CSG HOLDING CO., LTD.
SEMI-ANNUAL REPORT 2018
Chairman of the Board:
CHEN LIN
August 2018
Section I Important Notice, Content and Paraphrase
Board of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referredto as the Company) and its directors, supervisors and senior executives hereby confirm that thereare 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 andcompleteness of the whole contents.Ms. Chen Lin, Chairman of the Board, Mr. Wang Jian, responsible person in charge of accountingand Ms.Wang Wenxin, principal of the financial department (accounting officer) confirm that theFinancial Report enclosed in the semi-annual report of the Company is true, accurate and complete.All directors were present the meeting of the Board for deliberating the semi-annual report of theCompany in person.This report involves future plans and some other forward-looking statements, which shall not beconsidered as virtual promises to investors. Investors are kindly reminded to pay attention topossible risks.Details of the risk factors and countermeasures of future development have been well-described inthis report, please find in Section IV Performance Discussion and Analysis.The Company has no plans of cash dividend distribution, bonus shares being sent or convertingcapital reserve into share capital.This report is prepared both in Chinese and English. Should there be any inconsistency between theChinese and English versions, the Chinese version shall prevail.
Content
Section I. Important Notice, Content and Paraphrase ...................................................................................... 1
Section II. Company Profile & Financial Highlights ......................................................................................... 4
Section III. Overview of the Company’s Business ............................................................................................. 7
Section IV. Performance Discussion and Analysis ......................................................................................... 10
Section V. Important Events .............................................................................................................................. 23
Section VI. Changes in Shares and Particulars about Shareholders.............................................................. 39
Section VII. Particulars about Directors, Supervisors and Senior Executives .............................................. 46
Section VIII. Financial Report .......................................................................................................................... 48
Section IX. Documents Available for Reference ............................................................................................. 131
Paraphrase
Items Refers to
ContentsCompany, the Company, CSG or the Group Refers to
CSG Holding Co., Ltd.Foresea Life Refers to
Foresea Life Insurance Co., Ltd.Ultra-thin electronic glass Refers to
The electronic glass with thickness between 0.1~1.1mmSecond-generation energy-saving glass Refers to
Double silver coated glassThird-generation energy-saving glass Refers to
Triple Silver coated glass
Section II. Company Profile & Financial Highlights
I. Company Profile
Short form of the stock Southern Glass A、Southern Glass B
Stock code 000012、200012
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
CSGLegal Representative Chen Lin
II. Person/Way to contact
Secretary of the Board Representative of security affairsName Yang XinyuChen Chunyan
Contact address
CSG Building, No.1 of the 6th IndustrialRoad, Shekou, Shenzhen, P. R.C.
CSG Building, No.1 of the 6th IndustrialRoad, Shekou, Shenzhen, P. R.C.Tel. (86)755-26860666 (86)755-26860666Fax. (86)755-26860685 (86)755-26860685E-mail securities@csgholding.com securities@csgholding.com
III. Other information
1. Way of contact
Whether registered address, office address and their postal codes, website address and email address of the Company changed in thereport period or not□ Applicable √Not applicableThe registered address, office address and their postal codes, website address and email address of the Company did not change inthe report period. More details can be found in Annual Report 2017.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in the report period or not□Applicable √ Not applicableThe newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing semi-annualreport and preparation place of semi-annual report did not change in the report period. More details can be found in Annual Report2017.
3. Other relevant information
Whether other relevant information changed in the report period or not□Applicable √ Not applicable
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accountingerror correction or not
□Yes √ No
The report period(Jan. to Jun.2018)
The same period
of last year
Increase/decrease
year-on-yearOperating income (RMB)5,471,169,598
The same period
4,944,337,861
10.66%
Net profit attributable to shareholders of the listed company (RMB)[Note (1)]
352,837,153
392,992,163
-10.22%
Net profit attributable to shareholders of the listed company afterdeducting non-recurring gains and losses (RMB) [Note (2)]
334,049,718
360,945,244
-7.45%
Net cash flow arising from operating activities (RMB)764,564,088
1,019,889,454
-25.03%
Basic earnings per share (RMB/Share) [Note (3)]0.13
0.14
-7.14%
Diluted earnings per share (RMB/Share) [Note (4)] 0.12
0.14
-14.29%
Weighted average ROE [Note (5)] 4.09%
4.95%
-0.86%
End of this period
End of last year
Increase/decrease inthis period-end overthat of last year-end
Total assets (RMB) 20,524,811,756
19,535,002,368
5.07%
Net assets attributable to shareholders of the listed company (RMB) 8,789,183,848
8,458,587,873
3.91%
The total share capital of the company as of the previous trading day of disclosure (share) 2,856,769,678
Fully diluted earnings per share calculated with latest equity (RMB/share) 0.12
Note (1): The data in the above table has included apportionment of equity incentive expense included in profit and loss of RMB93.81 million from Jan. to Jun. 2018, which affected the net profit attributable to shareholders of the listed company of RMB 82.55million. In the period from Jan. to June 2018, after eliminating the impact of equity incentive cost sharing, the net profit attributableto shareholders of the listed company was RMB 435.39 million, with a year-on-year increase of RMB 42.4 million and growth rate of10.79%;
Note (2): After eliminating the impact of equity incentive cost sharing, net profit attributable to shareholders of the listed companyfrom Jan. to June 2018 was RMB 416.6 million with a year-on-year increase of RMB 55.66 million and growth rate of 15.42%;
Note (3): After eliminating the impact of equity incentive cost sharing, basic earnings per share from Jan. to June 2018 was RMB0.16 per share, with year-on-year growth rate of 14.29%;
Note (4): After eliminating the impact of equity incentive cost sharing, diluted earnings per share from Jan. to June 2018 was RMB0.16 per share, with year-on-year growth rate of 14.29%;
Note (5): After eliminating the impact of equity incentive cost sharing, weighted average ROE from Jan. to June 2018 was 5.05%,with year-on-year growth rate of 0.1%.
V. Difference of accounting data under domestic and overseas accounting standards
1. Differences of the net profit and net assets disclosed in financial report prepared under international andChinese accounting standards
□ Applicable √ Not applicableNo such differences in the report period.
2. Difference of the net profit and net assets disclosed in financial report prepared under overseas andChinese accounting standards
□ Applicable √ Not applicableNo such differences in the report period.
3.Explanation of the difference of accounting data under domestic and overseas accounting standards
□ Applicable √ Not applicable
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
Unit: RMBItemAmount Note
Gains/losses from the disposal of non-current asset (including the write-off thataccrued for impairment of assets)
-567,830
Governmental subsidy reckoned into current gains/losses (not including the subsidyenjoyed in quota or ration according to national standards, which are closely relevantto enterprise’s business)
22,013,800
Other non-operating income and expenditure except for the aforementioned items 1,567,244
Less: Impact on income tax 3,453,960
Impact on minority shareholders’ equity (post-tax) 771,819
Total 18,787,435
--It did not exist that items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&AAnnouncement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss inthe report period..
Section III Overview of the Company’s Business
I. Main business of the Company in the report period
CSG is a leading domestic brand of energy-saving glass and a renowned brand of solar PV products, electronic glass and displaydevices. Its products and technologies are very popular at home and abroad. Its main business covers R&D, manufacturing and salesof high quality float glass and architectural glass, solar glass, silicon materials, renewable energy products such as PV battery andmodules, and new materials and information display products such as ultra-thin electronic glass and display devices. It also providesone-stop services such as project development, construction, operation and maintenance of solar photovoltaic power plants.
Flat glass business
CSG’s five production bases for flat glass now has 10 float glass production lines representing the most advanced technology indomestic market and 2 solar glass production lines. The annual capacity of various high-grade float glass has reached more than 2.32million tons and the annual capacity of solar rolled glass has reached over 0.43 million tons. The Company owns quartz sand rawmaterial bases in Jiangyou, Sichuan Province and Yingde, Guangdong Province. The production bases for flat glass, solar glass of theCompany located in Dongguan, Chengdu, Langfang, Wujiang, and Xianning, which can produce various colors of high-grade floatglass and ultra-clear float glass with thickness from 1.3mm to 25mm, each performance indicator of which has reached domesticadvanced level. Those products are widely used in high-grade buildings, decoration and furniture, mirror, automotive windshield,scanner, copier, display devices and solar energy field.The Company always adheres to innovation, transformation and upgrading as well as implementation of differentiated competitivestrategy, which further enhances the profitability of flat glass business. In the first half of 2018, all subsidiaries actively launched theimprovement and optimization of production process, and increased the sales of high-value-added products such as original glass ofautomotive glass, continuing to enhance the market competitiveness of CSG’s flat glass.
Architectural glass business
As the nation's largest supplier of high-grade engineering and architectural glass, CSG has five architectural energy-saving glassprocessing bases which are located in Tianjin, Dongguan, Xianning, Wujiang and Chengdu. The Company possesses the world's mostadvanced glass deep-processing equipment and testing instruments, and its products cover all kinds of architectural glass. R&D anduse of coating technology of the Company keep pace with the world and its technology of high end product is even of the world’sleading level. Following the second generation of energy-saving glass products, the Company has successively developed the thirdgeneration and multi-function energy-saving glass products with continuous improving energy-saving and heat-preservation effect.Itshigh-quality energy-saving LOW-E insulating glass has occupied more than 50% of the domestic high-end market. At present, theCompany’s LOW-E coated insulating glass and LOW-E coated glass have reached annual capacity of more than 16 million squaremeters and 36 million square meters respectively.The Company’s quality management system for engineering and architectural glass has been respectively approved by organizationsof UK AOQC and Australia QAS. The product quality which meets the national standards of the US, the UK and Australia enablesCSG has an advantage in the international tendering and bidding. Since 1988, CSG's engineers and technicians have beencontinuously participating in the formulation and compilation of various national standards and industry standards. Varioushigh-quality architectural glass of the Company has been used in many landmark buildings at home and abroad, such as BeijingCapital International Airport, CCTV, Shanghai Oriental Fisherman's Wharf, China Resources Headquarters Building, ShenzhenKingKey100 Building, Ping An International Finance Centre, Hangzhou International Airport, Chengdu International Finance Centre,Hangzhou Hampton and other more than ten Hilton Hotel, Hong Kong Four Seasons Hotel, Melbourne Airport, Tokyo Midtown,International Centre of Abu Dhabi.
Solar Energy PV business
CSG has entered solar photovoltaic industry since 2005 and is one of enterprises which first enter the field in China. After more thanten years of construction, operation and technological upgrading, CSG has built a complete industrial chain in the world, coveringhigh purity polycrystalline silicon materials, silicon wafer, silicon solar cell and modules, and design and construction of solarphotovoltaic power plants, by which the Company ensures the stable quality and best cost-efficiency of its PV products to customers.The quality of the Company's polysilicon has reached the advanced level in the industry and it has reserved electronic-gradepolysilicon production technology. Meanwhile, the Company is also promoting silicon wafer project of Yichang CSG andtechnological innovation of solar cell module in Dongguan in order to enhance the anti-risk capacity of its PV industry chain anddrive the balanced, stable development of its PV industry chain. When the projects are completed, the quality and performanceindicators of the Company's silicon wafers and silicon solar cells will be greatly increased and the general competitiveness of thechain will be further improved.To perfect its solar energy chain, in 2015, the Company established Shenzhen CSG PV Energy Co., Ltd., a wholly-owned subsidiary,the mainline business of which is to invest and develop solar photovoltaic power plants and extend CSG's solar energy industry tocover highly value-added terminal applications. At the end of 2016, the Company newly established New Energy ApplicationDepartment to generally manage the investment, operation and maintenance of the Company's PV power plants and effectivelyintegrate internal resources, so as to enlarge and strengthen its solar energy industry.
Electronic glass and display device business
The Company, with its more than 20 years of experience in float glass production and powerful technology and innovation team,entered the ultra-thin electronic glass market in 2010 and gradually completed the nationwide strategic layout with four productionbases, namely Hebei Panel Glass, Yichang Nanbo Photoelectric Glass, Qingyuan CSG and Xianning CSG Photovoltaic Glass. Itselectronic glass products have occupied more than 50% of the domestic market.The quality of CSG’s aluminum and high-aluminumelectronic glass between 0.2mm to 1.1mm has reached the domestic leading level, the performance of which is comparable to that ofimported products, breaking the monopoly of foreign technology. Currently, the products are widely used in mobile terminal coverglass, tempered glass protective film, ITO conductive Glass, extending to the fields of high-speed rail, military industry, smart homeand others.Since Shenzhen Nanbo Display Technology Co., Ltd was established in the year of 2000, the Company’s main products and coretechnologies of the business have included vacuum magnetron sputtering coating, yellow light pattern forming and TP moduleprocessing, forming two complete touch industry chain.With electronic glass as basic materials, one industry chain is glasscoating→glass yellow light pattern forming→glass touch module processing and its main products covers high-grade andmedium-grade ITO conductive glass, glass Sensor/G-TP module, AR, AF, RT, DLC and other differentiated products of compositecoatings on glass substrates. With flexible optical film as basic materials, the other industry chain is substrate coating→flexibleyellow light pattern processing→flexible touch module manufacturing and its main products include high-grade and medium-gradeITO conductive roll film, ITO copper film, roll film Sensor/F-TP module, etc. Besides, the company has been devoted to the researchand development of high-end anti-glare (AG) glass substrate since 2013 and presently it is able to successfully produce high-qualitysodium calcium AG glass and high-alumina AG glass. With years of development, Shenzhen Nanbo Display Technology Co., Ltdhas become an application materials supplier in the display touch industry, touch sensor and TP module, and it can provide customerswith a full range of one-stop touch screen material solutions.
II. Major changes in main assets
1. Details of major changes in main assets
Main assets Note of major changesEquity assets There was no significant change in equity assets in the report period.
Fixed assets There was no significant change in fixed assets in the report period.Intangible assets There was no significant change in intangible assets in the report period.Construction in progress There was no significant change in construction in progress in the report period.
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
① The Company currently has built complete industrial chains in the industries it involved, which has complementary advantage. In
the glass industry, the Company has set up the industry chain as quartz sand → high quality float glass → architectural energy-savingglass. In the solar energy industry, the Company has finished the comprehensive construction of industry chain from high puritypolycrystalline silicon materials, silicon wafer processing to cell and its module, photovoltaic rolled glass, etc. and extended toterminal application of PV power plant. In the electronic glass and display device industry, the Company has set up a completeindustrial chain from the production of the base materials of electronic glass to touch module processing. With the improvement oftechnology in the chains, the industrial advantages emerged.
②The Company possesses a complete industry layout. At present, the Company has established large production bases in East China,
West China, South China, North China and Central China, which enables the Company to be closer to the market and serve themarket better.
③The Company has capability of technology innovation and product innovation. It owns independent intellectual property rights of
high-end float glass production process. The technology level of ultra-thin electronic glass is in the leading position in China. TheCompany also keeps its R&D and production of energy-saving glass in line with the world’s advanced level, and its technique andtechnology in the field of solar energy keep leading position in domestic market.
The Company possesses high ④anti-risk capability. It has established a perfect internal control system. Meanwhile, the management
and control ability of account receivable and inventory stand in a high level within the industry. CSG’s new management team has aninternational perspective and a more open management philosophy. It aims to achieve further expansion of capacity and marketcoverage and continues to expand new business fields along with the national policies of the Belt and Road based on the intensivedevelopment of CSG's main business, making the Company be bigger and stronger, so as to be a comprehensive industrial group.
Section IV. Performance Discussion and Analysis
I. Overview
Since 2018, China has continued to deepen the supply-side structural reform, steadily propelled the tasks of de-capacity,de-leveraging, de-stocking, de-cost and addressing weakness, further promoted replacing old growth drivers with new ones, andcontinuously improved the structure of economic development.In 2018, CSG, facing the complex and volatile economic environment and increasingly fierce market competition, seized favorablemarket opportunities timely and coped with all kinds of difficulties bravely to ensure the development of production and operationactivities. Oriented by market demand, the Company carefully analyzed its competitive advantages, took the initiative to transformbusiness mode and update technologies, and improved operating quality by fine management to realize the advancement in stability.In the first half of 2018, the operation revenue of the Company was RMB 5,471 million with a year-on-year increase of RMB 527million and growth rate of 10.66%. After eliminating the impact of equity incentive cost sharing, the Company realized net profit ofRMB 444 million, with a year-on-year increase of RMB 44 million and growth rate of 10.87%, and net profit attributable to theparent company of RMB 435 million, with a year-on-year increase of RMB 42 million and growth rate of 10.79%.
(I) Glass business
The State has continuously strengthened the structural adjustment of excess capacity, adopted strict environmental protection controlpolicies to eliminate backward production capacity, which promoted the glass business to enter a benign operation cycle step by step,and optimized the supply and demand structure. The Company spares no effort to grasp the development opportunities of all itsproducts in the process of supply-side structural reform.Float glass: In the first half of 2018, the market of float glass continued the favorable trend of last year. The Company adhered to theconcept of high-quality, energy-saving and environmental protection product. Based on its own technological quality advantages andcapacity scale advantages, it has kept strengthening internal management and intensive cultivation, improved production technologylevel, co-ordinated sales management and quality services,facilitated differentiation and high-end of products, consolidated its brandadvantage,and improved customer satisfaction. Consequently, the operating profit rose significantly and the revenue and net profitincreased by 17 % and 24% respectively.Architectural glass: In 2018, due to the sustained high prices of bulk raw materials, especially glass originals, and the growth ofdownstream fixed asset investment slowed down, the profitability of architectural glass was squeezed. Under this pressure, theCompany responded positively through a series of measures such as adjusting its market strategy, strengthening industry synergy,optimizing product structure, increasing overseas orders, intensifying communication with customers, improving productionefficiency, and guaranteed the profit growth, with revenue rising by 6% year-on-year and net profit rising by 12%.(II) Solar energy businessIn 2018, the State further promoted high-quality and orderly development of the photovoltaic industry, and strove to cultivate anumber of high-quality photovoltaic enterprises through the hands of the market, so as to push the achieving of the connection to gridat an equal price to be achieved. Besides, the investment and technical innovation in the photovoltaic industry have led to asubstantial increase in production capacity and a downward pressure on market price.In addition, as the material manufacturing ofphotovoltaic industry is a heavy assets industry, as well as the energy cost of Yichang Base of the group is higher than that of othercompanies in the same industry. Consequently, the management has adopted various strategies to respond positively includingattaching importance to production technology innovation and product innovation, planning technological upgrading, and enhancedthe production capacity of high value-added products. Meanwhile, In compliance with the guidance of industry put forward by the
State, the Company determined the connection to grid at an equal price as the cost control target and industrial development goal andultimately realized revenue increased by 3.54% year-on-year, and accumulated net profit of RMB minus 45 million.(III)Electronic glass and display device businessIn the first half of 2018, with the accumulation of technology and the steady development of the market, the performance of theelectronic glass and display devices continued to improve. For the sector of electronic glass, the company maintained its currentcapacity and its technology was approaching world-class level. The high-aluminum products of Qingyuan CSG have entered into theoriginal chips market of cover plate of the domestic mainstream brands of mobile phone and Yichang Photoelectric has successfullygained its expected technical objective in technical innovation. With the trial production of Xianning Photoelectric, a new generationof high-aluminum products will be on the market, and the competitive advantage in the high-end electronic glass market willcontinue to strengthen. For the sector of display device, the Company has always adhered to the high-end and smart product route. Asit seized the market opportunities of vehicle touch market in the first half year of 2018, the business shipment volumes of TP moduleincreased substantially, with gross margin rising significantly. The revenue and net profit of the electronic glass and display devicebusiness sector rose by 19% year-on-year and 162% year-on-year respectively in the first half of the year.
II. Main business analysis
See the relevant content in “I. Overview” in “Performance Discussion and Analysis”.Year-on-year changes of main financial data
Unit: RMBThe report period
The correspondingperiod of last year
Increase /decrease
year-on-year（%）
Reasons of changeOperating revenue 5,471,169,598
4,944,337,861
10.66%
Mainly due to the increase of salesand the price rise of some products
Operating costs 4,099,496,754
3,737,514,462
9.69%
Mainly due to the increase of salesand part of fuel costs
Sales expenses 172,217,254
156,344,731
10.15%
Mainly due to the increase intransportation costs
Administration expenses 540,554,002
402,554,340
34.28%
Mainly due to the increase of R&Dinvestment and equity incentivecost
Financial expenses 185,877,426
143,374,027
29.65%
Mainly due to the increase in cashreserves and interest rate rise
Income tax expenses 61,371,104
80,453,021
-23.72%
Mainly due to reduction of thesubsidiary income tax expense ofsome subsidiaries
R&D investment 185,844,867
166,809,377
11.41%
Mainly due to the increase of R&DinvestmentNet cash flow arising fromoperating activities
764,564,088
1,019,889,454
-25.03%
Mainly due to the increase in cashpayments for purchases of goods.Net cash flow arising frominvestment activities
-320,027,457
-739,345,310
-56.71%
Mainly due to the decrease in thecash paid to purchase fixed assets.
