applicable □Not applicable In RMB Amount in year-end Aging Other receivable Bad debt provision Withdrawal proportion Subitem within 1 year Credit period 4,705.44 Credit external within 1 year 96,922.88 4,846.14 5.00% 1-2 years 485,541.91 48,554.19 10.00% 2-3 years 718,105.55 215,431.67 30.00% Over 5 years 1,556,894.84 1,556,894.84 100.00% Total 2,862,170.62 1,825,726.84 63.79% 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 Name Closing balance Bad debt provision Related party transaction 1,712,163,930.24 Deposit 9,133,205.07 Personal loans 2,500.00 Total 1,721,299,635.31 Continue: Name Opening balance Bad debt provision Related party transaction 1,246,010,916.22 Personal insurance and provident fund 455,012.80 Personal loans 156,609.86 Deposit 9,620,000.00 Total 1,256,242,538.88 (2)Bad debt provision withdrawal, reversed or recovered in the report period. The amount of bad debt provision was RMB28,681.35, The amount of reversed or recovered bad debt provision in the report period RMB0.00. Significant amount of reversed or recovered bad debt provision: 185 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 In RMB Name Amount Method (3)Particulars of the actual verification of other accounts receivable during the reporting period. In RMB Items Amount Of which : Significant actual verification of other account receivable: In RMB Whether occurred Name Nature Amount Reason Procedure because of related party transactions (4)Other account receivable classified by account nature In RMB Nature Closing book value Opening book value Deposit 9,133,205.07 9,620,000.00 Personal loans 2,500.00 156,609.86 Related party transaction 1,712,163,930.24 1,246,010,916.22 Current fund 2,124,152.16 Personal insurance and provident fund 455,012.80 Other 2,862,170.62 780,453.14 Total 1,724,161,805.93 1,259,147,144.18 (5) The top five other account receivable classified by debtor at period end In RMB Closing balance of Name Nature Closing balance Aging Proportion % bad debt prof=vision Zhengzhou Xufei Optoelectronic Current account 878,336,950.00 Credit period 50.94% Technology Co., Ltd. Sichuan Ruiyi Construction Current account 436,148,606.69 Credit period 25.30% Engineering Co., Ltd. Beijing Xufeng Current account, 258,997,925.45 Credit period 15.02% Property Co., Ltd. loan Shijiazhuang Xuxin Current account 100,000,000.00 Credit period 5.80% 186 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Optoelectronic Technology Co., Ltd. Shijiazhuang Dongxu Optoelectronic Current account 19,630,448.10 Credit period 1.14% Equipment Technology Co., Ltd. Total -- 1,693,113,930.24 -- 98.20% (6) Accounts receivable involved with government subsidies In RMB Estimated received time, Name of units Project of government Closing balance Closing age amount and basis (7) Other account receivable which terminate the recognition owning to the transfer of the financial assets (8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivableOther notes: 3.Long-term equity investment In RMB Year-end balance Year-beginning balance Items Bad debt Bad debt Book balance Book value Book balance Book value provision provision Investment to the 11,246,757,277.3 10,868,584,627.5 10,143,802,777.3 378,172,649.84 378,172,649.84 9,765,630,127.51 subsidiary 5 1 5 Investment to joint ventures and 72,508,010.72 72,508,010.72 72,426,252.41 72,426,252.41 associated enterprises 11,319,265,288.0 10,941,092,638.2 10,216,229,029.7 Total 378,172,649.84 378,172,649.84 9,838,056,379.92 7 3 6 (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 187 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Shijiazhuang Baoshi Color Bulb 439,341,956.80 439,341,956.80 Co., Ltd. Hebei Xubao Construction Engineering 100,000,000.00 100,000,000.00 Installation Co., Ltd. Wuhu Dongxu Optoelectronic Equipment 93,100,000.00 93,100,000.00 Technology Co., Ltd. Wuhu Dongxu Optoelectronic 4,711,064,000.00 