CSG HOLDING CO., LTD.
ANNUAL REPORT 2014
Chairman of the Board:
ZENG NAN
March 2015
CSG Annual Report 2014
Section I Important Notice, Contents and Paraphrase
Board of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referred
to as the Company) and its directors, supervisors and senior executives hereby confirm that there
are no any fictitious statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the facticity, accuracy and
completeness of the whole contents.
Except for the follow director, others are present the meeting of the Board for deliberating the
annual report of the Company in person.
Name of director absent Position Reason for absence Name of authorized director
Li Jingqi Director On business Chen Chao
The deliberated and approved profit distribution plan in the Board Meeting is: taking total shares of
31 December 2014 as the radix, sending cash dividends of RMB 5.0 (tax included) per 10 shares to
all shareholders, neither bonus shares being sent, nor converting capital reserve into share capital.
Mr. Zeng Nan, Chairman of the Board, CFO Mr. Luo Youming and principal of the financial
department Mr. Zhang Guoming confirm that the Financial Report enclosed in this 2014 Annual
Report is true and complete.
Regarding to the forward-looking statements with future planning involved in the Report, they do
not constitute a substantial commitment for investors. Investors are advised to exercise caution of
investment risks.
This report is prepared both in Chinese and English. Should there be any inconsistency between the
Chinese and English versions, the Chinese version shall prevail.
CSG Annual Report 2014
Content
Section I Important Notice, Contents and Paraphrase ..................................................................................... 1
Section II Company profile .................................................................................................................................. 5
Section III Accounting data and summary of financial indexes ....................................................................... 7
Section IV Report of the Board of Directors ...................................................................................................... 9
Section V Important Events ............................................................................................................................... 31
Section VI. Changes in Shares and Particulars about Shareholders.............................................................. 38
Section VII. Particulars about Directors, Supervisors and Senior Executives and Employees ................... 44
Section VIII. Corporate Governance ................................................................................................................... 51
Section IX. Internal control .................................................................................................................................. 57
Section X. Financial Report .................................................................................................................................. 59
Section XI. Documents available for Reference ................................................................................................ 161
CSG Annual Report 2014
Paraphrase
Items Refers to Contents
Company, the Company, SG or the Group Refers to CSG Holding Co., Ltd.
Ultra-thin electronic glass Refers to The electronic glass with thickness between 0.1~1.1mm
Second-generation energy-saving glass Refers to Double silver coated glass
Third-generation energy-saving glass Refers to Triple Silver coated glass
CSG Annual Report 2014
Major risk warning
Existing industry risk, market risk and exchange rate risk have been
well-described in this report, please found details of risks and countermeasures
of future development described in Section IV Report of the Board of Directors.
CSG Annual Report 2014
Section II Company profile
I. Company information
Code for A-share 000012 Code for B-share
Short form for A-share Southern Glass A Short form for B-share Southern Glass B
Listing stock exchange Shenzhen Stock Exchange
Legal Chinese name of the Company 中国南玻集团股份有限公司
Abbr. of legal Chinese name of the Company 南玻集团
Legal English name of the Company CSG Holding Co., Ltd.
Abbr. of legal English name of the Company CSG
Legal Representative Zeng Nan
Registered Add. CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C.
Post Code
Office Add. CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C.
Post Code
Internet website www.csgholding.com
E-mail securities@csgholding.com
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Zhou Hong
CSG Building, No.1 of the 6th Industrial
Contacts add.
Road, Shekou, Shenzhen, P. R.C.
Tel. (86)755-26860666
Fax. (86)755-26860641
E-mail securities@csgholding.com
III. Information disclosure and preparation place
Newspapers for information disclosure China Securities Journal, Securities Times and Hong Kong Comercial Daily
Website assigned by CSRC to release the annual
www.cninfo.com.cn
report
The place for preparation of the annual report Department of Securities Affairs
CSG Annual Report 2014
IV. Registration changes of the Company
Registration NO. for
Date for No. of taxation Organization
Place for registration enterprise legal
registration registration code
license
Shenzhen Municipal Administration
Initial registration 1984-09-10 440301501125544 440300618838577 61883857-7
of Industry & Commerce
Registration at end Shenzhen Municipal Administration
2013-06-20 440301501125544 440300618838577 61883857-7
of report period of Industry & Commerce
Changes of main business since
No changes
listing (if applicable)
Previous changes for controlling
No changes
shareholders (if applicable)
V. Other relevant information
CPA engaged by the Company
Name of CPA PricewaterhouseCoopers Zhong Tian LLP
Offices add. for CPA 11/F, PricewaterhouseCoopers Center., 202 Hubin Road. Shanghai, P.R.C.