Net cash flow arising fromfinancing activities
454,077,150
67,852,001
569.22%
Mainly because the externalborrowings repaid in current yearreduced while the new borrowingsrose.
Net increase of cash andcash equivalent
898,500,181
347,483,532
158.57%
Mainly because the net amount ofexternal financing rose andincreased cash reserves.Major changes on profit composition or profit resources in the report period
□Applicable √Not applicable
There were no major changes on profit composition or profit resources in the report period.Composition of main business
Unit: RMB
Operating
revenue
Operating cost
| Gross profit ratio |
Increase/decrease
of operatingrevenue y-o-y
Increase/decreaseof operating cost
y-o-y
Increase/decrease
of gross profit
ratio y-o-yAccording to industryGlass industry 3,633,095,495
2,557,816,187
29.60%
13.48%
7.59%
3.86%
Electronic glassand displaydevice industry
433,619,425
291,441,739
32.79%
19.16%
11.99%
4.30%
Solar energyindustry
1,408,790,389
1,282,040,941
9%
2.62%
15.11%
-9.87%
Inter-segmentoffset
-48,174,687
-45,085,039
According to productGlass product 3,633,095,495
2,557,816,187
29.60%
13.48%
7.59%
3.86%
Electronic glassand displaydevice product
433,619,425
291,441,739
32.79%
19.16%
11.99%
4.30%
Solar energyproduct
1,408,790,389
1,282,040,941
9%
2.62%
15.11%
-9.87%
Inter-segmentoffset
-48,174,687
-45,085,039
According to regionMainland China
4,647,386,365
3,479,308,363
25.13%
5.05%
3.05%
1.45%
H.K. China 152,221,834
93,917,427
38.30%
-4.33%
-1.52%
-1.76%
Asia (excludingMainland China
538,291,685
437,927,883
18.64%
89%
97.66%
-3.57%
and H.K.)North America 18,072,258
15,723,035
13%
95.68%
110.37%
-6.08%
Australia 29,949,405
21,249,428
29.05%
26.54%
18.23%
4.99%
Europe 37,480,049
35,277,495
5.88%
257.98%
270.87%
-3.27%
Other regions 3,929,026
2,810,197
28.48%
20.70%
10.18%
6.83%
III. Non - core business analysis
√Applicable □ Not applicable
Unit: RMBAmount
Percentage to total profits
Explanation of the reason Whether sustainable or not
Impairment ofassets
3,653,609
0.87%
Mainly due to provision for bad debts No
Non-operatingincome
2,595,795
0.62%
Mainly due to income incurred byclaims for compensation
No
Non-operatingexpenses
878,551
0.21%
Mainly due to expenses incurred byassessment of deviation of electricityconsumption
No
IV. Assets and liabilities
1. Significant changes in assets composition
Unit: RMB
End of the report period
End of the same period of last
year
Increase ordecrease inproportion
Explanation of s
ignificant
changesAmount
Percentage
to totalassets
Amount
Percentage to
total assets
ignificant
Monetary funds 3,372,045,169
16.43%
934,235,201
5.16%
11.27%
Mainly due to the increase instrategic cash reserves aswell as debt restructuringAccountsreceivable
707,375,368
3.45%
679,943,915
3.76%
-0.31%
Inventory 713,622,649
3.48%
630,593,776
3.48%
Fixed assets 11,494,297,683
56%
11,773,502,135
65.05%
-9.05%
Construction inprogress
1,190,859,428
5.80%
1,259,425,371
6.96%
-1.16%
Short-term3,949,419,972
19.24%
2,399,694,000
13.26%
5.98%
Mainly due to the increase of
borrowing borrowingLong-term
borrowing
2,364,000,000
11.52%
1,624,000,000
8.97%
2.55%
Mainly due to the issuance of
medium-term bill during theperiod
2. Assets and liabilities at fair value
□Applicable √Not applicable
3. Limited asset rights as of the end of the report period
Item Closing book value Limited reasonMonetary funds13,791,823
Mainly due to the issuance of
Limited margin circulationFixed assets2,369,789,041
Limited financing leaseTotal2,383,580,864
V. Investment analysis
1. Overall situation
√Applicable □ Not applicable
Investment in the report period (RMB) Investment in the same period of last year ( RMB)
Change range327,218,870
763,429,330
-57.14%
2. The major equity investment obtained in the report period
□Applicable √Not applicable
3. The major ongoing non-equity investment in the report period
√Applicable □ Not applicable
Unit: RMB 0,000
Project
Way
ofinvestment
Fixedassetinvestmentor not
Industryinvolved
Amountinvested
in thereportperiod
Accumula
tiveamountactuallyinvestedby the end
of thereportperiod
Sourc
e offunds
Progress of project
Expected
return
Accumulative
revenueachieved bythe end of thereport period
Reasons for
notachievingthe plannedprogress andthe expected
return
Date ofdisclosure
Index ofdisclosure
600Ttechnicalrenovationproject ofHebeiCSG
Self-built
Yes
Manufacturingindustry
Ownfundsandborrowingsfromfinancialinstitutions
The technical renovation of600T production line in HebeiCSG. At present, the demolitionof the project has beencompleted, and re-masonry andrehabilitation are under way,and the denitrification projecthas begun construction. Thewhole project meets thescheduled requirements, and itis under construction.
3,887
No gains asthe projectis in theconstructionperiod.
March 16,2018
Noticenumber:
2018-012
YichangCSG toadd a1GW
Self-built
Yes
Manufacturingindustry
46,182
Ownfundsandborro
CSG has added 1GW capacityof high-efficient polysiliconwafer to achieve 2.2GWcapacity of polysilicon wafer.
14,853
Theremaining500MWcapacity
January 06,2016, April16, 2016, July28, 2018
Noticenumber:
2016-001、2016-018、
siliconwaferproject
wingsfromfinancialinstitutions
Construction of the first 500MW capacity of polysiliconwafer was completed in
September 2017，and the
original capacity target has beenachieved. The remaining500MW capacity constructionproject has been stoped.
constructionproject hasbeenstopped.
2018-040
PV powerplantinvestment
Self-built
Yes
Manufacturingindustry
25,490
Ownfundsandborrowingsfromfinancialinstitutions
CSG plans to construct a PVpower plant within two yearsfrom 2016 to 2017. Itswholly-owned subsidiary,Shenzhen CSG PV Energy Co.,Ltd. will self-build 200MW andthe remaining 140MW will beconstructed by CSG with QibinGroup. During 2016 to June2018, Shenzhen CSG PVdeveloped and built a total of81.5MW of photovoltaic powerstations, including 61.5MW ofdistributed photovoltaic powerplants and 20MW of centralizedphotovoltaic power plants.
4,344
2,667
Part of theproject hasbeencompleted.
January 22,2016
Noticenumber:2016-006
4 millionsquaremeterslight guideplate and
Self-built
Yes
Manufacturingindustry
5,986
57,444
Ownfundsandborrowings
The Company plans toconstruct a 4 million squaremeters PV glass production linefor new type ultra-thin LCDdisplay. The line is also
10,543
No gains asthe projectis in theconstruction
May 21, 2016
Noticenumber:2016-025
PV glassproduction line
fromfinancialinstitutions
provided with a capacity ofhigher strength ultra-thinelectronic glass than CSGQingyuan. The equity ofXianning Feng Wei TechnologyCo., Ltd. has been acquired in2016 and the project is underconstruction.
period.
HebeiPanelGlassproject ofmedium-aluminaultra-thinelectronicglass
Self-built
Yes
Manufacturingindustry
1,266
Ownfunds
Plan to establish a productionline for medium-aluminaultra-thin electronic glass inHebei Panel Glass, using cleannatural gas as the fuel, and
produce 0.33mm～1.1mm
medium-alumina ultra-thinglass with float process. Theproject was still in preparation.
No gains asthe projectis in theconstructionperiod.
October 29,2014
Noticenumber:2014-030
Expansiononenergy-saving glasscapacityofWujiangProject
Self-built
Yes
Manufacturingindustry
21,239
--
Plan to increase two coatingglass production lines andsupport insulating glasscapacity. When the project iscompleted, the annualcapacities of wide flat coatedglass and coated insulatingglass will rise by 3 millionsquare meters and 1.2 millionsquare meters respectively. Thewide flat coated glass line of 3million square meters has been
By now,part of theproject hasbeencompletedand therevenue wasnotcalculatedindividually.
December 25,2010
Noticenumber:2010-046
completed, and the others willbe invested according to marketsituations.YichangCSG700MWcrystallinesiliconsolar cellproject
Self-built
Yes
Manufacturingindustry
--
Plan to build a crystallinesilicon solar cell production linewith annual capacity of700MW. The project wassuspended and furtherinvestment will be based onactual industry situations.
The projectwassuspended.
December 25,2010
Noticenumber:2010-046
Expanding 500MWsolarmoduleproject inDongguan
Self-built
Yes
Manufacturingindustry
--
Plan to expand the solar moduleproduction line with annualcapacity of 500MW. The projectwas suspended and furtherinvestment will be based onactual industry situations.
The projectwassuspended.
January 18,2011
Noticenumber:2011-003
Relocation andequipmentupgradingof thesolarmoduleproduction line inDongguan
Self-built
Yes
Manufacturingindustry
--
The Company plans toconstruct a module workshop inXianning, Hubei Province, ofwhich the final capacity will be500MW. By relocation of someof the module equipment of itssubsidiary, Dongguan CSG PVTechnology Co., Ltd. andpurchase of some newequipment, the first stagecapacity of the Xianningworkshop will be 300MW and,
The projectwassuspended.
April 16, 2016
Noticenumber:2016-018
afterwards, it will be expandedto 500MW as required by themarket conditions.
Solaronlineself-cleaning coatedglassproject ofDongguanCSG
Self-built
Yes
Manufacturingindustry
--
The Company plans toconstruct an onlineself-cleaning coated glass linein Dongguan.
The projectwassuspended.
April 16, 2016
Noticenumber:2016-018
Malaysia-investedarchitectural glassplant
Self-built
Yes
Manufacturingindustry
--
The Company plans toconstruct an architectural glassplant in Negeri Sembilan,Malaysia. The Phase I capacityof the newly-built plant will be1,200,000 square metersinsulating glass and 1,000,000square meters single coatedglass.
The projectwassuspended.
April 16, 2016
Noticenumber:2016-018
Total -- -- -- 7,342
151,887
-- -- 33,627
3,338
-- -- --
4. Financial assets investment(1) Securities investment
□ Applicable √ Not applicable
(2) Derivative investment
□ Applicable √ Not applicable
VI. Sale of major assets and equity
1. Sale of major assets
□ Applicable √ Not applicableThere was no sale of major assets in the report period.
2. Sale of major equity
□ Applicable √ Not applicable
VII. Analysis of main subsidiaries and joint-stock companies
√Applicable □ Not applicable
Particular about main subsidiaries and joint -stock companies which have influence on the Company's net profit by over 10%
Unit: RMB
Name ofcompany
Type Main business
Registered
capital
Total assets
Net assets Operating revenue
Operating
profit
Net profitChengdu CSG
Glass Co., Ltd.
Subsidiary
Development,manufacture andsales of variousspecial glass
260 million 1,058,545,003
510,073,253
549,440,862
121,815,810
103,491,263
Xianning CSG
Glass Co., Ltd.
Subsidiary
Development andmanufacture andsales of variousspecial glass
235 million 813,053,777
Glass Co., Ltd.
418,589,912
395,860,809
64,778,232
57,874,224
Wujiang CSGGlass Co., Ltd.
Subsidiary
Manufacture andsales of variousspecial glass
565.04
million
1,789,551,580
877,988,690
831,333,867
137,948,797
119,532,274
DongguanCSG SolarGlass Co., Ltd.
Subsidiary
Manufacture andsales ofSolar-Energy Glassproducts
480 million 1,322,873,969
661,957,756
526,314,116
76,749,240
65,347,973
Hebei CSGGlass Co., Ltd.
Subsidiary
Manufacture andsales of variousspecial glass
USD 48.06
million
839,991,793
436,284,711
297,922,206
39,031,404
29,532,840
DongguanCSGArchitecturalGlass Co., Ltd.
Subsidiary
Deep processingof glass
240 million 919,028,260
491,472,854
411,980,590
20,542,961
19,153,525
Wujiang CSGEast ChinaArchitecturalGlass Co., Ltd.
Subsidiary
Deep processingof glass
320 million 816,346,288
449,638,623
302,466,866
12,968,250
12,581,038
Tianjin CSGEnergyConservationGlass Co., Ltd
Subsidiary
Development,producing and salesof energy-savingspecial glass
336 million 756,155,581
529,888,778
353,514,982
20,739,218
17,628,335
Yichang CSGPolysiliconCo., Ltd.
Subsidiary
Manufacture andsales of high puritysilicon materialproducts
1,467.98
million
3,999,258,649
1,352,851,454
859,485,208
-85,829,124
-73,792,946
Qingyuan CSGNewEnergy-SavingMaterials Co.,
Ltd.
Subsidiary
Development,producing and salesof ultra-thinelectronic glass
300 million
714,720,246
320,410,765
144,999,746
45,527,193
38,873,189
ShenzhenNanbo DisplayTechnologyCo., Ltd.
Subsidiary
Manufacture andsales of displaydevice products
143 million 1,666,210,320
806,171,276
240,861,525
52,811,108
11,154,553
CSG(Hongkong)InvestmentCo., Ltd.
Subsidiary
Investment andtrading
HKD 1million
1,369,789,943
1,251,637,700
79,164,800
81,285,539
Particular about subsidiaries obtained or disposed in report period□ Applicable √ Not applicable
VIII. Structured main bodies controlled by the Company
□ Applicable √ Not applicable
IX. Prediction of business performance from January to September 2018
Alert of loss or significant change in accumulative net profit from the beginning of year to the end of the next report period orcompared with the same period of last year, and statement of causations.
□ Applicable √Not applicable
X. Risks and response measures the Company faces
In 2018, in the face of “New Normal” of domestic economic development and “New CSG” construction task of the Company, theCompany will face the following risks and challenges:
① In 2018, under the efforts of the Board of Directors and all employees, the daily operation of the Company is stable. However, the
Company still faces the risk of lack of high-end talent reserve. To cope with aforesaid risks, the Company will take the followingmeasures:
A. Construct new corporate culture of CSG as soon as possible, establish an kind of open, equal, fair and enterprising corporateculture, and reinforce internal core cohesion of employees;B. Establish remuneration incentive system which related to performance and improve employee incentive mechanism;C. Strengthen internal employee training, introduce externalhigh-quality talent, and rapidly establish a high-quality talent team;D. Establish sustainable talent recruitment, cultivation, utilization, retaining, and development management system; create afuture-oriented human resource production, development, supply system that can support the future development of CSG.
②The glass industry is under pressure from fierce competition for similar products and rising raw materials, the solar energy and PV
industry is faced with the risk of industrial integration and price fluctuation, the electronic glass and display devices industry willencounter the risk of accelerated technical upgrading and slow down in electronic product demand. To cope with aforesaid risks, thecompany will take the following measures:
A. In the flat glass industry, the Company will accelerate the technical upgrading and reform of the existing production line to realizedifferential operation, expand industrial scale and strengthen industrial competitiveness through industrial M&A;B. In architectural glass industry, the Company will strengthen the development of high-end market and overseas market, consolidatethe competitive advantage of the Company, and actively develop the residence market, explore new profit growth point, and at thesame time, maintain the industrial advantageous position of the Company through market-oriented extension of industrial chain;C. In the solar photovoltaic industry, the Company intends to further improve the power generation efficiency of silicon wafers, cellsand modules, reduce manufacturing costs, and improve the market competitiveness of products through technical upgradingmeasures such as ingot single crystal and wet-method black silicon PERC technology. At the same time, the Company will firmlyupgrade its technology towards electronic-grade polysilicon and excavate new products and explore new product market;D. In electronic glass and display devices industry, the Company will strengthen research and development of new technology, newproduct, maintain its technical leading advantage in the industry, and further improve the product quality of ultra-thin electronic glass,so as to rapidly develop terminal market and improve industrial profitability.
③ Since 2018, the market price of the glass and solar industry have experienced great fluctuations, while the price of upstream raw
material has fluctuated significantly, and meanwhile the labor price is constantly rising, which has brought risks to the operation ofthe Company. To cope with risk, the Company will take the following measures:
A. Vigorously exploit potential and increase efficiency, and effectively implement energy saving and consumption reduction;B. Focus on the market change, and lock the price of bulk commodity at proper time;C. Utilize bulk purchase advantage to reduce purchase cost;D. Improve automatic production level, raise labor productivity.
④ Risk of fluctuation of foreign exchange rate: At present, nearly 14.37% of the main business income of the Company are from
overseas, in the future, the Company will further develop overseas business, and therefore, the fluctuation of exchange rate will bringcertain risk to the operation of the Company. To cope with such risk, the Company will settle exchange in time and use safe andeffective risk evading instrument and product to relatively lock exchange rate and reduce the risk caused by fluctuation of exchange
rate.
Section V. Important Events
I. Particulars about annual general meeting and extraordinary general meeting held in thereport period
1. Particulars about Shareholders' General Meeting in the report period
Meeting session
Type of meeting
Investorparticipation ratio
Hold date Disclosure date
Disclosure indexThe First
ExtraordinaryShareholders’General M
eeting
of 2018
Extraordinarygeneral meeting
26.99%
eeting
Mar. 15, 2018
Mar. 16, 2018
Juchao website(www.cninfo.com.cn)Notice number:2018-011
AnnualShareholders’
of 2017
Annual generalmeeting
27.27%
General Meeting
May 14, 2018
May 15, 2018
Juchao website(www.cninfo.com.cn)Notice number:2018-024
2. Extraordinary general meeting which is requested to convene by the preferred shareholders who haveresumed the voting right
□ Applicable √Not applicable
II.Profit distribution and capitalization of capital reserve in the report period
□ Applicable √Not applicableThe Company has no plans of cash dividend distribution, bonus shares being sent or converting capital reserve into share capital.
III. Commitments completed by the actual controllers, the shareholders, the related parties,the purchasers and the Company during the report period and those that hadn’t beencompleted execution by the end of the report period
√Applicable □ Not applicable
Commitments
Promisee
Type ofcommitments
Content of commitments
Commit-m
ent date
Commit-
| ment term | |
Implement-
ationCommitments
forShare MergerReform
The originalnon-tradableshareholderShenzhen
Commitmentof sharereduciton
The Company has implemented sharemerger reform in May 2006. Till June2009, the share of the originalnon-tradable shareholders which
2006-5-22
N/A
By the end ofthe reportperiod, theabove
InternationalHoldings (SZ)Limited and XinTong ChanIndustrialDevelopment(Shenzhen) Co.,Ltd.
holding over 5% total shares of theCompany had all released. Therein, theoriginal non-tradable shareholderShenzhen International Holdings (SZ)Limited and Xin Tong Chan IndustrialDevelopment (Shenzhen) Co., Ltd. bothare wholly-funded subsidiaries toShenzhen International HoldingsLimited (hereinafter ShenzhenInternational for short) listed in HongKong united stock exchange mainboard. Shenzhen International madecommitment that it would strictly carryout related regulations of SecuritiesLaw, Administration of the Takeover ofListed Companies Procedures andGuiding Opinions on the ListedCompanies’ Transfer of Original SharesReleased from Trading Restrictionsissued by CSRC during implementingshare decreasingly-held plan and takeinformation disclosure responsibilitytimely.
shareholdersof theCompany had
out theirpromises.
strictly carriedCommitments in
report ofacquisition orequity change
Foresea LifeInsurance Co.,Ltd., ShenzhenJushenghua Co.,Ltd. and ChengtaiGroup Co., Ltd.