4,711,064,000.00 Technology Co., Ltd. Sichuan Ruiyi Construction 100,453,728.53 900,000,000.00 1,000,453,728.53 Engineering Co., Ltd. Wuhan Dongxu Optoelectronic 3,125,000.00 3,125,000.00 Technology Co., Ltd. Beijing Xufeng Real Estate Co., 470,000,000.00 470,000,000.00 Ltd. Dongxu (Kunshan) 280,500,000.00 119,500,000.00 400,000,000.00 Display Material Co., Ltd. Jiangsu Jixing New Material Co., 167,345,300.00 167,345,300.00 Ltd. Beijing Xutan New Material 10,500,000.00 10,500,000.00 Technology Co., Ltd. Beijing Dongxu 3,500,000.00 3,500,000.00 Huaqing 188 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Investment Co., Ltd. Shijiazhuang Xuxin Optoelectronic 1,966,568,609.92 1,966,568,609.92 Technology Co., Ltd. Zhengzhou Xufei Optoelectronic 1,798,304,182.10 1,798,304,182.10 Technology Co., Ltd. Fuzhou Dongxu Optoelectronic 10,000,000.00 10,000,000.00 Technology Co., Ltd. Shanghai Tanyuan Huigu New Material 73,454,500.00 73,454,500.00 Technology Co., Ltd Less: Long-terminvestm 378,172,649.84 ent depreciation reserves 10,143,802,777.3 11,246,757,277.3 Total 1,102,954,500.00 378,172,649.84 5 5 (2)Investment to joint ventures and associated enterprises In RMB Increase /decrease in reporting period Closing Adjustme Withdraw balance nt of Declarati Opening Add Other n Closing of Name other on of cash balance investmen equity impairme Other balance impairme comprehe dividends t changes nt nt nsive or profit provision provision income I. Joint ventures II. Associated enterprises Zhongda 72,426,2 72,508,01 81,758.31 Chengxi 52.41 0.72 189 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 n Internati onal Commer cial Factorin g Co., Ltd. 72,426,2 72,508,01 Subtotal 81,758.31 52.41 0.72 72,426,2 72,508,01 Total 81,758.31 52.41 0.72 (3)Other notes 4.Business income and Business cost In RMB Items Amount of current period Amount of previous period Income Cost Income Cost Main business 369,700,169.65 236,073,823.43 2,792,700.86 3,321,758.79 Other business 14,147,651.79 67,061.63 4,502,136.76 146,629.82 Total 383,847,821.44 236,140,885.06 7,294,837.62 3,468,388.61 Other notes: 5. Investment income In RMB Items Amount of current period Amount of previous period Income from long-term equity investment 81,758.31 -28,077.74 measured by adopting the Equity method Total 81,758.31 -28,077.74 6.Other XV. Supplementary Information 1.Current non-recurring gains/losses √ Applicable □Not applicable In RMB 190 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 Items Amount Notes Gains/Losses on the disposal of non-current -4,430.74 Fixed asset disposal gains and losses assets Government grants recognized in the current period, except forthose acquired in the ordinary course of business or granted at 103,218,866.64 Government grants certain quotas or amounts according to the country’s unified standards Gain/loss on loans obtained by entrusting 1,500,000.00 Entrusted income others Other non-operating income and expenditure 282,354.44 beside for the above items Less: Influenced amount of income tax 14,800,733.73 Amount of influence of minority interests 4,126,999.02 Total 86,069,057.59 -- 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 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 3.79% 0.14 0.14 Company. Net profit attributable to the Common stock shareholders of 3.20% 0.12 0.12 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 191 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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 192 Dongxu Optoelectronic Technology Co., Ltd. The Semi-annual Report 2016 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. 【Notes】This Report has been prepared in both Chinese and English. In case of any discrepancy, the Chinese version shall prevail. Dongxu Optoelectronic Technology Co., Ltd. Chairman: Li Zhaoting Issue day approved by the Board of Directors:August 29,2016 193