Signing Accountants Yao Wenping, Yang Hua
Sponsor institute engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
CSG Annual Report 2014
Section III Accounting data and summary of financial indexes
I. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting
error correction or not
√Yes □ No
Changes over
2013
2014 last year (%)
Before adjusted After adjusted After adjusted Before adjusted After adjusted
Operating income
7,044,502,645 7,733,796,114 7,733,796,114 -8.91% 6,994,358,029 6,994,358,029
(RMB)
Net profit attributable to
shareholders of the 873,653,030 1,535,929,739 1,535,929,739 -43.12% 274,746,219 274,746,219
listed company(RMB)
Net profit attributable to
shareholders of the
listed company after 438,889,847 605,966,975 605,966,975 -27.57% 116,098,805 116,098,805
deducting non-recurring
gains and losses(RMB)
Net cash flow arising
from operating 1,406,259,210 1,698,867,535 1,698,867,535 -17.22% 1,725,795,529 1,725,795,529
activities(RMB)
Basic earnings per share
0.42 0.74 0.74 -43.24% 0.13 0.13
(RMB/Share)
Diluted earnings per
0.42 0.74 0.74 -43.24% 0.13 0.13
share (RMB/Share)
Return on Equity (%) 10.61% 20.52% 20.52% -9.91% 4.04% 4.04%
Changes over
End of 2013 end of last year End of 2012
End of 2014
(%)
Before adjusted After adjusted After adjusted Before adjusted After adjusted
Total assets (RMB) 15,116,808,305 15,078,866,777 15,078,866,777 0.25% 14,335,809,746 14,335,809,746
Net assets attributable to
shareholder of listed
company (Owners’
8,348,561,765 8,047,894,139 8,047,894,139 3.74% 6,816,210,753 6,816,210,753
equity attributable to
shareholder of listed
company ) (RMB)
CSG Annual Report 2014
II. Items and amounts of extraordinary profit (gains)/loss
Unit: RMB
Item Amount in 2014 Amount in 2013 Amount in 2012 Note
Gains/losses from the disposal of non-current asset (including the
-17,722,782 -136,459,236 7,202,099 --
write-off that accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not
including the subsidy enjoyed in quota or ration according to
90,223,936 115,138,161 89,424,440 --
national standards, which are closely relevant to enterprise’s
business)
Gains on disposal of available-for-sale financial assets, gains and
losses from change of fair values of held-for-transaction financial
assets and financial liabilities except for the effective hedge
7,010,790 432,000 360,000 --
business related to normal business of the Company, and
investment income from disposal of transactional financial assets
and liabilities and financial assets available for sale
Other non-operating income and expenditure except for the
14,816,694 85,892,326 15,477,992 --
aforementioned items
Other gains/losses satisfied definition of extraordinary profit
389,101,151 926,639,137 71,306,374 --
(gains)/loss
Less: Impact on income tax 20,318,806 48,004,628 18,202,387 --
Impact on minority shareholders’ equity (post-tax) 28,347,800 13,674,996 6,921,104 --
Total 434,763,183 929,962,764 158,647,414 --
Explain reasons for the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for
Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss
according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss,
√Applicable □ Not applicable
Item Amount involved (RMB) Reasons
Other gains/losses satisfied
It was mainly due to the Company sold 100% equity of Shenzhen CSG
definition of extraordinary 311,247,064
Float Glass Co., Ltd.
profit (gains)/loss
Confirmed by State Taxation Bureau of Shuangliu County, Chengdu
CSG Glass Co., Ltd. applied to a preferential income tax rate of 15%
Other gains/losses satisfied
which stipulated in west development policies for encouraging the
definition of extraordinary 77,854,087
enterprises, therefore the enterprise income taxes which were paid at
profit (gains)/loss
original tax rate of 25% in 2011, 2012 and 2013, were adjusted for
final settlement in 2014.
CSG Annual Report 2014
Section IV Report of the Board of Directors
I. Introduction
In 2014, when six years has passed since the outbreak of global financial crisis, the global economy remained uncertain.
Development of the major economies was uneven, and emerging economies confronted with challenge from decrease of growth. The
economic recovery was still rough due to lots of uncertain factors, though the economy of advanced economies headed by America
showed a sign of slow recovery. Being influenced by many factors, such as real estate industry adjustment, structural transformation
of economy, insufficient demand as well as over capacity, Chinese economy also challenged by the problems as decline in investment
growth, obvious constraint of financing, relevant industries moving downward obviously, and enterprise operating difficulties. Under
the complicated and varying market condition, the Company responded actively to the adverse impact from market environment
through industrial transformation and upgrade, innovation, construction of expertise team, refined management, comprehensive
energy management, cost management and strict control of operating risks. Meanwhile, the Company constantly took the route of
differential operation and industry upgrading relying on R&D and technology innovation, and continued to strengthen construction of
R&D system and R&D ability. Totally 133 patent applications were submitted by the Company in 2014, and new 39 patent
applications were granted (12 of which were invention patents). Currently, the Company owes 234 authorized patents in total, 56
invention patents included, which account for 24%. Due to the overall loss in float glass industry and shares of the fine glass held by
CSG reduced and the profit of fine glass industry declined as well, CSG implemented revenue of RMB 7,045 million in 2014 with a
year-on-year decline of 8.91%, while a year-on-year increase of 2% after deducting the effect of fine glass. Meanwhile, due to the
overall loss in float glass industry and decline of return on investment as well as influence of fine glass mentioned above, the net
profit attributable to parent company was RMB 874 million. After deducting non-recurring gains and losses, the net profit attributable
to parent company was RMB 439 million with a year-on-year decline of 27.57%.
In 2014, affected by adjustment of real estate and over capacity, float glass industry suffered a greater impact. As the price of float
glass keeping downside and the cost of soda ash and gas retaining upside, the pressure on float industry became more and more
intensified and the whole industry was in the state of poor performance. To cope with unfavorable market environment, flat glass
division of the Company upgraded the old lines which were not competitive after assessing the existing production lines and
continued to reinforce cost control, energy-saving, and promote the manufacture and sales of differentiated and high-grade products.
In 2014, flat glass division achieved revenue of RMB 3,668.29 million (deducted connected transaction) with a year-on-year decline
of 7.71%, and profit of RMB 233.97 million with a year-on-year decline of 21.30%.
In 2014, there was a slowdown in market demand of architectural glass due to adjustment of real estate market, meanwhile, as
homogeneous competition intensified, sales and profit of con