Commitments in
Commitmentof horizontalcompetition,affiliateTransactionand capitaloccupation
Foresea Life Insurance Co., Ltd.,Shenzhen Jushenghua Co., Ltd. andChengtai Group Co., Ltd. issueddetailed report of equity change on 29June 2015, in which, they undertook tokeep independent from CSG in aspectsof personnel, assets, finance,organization set-
up and business as long
as Foresea Life Insurance remained thelargest shareholder of CSG. Meanwhile,they made commitment on regularizingrelated transaction and avoidingindustry competition.
2015-6-29
up and business as long
Duringthe periodwhenForeseaLiferemains
the largest
shareholder of theCompany
the largest
By the end ofthe reportperiod, theaboveshareholdersof theCompany had
strictly carried
out theirpromises.
strictly carriedCommitments in
assetsreorganization
Not applicable
Commitments in
Commitments in
initial publicoffering orre-financing
Not applicable
Commitments in
Equity incentivecommitment
The listedcompany
CSG has promised not to provide loansand other forms of financial assistancefor restricted stocks for the incentivetargets under this plan, includingproviding guarantees for their loans.
2017-10-1
Duringtheimplementation ofthe equityincentiveplan
Thecommitmentis in normalperformance.
Othercommitmentsfor medium andsmallshareholders
Not applicable
Completed ontime(Y/N)
Yes
If thecommitments isnot fulfilled on
Yestime, explain the
reasons and thenext work plan
time, explain the
Not applicable
IV. Engaging and dismissing of CPA
Whether the semi-annual report has been audited or not□ Yes √ NoThe semi-annual report of the Company has not been audited.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors(if applicable) for “Non-standard audit report” of the period that issued by CPA
□ Applicable √ Not applicable
VI. Explanation from Board of Directors for “Non-standard audit report” of the previousyear
□ Applicable √ Not applicable
VII. Issues related to bankruptcy and reorganization
□ Applicable √ Not applicable
VIII. Lawsuits
Significant lawsuits and arbitrations□ Applicable √ Not applicable
There were no significant lawsuits or arbitrations in the report period.Other lawsuits□ Applicable √ Not applicable
IX. Penalty and rectification
□ Applicable √ Not applicableNo penalty or rectification for the Company in the report period.
X. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan orother employee incentives
√ Applicable □ Not applicableOn Oct. 10, 2017, the third meeting of the company's eighth session of the board of directors deliberated and approved 2017 A-shareRestricted Stock Incentive Plan (Draft) of CSG and its abstract, the Implementation Evaluation and Management Measures of 2017A-share Restricted Stock Incentive Plan (Draft) of CSG and the Proposal to Apply for the Shareholders’ Meeting to Authorize theBoard of Directors to Handle the Issues Related to 2017 A-share Restricted Stock Incentive Plan. For the above-mentioned contents,please refer to the Decision Bulletin of the Third Meeting of the Eighth Session of the Board of Directors (Notice No. 2017-063)published in www.cninfo.com.cn on Oct. 11, 2017. The independent directors of the company have issued independent opinions onthe issues related to the company's 2017 restricted A-share incentive plan.
On Oct. 26, 2017, 2017 fifth temporary shareholders’ meeting of the company convened the above three resolutions. On Dec. 11,2017, the 21
st
temporary meeting of the eighth session of the board of directors deliberated and approved the Resolution on Adjustingthe Granting List and Quantity of Targets of 2017 A-share Restricted Stock Incentive Plan. It is determined that 454 staff will begranted with 97,511,654 restricted shares on Dec. 11, 2017. The first award price is RMB 4.28 /share and 17,046,869 restrictedshares will be reserved.
The granting of restricted shares was completed on Dec. 25, 2017. For detailed contents, refer to the Announcement on Completion ofthe Granting of 2017 Restricted A-shares (Notice No.: 2017-079) published in www.cninfo.com.cn on Dec. 22, 2017.According to the relevant provisions of the Accounting Standards for Enterprises, the implementation of restricted shares will havecertain impacts on the financial situation and operating results of the company in the coming years. The results will be based on theannual audit report issued by the accounting firm.
XII.Major related transaction
1. Related transaction with routine operation concerned
□ Applicable √ Not applicableIn the report period, the Company did not have related transaction with routine operation concerned.
2. Related transaction with acquisition of assets or equity, sales of assets or equity concerned
□ Applicable √ Not applicableIn the report period, the Company did not have related transaction with acquisition of assets or equity, sales of assets or equityconcerned.
3. Related transaction with jointly external investment concerned
□ Applicable √ Not applicableIn the report period, the Company did not have related transaction with jointly external investment concerned.
4. Credits and liabilities with related parties
□ Applicable √ Not applicableThere were no credits and liabilities with related parties in the report period.
5. Other major related transaction
□ Applicable √ Not applicableThere was no other major related transaction in the report period.
XIII.Particular about non-operating fund of listed company occupied by controllingshareholder and its affiliated enterprises
□Applicable √Not applicableIt did not exist that non-operating fund of the listed company was occupied by controlling shareholder or its affiliated enterprises inthe report period.
XIV. Significant contracts and their implementation
1. Trusteeship, contract and leasing(1) Trusteeship
□ Applicable √ Not applicableNo trusteeship for the Company in the report period.
(2) Contract
□ Applicable √ Not applicableNo contract for the Company in the report period.
(3) Leasing
□ Applicable √ Not applicableNo leasing for the Company in the report period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantee
Unit: RMB 0,000Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)Name of the
Companyguaranteed
RelatedAnnouncementdisclosure date
Guarantee
limit
Actual date of
happening (Date
of signingagreement)
Actualguarantee
limit
Guarantee
type
Guarantee
term
Complete
happening (Date
implement
ation or
not
Guaranteefor related
party (Yes or
no)Guarantee of the Company for the subsidiariesName of the
Companyguaranteed
RelatedAnnouncementdisclosure date
party (Yes or
Guarantee
limit
Actual date of
happening (Date
of signingagreement)
Actualguarantee
limit
Guarantee
type
Guarantee
term
Complete
happening (Date
implement
ation or
not
Guaranteefor related
party (Yes or
no)Chengdu CSGGlass Co.,Ltd.
2017-07-31 5,000
party (Yes or
2017-08-16 5,000
Joint liabilityguarantee
1 year No NoDongguan CSG
ArchitecturalGlass Co., Ltd.
2017-07-31 11,200
2017-08-11 10,000
Joint liabilityguarantee
1 year Yes NoDongguan CSG
ArchitecturalGlass Co., Ltd.
2017-01-13 18,000
2017-02-09 13,000
Joint liabilityguarantee
1 year Yes NoXianning CSG
Glass Co., Ltd.
2017-07-31 7,000
2017-08-11 2,000
Joint liabilityguarantee
1 year Yes NoXianning CSG
Glass Co., Ltd.
2017-07-31 10,000
2017-09-12 1,000
Joint liabilityguarantee
1 year No NoSichuan CSG
EnergyConservationGlass Co., Ltd.
2017-07-31 7,000
2017-08-11 2,000
Joint liabilityguarantee
1 year No NoSichuan CSG
EnergyConservationGlass Co., Ltd.
2017-01-23 5,000
2017-04-11 2,000
Joint liabilityguarantee
1 year Yes NoWujiang CSG
Glass Co., Ltd.
2016-08-12 10,000
2017-03-07 5,000
Joint liabilityguarantee
1 year Yes No
Wujiang CSGGlass Co., Ltd.
2017-11-27 10,000
2017-11-30 3,000
Joint liabilityguarantee
1 year Yes NoWujiang CSG
East ChinaArchitecturalGlass Co., Ltd.
2016-08-12 10,000
2017-04-28 6,000
Joint liabilityguarantee
1 year Yes NoWujiang CSG
East ChinaArchitecturalGlass Co., Ltd.
2016-08-12 10,000
2018-04-20 6,000
Joint liabilityguarantee
1 year No NoWujiang CSG
East ChinaArchitecturalGlass Co., Ltd.
2017-11-27 10,000
2017-11-30 3,000
Joint liabilityguarantee
1 year Yes NoWujiang CSG
East ChinaArchitecturalGlass Co., Ltd.
2017-07-31 10,000
2017-09-14 10,000
Joint liabilityguarantee
1 year No NoDongguan CSG
Solar Glass Co.,Ltd.
2017-07-31 15,000
2017-8-11 2,800
Joint liabilityguarantee
1 year No NoYichang Nanbo
Display Co., Ltd.
2017-05-31 3,648
2017-06-02 3,600
Joint liabilityguarantee
1 year Yes NoTianjin CSG
Energy-SavingGlass Co., Ltd.
2016-08-12 10,000
2017-02-14 2,000
Joint liabilityguarantee
1 year Yes NoDongguan CSG
PV-tech Co., Ltd.
2017-05-22 15,000
2017-06-15 4,680
Joint liabilityguarantee
1 year No NoYichang CSG
Polysilicon Co.,Ltd.
2017-08-07 6,600
2017-08-25 4,000
Joint liabilityguarantee
1 year No NoYichang CSG
Polysilicon Co.,Ltd.
2017-06-23 30,000
2017-07-10 5,000
Joint liabilityguarantee
1 year No NoQingyuan CSG
NewEnergy-SavingMaterials Co.,Ltd.
2017-09-15 5,000
2017-09-22 2,495
Joint liabilityguarantee
1 year No No
Zhanjiang CSG2017-07-31 9,000
2017-09-26 9,000
Joint liability3 years No No
New Energy Co.,Ltd.
guaranteeXianning CSG
Co., Ltd.
2016-08-12 30,000
| Photovoltaic Glass | |
2017-01-03 19,000
Joint liabilityguarantee
3 years No NoXianning CSG
Photovoltaic Glass
Co., Ltd.
2017-07-31 20,000
| Photovoltaic Glass | |
2017-09-07 3,400
Joint liabilityguarantee
3 years No NoYichang Nanbo
PhotoelectricGlass Co., Ltd.
2017-05-22 5,472
2017-05-26 5,400
Joint liabilityguarantee
3 years No NoYichang Nanbo
PhotoelectricGlass Co., Ltd.
2016-12-14 2,432
2017-05-23 2,400
Joint liabilityguarantee
1 year Yes YesYichang Nanbo
PhotoelectricGlass Co., Ltd.
2017-05-22 10,032
2017-05-31 7,094
Joint liabilityguarantee
3 years No NoYichang CSG
Polysilicon Co.,Ltd.
2017-05-22 20,000
2017-06-22 13,043
Joint liabilityguarantee
3 years No NoDongguan CSG
PV-tech Co., Ltd.
2017-11-27 20,000
2017-12-20 16,881
Joint liabilityguarantee
3 years No NoWujiang CSG
Glass Co., Ltd.
2017-08-28 30,000
2017-09-13 25,000
Joint liabilityguarantee
3 years No NoXianning CSG
Glass Co., Ltd.
2017-08-28 25,000
2017-09-18 18,751
Joint liabilityguarantee
3 years No NoDongguan CSG
Solar Glass Co.,Ltd.
2017-08-07 20,000
2017-09-22 18,500
Joint liabilityguarantee
3 years No NoYichang CSG
Polysilicon Co.,Ltd.
2017-06-23 20,000
2017-06-28 16,049
Joint liabilityguarantee
3 years No NoSichuan CSG
EnergyConservationGlass Co., Ltd.
2017-09-25 15,000
2017-09-30 11,250
Joint liabilityguarantee
3 years No NoHebei CSG Glass
Co., Ltd.
2017-10-10 20,000
2017-10-30 16,881
Joint liabilityguarantee
3 years No NoChengdu CSG
Glass Co.,Ltd.
2017-09-25 20,000
2017-09-28 15,929
Joint liabilityguarantee
3 years No No
Dongguan CSGArchitecturalGlass Co., Ltd.
2017-01-13 18,000
2017-02-09 13,000
Joint liabilityguarantee
1 year No NoWujiang CSG
Glass Co., Ltd.
2017-08-28 10,000
2017-09-20 2,000
Joint liabilityguarantee
1 year No NoWujiang CSG
East ChinaArchitecturalGlass Co., Ltd.
2017-11-27 10,000
2018-02-12 1,000
Joint liabilityguarantee
1 year No NoWujiang CSG
East ChinaArchitecturalGlass Co., Ltd.
2017-11-27 10,000
2018-06-22 1,000
Joint liabilityguarantee
1 year No NoWujiang CSG
East ChinaArchitecturalGlass Co., Ltd.
2017-11-27 10,000
2018-04-19 1,000
Joint liabilityguarantee
1 year No NoYichang CSG
Polysilicon Co.,Ltd.
2017-06-23 30,000
2017-07-10 5,000
Joint liabilityguarantee
1 year No NoXianning CSG
Co., Ltd.
2017-07-31 20,000
| Photovoltaic Glass | |
2017-09-07 5,000
Joint liabilityguarantee
3 years No NoWujiang CSG
Glass Co., Ltd.
2017-08-28 10,000
2017-09-20 5,000
Joint liabilityguarantee
1 year No NoChengdu CSG
Glass Co.,Ltd.
2017-05-22 5,000
2018-04-02 4,500
Joint liabilityguarantee
1 year No NoSichuan CSG
EnergyConservationGlass Co., Ltd.
2017-05-02 5,000
2018-04-08 2,700
Joint liabilityguarantee
1 year No NoWujiang CSG
Glass Co., Ltd.
2017-11-27 10,000
2018-03-07 2,000
Joint liabilityguarantee
1 year No NoDongguan CSG
PV-tech Co., Ltd.
2017-05-22 10,500
2017-06-15 5
Joint liabilityguarantee
3 years No NoChengdu CSG
Glass Co., Ltd.
2017-07-31 7,000
2017-08-11 1,500
Joint liabilityguarantee
1 year No NoXianning CSG
Glass Co., Ltd.
2017-07-31 7,000
2017-08-11 2,000
Joint liabilityguarantee
1 year No NoWujiang CSG2018-03-09 10,000
2018-06-28 3,500
Joint liability1 year No No
Glass Co., Ltd. guaranteeWujiang CSGGlass Co., Ltd.
2017-08-28 10,000
2017-09-20 1,000
Joint liabilityguarantee
1 year No NoDongguan CSG
Solar Glass Co.,Ltd.
2017-11-27 3,200
2018-06-14 3,000
Joint liabilityguarantee
1 year No NoDongguan CSG
Solar Glass Co.,Ltd.
2017-09-15 4,000
2017-10-13 4,000
Joint liabilityguarantee
1 year No NoTianjin CSG
Energy-SavingGlass Co., Ltd.
2018-04-09 5,000
2018-06-22 2,000
Joint liabilityguarantee
1 year No NoXianning CSG
Energy-SavingGlass Co., Ltd.
2017-07-31 7,000
2017-08-11 3,000
Joint liabilityguarantee
1 year No NoChina Southern
Glass (HongKong) Limited
2018-06-20 6,009
2018-06-25 6,009
Joint liabilityguarantee
1 year No NoTotal amount of approving
guarantee for subsidiaries in reportperiod (B1)
21,009
Total amount of actualoccurred guarantee forsubsidiaries in report period(B2)
359,367
Total amount of approvedguarantee for subsidiaries at theend of reporting period (B3)
359,367
585,813
585,813
Total balance of actual
guarantee for subsidiaries at
the end of reporting period(B4)
| guarantee for subsidiaries at | |
Guarantee of subsidiaries for subsidiariesName
307,367of the Company
guaranteed
RelatedAnnounce
mentdisclosure
date
Guarantee
limit
Actual date ofhappening (Date
of signingagreement)
Actualguarantee
limit
Guarantee
type
Guarantee
term
Complete
of the Company
implementation or
not
Guarante
e forrelated
party(Yes or
no)Dongguan CSGPV-tech Co., Ltd.
2017-05-22
15,0002017-06-154,680
Joint liabilityguarantee
1 year No YesDongguan CSG
PV-tech Co., Ltd.
2017-05-22
10,5002017-06-15
Joint liabilityguarantee
3 years No YesTotal amount of approving
guarantee for subsidiaries in reportperiod (C1)
Total amount of actualoccurred guarantee forsubsidiaries in report period(C2)
4,685
Total amount of approvedguarantee for subsidiaries at the
25,500
Total balance of actualguarantee for
| subsidiaries at | ||
4,685
end of reporting period (C3) the end of reporting period
(C4)Total amount of guarantee of the Company (total of three abovementioned guarantee)Total amount of approvingguarantee in report period(A1+B1+C1)
21,009
Total amount of actualoccurred guarantee in reportperiod (A2+B2+C2)
364,052
Total amount of approvedguarantee at the end of reportperiod (A3+B3+C3)
611,313
Total balance of actual
| guarantee at the end of report | ||
period (A4+B4+C4)
312,052
The proportion of the total amount of actual guarantee in the netassets of the Company (that is A4+ B4+C4)
35.50%
Including:
Amount of guarantee for shareholders, actual controller and itsrelated parties(D)
The debts guarantee amount provided for the guaranteed partieswhose assets-liability ratio exceed 70% directly or indirectly(E)
Proportion of total amount of guarantee in net assets of theCompany exceed 50%(F)
Total amount of the aforesaid three guarantees(D+E+F)
Explanations on possibly bearing joint and several liquidatingresponsibilities for undue guarantees (if any)
The Company shall bear joint and several liabilities in guarantee
range if the subsidiaries fail to fulfill the obligation ofrepayment.Explanations on external guarantee against regulated procedures Nil
(2) Illegal external guarantee
□ Applicable √ Not applicableNo illegal external guarantee in the report period.
3. Other material contracts
□ Applicable √ Not applicableNo other material contracts for the Company in the report period.
XV. Social responsibilities
1. Significant environmental situation
Name of
The Company shall bear joint and several liabilities in guaranteeCompany or
subsidiary
Company or
Name of
majorpollutants
Way ofemission
Number ofExhau
Exhaust
ventdistributio
Emissionconcentration
Implementation of pollutant
emission
Totalemission
Approved
totalemission
Excessive
emissions
Excessive
andcharacteristi
ccontaminant
s
stvent
n standards
Xianning
CSG Glass
Co., Ltd.
Dust\Soot\SO
\Nitrogenoxide
Dischargeafter thetreatment ofdenitrification and dustremoval
Chimney,Exhaustgas outlet
CSG Glass
Dust≤30mg/m?;soot≤40 mg/m?;SO
≤200 mg/m?;NOx≤350 mg/m?
《Emission st
andard of airpollutants for flat glass in
dustry》
(GB26453-20
11)
Particulates:
19.6t;SO
:99.3t;NOx:233.5t
Particulates:96.82t/a;SO
:636.5t/a;Nitrogenoxides:
1113.89t/a
Reach the
dischargestandard
Reach the
ChengduCSG GlassCo., Ltd.
Dust\ Soot\SO
\Nitrogenoxide
Dischargeafter thetreatment ofdenitrification and dustremoval
Chimney,Exhaustgas outlet
Dust≤26.8mg/m?;soot≤23.8 mg/m?;SO
≤263 mg/m?;NOx≤331.6 mg/m?
《Emission st
andard of airpollutants for flat glass in
dustry》
(GB26453-20
11)
Particulates:
38.347t;SO2:
:433.32
6t;NOx:536.608t
Particulates:129.395t/a;SO
:1035.162t/a;Nitrogenoxides:
1811.536t/a
Reach the
dischargestandard
Reach the
Hebei CSGGlass Co.,Ltd.
Dust\ Soot\SO
\Nitrogenoxide
Dischargeafter thetreatment ofdenitrification and dustremoval
Chimney,Exhaustgas outlet
Particulates≤8.7mg/m?SO
≤50.3 mg/m?;NOx≤265.8 mg/m?
《Emission
Standard forAir Pollutantsin ElectronicGlass
Industry》（DB13/2168-2015）Hebei
LocalStandard
Particulates:
2.46t;SO
:14.27t;
NOx:65.18t
Particulates:59.78t/a;
SO
:498.18t/a;Nitrogenoxides:
982.2t/a
Reach the
dischargestandard
Reach the
YichangCSGPolysiliconCo., Ltd.
PH\COD\Ammonianitrogen/fluoride
Dischargedto thesewagetreatmentplant afterbeingtreated bytheCompany'ssewagetreatmentstation.
Dischargeoutlets of
wastewater
PH:6-9;COD≤500mg/L;Fluoride≤10 mg/L
《Comprehen
sive SewageDischarge
Standard》
Grade 3
rd
standard(GB8978-1996), implementgrade 1
st
standard forfluoride
COD:24.86t;
Ammonianitrogen:0.35t
COD:198.47t/a;Ammonianitrogen:2.49t/a
| Reach the | ||
dischargestandard
WujiangCSG GlassCo., Ltd.
Particulates\
SO
\Nitrogenoxide
Dischargeafter thetreatment ofdenitrification and dustremoval
Chimney,Exhaustgas outlet
Particulates≤20mg/m?; SO
≤200mg/m?; NOx≤300mg/m?
《Emission st
andard of airpollutants for flat glass in
dustry》
(GB26453-20
11)
Particulates:
13.1t;SO
:28.1t;NOx:194.76t
Particulates:76.91t/a;SO
:238.28t/a;Nitrogenoxides:
818.04t/a
Reach the
dischargestandard
Reach the
DongguanCSG SolarGlass Co.,Ltd.
Dust\ Soot\SO
\Nitrogenoxide
Dischargeafter thetreatment ofdenitrification and dustremoval
Chimney,Exhaustgas outlet
Dust≤5mg/m?;soot≤10mg/m?;SO
≤400 mg/m?;NOx≤650 mg/m?
《Emission st
andard of airpollutants for flat glass in
dustry》
(GB26453-20
11)
Particulates:
8.75t;SO
:104.49t;
NOx:236.84t
Particulates:34.85t/a;SO
:300.99t/a;Nitrogenoxides:
535.67t/a
Reach the
dischargestandard
Reach the
DongguanCSGArchitectural Glass Co.,Ltd.
PH\COD\Ammonianitrogen
Dischargedto thesewagetreatmentplant afterbeingtreated bythecompany'ssewagetreatmentstation.
Dischargeoutlets of
wastewater
PH:6~9;COD≤16 mg/L;Ammonianitrogen≤0.784mg/L
DischargeLimits ofWaterPollutants inGuangdong(DB44/26-2001), the secondperiod, thefirst gradestandard
COD:0.37t;
Ammonianitrogen:0.018t
COD:5.4t/a;Ammonianitrogen:0.6 t/a
| Reach the |
dischargestandard
DongguanCSGPV-techCo., Ltd.
Wastewater:
Fluoride\COD\Ammonianitrogen
Exhaustgas:
HF\NOx\H
CI\CL
\NH
\VOC
The wastewater isdischargedafter thetreatmentby thecompany'ssewagestation, andthe exhaustgas isdischargedaftertreatmentby thecompany's
outlets forwastewater
and
outlets forexhaust gas
Dischargeoutlets of
wastewater and
exhaust
gas
Waste water:
SS≤50mg/L;COD≤70 mg/L;Ammonianitrogen≤10mg/L;Fluoride≤8mg/L;Exhaust gas:
NO
x
≤30mg/m
;HF≤3mg/m
;CL
≤5mg/m
;HCI≤5mg/m
;VOC≤30mg/m
;
DischargeLimits ofWaterPollutants inGuangdong(DB44/26-2001), the secondperiod, thefirst gradestandard;DischargeStandard ofPollutants inBatteryIndustry(GB30484-2013);F
Waste water:
COD:4.86t;Ammonianitrogen:0.17t;Fluoride:0.42tExhaust gas
Waste water:
Nitrogenoxide:9.325t;Fluoride:0.41t;Hydrogen
fluoride：
0.29t;
Wastewater:
Suspended
matter:
9.36t/a;COD:14.04t/a;
Ammonianitrogen:1.56t/a;
Fluoride:1.56t/a
Exhaustgas
SuspendedReach the
dischargestandard
Reach the
exhaust gastreatmenttower.
to implementthe EmissionStandards forFurniture
or VOCs, referManufacturing
Industry(DB44/814-2010), thestandard forthe secondstage; ForNH3,implement theEmissionStandards forOdorPollutants(GB14554-93).
Chlorine:
0.089t;Ammonia:0.674t;VOC:0.119t
Manufacturing
Nitrogenoxide:20.825t/a;Fluoride:1.5156t/a;Hydrogenfluoride:1.0829t/a;
Chlorine:0.2363t/a;
Ammonia:
2.3312t/a;
VOC:1.0986 t/a
Hebei PanelGlass Co.Ltd.
Dust\ Soot\SO
\Nitrogenoxide
Dischargeafter thetreatment ofdenitrification and dustremoval
Chimney,Exhaustgas outlet
Dust≤30mg/m?;Soot≤20mg/m?;SO2≤30mg/m?;NOx≤300mg/m?;
《Emission
standard forair pollutantsin electronicglass
industry》
(GB29495-2013)
Particulates:
0.921t;SO2:
0.041t;NOx:8.819t;
Particulates:8.2125t/a;SO2:22t/a;
Nitrogenoxide:39.4t/a
Reach the
dischargestandard
Reach the
Construction and operation of pollution prevention and control facilitiesThe Company has built flue gas dust removal and denitrification system on production lines. The system runs normally, and the
emission of exhaust gas meets regulations.The environmental impact assessment of construction projects and other environmental protection licenseThe new production line of light guide plate photoelectric materials of Xianning CSG Photoelectric Glass Co. Ltd. newly established
in 2017 has entered into the stage of trial production. Its pollution prevention and control facilities are running normally, andenvironmental protection acceptance work is being carried out. The subsidiary companies have effectively carrying out the “ThreeSimultaneous” procedures for all other new and old projects, and have been rewarded with the pollutant discharge license within thevalidity period. They timely declared the pollutant discharge, carried out the monitoring and reporting of pollutant discharge and paidthe environmental tax.
Emergency response plan system of environment incidentIn accordance with the national requirements, all subsidiary companies prepared emergency environmental response plan for
environment incident, organized and carried out expert evaluation and put on record in the local environmental protection departmentas required, conducted the emergency drill against environmental incidents. And no major environmental incidents occurred in the
first half of 2018.Environmental self-monitoring schemeIn accordance with provisions of national laws and regulations and the requirements put forward in the assessment documents of the
environment impact of construction project and reply, the subsidiary companies built on-line monitoring equipment for waste waterand exhaust gas which are put into operation normally. They compared and reviewed the effectiveness of the on-line monitoringfacilities on a regular basis. Besides, they also entrusted the third-party units to carry out the manual monitoring of the environment andfully monitor the discharge of the pollutants.
Other environmental information to be disclosedThe key monitored subsidiary companies above municipal level disclosed their environment protection status and made regular
updating through websites, display cards, environmental information platform and other ways.Other information related to environment protection
CSG always attaches great importance to environmental protection work, actively fulfills its social responsibility, adheres to thedevelopment road of energy saving, emission reduction, low carbon and environmental protection. In order to further reducepollutant emissions, many subsidiaries of the group have carried out the construction of desulfurization facilities in 2018. After suchfacilities are completed and put into production, the emission concentration of sulfur dioxide will be further reduced substantially onthe basis of existing emission level which has met with standards, and the ultra-low emissions will be achieved step-by-step.
2. Performance of social responsibility for targeted poverty alleviation
No targeted poverty alleviation was carried out in the first half of the year, no follow-up plan for targeted poverty alleviation either.
XVI. Statement on other important matters
√Applicable □ Not applicable1. Short-term Financing BillsOn Dec.14, 2016, the second extraordinary shareholders’ general meeting of 2016 of CSG deliberated and approved the proposal ofthe offering and registration of short-term financing bills, and agreed the Company’s registration and issuance of short-term financingbills with a total amount of RMB 2.7 billion, which could be issued by stages within period of validity of the registration according tothe Company’s actual demands for funds and the status of inter-bank funds. However, the term of each issue shall not be longer thanone year and the registered quota shall not exceed 40 percent of the Company’s net assets.
2. Ultra-short-term financing billsOn 14 May 2018, the 2017 Annual General Meeting of Shareholders’ deliberated and approved the proposal of application forregistration and issuance of ultra-short-term financing bills with registered capital of RMB 4 billion at most and validity within 2years(This amount is not subject to a 40% net asset limit). which could be issued by stages within period of validity of theregistration according to the Company’s actual demands for funds and the status of inter-bank funds.For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.
3. Perpetual bondsOn April 15, 2016, the Shareholders’ General Meeting 2015 of CSG deliberated and approved the proposal of application forregistration and issuance of perpetual bonds, and agreed the Company to register and issue perpetual bonds with total amount of
RMB 3.1 billion which could be issued by stages within period of validity of the registration according to the Company’s actualdemand for funds and the capital status of inter-bank market.
4. Medium-term notesOn December 10, 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltd deliberated andapproved the proposal of application for registeration and issuance of medium term notes with total amount of RMB 1.2 billion atmost. On May 21, 2015, National Association of Financial Market Institutional Investors (NAFMII) held the 32nd registrationmeeting of 2015, in which NAFMII decided to accept the registration of the Company’s medium-term notes, amounting to RMB 1.2billion and valid for two years. China Merchants Bank Co., Ltd. and Shanghai Pudong Development Bank Co., Ltd. were joint leadunderwriters of these medium-term notes which could be issued by stages within period of validity of the registration. On July 10,2015, the Company issued the first batch of medium term notes with total amount of RMB 1.2 billion and valid term of 5 years at theissuance rate of 4.94%, which will be redeemed on July 14, 2020.On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal of application forregistration and issuance of medium term notes with total amount of RMB 0.8 billion, which could be issued by stages within periodof validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. On March 2,2018, National Association of Financial Market Institutional Investors (NAFMII) held the 14
th
registration meeting of 2018, in whichNAFMII decided to accept the registration of the Company’s medium term notes, amounting to RMB 0.8 billion and valid for twoyears. Shanghai Pudong Development Bank Co., Ltd. and China CITIC Bank Corporation Limited were joint lead underwriters ofthese medium term notes which could be issued by stages within period of validity of the registration. On May 4, 2018, the Companyissued the first batch of medium-term notes with total amount of RMB 0.8 billion and valid term of 3 years at the issuance rate of 7%,which will be redeemed on May 4, 2021.On May 22, 2017, the Shareholders’ General Meeting of 2016 of CSG deliberated and approved the proposal of application forregistration and issuance of medium term notes with total amount of RMB 1 billion, which could be issued by stages within period ofvalidity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds.For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.
XVII. Significant events of subsidiaries of the Company
□ Applicable √ Not applicable
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
Unit: Share
Before the Change Increase/Decrease in the Change (+, -) After the ChangeAmount
(%)
New shares
issued
Bonusshares
| Proportion | ||
Capitalization
of publicreserve
Others Subtotal Amount
(%)I. Restricted shares97,772,560
Proportion
3.94%
14,665,883
14,665,883
112,438,443
3.94%
1. State-owned shares
2. State-
person’s shares
owned legal
3. Other domestic shares
97,772,560
3.94%
14,665,883
14,665,883
112,438,443
3.94%
Including: Domesticlegal person’s shares
Domestic natural
person’s shares
97,772,560
3.94%
14,665,883
14,665,883
112,438,443
3.94%
4. Foreign shares
Including: Foreign legalperson’s shares
Foreign natural
person’s shares
II. Unrestricted shares2,386,374,987
96.06%
357,956,248
357,956,248
2,744,331,235
96.06%
1. RMB Ordinary shares
1,509,517,397
| 1. RMB Ordinary shares |
60.76%
226,298,989
226,298,989
1,735,816,386
60.76%
2. Domestically listed
foreign shares
876,857,590
2. Domestically listed
35.30%
131,657,259
131,657,259
1,008,514,849
35.30%
3. Overseas listed
foreign shares
3. Overseas listed
4. Others
III.Total shares2,484,147,547
100%
372,622,131
372,622,131
2,856,769,678
100%
Reasons for share changed√ Applicable □ Not applicableDue to the implementation of profit distribution and the capitalizing of common reserves proposal in 2017, the total shares of theCompany rose by 372,622,131 shares.Approval of share changed√ Applicable □ Not applicable
2017 profit distribution and the capitalization of capital reserve propose was deliberated and approved on the 5
th
Meeting of the 8
th
Session of Board of Directors held on Apr. 20, 2018 and 2017 Annual General Meeting of Shareholders held on May 14, 2018.Transfer of ownership of changes in shares
√Applicable □Not applicableThe registration date of the profit distribution and the capitalizing of common reserves in 2017 was June 26, 2018, and the
ex-dividend date was June 27, 2018. A-shares transferred this time were directly credited to the A-shares securities account ofshareholders on June 27, 2018. The registration date of B-shares was June 29, 2018, and the ex-dividend date was June 27, 2018.B-shares transferred this time were directly credited to the B-shares securities account of shareholders on June 29, 2018.Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in the latest year and period
√Applicable □Not applicablePlease refer to the main accounting data and financial indicators in this report for the details of the impact of stock changes.
Other information necessary to be disclosed or need to be disclosed under requirement from securities regulators□Applicable √ Not applicable
2. Changes of restricted shares
√Applicable □ Not applicable
Unit: ShareShareholder
s’ name
Number ofshares restrictedat Period-
begin
Number ofshares released
in the Year
| begin |
Number of newshares restricted
in the Year
Number ofshares restricted
at Period-end
Restriction
reasons
Released date
Chen Lin 3,207,639
481,146
3,688,785
Awarded equityincentives onDecember 11,2017, and therestricted sharesincreased due totheimplementation ofthe 2017 profitdistribution andcapital reservefund conversionscheme
According to theimplementation of theCompany's restricted stockequity incentive plan toimplement the lifting of therestriction period, after theban is lifted, the sharesheld by the executives willbe locked according torelevant policies.
Lu Wenhui
2,405,729
360,859
2,766,588
Awarded equityincentives onDecember 11,2017, and therestricted sharesincreased due totheimplementation ofthe 2017 profit
According to theimplementation of theCompany's restricted stockequity incentive plan toimplement the lifting of therestriction period, after theban is lifted, the sharesheld by the executives willbe locked according to
distribution andcapital reservefund conversionscheme
relevant policies.
Li Weinan 2,549,920
382,487
2,932,407
Executive lockedshares andawarded equityincentives onDecember 11,2017 and therestricted sharesincreased due totheimplementation ofthe 2017 profitdistribution andcapital reservefund conversionscheme
Executive locked stocks
time. According to theimplementation of theCompany's restricted stockequity incentive plan toimplement the lifting of therestriction period, after theban is lifted, the sharesadded will be lockedaccording to relevantpolicies.
He Jin 1,600,000
will be locked up for a long
240,000
1,840,000
Awarded equityincentives onDecember 11,2017, and therestricted sharesincreased due totheimplementation ofthe 2017 profitdistribution andcapital reservefund conversionscheme
According to theimplementation of theCompany's restricted stockequity incentive plan toimplement the lifting of therestriction period, after theban is lifted, the sharesheld by the executives willbe locked according torelevant policies.
Yang Xinyu
2,291,170
343,675
2,634,845
Awarded equityincentives onDecember 11,2017, and therestricted sharesincreased due totheimplementation ofthe 2017 profitdistribution andcapital reserve
According to theimplementation of theCompany's restricted stockequity incentive plan toimplement the lifting of therestriction period, after theban is lifted, the sharesheld by the executives willbe locked according torelevant policies.
fund conversionscheme
CoreManagement Team (108persons)
62,410,653
9,361,591
71,772,244
Awarded equityincentives onDecember 11,2017, and therestricted sharesincreased due totheimplementation ofthe 2017 profitdistribution andcapital reservefund conversionscheme
According to theimplementation of theCompany's restricted stockequity incentive plan toimplement the lifting of therestriction period
TechnologyandBusinessBackbone(341persons)
23,305,293
3,495,802
26,801,095
Awarded equityincentives onDecember 11,2017, and therestricted sharesincreased due totheimplementation ofthe 2017 profitdistribution andcapital reservefund conversionscheme
According to theimplementation of theCompany's restricted stockequity incentive plan toimplement the lifting of therestriction period
Zhao Peng 2,156
2,479
Executive lockedshares increaseddue to theimplementation ofthe 2017 profitdistribution andcapital reservefund conversionscheme
Long-term locked
Total 97,772,560
14,665,883
112,438,443
-- --
II. Issuance and listing of Securities
□Applicable √ Not applicable
III.Amount of shareholders of the Company and particulars about shares holding
Unit: shareTotal amount of shareholdersat the end of the report period
153,651
Total amount of the preferred shareholders who have resumedthe voting right at end of report period (if applicable)
Shareholder with above 5% shares held or top ten shareholders
Full name of Shareholders
Nature ofshareholder
Proporti
on ofsharesheld (%)
Total sharesheld at the
end of report
period
Changes inreport period
| end of report | |
Amount
ofrestricted shares
held
Amount ofun-
shares held
restricted
Number of share
pledged/frozenShare
status
Amount
Foresea Life Insurance Co., Ltd.
– Haili Niannian
Domestic nonstate-ownedlegal person
14.84%
Foresea Life Insurance Co., Ltd.
423,988,067
55,302,791
423,988,067
– Universal Insurance Products
Foresea Life Insurance Co., Ltd.
Domestic nonstate-ownedlegal person
3.77%
107,659,097
14,042,491
107,659,097
Shenzhen Jushenghua Co., Ltd.
Domestic nonstate-ownedlegal person
2.76%
78,757,679
10,272,741
78,757,679
Pledge[Note]
78,757,652
– Own Fund
Domestic nonstate-ownedlegal person
2.06%
| Foresea Life Insurance Co., Ltd. | ||
58,877,419
7,679,663
58,877,419
Management Ltd.
State-ownedlegal person
1.84%
| Central Huijin Asset | ||
52,650,444
6,867,449
52,650,444
China Galaxy InternationalSecurities (Hong Kong) Co.,
Limited
Foreign legalperson
1.31%
| Securities (Hong Kong) Co., | |
37,313,064
4,917,019
37,313,064
(HK) Co., Limited
State-ownedlegal person
1.02%
| China Merchants Securities | ||
29,155,288
3,098,580
29,155,288
Shenzhen International Holdings(SZ) Limited
Domestic nonstate-ownedlegal person
0.93%
26,450,000
3,450,000
26,450,000
Wang Heng
Domesticnatural person
0.63%
17,939,087
4,433,546
17,939,087
VANGUARD EMERGINGMARKETS STOCK INDEXFUND
Foreign legalperson
0.61%
17,563,848
2,290,937
17,563,848
Strategic investors or general legal personbecomes top 10 shareholders due to shares
N/A
issued (if applicable)
the aforesaid shareholders
Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-
| Explanation on associated relationship among | Haili |
Niannian, Foresea Life Insurance Co., Ltd.-Universal Insurance Products,
Life Insurance Co., Ltd.-Own Fund are all held by Foresea Life
ForeseaInsurance Co.,
Ltd. Shenzhen Jushenghua Co., Ltd. is a related legal person of Foresea Life
Insurance Co.,
Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related legal person of
Foresea Life Insurance Co., Ltd, which held 36,534,458 shares via
Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related legal person ofChina Galaxy
International Securities (Hong Kong) Co., Limited.Except for the above-mentioned shareholders, it is unknown whether othershareholders belong to related party or have associated relationship regulated bythe Management Regulation of Information Disclosure on Change ofShareholding for Listed Companies.Particular about top ten shareholders with un-restrict shares held
Shareholders’ name Amount of un-restrict shares held at year-end
China Galaxy
Type of sharesType AmountForesea Life Insurance Co., Ltd. –Haili Niannian
423,988,067
RMB ordinary shares
423,988,067
Foresea Life Insurance Co., Ltd. –Universal Insurance Products
107,659,097
RMB ordinary shares
107,659,097
Shenzhen Jushenghua Co., Ltd. 78,757,679
RMB ordinary shares
78,757,679
Foresea Life Insurance Co., Ltd. –
Own Fund
58,877,419
RMB ordinary shares
58,877,419
Ltd.
52,650,444
| Central Huijin Asset Management | ||
RMB ordinary shares
52,650,444
China Galaxy InternationalSecurities (Hong Kong) Co.,
Limited
37,313,064
| Securities (Hong Kong) Co., | |
shares
Domestically listed foreign
37,313,064
China Merchants Securities (HK)
Co., Limited
29,155,288
China Merchants Securities (HK)
Domestically listed foreign
shares
Domestically listed foreign
29,155,288
Shenzhen International Holdings (SZ)Limited
26,450,000
RMB ordinary shares
26,450,000
Wang Heng 17,939,087
RMB ordinary shares
17,939,087
VANGUARD EMERGINGMARKETS STOCK INDEX FUND
17,563,848
D
omestically listed foreign
shares
omestically listed foreign
17,563,848
Statement on associated relationship
or consistent action among theabove shareholders:
Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian,
Statement on associated relationshipForesea
Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-
ForeseaOwn
Fund are all held by Foresea Life
OwnInsurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a
related legal person of Foresea Life
Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is aInsurance Co., Ltd. and Chengtai Group Co., Ltd., another
related legal person of Foresea Life Insurance Co., Ltd, which held 36,534,458
China Galaxy International Securities (Hong Kong) Co., Limited.Except for the above-mentioned shareholders, It is unknown whether other shareholdersbelong to related party or have associated relationship regulated by the ManagementRegulation of Information Disclosure on Change of Shareholding for Listed Companies.
shares viaExplanation on shareholders
Explanation on shareholdersinvolving margin business (if
applicable)
N/A
Note: On July 13, 2018, the Company received the notification letter from Shenzhen Jushenghua Co., Ltd, which indicated that the78,757,652 unrestricted A-shares of CSG pledged by Jushenghua to China Galaxy Securities Co., Ltd had been released on July 12,2018 and the releasing procedures of pledge has been completed in Shenzhen Branch of China Securities Depository and ClearingCo., Ltd. For detailed contents, please refer to the Announcement of Releasing Pledge of Shares Held by Shareholders ((Notice No. :
2018-034) issued on July 14, 2018.Whether the top ten shareholders or top ten shareholders with un-restrict shares carried out buy back deals in the report period□Yes √ No
IV. Changes of controlling shareholder or actual controller
Changes of controlling shareholders in the report period□Applicable √ Not applicableChanges of actual controller in the report period□Applicable √ Not applicable
Section VII. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title
Working
status
Thenumber of
shares held
at thebeginning
of theperiod(shares)
shares held
Thenumber of
increase of
holding inthe current
period(shares)
increase of
Thenumber of
decrease of
holding inthe curr
decrease ofent
period(shares)
ent
Thenumber of
shares held
at the end
of theperiod(shares)
shares held
The number of
restricted shares
granted at the
restricted sharesbeginning of the
period (shares)
| beginning of the | |
The numberof restricted
sharesgranted inthe current
period(shares)
The number of
restrictedshares grantedin the currentperiod (shares)
Chen Lin
Chairman of
the Board
Currentlyin office
Chairman of
3,207,639
3,688,785
3,207,639
3,688,785
Wang Jian
Deputy
Chairman of
the Board,CEO
Currentlyin office
Chairman of
JinQingjun
IndependentDirector
Currentlyin office
ZhanWeizai
IndependentDirector
Currentlyin office
ZhuGuilong
IndependentDirector
Currentlyin office
ZhangJinshun
Director
Currentlyin office
YeWeiqing
Director
Currentlyin office
ChengXibao
Director
Currentlyin office
ZhangWandong
Chairman of
theSupervisoryBoard
Currentlyin office
Chairman of
Li Xinjun
Supervisor
Currentlyin office
Zhao Peng
Staff Currently2,875
3,306
Supervisor
in office
Lu Wenhui
ExecutiveVicePresident
Currentlyin office
2,405,729
2,766,588
2,405,729
2,766,588
Li Weinan
Vicepresident
Currentlyin office
2,636,170
3,031,595
2,636,170
3,031,595
Li Cuixu
Vicepresident
Currentlyin office
He Jin
Vicepresident
Currentlyin office
1,600,000
1,840,000
1,600,000
1,840,000
YangXinyu
Secretary ofthe Board
Currentlyin office
2,291,170
2,634,845
2,291,170
2,634,845
PanYonghong
Director &CEO
Postleaving
Total -- -- 12,143,583
13,965,119
12,140,708
13,961,813
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date ReasonLi Cuixu Vice president Be employed 2018-04-08
Senior management employed by the Board ofDirectors
He Jin Vice president Be employed 2018-04-08
Senior management employed by the Board ofDirectors
Pan Yonghong Director，CEO Post leaving 2018-06-29 Resigned
Wang Jian CEO Be employed 2018-07-02
Senior management employed by the Board ofDirectors
Section VIII. Financial Report
(I) Auditors’ Report
Whether the Semi-annual Report has been audited or not□ Yes √ No
(II) Financial Statements
All figures in the Notes to the Financial Statements are in RMB.
1. Consolidated Balance Sheet
Prepared by CSG Holding Co., Ltd.
Unit: RMBItem Ending balance Beginning balanceCurrent assets
Cash at bank and on hand 3,372,045,169
2,462,605,764
Notes receivable 789,078,376
552,232,420
Accounts receivable 707,375,368
638,238,290
Advances to suppliers 122,002,548
143,848,023
Other receivables 209,270,387
205,939,019
Inventories 713,622,649
685,895,317
Assets classified as held for sale 45,983,520
45,983,520
Other current assets 178,803,755
200,847,989
Total current assets6,138,181,772
4,935,590,342
Non-current assets
Fixed assets 11,494,297,683
11,540,769,697
Construction in progress 1,190,859,428
1,417,624,618
Intangible assets 1,033,563,687
1,047,222,407
Development expenditure 71,977,914
61,365,537
Goodwill 397,392,156
397,392,156
Long-term prepaid expenses 12,251,997
2,223,397
Deferred tax assets 100,120,499
80,872,862
Other non-current assets 86,166,620
51,941,352
Total non-current assets14,386,629,984
14,599,412,026
TOTAL ASSETS20,524,811,756
19,535,002,368
Current liabilities
Short-term borrowings 3,949,419,972
3,704,630,909
Notes payable 208,201,622
213,401,622
Accounts payable 1,331,128,942
1,400,166,042
Advances from customers 183,976,533
195,563,465
Employee benefits payable 182,613,590
272,170,660
Taxes payable 107,612,699
111,996,764
Interest payable 73,371,196
34,032,740
Dividend payable 4,875,583
Other payables 620,540,633
619,324,354
Current portion of non-current liabilities 941,647,396
904,261,397
Other current liabilities 300,000
300,000
Total current liabilities7,603,688,166
7,455,847,953
Non-current liabilities
Long-term borrowings 2,364,000,000
1,554,120,000
Long term payable 866,214,017
1,161,794,247
Deferred income 550,026,465
562,701,103
Deferred tax liabilities 24,419,058
20,915,954
Total non-current liabilities3,804,659,540
3,299,531,304
Total liabilities11,408,347,706
10,755,379,257
Shareholders’ equity
Share capital 2,856,769,678
2,484,147,547
Capital surplus 1,029,395,134
1,306,381,765
Less: Treasury shares 412,640,249
417,349,879
Other comprehensive income 2,640,961
1,948,943
Special reserve 3,988,036
3,224,938
Surplus reserve 920,592,332
920,592,332
Undistributed profits 4,388,437,956
4,159,642,227
parent company
8,789,183,848
| Total equity attributable to shareholders of | ||
8,458,587,873
Minority shareholders' equity327,280,202
321,035,238
Total shareholders' equity9,116,464,050
8,779,623,111
EQUITY
20,524,811,756
| TOTAL LIABILITIES AND SHAREHOLDERS’ | ||
19,535,002,368
Legal Representative:Chen Lin Principal in charge of accounting:Wang Jian Principal of the financial department:Wang Wenxin
2. Balance Sheet of the Parent Company
Unit: RMBItem Ending balance Beginning balanceCurrent assets
Cash at bank and on hand 2,594,187,340
1,681,877,320
Advances to suppliers 2,839,117
146,132
Other receivables 2,811,139,401
2,400,334,816
Total current assets5,408,165,858
4,082,358,268
Non-current assets
Long-term receivables 1,200,000,000
1,200,000,000
Long-term equity investments 4,896,117,578
4,795,987,652
Fixed assets 20,923,085
22,182,246
Construction in progress 2,261,607
Intangible assets 1,079,827
1,742,109
Other non-current assets 533,718
2,132,041
Total non-current assets6,120,915,815
6,022,044,048
TOTAL ASSETS11,529,081,673
10,104,402,316
Current liabilities
Short-term borrowings 2,850,000,000
2,600,000,000
Accounts payable 261,024
261,024
Employee benefits payable 23,615,615
40,856,313
Taxes payable 2,126,282
1,762,580
Interest payable 12,748,838
3,090,735
Dividends payable 4,875,583
Other payables 1,175,125,741
909,432,991
Non-current liabilities due within one year 180,000,000
180,000,000
Total current liabilities4,248,753,083
3,735,403,643
Non-current liabilities
Long-term borrowings 2,000,000,000
1,200,000,000
Deferred income 185,584,400
186,526,280
Total non-current liabilities2,185,584,400
1,386,526,280
Total liabilities6,434,337,483
5,121,929,923
Shareholders’ equity
Share capital 2,856,769,678
2,484,147,547
Capital surplus 1,174,222,448
1,451,209,079
Less:Treasury shares 412,640,249
417,349,879
Other comprehensive income
Surplus reserve 935,137,692
935,137,692
Undistributed profits 541,254,621
529,327,954
Total shareholders' equity5,094,744,190
4,982,472,393
EQUITY
11,529,081,673
| TOTAL LIABILITIES AND SHAREHOLDERS’ | ||
10,104,402,316
3. Consolidated Income Statement
Unit: RMBItem Balance of this period Balance of last periodI. Total revenue5,471,169,598
4,944,337,861
Incl. Business income 5,471,169,598
4,944,337,861
II. Total business cost5,073,729,591
4,502,642,030
Incl: Business cost 4,099,496,754
3,737,514,462
Tax and surcharge 71,930,546
61,745,775
Sales expense 172,217,254
156,344,731
Administrative expense 540,554,002
402,554,340
Financial expenses 185,877,426
143,374,027
Asset impairment loss 3,653,609
1,108,695
Plus: Income on disposal assets (“- “for loss) -567,830
-71,756
Other Income 21,863,800
23,674,234
III. Operational profit (“- “for loss)418,735,977
465,298,309
Plus: non-operational income 2,595,795
15,971,862
Less: non-operational expenditure 878,551
603,102
IV. Total profit (“- “for loss)420,453,221
480,667,069
Less: Income tax expenses 61,371,104
80,453,021
V. Net profit (“- “for net loss)359,082,117
400,214,048
(I) Net income from continuing operations (“-
net loss)
359,082,117
| ” for | ||
400,214,048
Attributable to shareholders of parent company 352,837,153
392,992,163
Minority shareholder gains and losses 6,244,964
7,221,885
VI. Other comprehensive income net after tax692,018
-1,076,264
attributable to shareholders of parent company
692,018
Other comprehensive income net after tax
-1,076,264
reclassified subsequently to profit or loss
692,018
| Other comprehensive income items which will be | ||
-1,076,264
Differences on translation of foreign currency
financial statements
692,018
| Differences on translation of foreign currency | ||
-1,076,264
VII. Total comprehensive income359,774,135
399,137,784
shareholders of parent company
353,529,171
| Total comprehensive income attributable to | ||
391,915,899
Total comprehensive income attributable to
minority shareholders
6,244,964
| Total comprehensive income attributable to | ||
7,221,885
VIII. Earnings per share:
(I) Basic earnings per share 0.13
0.14
(II) Diluted earnings per share 0.12
0.14
Legal Representative:Chen Lin Principal in charge of accounting:Wang Jian Principal of the financial department:Wang Wenxin
4. Income Statement of the Parent Co.
Unit: RMBItem Balance of this period Balance of last periodI. Revenue30,709,068
27,295,266
Less: Business cost
Tax and surcharge 246,465
5,136,944
Sales expense
Administrative expense 97,263,171
70,540,224
Financial expenses 29,932,558
19,800,295
Asset impairment loss -46,118
7,706
Plus: Investment income (“- “for loss) 231,537,606
Income on disposal assets (“- “for loss) 2,440
Other Income 991,880
18,000
II. Operating profit135,844,918
-68,171,903
Add: Non-operating revenue 123,450
794,380
Less: Non-operating expenses 277
III. Total profit (“- “for loss) 135,968,091
-67,377,523
Less: Income tax (expenses)/revenue
IV. Net profit (“- “for loss) 135,968,091
-67,377,523
Net profit for continuing operations(“- “for
loss)
135,968,091
-67,377,523
V. Total comprehensive income135,968,091
-67,377,523
VI. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMBItem Balance of this period Balance of last periodI. Cash flows from operating activities
services
5,795,543,089
Cash received from sales of goods or rendering of
5,472,732,654
Refund of taxes and surcharges
14,619,913
7,273,335
Cash received relating to other operating activities
63,866,925
68,210,702
Sub-total of cash inflows
5,874,029,927
5,548,216,691
Cash paid for goods and services
3,670,547,749
3,278,955,888
Cash paid to and on behalf of employees
723,605,247
617,464,364
Payments of taxes and surcharges
404,939,607
380,644,776
Cash paid relating to other operating activities
310,373,236
251,262,209
Sub-total of cash outflows
5,109,465,839
4,528,327,237
activities
764,564,088
Net cash flows from/(used in) operating
1,019,889,454
II. Cash flows from investing activities
intangible assets and other long-term assets
3,466,136
Net cash received from disposal of fixed assets,
44,820
Cash received relating to other investing activities
3,725,277
24,039,200
Sub-total of cash inflows
7,191,413
24,084,020
and other long-term assets
268,526,891
Cash paid to acquire fixed assets, intangible assets
731,954,148
Cash paid relating to other investing activities
58,691,979
31,475,182
Sub-total of cash outflows
327,218,870
763,429,330
activities
-320,027,457
Net cash flows (used in)/from investing
-739,345,310
III. Cash flows from financing activities
Cash received from borrowings
2,870,654,472
1,452,919,750
Cash received relating to other financing activities
16,276,534
1,666,591,530
Sub-total of cash inflows
2,886,931,006
3,119,511,280
Cash repayments of borrowings
1,777,250,000
2,924,757,768
distribution of dividends or profits
293,602,183
Cash payments for interest expenses and
123,450,004
Cash payments relating to other
activities
362,001,673
financing
3,451,507
Sub-total of cash outflows
2,432,853,856
3,051,659,279
activities
454,077,150
Net cash flows (used in)/from financing
67,852,001
and cash equivalents
-113,600
4. Effect of foreign exchange rate changes on cash
-912,613
equivalents
898,500,181
5. Net increase/(decrease) in cash and cash
347,483,532
of current period
2,459,753,165
Add: Cash and cash equivalents at beginning
584,566,990
6. Cash and cash equivalents at end of
period
3,358,253,346
current
932,050,522
6. Cash Flow Statement of the Parent Co.
Unit: RMBItem Balance of this period Balance of last periodI. Cash flows from operating activities
Cash received relating to other operating activities
22,667,417
4,843,988
Sub-total of cash inflows
22,667,417
4,843,988
Cash paid to and on behalf of employees
63,635,591
33,652,141
Payments of taxes and surcharges
1,057,736
6,095,316
Cash paid relating to other operating activities
15,743,250
12,279,684
Sub-total of cash outflows
80,436,577
52,027,141
activities
-57,769,160
Net cash flows from/(used in) operating
-47,183,153
II. Cash flows from investing activities
intangible assets and other long-term assets
2,440
Net cash received from disposal of fixed assets,
Cash received relating to other investing activities
5,000,000
Sub-total of cash inflows
2,440
5,000,000
and other long-term assets
4,544,893
Cash paid to acquire fixed assets, intangible assets
565,260
Cash paid for investing activities
36,750,000
Sub-total of cash outflows
41,294,893
565,260
-41,292,453
Net cash flows (used in)/from investing
4,434,740
activitiesIII. Cash flows from financing activities
Cash received from borrowings
2,190,000,000
990,693,638
Cash received relating to other financing activities
125,399,471
1,806,455,260
Sub-total of cash inflows
2,315,399,471
2,797,148,898
Cash repayments of borrowings
1,140,000,000
2,496,723,365
distribution of dividends or profits
164,279,306
Cash payments for interest expenses and
2,213,425
Sub-total of cash outflows
1,304,279,306
2,498,936,790
activities
1,011,120,165
Net cash flows (used in)/from financing
298,212,108
4. Effect of foreign exchange rate changes on cash
and cash equivalents
-1,253,410
855,016
equivalents
910,805,142
5. Net increase/(decrease) in cash and cash
256,318,711
of current period
1,680,672,390
Add: Cash and cash equivalents at beginning
301,637,933
6. Cash and cash equivalents at end of
period
2,591,477,532
current
557,956,644
7. Statement of Change in Owners’ Equity (Consolidated)
Amount of this term
Unit: RMB
Item
Amount of the Current TermOwners’ Equity Attributable to the Parent Company
Minorityshareholders'
equity
equityShare capital
Capitalsurplus
Less: treasury
share
Othercomprehensiv
e income
Specialreserves
Surplusreserve
Undistributed
profitsI. Balance at the end of the previous
year
2,484,147,547
Total shareholders'
1,306,381,765
417,349,879
1,948,943
3,224,938
920,592,332
4,159,642,227
321,035,238
8,779,623,111
Plus: change of accounting policy
Correction of errors in previousperiods
II. Balance at the beginning of currentyear
2,484,147,547
1,306,381,765
417,349,879
1,948,943
3,224,938
920,592,332
4,159,642,227
321,035,238
8,779,623,111
III. Amount of change in current term
(“- “for decrease)
372,622,131
-276,986,631
-4,709,630
692,018
763,098
228,795,729
6,244,964
336,840,939
(I) Total amount of the comprehensive
income
| (I) Total amount of the comprehensive | ||
692,018
352,837,153
6,244,964
359,774,135
(II) Capital paid in and reduced byowners
95,635,500
-4,709,630
100,345,130
1. Common shares invested by theshareholders
95,635,500
95,635,500
2. Others
-4,709,630
4,709,630
(III) Profit distribution
-124,041,424
-124,041,424
1. Appropriations to surplus reserves
2. Appropriations to owners (orshareholders)
-124,041,424
-124,041,424
(IV) Internal carry-
forward of owners’
equity
372,622,131
forward of owners’
-372,622,131
New increase of capital (or sharecapital) from capital public reserves
372,622,131
-372,622,131
(V) Specific reserve
763,098
763,098
1. Withdrawn for the period
4,150,167
4,150,167
2. Used in the period
3,387,069
3,387,069
IV. Balance at the end of this term
2,856,769,678
1,029,395,134
412,640,249
2,640,961
3,988,036
920,592,332
4,388,437,956
327,280,202
9,116,464,050
Amount of last year
Unit: RMB
Item
Amount of the same period of last yearOwners’ Equity Attributable to the Parent Company
Minorityshareholders'
equity
Totalshareholders'
equityShare capital
Capitalsurplus
Less: treasury
share
Othercomprehensi
ve income
Special reserves
Surplusreserve
Undistributed
profitsI. Balance at the end of the previous
year
2,075,335,560
1,260,702,197
4,653,971
5,843,473
888,508,230
3,573,871,573
320,276,015
8,129,191,019
Plus: change of accounting policy
Correction of errors in previous periods
II. Balance at the beginning of currentyear
2,075,335,560
1,260,702,197
4,653,971
5,843,473
888,508,230
3,573,871,573
320,276,015
8,129,191,019
III. Amount of change in current term(“- “for decrease)
408,811,987
45,679,568
417,349,879
-2,705,028
-2,618,535
32,084,102
585,770,654
759,223
650,432,092
(I) Total amount of the comprehensiveincome
-2,705,028
825,388,312
3,247,723
825,931,007
(II) Capital paid in and reduced byowners
97,511,654
356,979,901
417,349,879
37,141,676
1. Common shares invested by theshareholders
2. Capital invested by the owners ofother equity instruments
3. Amounts of share-based paymentsrecognized in owners’ equity
97,511,654
328,032,920
417,349,879
8,194,695
4. Others
28,946,981
28,946,981
(III) Profit distribution
32,084,102
-239,617,658
-2,488,500
-210,022,056
1. Appropriations to surplus reserves
32,084,102
-32,084,102
2. Appropriations to general riskprovisions
3. Appropriations to owners (orshareholders)
-207,533,556
-2,488,500
-210,022,056
(IV) Internal carry-forward of owners’equity
311,300,333
-311,300,333
1.New increase of capital (or sharecapital) from capital public reserves
311,300,333
-311,300,333
(V) Specific reserve
-2,618,535
-2,618,535
1. Withdrawn for the period
7,831,127
7,831,127
2. Used in the period
10,449,662
10,449,662
(VI) Others
IV. Balance at the end of this term2,484,147,547
1,306,381,765
417,349,879
1,948,943
3,224,938
920,592,332
4,159,642,227
321,035,238
8,779,623,111
8. Statement of Change in Owners’ Equity (Parent Co.)
Amount of this term
Unit: RMBItem
Amount of the Current TermShare capital Capital surplus
Less: treasury
share
Othercomprehensive
income
Special reserves
Surplusreserve
Undistributed
profits
Totalshareholders'
equityI. Balance at the end of the previous year
2,484,147,547
1,451,209,079
417,349,879
935,137,692
529,327,954
4,982,472,393
Plus: change of accounting policy
Correction of errors in previous periods
II. Balance at the beginning of currentyear
2,484,147,547
1,451,209,079
417,349,879
935,137,692
529,327,954
4,982,472,393
III. Amount of change in current term(“- “for decrease)
372,622,131
-276,986,631
-4,709,630
11,926,667
112,271,797
(I) Total amount of the comprehensiveincome
135,968,091
135,968,091
(II) Capital paid in and reduced by owners
95,635,500
-4,709,630
100,345,130
1. Amounts of share-based paymentsrecognized in owners’ equity
95,635,500
95,635,500
2. Others
-4,709,630
4,709,630
(III) Profit distribution
-124,041,424
-124,041,424
1. Appropriations to surplus reserves
2. Appropriations to owners (orshareholders)
-124,041,424
-124,041,424
(IV) Internal carry-forward of owners’equity
372,622,131
-372,622,131
New increase of capital (or share capital)from capital public reserves
372,622,131
-372,622,131
IV. Balance at the end of this term2,856,769,678
1,174,222,448
412,640,249
935,137,692
541,254,621
5,094,744,190
Amount of last year
Unit: RMBItem
Amount of the same period of last yearShare capital Capital surplus
Less: treasury share
Othercomprehensive
income
Specialreserves
Surplusreserve
Undistributed
profits
Total shareholders'
equityI. Balance at the end of the previous
year
2,075,335,560
1,405,529,511
903,053,590
448,104,587
4,832,023,248
Plus: change of accounting policy
Correction of errors in previousperiods
II. Balance at the beginning of currentyear
2,075,335,560
1,405,529,511
903,053,590
448,104,587
4,832,023,248
III. Amount of change in current term
(“- “for decrease)
408,811,987
45,679,568
417,349,879
32,084,102
81,223,367
150,449,145
(I) Total amount of the comprehensive
income
| (I) Total amount of the comprehensive | ||||||||||||
320,841,025
320,841,025
(II) Capital paid in and reduced byowners
97,511,654
356,979,901
417,349,879
37,141,676
1. Amounts of share-based paymentsrecognized in owners’ equity
97,511,654
328,032,920
417,349,879
8,194,695
2. Others
28,946,981
28,946,981
(III) Profit distribution
32,084,102
-239,617,658
-207,533,556
1. Appropriations to surplus reserves
32,084,102
-32,084,102
2. Appropriations to owners (orshareholders)
-207,533,556
-207,533,556
(IV) Internal carry-
equity
311,300,333
| forward of owners’ | ||
-311,300,333
1.New increase of capital (or sharecapital) from capital public reserves
311,300,333
-311,300,333
IV. Balance at the end of this term2,484,147,547
1,451,209,079
417,349,879
935,137,692
529,327,954
4,982,472,393
III. Basic Information of the Company
CSG Holding Co Ltd (the “Company”) was incorporated in September 1984, known as China South Glass Company, as a joint
venture enterprise by Hong Kong China Merchants Shipping Co., LTD (香港招商局轮船股份有限公司), Shenzhen BuildingMaterials Industry Corporation (深圳建筑材料工业集团公司), China North Industries Corporation (中国北方工业深圳公司) andGuangdong International Trust and Investment Corporation (广东国际信托投资公司). The Company was registered in Shenzhen,
Guangdong Province of the People's Republic of China and its headquarters is located in Shenzhen, Guangdong Province of thePeople's Republic of China. The Company issued RMB-denominated ordinary shares (“A-share”) and foreign shares (“B-share”)publicly in October 1991 and January 1992 respectively, and was listed on Shenzhen Stock Exchange on February 1992. As at June30, 2018, the registered capital was RMB 2,856,769,678, with nominal value of RMB 1 per share.
The Company and its subsidiaries (collectively referred to as the “Group”) are mainly engaged in the manufacture and sales offlat glass, architectural glass and other building energy - saving materials, polycrystalline silicon and solar module and theconstruction and operation of photovoltaic plant as well as the manufacture and sales of electronic glass and display device etc.
The main subsidiaries included in the scope of consolidation this year are detailed in the notes.
The financial statements were authorised for issue by the Board of Directors on August 27, 2018.
IV. Basis of the preparation of financial statements
1. Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises - Basic Standard, andthe specific accounting standards and other relevant regulations issued by the Ministry of Finance on 15 February 2006 and insubsequent periods (hereafter collectively referred to as “the Accounting Standard for Business Enterprises” or “CAS”), andInformation Disclosure Rule No. 15 for Companies with Public Traded Securities - Financial Reporting General Provision issued byChina Security Regulatory Commission.
2. Going concern
As at June 30, 2018, the Group current liabilities exceed current assets about RMB 1,466 million and committed capital expenditureof about RMB 218 million. The directors of the Company has assessed the following facts and conditions: a) the Group has been ableto generate positive operating cash flows in prior years and expect to do so in the next 12 months, From January to June 2018, the netcash inflow from operation activities is approximately RMB 765 million; b) the Group has maintained good relationship with banks,so the Group has been able to successfully renew the bank facilities upon the expiry. As at June 30, 2018, the Group had unutilisedbanking facilities of approximately RMB 5.4 billion, among which long-term banking facilities were about RMB 251 million. Inaddition, the shareholder of the Group or other appointed related parties are willing to provide the Group with RMB 2 billioninterest-free loan. The Group also has other sources of financing, such as issuing short-term bonds, ultra-short-term financing bondsand medium-term notes. The directors are of view that the banking facilities and shareholder’s support above can meet the fundingrequirements
V. Significant accounting policies and accounting estimates
The Group determines its specific accounting policies and estimates according to manufacturing and operation feature. It mainlyreflected in provision for bad debts of receivables, inventory costing method, amortisation of property, plant and equipmentandintangible assets, criteria for determining capitalised development expenditure, and timing for revenue recognition.
Please see Note for the key judgements adopted by the Group in applying important accounting policies.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the first half year of 2018 truly and completely present the financial position as of June30, 2018 and the operating results, cash flows and other information for the first half year of 2018 of the Group and the Company incompliance with the Accounting Standards for Business Enterprises.
2. Accounting period
The Company’s accounting year starts on 1 January and ends on 31 December.
3. Operating cycle
The Company’s operating cycle starts on 1 January and ends on 31 December.
4. Recording currency
The recording currency is Renminbi (RMB). The economic environment of subsidiaries, Hong Kong Southern Glass Trading Limitedand China Southern Glass (Hong Kong) Limited, determines their recording currency is Hong Kong dollar. The recording currency inthis report is Renminbi (RMB).
5. Business combinations(a)Business combinations involving entities under common control
The consideration paid and net assets obtained by the absorbing party in a business combination are measured at book value. Thedifference between book value of the net assets obtained from the combination and book value of the consideration paid for thecombination is treated as an adjustment to capital surplus (share premium). If the capital surplus (share premium) is not sufficient toabsorb the difference, the remaining balance is adjusted against retained earnings. Costs directly attributable to the combination areincluded in profit or loss in the period in which they are incurred. Transaction costs associated with the issue of equity or debtsecurities for the business combination are included in the initially recognised amounts of the equity or debt securities.
(b) Business combinations involving entities not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business combination are measured at fair value atthe acquisition date. Where the cost of the combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiablenet assets, the difference is recognised as goodwill; where the cost of combination is lower than the acquirer’s interest in the fairvalue of the acquiree’s identifiable net assets, the difference is recognised in profit or loss for the current period. Costs directly
attributable to the combination are included in profit or loss in the period in which they are incurred. Transaction costs associatedwith the issue of equity or debt securities for the business combination are included in the initially recognised amounts of the equityor debt securities.
6. Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that suchcontrol ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is includedin the consolidated financial statements from the date when it, together with the Company, comes under common control of theultimate controlling party. The portion of the net profits realised before the combination date presented separately in the consolidatedincome statement.
In preparing the consolidated financial statements, where the accounting policies and the accounting periods of the Company andsubsidiaries are inconsistent, the financial statements of the subsidiaries are adjusted in accordance with the accounting policies andthe accounting period of the Company. For subsidiaries acquired from business combinations involving enterprises not undercommon control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable netassets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. Theportion of subsidiaries’ equity and the portion of a subsidiaries’ net profits and losses and comprehensive incomes for the period notattributable to Company are recognised as minority interests and presented separately in the consolidated financial statements underequity, net profits and total comprehensive income respectively. Unrealised profits and losses resulting from the sales of assets by theCompany to its subsidiaries are fully eliminated against net profit attributable to shareholders of the parent company. Unrealisedprofits and losses resulting from the sales of assets by a subsidiary to the Company are eliminated and allocated between net profitattributable to shareholders of the parent company and non-controlling interests in accordance with the allocation proportion of theparent company in the subsidiary. Unrealised profits and losses resulting from the sales of assets by one subsidiary to another areeliminated and allocated between net profit attributable to shareholders of the parent company and non-controlling interests inaccordance with the allocation proportion of the parent in the subsidiary.
After the control over the subsidiary has been gained, whole or partial minority equities of the subsidiary owned by minorityshareholders are acquired from the subsidiary’s minority shareholders. In the consolidated financial statements, the subsidiary's assetsand liabilities are reflected with amount based on continuous calculation starting from the acquisition date or consolidation date.Capital surplus is adjusted according to the difference between newly increased long-term equity investment arising from acquisitionof minority equity and the share of net assets calculated based on current shareholding ratio that the parent company is entitled to.The share is subject to continuous calculation starting from the acquisition date or consolidation date. If the capital surplus (capitalpremium or share capital premium) is not sufficient to absorb the difference, the remaining balance is adjusted against retainedearnings.
If the accounting treatment of a transaction which considers the Group as an accounting entity is different from that considers theCompany or its subsidiaries as an accounting entity, it is adjusted from the perspective of the Group.
7. Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term and highly liquidinvestments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
8. Translating of foreign currency operations and foreign currency report form
(a) Foreign currency transaction
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB using the spot exchange rateson the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period,except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition or constructionof qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currenciesthat are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of thetransactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balancesheet date. Among the shareholders’ equity items, the items other than “undistributed profits” are translated at the spot exchange ratesof the transaction dates. The income and expense items in the income statements of overseas operations are translated at the spotexchange rates of the transaction dates. The differences arising from the above translation are presented separately in theshareholders’ equity. The cash flows of overseas operations are translated at the spot exchange rates on the dates of the cash flows.The effect of exchange rate changes on cash is presented separately in the cash flow statement.
9. Financial instrument
(a) Financial assets(i) Classification of financial assetsFinancial assets are classified into the following categories at initial recognition: financial assets at fair value through profit or loss,receivables, available-for-sale financial assets and held-to-maturity investments. The classification of financial assets depends on theGroup’s intention and ability to hold the financial assets. The Group had no financial assets at fair value through profit or loss andheld-to-maturity investments for the period.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.Receivables comprise notes receivable, accounts receivable and other receivables.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in anyof the other categories at initial recognition. Available-for-sale financial assets are included in other current assets on the balancesheet if management intends to dispose of them within 12 months after the balance sheet date.
(ii) Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to the contractual provisions of thefinancial instrument. The related transaction costs that are attributable to the acquisition of receivables and available-for-salefinancial assets are included in their initial recognition amounts.
Available-for-sale financial assets are subsequently measured at fair value. Investments in equity instruments are measured at costwhen they do not have a quoted market price in an active market and whose fair value cannot be reliably measured. Receivables aremeasured at amortised cost using the effective interest method.
Gains or losses arising from change in fair value of available-for-sale financial assets are recognised directly in equity, except forimpairment losses and foreign exchange gains and losses arising from translation of monetary financial assets. When such financialassets are derecognised, the cumulative gains or losses previously recognised directly into equity are recycled into profit or loss forthe current period. Interests on available-for-sale investments in debt instruments calculated using the effective interest methodduring the period in which such investments are held and cash dividends declared by the investee on available-for-sale investments inequity instruments are recognised as investment income, which is recognised in profit or loss for the period.
(iii) Impairment of financial assets
The Group assesses book values of financial assets at each balance sheet date. If there is objective evidence that a financial asset isimpaired, an impairment loss is provided for.
The objective evidence of impairment losses on financial assets refers to events that actually incurred after the initial recognition offinancial assets, have influence on the expected future cash flow from the financial assets and the influence can be reliably measured.
Objective evidence which indicates the occurrence of impairment for available-for-sale equity instruments includes significant ornon-temporary decrease of fair value of equity instruments investment. The Group conducts individual Checkion on eachavailable-for-sale equity instruments investment at balance sheet date, if the fair value of the available-for-sale equity instrument isless than its initial investment cost for more than 50% (inclusive) or less than its initial investment cost continually for more than 1year, that means impairment incurred; if the fair value of the available-for-sale equity instrument is less than its initial investmentcost for more than 20% (inclusive) but has not reached 50%, the Group will comprehensively consider other factors such as pricevolatility to determine whether the equity instrument investment has been impaired. The Group calculates the initial investment costof initial available-for-sale equity instruments investment using the weighted average method.
When an impairment loss on a financial asset carried at amortised cost has occurred, the amount of loss is provided for at thedifference between the asset’s carrying amount and the present value of its estimated future cash flows (excluding future credit lossesthat have not been incurred). If there is objective evidence that the value of the financial asset is recovered and the recovery is relatedobjectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed and the
amount of reversal is recognised in profit or loss.
If an impairment loss on available-for-sale financial assets measured at fair value is incurred, the cumulative losses arising from thedecline in fair value that had been recognised directly in shareholders' equity are transferred out from equity and into impairment loss.For an investment in debt instrument classified as available-for-sale on which impairment losses have been recognised, if, in asubsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss wasrecognised in profit or loss, the previously recognised impairment loss is reversed into profit or loss for the current period. For aninvestment in an equity instrument classified as available-for-sale on which impairment losses have been recognised, the increase in itsfair value in a subsequent period is recognised directly in equity.
(iv) Derecognition of financial assets
Financial assets are derecognised when: i) the contractual rights to receive the cash flows from the financial assets have expired; or ii) allsubstantial risks and rewards of ownership of the financial assets have been transferred; or iii) the control over the financial asset hasbeen waived even if the Group does not transfer or retain nearly all of the risks and rewards relating to the ownership of a financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received and thecumulative changes in fair value that had been recognised directly in owner's equity, is recognised in profit or loss.
(b) Financial liabilities
Financial liabilities are classified into two categories at initial recognition: financial liabilities at fair value through profit or loss and otherfinancial liabilities. Other financial liabilities in the Group mainly include payables, borrowings and bonds payable.
The fair value change of financial liabilities at fair value through profit or loss is charged to income statement.
Payables comprise accounts payable, notes payable and other payables, which are recognised initially at fair value and measuredsubsequently at amortised cost using the effective interest method.
Borrowings and bonds payable are recognised initially at fair value, net of transaction costs incurred, and subsequently measured atamortised cost using the effective interest method.
Other financial liabilities within one year (including one year) is presented as current liabilities, while non-current financial liabilities duewith one year (including one year) is reclassified as non-current liabilities due within one year. Others are presented as non-currentliabilities.
A financial liability (or a part of a financial liability) is derecognised when all or part of the obligation is extinguished. The differencebetween the carrying amount of a financial liability (or a part of financial liability) extinguished and the consideration paid is recognisedin the income statement.
(c) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fairvalue of a financial instrument that is not traded in an active market is determined by using a valuation technique. During valuation, the
Group adopts a valuation technique suitable for current situation, which is supported by sufficient available data and other information,chooses the inputs consistent with the feature of assets or liabilities considered in the transaction thereof with market participants, anduses related observable inputs in preference to the greatest extent. Unobservable inputs are used when it is unable to obtain or isinfeasible for related observable inputs.
10. Recognition standard impairment and receivables(1) Bad debt provision on receivable accounts with major amount individually
individually significant
The amount individually greater than 20 million.Basis of bad debt provision
Basis of recognition or standard amount of Receivables that areon receivable accounts with major
amount individually
on receivable accounts with majorReceivables that are individually significant are subject to
separate impairment assessment. A provisi
Receivables that are individually significant are subject toon for impairment
on for impairmentof the receivable is recognized if there is objective evidence
of the receivable is recognized if there is objective evidencethat the Group will not be able to collect the full amounts
according to the original terms.
(2) Receivables that are provided for provision based on their credit risk characteristics
Name of the portfolio Basis of bad debt provisionPortfolio 1 according to percentage of balance methodPortfolio 2 according to percentage of balance methodAccounts on aging analysis basis in the portfolio:
□Applicable √Non-applicable
Accounts on percentage basis in the portfolio:
√Applicable □Non-applicable
Name of the portfolio
Percentage of provision for
accounts receivable(%)
Percentage of provision for other
receivables(%)Portfolio 1 2%
that the Group will not be able to collect the full amounts
2%
Portfolio 2 2%
2%
Accounts on other basis in the portfolio:
□Applicable √Non-applicable
(3) The method of provision for impairment of receivables that are individually significant
Reason for providing bad debtindividually:
A provision for impairment of the receivable is recognized if ther
the Group will not be able to collect the full amounts according to the original terms.Basis of bad debt provision:
e is objective evidence thatThe provision for impairment of the receivable is established at the difference between the
carrying amount of the receivable and the present value of estimated future cash flows.
11. Inventories
(a) ClassificationInventories refer to manufacturing sector, including raw materials, work in progress, finished goods and turnover materials, and aremeasured at the lower of cost and net realisable value.
(b)Inventory costing methodCost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw materials,direct labour and systematically allocated production overhead based on the normal production capacity.
(c)Amortisation methods of low value consumables and packaging materialsTurnover materials include low value consumables and packaging materials, which are expensed when issued.
(d)The determination of net realisable value and the method of provision for impairment of inventoriesProvision for decline in the value of inventories is determined at the excess amount of the carrying amounts of the inventories overtheir net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business,less the estimated costs to completion and estimated costs necessary to make the sale and related taxes.
(e)The Group adopts the perpetual inventory system.
12. Assets classified as held for sale
A non-current asset or a disposal group is classified as held for sale when all of the following conditions are satisfied: (1) the non-currentasset or the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary forsales of such non-current asset or disposal group; (2) the group has signed with other parties legally binding sale agreement and approvalhas been obtained, is expected to the sale will be completed within one year.
Non-current assets (except for financial assets and deferred tax assets) that meet the recognition criteria for held for sale are recognised atthe amount equal to the lower of the fair value less costs to sell and the carrying amount. The difference between fair value less costs tosell and the carrying amount should be presented as impairment loss.
Such non-current assets and assets included in disposal groups as classified as held for sale are accounted for as current assets; whileliabilities included in disposal groups classified as held for sale are accounted for as current liabilities, which are presented separately inthe balance sheet.
A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale, and is separatelyidentifiable operationally and for financial reporting purposes, and satisfies one of the following conditions: (1) represents a separatemajor line of business or geographical area of operations; (2) is part of a single coordinated plan to dispose of a separate major line ofbusiness or geographical area of operations; and (3) is a subsidiary acquired exclusively with a view to resale.
Earnings from discontinued operations stated in the income statement include operating profit and loss and disposal gains and losses.
13. Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, and the Group’s long-termequity investments in its associates.
Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group hassignificant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in the Company’s financial statements, and adjusted by using theequity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equitymethod.
(a) Initial recognition
For long-term equity investments formed in business combination: when obtained from business combinations involving entitiesunder common control, the long-term equity investment is stated at carrying amount of equity for the combined parties at the timeof merger; when the long-term equity investment obtained from business combinations involving entities not under commoncontrol, the investment is measured at combination cost.
For long-term equity investments not formed in business combination: the one paid by cash is initially measured at actual purchaseprice; the long-term investment obtained by issuing equity securities is stated at fair value of equity securities as initial investmentcost.
(b) Subsequent measurement and recognition method of profit or loss
Long-term equity investments accounted for using the cost method are measured at initial investment cost. Cash dividend or profitdistribution declared by the investees is recognised as investment income in profit or loss.
For long-term equity investments accounted for using the equity method, where the initial investment cost exceeds the Group’sshare of the fair value of the investee’s identifiable net assets at the time of acquisition, the investment is initially measured at cost.Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the timeof acquisition, the difference is included in profit or loss for the current period and the cost of the long-term equity investment isadjusted upwards accordingly.
For long-term equity investments accounted for using the equity method, the Group recognises the investment income according toits share of net profit or loss of the investee. The Group discontinues recognising its share of the net losses of an investee after thecarrying amounts of the long-term equity investment together with any long-term interests that in substance form part of theinvestor’s net investment in the investee are reduced to zero. However, if the Group has obligations for additional losses and thecriteria with respect to recognition of provisions under the accounting standards on contingencies are satisfied, the Group continuesrecognising the investment losses and the provisions. For changes in owners’ equity of the investee other than those arising from itsnet profit or loss, its proportionate share is directly recorded into capital surplus, provided that the proportion of shareholding of theGroup in the investee remains unchanged. The carrying amount of the investment is reduced by the Group’s share of the profit
distribution or cash dividends declared by an investee. The unrealised profits or losses arising from the transactions between theGroup and its investees are eliminated in proportion to the Group’s equity interest in the investees, based on which the investmentgain or losses are recognised. Any losses resulting from transactions between the Group and its investees attributable to assetimpairment losses are not eliminated.
(c) Definition of control, joint control and significant influence over the investees
The term "control" refers to the power in the investees, to obtain variable returns by participating in the related business activitiesof the investees, and the ability to affect the returns by exercising its power over the investees.
The term "significant influence" refers to the power to participate in the formulation of financial and operating policies of anenterprise, but not the power to control, or jointly control, the formulation of such policies with other parties.
(d) Impairment of long-term equity investments
The carrying amount of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount when therecoverable amount is less than the carrying amount.
14. Fixed assets
(1) Recognition and initial measurementFixed assets comprise buildings, machinery and equipment, motor vehicles and others.
Fixed assets are recognised when it is probable that the related economic benefits will flow to the Group and the costs can be reliablymeasured. Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associatedeconomic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part isderecognised. All the other subsequent expenditures are recognised in profit or loss in the period in which they are incurred.
(2) Depreciation methods
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated residual values overtheir estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge isprospectively determined based upon the adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation rates offixed assets are as follows:
Categories Depreciation methods
Period of depreciation
Estimated net residual
value
Annual depreciation rate
Buildings straight-line method 20 to 35 years 5% 2.71% ~ 4.75%Machinery and equipment straight-line method 8 to 20 years 5% 4.75%~11.88%Motor vehicles and others straight-line method 5 to 8 years 0% 12.50%~20.00%
15. Construction in progress
Construction in progress is recorded at actual cost. Actual cost comprises construction cost, installation cost, borrowing costs eligiblefor capitalised condition and necessary expenditures incurred for its intended use. Actual cost also includes net of trial productioncost and trial production income before construction in progress is put into production.
Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation begins fromthe following month.
Book value of construction in progress is reduced to the recoverable amount when the recoverable amount is below book
value。
16. Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of an asset that needs a substantially long periodof time for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the assetand borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to preparethe asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition orconstruction becomes ready for its intended use and the borrowing costs incurred thereafter are recognised in profit or loss for thecurrent period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed assetis interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.
For the specific borrowings obtained for the acquisition or construction of an asset qualifying for capitalisation, the amount ofborrowing costs eligible for capitalisation is determined by deducting any interest income earned from depositing the unused specificborrowings in the banks or any investment income arising on the temporary investment of those borrowings during the capitalisationperiod.
For the general borrowings obtained for the acquisition or construction of an asset qualifying for capitalisation, the amount ofborrowing costs eligible for capitalisation is determined by applying the weighted average effective interest rate of generalborrowings, to the weighted average of the excess amount of cumulative expenditures on the asset over the amount of specificborrowings. The effective interest rate is the rate at which the estimated future cash flows during the period of expected duration ofthe borrowings or applicable shorter period are discounted to the initial amount of the borrowings.
17. Intangible assets(1) Valuation method, service life and impairment test
Intangible assets, mainly including land use rights, patents and proprietary technologies, exploitation rights and others, are measuredat cost.
(a) Land use rights
Land use rights are amortised on the straight-line basis over their approved use period of 30 to 70 years. If the acquisition costs of theland use rights and the buildings located thereon cannot be reasonably allocated between the land use rights and the buildings, all ofthe acquisition costs are recognised as fixed assets.
(b) Patents and proprietary technologies
Patents are amortised on a straight-line basis over the estimated use life.
(c) Exploitation rights
Exploitation rights are amortised on a straight-line basis over permitted exploitation periods on the exploitation certificate.
(d) Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each year-end, withadjustment made as appropriate.
(e) Impairment of intangible assetsBook value of intangible assets is reduced to the recoverable amount when the recoverable amount is below book value.
(2) Internal research and development expenditure accounting policy
The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditureon the development phase based on its nature and whether there is material uncertainty that the research and development activitiescan form an intangible asset at end of the project.
Expenditure on the research phase related to planned survey, evaluation and selection for research on manufacturing technique isrecognised in profit or loss in the period in which it is incurred. Prior to mass production, expenditure on the development phaserelated to the design and testing phase in regards to the final application of manufacturing technique is capitalised only if all of thefollowing conditions are satisfied:
? the development of manufacturing technique has been fully demonstrated by technical team;? management has approved the budget for the development of manufacturing technique;? there are research and analysis of pre-market research explaining that products manufactured with such technique are capable
of marketing;? There is sufficient technical and capital to support the development of manufacturing technique and subsequent mass
production; and the expenditure on manufacturing technique development can be reliably gathered.
Other development expenditures that do not meet the conditions above are recognised in profit or loss in the period in which they areincurred. Development costs previously recognised as expenses are not recognised as an asset in a subsequent period. Capitalisedexpenditure on the development phase is presented as development costs in the balance sheet and transferred to intangible assets atthe date that the asset is ready for its intended use.
18. Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives and long-term equity investments in joint ventures andassociates are tested for impairment if there is any indication that the assets may be impaired at the balance sheet date; intangible
assets not ready for their intended use are tested at least annually for impairment, irrespective of whether there is any indication thatthey may be impaired. If the result of the impairment test indicates that the recoverable amount of an asset is less than its carryingamount, a provision for impairment and an impairment loss are recognised for the amount by which the asset’s carrying amountexceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the present valueof the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognised on theindividual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of agroup of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generateindependent cash inflows.
Goodwill that is separately presented in the financial statements is tested at least annually for impairment, irrespective of whetherthere is any indication that it may be impaired. In conducting the test, book value of goodwill is allocated to the related asset groupsor groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the testindicates that the recoverable amount of an asset group or group of asset groups, including the allocated goodwill, is lower than itscarrying amount, the corresponding impairment loss is recognised. The impairment loss is first deducted from book value of goodwillthat is allocated to the asset group or group of asset groups, and then deducted from book values of other assets within the assetgroups or groups of asset groups in proportion to book values of assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the subsequent periods.
19. Long-term prepaid expenses
Long-term prepaid expenses include the expenditures that have been incurred but should be recognised as expenses over more thanone year in the current and subsequent periods. Long-term prepaid expenses are amortised on the straight-line basis over the expectedbeneficial period and are presented at actual expenditure net of accumulated amortisation.
20. Employee benefits
(1) Short-term employee benefits accounting methodShort-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staff welfare, medical care, work injuryinsurance, maternity insurance, housing funds, labour union funds, employee education funds and paid short-term leave, etc. Theemployee benefit liabilities are recognised in the accounting period in which the service is rendered by the employees, with acorresponding charge to the profit or loss for the current period or the cost of relevant assets. Employee benefits which arenon-monetary benefits shall be measured at fair value.
(2) Post-employment benefits accounting methodThe Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. Definedcontribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and willhave no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than definedcontribution plans. During the reporting period, the Group's post-employment benefits mainly include basic pensions andunemployment insurance, both of which belong to the defined contribution plans.
(3) Basic pensionsThe Group’s employees participate in the basic pension plan set up and administered by local authorities of Ministry of HumanResource and Social Security. Monthly payments of premiums on the basic pensions are calculated according to prescribed bases andpercentage by the relevant local authorities. When employees retire, local labour and social security institutions have a duty to paythe basic pension insurance to them. The amounts based on the above calculations are recognised as liabilities in the accountingperiod in which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the current
period or the cost of relevant assets.
(4) Termination benefits accounting methodThe Group provides compensation for terminating the employment relationship with employees before the end of the employmentcontracts or as an offer to encourage employees to accept voluntary redundancy before the end of the employment contracts. TheGroup recognises a liability arising from compensation for termination of the employment relationship with employees, with acorresponding charge to profit or loss at the earlier of the following dates: 1) when the Group cannot unilaterally withdraw the offerof termination benefits because of an employment termination plan or a curtailment proposal; 2) when the Group recognises costs orexpenses related to the restructuring that involves the payment of termination benefits.
The termination benefits expected to be paid within one year since the balance sheet date are classified as current liabilities.
21. Provisions
Business restructuring, provisions for product warranties, loss contracts etc. are recognised when the Group has a present obligation,it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can bemeasured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factorssurrounding a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reachingthe best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined bydiscounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time isrecognised as interest expense.
Book value of provision is reviewed at each balance sheet date and adjusted to reflect the current best estimate.
The provisions expected to be paid within one year since the balance sheet date are classified as current liabilities.
22. Share-based payments
Share-based payments are divided into equity-settled and cash-settled payments. The term "equity-settled share-based payment"refers to a transaction in which an enterprise grants shares or other equity instruments as a consideration in return for services.
Equity-settled share-based payment The Group‘s stock optionstock option plan is the equity-settled share-based payment in exchangeof employees' services and is measured at the fair value of the equity instruments at grant date. The equity instruments are exercisableafter services in vesting period are completed or specified performance conditions are met. In the vesting period, the servicesobtained in current period are included in relevant cost and expenses at the fair value of the equity instruments at grant date based onthe best estimate of the number of exercisable equity instruments, and capital surplus is increased accordingly. If the subsequentinformation indicates the number of exercisable equity instruments differs from the previous estimate, an adjustment is made and, onthe exercise date, the estimate is revised to equal the number of actual vested equity instruments. The Group determines the fair valueof stock optionstock options using option pricing model, which is Black-Scholes option pricing model (B-S model).
In the period at which performance conditions and term of service are met, the relevant cost and expenses of equity-settled paymentshould be recognized, and capital surplus is increased accordingly. Before the exercise date, the accruing amounts of equity-settledpayments on balance sheet date reflect the part of expired waiting period and optimal estimation for the number of the Company final
vested equity instruments.
If the non-market conditions and term of service are not met so that share-based payment fail to exercise, the costs and expenses onthis portion should not be recognized. If the share-based payment agreement sets out the market conditions and term of non-vesting,as long as performance conditions and term of service are met, it is should be regard as exercisable right, no matter the marketconditions and non-vesting conditions are meet or not.
If the terms of equity-settled payment are modified, at least the service is confirmed in accordance with the unmodified terms. Inaddition, the increase of the fair value of the authorized equity instruments, or the beneficial changes to the employees on themodification date, the increase of service are confirmed.
If the equity-settled payment is cancelled, the cancellation date shall be deemed as an expedited exercise, and the unconfirmedamount shall be confirmed immediately. If the employee or other party is able to choose to meet the non-vesting conditions but not
satisfied in the waiting period, equity-settled payment should be cancelled. But if a new equity instrument is granted, and the new
equity instrument is confirm to replace the old equity instrument which is canceled in the authorization date of the new equityinstrument, the new equity instrument should be disposed by using the same conditions and terms of the old equity instrument formodifications.
23. Revenue
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for the sales ofgoods and services in the ordinary course of the Group’s activities. Revenue is shown net of discounts, rebates and returns.
Revenue is recognised when the economic benefits associated with the transaction will probably flow to the Group, the relatedrevenue can be reliably measured, and the specific revenue recognition criteria have been met for each type of the Group’s activitiesas described below:
(a) Sales of goodsThe Group mainly sells flat and engineering glass, products related to solar energy, and electronic glass and displays. For domesticsales, the Group delivers the products to a certain place specified in the contract. When the buyer takes over the goods, the Grouprecognises revenue. For export sales, the Group recognises the revenue when it finished clearing goods for export and deliver thegoods on board the vessel, or when the goods are delivered to a certain place specified in the contract. For above sales, when thebuyer takes over the goods, the buyer has the right to sell the products, and should bear the risk of price fluctuation or goods damage.
(b) Rendering of servicesRevenue is recognised for the rendering of service by the Group to external parties upon the completion of related service.
(c) Transfer of asset use rightsInterest income is recognised on a time-proportion basis using the effective interest method.
24. Government grants(1)Judgment basis and accounting method of government grants related to an asset
The government grants related to assets refers to government grant obtained by enterprises and used for purchase and construction oflong-term assets or formation of long-term in other ways.
The government subsidies related to assets will be used to write off the book value of assets concerned, or be recognized as thedeferred gains and be booked into the gains and losses in a reasonable and systematic manner over the useful life of the assetsconcerned.
(2) Judgment basis and accounting method of government grants related to income
The government grants related to income refer to grants other than those related to assets.
The income-related government subsidy which is used to compensate for costs or losses associated with the subsequent periods willbe recognized as deferred gains and is recorded as current gains or losses or offsets related costs during the period in which therelevant cost costs or losses are recognized; The income-related government subsidy which is used to compensate for related costs orlosses incurred will be directly included in current profits or losses or related costs. The group adopts the same presentation methodfor similar government grants.
(3) Judgment basis and accounting method of government grants related to ordinary activities.
The ordinary activitiy government grants should be counted into operating profits; the government grants which not belong ordinaryactivities should be counted inton non-operationg income.
25. Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax bases ofassets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognised for the deductible lossesthat can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred taxliability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred taxliability is recognised for the temporary differences resulting from the initial recognition of assets or liabilities due to a transactionother than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). At the balance sheetdate, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when theasset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to the extent that it isprobable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses andtax credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries and associates, except wherethe Group is able to control the timing of reversal of the temporary difference, and it is probable that the temporary difference willnot reverse in the foreseeable future. When it is probable that the temporary differences arising from investments in subsidiaries andassociates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which thetemporary differences can be utilised, the corresponding deferred tax assets are recognised.
Deferred tax assets and liabilities are offset when:
? the deferred taxes are related to the same tax payer within the Group and the same taxation authority; and,? that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax liabilities.
26. Leases(1) Accounting method of operating lease
Lease payments under an operating lease are recognised on a straight-line basis over the period of the lease, and are either capitalisedas part of the cost of related assets, or charged as an expense for the current period.
Lease income under an operating lease is recognised as revenue on a straight-line basis over the period of the lease.
(2) Accounting method of financing lease
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An operating leaseis a lease other than a finance lease.
27. Safety production costs
According to relevant regulations of the Ministry of Finance and National Administration of Work Safety, a subsidiary of the Groupwhich is engaged in producing and selling polysilicon appropriates safety production costs on following basis:
(a) 4% for revenue below RMB10 million (inclusive) of the year;(b) 2% for the revenue between RMB10 million to RMB100 million (inclusive) of the year;(c) 0.5% for the revenue between RMB100 million to RMB1 billion (inclusive) of the year;(d) 0.2% for the revenue above RMB1 billion of the year.
The safety production costs is mainly used for the overhaul, renewal and maintenance of safety facilities. The safety production costsare charged to costs of related products or profit or loss when appropriated, and safety production costs in equity account are creditedcorrespondingly. When using the special reserve, if the expenditures are expenses in nature, the expenses incurred are offset againstthe special reserve directly when incurred. If the expenditures are capital expenditures, when projects are completed and transferredto fixed assets, the special reserve should be offset against the cost of fixed assets, and a corresponding accumulated depreciation arerecognised. The fixed assets are no longer be depreciated in future.
28. Segment information
The Group identifies operating segments based on the internal organisation structure, management requirements and internalreporting system, and discloses segment information of reportable segments which is determined on the basis of operating segments.
29. Significant changes in accounting policies(1) Changes in significant accounting policies
□Applicable √Not applicable
(2)Changes in significant accounting estimates
□Applicable √ Not applicable
30. Critical accounting estimates and judgements
The Group continually Estimates the critical accounting estimates and key assumptions applied based on historical experience andother factors, including expectations of future events that are believed to be reasonable.
The critical accounting estimates and key assumptions that have a significant risk of possibly causing a material adjustment to bookvalues of assets and liabilities within the next accounting year are outlined below:
(a) Income taxThe Group is subject to Income tax in numerous jurisdictions. There are some transactions and events for which the ultimate taxdetermination is uncertain during the ordinary course of business. Significant judgement is required from the Group in determiningthe provision for Income tax in each of these jurisdictions. Where the final identified outcome of these tax matters is different fromthe initially-recorded amount, such difference will impact the income tax expenses and deferred income tax in the period in whichsuch determination is finally made.
(b) Deferred income tax
Estimates on deferred tax assets are based on estimates on amount of taxable income and applicable tax rate for every year.Realisation of deferred income tax are subject to sufficient taxable income that are possible to be obtained by the Group in the future.Change of the future tax rate as well as the reversed time of temporary difference might have effects on tax expense (income) and thebalance of deferred tax assets or liabilities. Those estimates may also cause significant adjustment on deferred tax.
(c) Impairment of long-term assets (excluding goodwill)
Long-term assets at the balance sheet date should be subject to impairment testing if there are any indications of impairment.Management determines whether the long-term assets impaired or not by evaluating and analysing following aspects: (1) whether theevent affecting assets impairment occurs; (2) whether the expected obtainable present value of future cash flows is lower than theasset’s carrying amount by continually using the assets or disposal; and (3) whether the assumptions used in expected obtainablepresent value of future cash flows are appropriate.
Various assumptions, including the discount rate and growth rate applied in the method of present value of future cash flow, arerequired in evaluating the recoverable amount of assets. If these assumptions cannot be conformed, the recoverable amount should bemodified, and the long-term assets may be impaired accordingly.
(d) The useful life of fixed assets
Management estimates the useful life of fixed assets, based on historical experiences on using fixed assets that have similarproperties and functions. When there are differences between actually useful life and previously estimation, management will adjustestimation to useful life of fixed assets. The fixed assets would be written off or written down when fixed assets been disposed orbecame redundant. Thus, the estimated result based on existing experience may be different from the actual result of the nextaccounting period, which may cause major adjustment to book value of fixed assets on balance sheet.
(e) Goodwill impairment
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potentialimpairment. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of thecash-generating units (“CGUs”), or groups of CGUs, and future cash flow from each CGU or CGUs is forcasted and discounted withappropriate discount rate.
VI. Taxation
1. The main categories and rates of taxes applicable to the Group are set out below:
Tax item Tax basis Tax rateValue-added tax (“VAT”)
Taxable value-added amount (Tax payable is calculatedusing the taxable sales amount multiplied by the applicabletax rate less deductible VAT input of the current period)
6%-17%City maintenance and construction tax VAT paid 1%-7%
Enterprise income tax Taxable income 0%-25%Educational surcharge VAT paid 3%-5%Resource tax Sales volume of silica 6.5%
2. Tax incentives
The main tax incentives the Group is entitled to are as follows:
Tianjin Energy Conservation Glass Co., Ltd. (“Tianjin Energy Conservation”) passed review on a high and new tech enterprise in 2015and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for threeyears since 2015. Currently in the review of high and new tech enterprise, this report period temporary by 15% income tax rate.
Dongguan CSG Architectural Glass Co., Ltd. (“Dongguan CSG”) passed review on a high and new tech enterprise in 2016 andobtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three yearssince 2016.
Wujiang CSG North-east Architectural Glass Co., Ltd. (“Wujiang CSG”) passed review on a high and new tech enterprise in 2017and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for threeyears since 2017.
Dongguan CSG Solar Glass Co., Ltd. (“Dongguan CSG Solar”) passed review on a high and new tech enterprise in 2017 andobtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for threeyears since 2017.
Yichang CSG Silicon Co., Ltd. (“Yichang CSG Silicon”) passed review on a high and new tech enterprise in 2017 and obtained theCertificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since2017.
Dongguan CSG PV-tech Co., Ltd. (“Dongguan CSG PV-tech”) passed review on a high and new tech enterprise in 2016 and obtainedthe Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since2016.
Hebei Panel Glass Co., Ltd. (“Hebei Panel”) passed review on a high and new tech enterprise in 2016 and obtained the Certificate ofHigh and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since 2016.
Wujiang CSG Glass Co., Ltd. (“Wujiang CSG”) was recognised as a high and new tech enterprise in 2017, and obtained theCertificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three yearssince 2017.
Xianning CSG Glass Co Ltd. (“Xianning CSG”) was recognised as a high and new tech enterprise in 2017, and obtained theCertificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three yearssince 2017.
Xianning CSG Energy-Saving Glass Co., Ltd. (“Xianning CSG Energy-Saving”) was recognised as a high and new tech enterprise in2015, and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% taxrate for three years since 2015. Currently in the review of high and new tech enterprise, this report period temporary by 15% incometax rate.
Yichang CSG Photoelectric Glass Co., Ltd. (“Yichang CSG Photoelectric”) was recognised as a high and new tech enterprise in 2015,and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax ratefor three years since 2015. Currently in the review of high and new tech enterprise, this report period temporary by 15% income taxrate.
Yichang CSG Display Co., Ltd (“Yichang CSG Display”) was recognised as a high and new tech enterprise in 2016, and obtained theCertificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three yearssince 2016.
Qingyuan CSG New Energy-Saving Materials Co., Ltd. (“Qingyuan CSG Energy-Saving”) was recognised as a high and new techenterprise in 2016, and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years. Itapplies to 15% tax rate for three years since 2016.
Sichuan CSG Energy Conservation Glass Co., Ltd. (“Sichuan CSG Energy Conservation”) obtains enterprise income tax preferentialtreatment for Western Development, and temporarily calculates enterprise income tax at a tax rate of 15% for current year.
Chengdu CSG Glass Co., Ltd. (“Chengdu CSG”) obtains enterprise income tax preferential treatment for Western Development, andtemporarily calculates enterprise income tax at a tax rate of 15% for current year.
Qingyuan CSG New Energy Co., Ltd. (“Qingyuan CSG New Energy”), Suzhou CSG PV Energy Co., Ltd. (“Suzhou CSG PVEnergy”), Jiangsu Wujiang CSG New Energy Co., Ltd. (“Wujiang CSG New Energy”), and Yichang CSG New Energy Co., Ltd.(“Yichang CSG New Energy”), Zhangzhou CSG Kibing PV Energy Co., Ltd. (“Zhangzhou CSG”), Heyuan CSG Kibing PV Energy
Co., Ltd. (“Heyuan CSG”), Shaoxing CSG Kibing PV Energy Co., Ltd. (“Shaoxing CSG”) are public infrastructure project speciallysupported by the state in accordance with the Article 87 in Implementing Regulations of the Law of the People's Republic of China onEnterprise Income Tax, and can enjoy the tax preferential policy of “three-year exemptions and three-year halves”, that is, startingfrom the tax year when the first revenue from production and operation occurs, the enterprise income tax is exempted from the firstto the third year, while half of the enterprise income tax is collected for the following three years. Qingyuan CSG New Energy,Suzhou CSG PV Energy and Wujiang CSG New Energy started to carry out operations in 2015, while Yichang CSG New Energystarted operation in 2016, Zhangzhou CSG, Heyuan CSG and Shaoxing CSG started operation in 2017.
In addition, pursuant to the document Fogang Guo Shui Shui Tong [2015] No. 2489, the VAT for photovoltaic power generation ofQingyuan CSG New Energy is subject to the refund upon collection policy.
3. Others
Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported and the refund rate is 5%-17%.
VII. Notes to the consolidated financial statements
1. Cash at bank and on hand
Unit: RMBItem Balance at the end of the period Balance at the beginning of the periodCash on hand 14,984
36,182
Cash at bank 3,358,238,362
2,409,716,983
Other cash balances 13,791,823
52,852,599
Total 3,372,045,169
2,462,605,764
Other cash balances include margin deposits for the application of opening letter of credit and loan from the bank, amounting to RMB
13,791,823 (Dec. 31,2017: RMB 2,852,599), which is restricted cash.
2. Notes receivable(1) Notes receivable listed by classification
Unit: RMBItem Balance at the end of the period Balance at the beginning of the periodBank acceptance notes 443,248,211
222,826,841
Trade acceptance notes 345,830,165
329,405,579
Total 789,078,376
552,232,420
(2) Notes receivable which have been endorsed or discounted at the end of the term by the Group but arenot yet due are as follows:
Unit: RMBItem
Amount of recognition termination
at the period-end
Amount of not terminated recognition at the
period-endBank acceptance notes 2,358,041,319
Trade acceptance notes
150,400,507
Total 2,358,041,319
150,400,507
3. Accounts receivable(1) Accounts receivable disclosed by category
Unit: RMBCategory
End of term Beginning of term
Carrying amount Provision for bad debts
Book value
Carrying amount Provision for bad debts
Book value
Amount
Proporti
on
Amount
Propor
tion
Amount
Propor
tion
Amount
Propor
tion
With amountsthat areindividuallysignificant butthat the relatedprovision forbad debts isprovided on theindividual basis
Accountsreceivablewithdrawn baddebt provisionaccording tocredit riskscharacteristics
710,368,384
97%
14,207,893
2%
696,160,491
636,614,136
96%
12,233,039
2%
624,381,097
With amountsthat are notindividuallysignificant butthat the relatedprovision for
19,750,276
3%
8,535,399
43%
11,214,877
23,536,221
4%
9,679,028
41%
13,857,193
bad debts isprovided on theindividual basis
Total 730,118,660
100%
22,743,292
3%
707,375,368
660,150,357
100%
21,912,067
3%
638,238,290
Accounts receivable with large amount individually and bad debt provisions were provided□ Applicable √ Non-applicableAccounts receivable on which bad debt provisions are provided on age analyze basis in the portfolio□ Applicable √ Non-applicableAccounts receivable on which bad debt provisions are provided on percentage analyze basis in a portfolio√Applicable □ Non-applicable
Unit: RMBName of portfolio
Closing balalnceAccounts receivable Bad debt provision Proportion %Portfolio 1 710,368,384
14,207,893
2%
Total 710,368,384
14,207,893
2%
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the report period was of RMB 7,311,182. The amount of the reversed orcollected part during the report period was of RMB 3,725,813.
(3) The actual write-off accounts receivable
Unit: RMBItem Write-off amountAccounts receivable 2,754,144
The receivables actually written off during the year amounted to RMB 2,754,144, which was due to small receivables and non-relatedtransactions. The reasons for write-off include business disputes or failure to contact the debtor and result in uncollectible payments.
(4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party
As at June 30, 2018, the top 5 of the closing balance of the accounts receivable colleted according to the arrears party were collectedand analyzed as follows:
Balance
Provision for bad debts
Percentage in total accounts receivable balance
accounts receivable
100,227,996
| Total balances for the five largest |
2,004,560
14%
4. Advances to suppliers(1) Listed by aging analysis
Unit: RMBAge
Closing balance Opening balanceAmount Proportion Amount Proportionwithin 1 year 109,057,887
89%
130,813,397
91%
1 to 2 years 102,035
264,952
2 to 3 years 72,952
12,769,674
9%
over 3 years 12,769,674
11%
Total 122,002,548
-- 143,848,023
--As at June 30, 2018, advances to suppliers ageing over one-year amount to RMB 12,944,661 (December 31 2017: RMB 13,034,626).They were mainly mainly for prepaid gas and material purchases, and the payment had not been selected because the materials had notbeen received.
(2) Top 5 of the closing balance of the advances to suppliers colleted according to the target
As at June 30, 2018, the top five largest advances to supplies are set out as below:
Balance Percentage in total advances balanceTotal advances for the five largest advances
| 56,202,340 |
46%
5. Other account receivable(1) Other accounts receivable disclosed by category:
Unit: RMB
Category
End of term Beginning of termCarrying amount
Provision for bad
debts
Book value
Carrying amount
Provision for bad
debts
Book value
Amount
Propor
tion
Amount
Propor
tion
Amount
Propor
tion
Amount
Propor
tion
With amounts thatare individuallysignificant but thatthe related provisionfor bad debts isprovided on theindividual basis
Accounts receivablewithdrawn bad debtprovision accordingto credit riskscharacteristics
213,536,126
100%
4,265,739
2%
209,270,387
210,136,518
100%
4,197,499
2%
205,939,019
With amounts thatare not individuallysignificant but thatthe related provisionfor bad debts isprovided on theindividual basis
322,905
322,905
100%
322,905
322,905
100%
Total 213,859,031
100%
4,588,644
2%
209,270,387
210,459,423
100%
4,520,404
2%
205,939,019
Other accounts receivable with large amount and were provided bad debt provisions individually at end of period.□ Applicable √ Non-applicableOther accounts receivable in the portfolio on which bad debt provisions were provided on age analyze basis□ Applicable √ Non-applicableOther accounts receivable in the portfolio on which bad debt provisions were provided on percentage basis√ Applicable □ Non-applicable
Unit: RMBName of portfolio
Closing balanceOther receivable accounts Provision for bad debts proportionPortfolio 1 42,536,126
845,739
2%
Portfolio 2 171,000,000
3,420,000
2%
Total 213,536,126
4,265,739
2%
Other accounts receivable in the portfolio on which bad debt provisions were provided on other basis□ Applicable √ Non-applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the report period was of RMB150,117. The amount of the reversed orcollected part during the report period was of RMB 81,877.
(3) Other accounts receivable classified by the nature of accounts
Unit: RMBNature Closing balance Opening balanceReceivables from related parties 171,000,000
171,000,000
Refundable deposits 20,162,058
16,957,562
Payments made on behalf of other parties
13,889,009
19,306,658
Petty cash 1,519,176
875,714
Others 7,288,788
2,319,489
Total 213,859,031
210,459,423
(4) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party
Unit: RMBName of the
companiesIndustrial
Nature of business Closing balance Ages
Proportion of the
total year endbalance of the
Closing balance ofbad debt provision
accounts receivable
Company ARelated parties 171,000,000
4 to 5 years 80%
3,420,000
Governmentaldepartment B
Independent third party
11,067,754
3 to 4 years
5%
221,355
Company CIndependent third party
5,000,000
1 to 2 years 2%
100,000
Company DIndependent third party
3,350,000
Within 1 year 2%
67,000
Governmental
department E
Independent third party
2,728,214
Within 1 year
1%
54,564
Total -- 193,145,968
-- 90%
3,862,919
6. Inventories(1) Categories of inventory
Unit: RMBItem
Closing balance Opening balance
Carrying amount
Provision fordecline in the value
Book valueCarrying amount
Provision for decline
in the value
Book valueRaw materials 209,815,202
1,444,252
208,370,950
213,348,012
1,447,590
211,900,422
Products in process
20,713,776
20,713,776
45,614,905
45,614,905
Products in stock 443,933,341
68,974
443,864,367
387,489,714
68,974
387,420,740
Material incirculation
40,673,556
40,673,556
40,959,250
40,959,250
Total 715,135,875
1,513,226
713,622,649
687,411,881
1,516,564
685,895,317
(2) Provision for decline in the value of inventories
Unit: RMB
Category Opening balance
Increased in this term Decreased in this term
Closing balance
Withdrawal Other Reverse or write-off OtherRaw materials 1,447,590
3,338
1,444,252
Products in stock
68,974
68,974
Total 1,516,564
3,338
1,513,226
Provision for decline in the value of inventories is as follows:
Basis for provision for decline in the value of inventories
Reasons of reversal of the decline in
the value of inventories
Products in stock
The amount of carrying amount less than that of net realisable value
due to decline in price of products
Sold
Raw materials
The amount of book value more that of net realisable value due to
sluggish or damaged raw materials
Used
7. Assets classified as held for sale
Unit: RMBItem
carrying amounts
at the end of period
Fair value Estimated disposal costs
Estimateddisposal time
Intangible assets 15,048,314
18,390,394
Construction in progress 30,935,206
37,805,606
Total 45,983,520
56,196,000
--The subsidiary of the Group, Dongguan CSG PV-tech signed a grant contract of land use right with third party Dongguan ChaoyingTextile Co., LTD. (Dongguan Chaoying Company) on 17 June 2016. Dongguan CSG PV-tech sells its land use right along with thebuildings on the land to Dongguan Chaoying Company. Therefore, the construction-in-progress and intangible assets of DongguanCSG PV-tech were transferred to assets held for sale. By the end of this reporting period, the above transfer procedures have not beencompleted.
8. Other current assets
Item Closing balance Opening balanceVAT to be offset 154,548,103
181,667,326
Enterprise income tax prepaid 2,198,301
1,132,508
VAT input to be recognised 22,057,351
18,048,155
Total: 178,803,755
200,847,989
9. Fixed assets(1) Particulars of fixed assets
Unit: RMBItem Buildings
Machinery and
equipment
Motor vehicles
TotalI. Original book value:
1. Opening balance 3,999,368,700
12,462,823,260
208,292,757
16,670,484,717
2. Increased amount of the period
(1) Acquisition 71,132
7,573,067
3,439,675
11,083,874
(2) Transfers from construction in progress 10,251,332
430,457,709
2,839,472
443,548,513
(3) Others 6,596,592
18,819,685
2,274,639
27,690,916
3. Decreased amount of the period
(1) Disposal or retirement
19,245,299
2,743,499
21,988,798
(2) Transfer to construction in progress
145,340,491
145,340,491
4. Closing balance 4,016,287,756
12,755,087,931
214,103,044
16,985,478,731
II. Accumulative depreciation
1. Opening balance 751,518,811
3,908,894,072
188,549,283
4,848,962,166
2. Increased amount of the period
(1) Provision 63,278,467
422,717,038
11,716,224
497,711,729
3. Decreased amount of the period
(1) Disposal or retirement
4,968,193
2,715,456
7,683,649
(2) Transferred to construction in progress
117,366,019
117,366,019
4. Closing balance 814,797,278
4,209,276,898
197,550,051
5,221,624,227
III. Depreciation reserves
1. Opening balance 10,580,861
270,171,993
280,752,854
2. Increased amount of the period
(1) Provision
3. Decreased amount of the period
(1) Disposal or retirement
11,196,033
11,196,033
4. Closing balance 10,580,861
258,975,960
269,556,821
IV. Book value
1. Closing book value 3,190,909,617
8,286,835,073
16,552,993
11,494,297,683
2. Opening book value 3,237,269,028
8,283,757,195
19,743,474
11,540,769,697
(2) Fixed assets with pending certificates of ownership
Unit: RMBItems Book value Reason for not yet obtaining certificates of title
Buildings 825,479,080
Have submitted the required documents and are in the process ofapplication, or the related land use right certificate pending
10. Construction in process(1)Particulars of construction in process
Unit: RMBItem
Closing balance Opening balance
Carrying amount
Provision for
impairment loss
Provision for
Carrying amount
Carrying amount
impairment loss
Provision for
Carrying amount
Xianning CSG Photoelectric Glass
project
460,524,423
| Xianning CSG Photoelectric Glass | ||||
460,524,423
400,665,493
400,665,493
Yichang display device company flat
panel display project
321,772,258
| Yichang display device company flat | ||
14,160,474
307,611,784
298,794,622
14,160,474
284,634,148
Yichang Optoelectronic Technology
Reform Project
1,117,944
| Yichang Optoelectronic Technology | ||||
1,117,944
242,055,237
242,055,237
Hebei float 600T tech-
innovation
project
116,421,995
| innovation | ||||
116,421,995
113,762,853
113,762,853
Zhanjiang Photovoltaic 20MV
Step-by-
Zhanjiang Photovoltaic 20MVstep Photovoltaic Power Plant
Project
4,239,529
| step Photovoltaic Power Plant |
4,239,529
100,570,104
100,570,104
Dongguan Solar Glass Phase I and II
improvement project
78,970,995
| Dongguan Solar Glass Phase I and II | ||
40,248,018
38,722,977
78,970,995
40,248,018
38,722,977
Wujiang energy glass expansion
project
70,936,821
| Wujiang energy glass expansion | ||
19,876,460
51,060,361
72,600,518
19,876,460
52,724,058
Yichang 1GW silicon slice project48,653,281
48,653,281
43,617,802
43,617,802
LED Sapphire Substrate Project31,762,102
19,303,853
12,458,249
30,886,629
19,303,853
11,582,776
Materials Project
4,805,466
| Wujiang Photovoltaic Packaging | ||||
4,805,466
7,414,854
7,414,854
Dongguan PV Tech 200MW PV-tech
Battery Expansion project
1,541,388
1,541,388
1,179,935
1,179,935
Dongguan Solar Glass new
photovoltaic glass project
32,491,564
32,491,564
1,888,363
1,888,363
others111,616,450
405,983
111,210,467
119,212,001
405,983
118,806,018
Total1,284,854,216
93,994,788
1,190,859,428
1,511,619,406
93,994,788
1,417,624,618
(2) Movement of significant project
Unit: RMB
Projects Budget
Openingbalance
Increasedthis term
assets in this
term
Otherdecreases in
this term
Closingbalance
Proportion
betweenengineering
input and
budget
Progress
Transfer to fixed
Accumulate
ofinterestcapitalized
Including:
interestcapitalized this
term
Capitalizin
g rate ofinterestthis term
Fund recourse
Xianning CSGPhotoelectric Glass
project
510,000,000
| Photoelectric Glass | |
400,665,493
59,858,930
460,524,423
91%
100%
14,047,509
6,276,896
4.75%
Internal fund andbank loan
Yichang displaydevice company flat
panel display project
device company flat
1,970,000,000
298,794,622
23,438,436
460,800
321,772,258
82%
85%
6,607,890
2,463,731
4.47%
bank loan
YichangOptoelectronic
Internal fund andTechnology Reform
Project
258,296,536
Technology Reform
242,055,237
9,970,569
250,054,605
853,257
1,117,944
100%
100%
Internal fund
tech-innovationproject
145,750,000
Hebei float 600T
113,762,853
2,659,142
116,421,995
14%
15%
163,839
163,839
4.94%
Internal fund andbank loan
Zhanjiang
Step-by-step
Photovoltaic 20MVPhotovoltaic Power
Plant Project
133,000,000
Photovoltaic Power
100,570,104
92,218,630
4,111,945
4,239,529
100%
100%
2,280,097
Internal fund andbank loan
Dongguan SolarGlass Phase I and II
improvement project
Glass Phase I and II
396,410,000
78,970,995
78,970,995
80%
81%
Internal fund
expansion project
845,630,000
| Wujiang energy glass | ||
72,600,518
1,396,512
2,899,013
161,196
70,936,821
100%
100%
20,120,444
Internal fund andbank loan
slice project
1,073,209,600
| Yichang 1GW silicon | ||
43,617,802
5,081,198
45,719
48,653,281
39%
60%
10,105,307
1,475,314
5.15%
Internal fund andbank loan
Substrate Project
35,000,000
| LED Sapphire | ||
30,886,629
875,473
31,762,102
88%
88%
4,650,543
bank loan
Wujiang Photo
Internal fund andvoltaic
voltaicPackaging Materials
Project
520,100,000
| Packaging Materials | |
7,414,854
22,910,266
24,771,759
747,895
4,805,466
95%
100%
bank loan
Dongguan PV Tech200MW PV-techBattery Expansion
project
697,000,000
Internal fund and
1,179,935
1,094,726
733,273
1,541,388
100%
100%
32,417,335
bank loan
Dongguan SolarGlass newphotovoltaic glass
project
60,000,000
Internal fund and
1,888,363
30,603,201
32,491,564
57%
80%
Internal fund
others1,283,748,333
119,212,001
64,904,542
72,364,714
135,379
111,616,450
8,789,090
9,388
bank loan
Total7,928,144,469
Internal fund and
1,511,619,406
222,792,995
443,548,513
6,009,672
1,284,854,216
-- -- 99,182,054
10,389,168
--
11. Intangible assets(1) Particulars of intangible assets
Unit: RMBItem Land use rights
Patents
Exploitation
rights
Others TotalI. Original book value:
1. Opening balance 1,026,603,700
246,011,919
4,456,536
36,106,710
1,313,178,865
2. Increased amount of this period
(1) Acquisition
25,361
278,387
303,748
(2) Internal R&D
9,191,305
9,191,305
3. Decreased amount of the period
(1)Disposal
4. Closing balance 1,026,603,700
255,228,585
4,456,536
36,385,097
1,322,673,918
II. Accumulated amortisation
1. Opening balance 149,057,265
74,985,236
3,706,724
24,996,753
252,745,978
2. Increased amount of this period
(1) Provision 10,193,270
9,333,131
200,321
3,427,051
23,153,773
3. Decreased amount of the period
(1) Disposal
4. Closing balance 159,250,535
84,318,367
3,907,045
28,423,804
275,899,751
III. Impairment provision
1. Opening balance
13,201,347
9,133
13,210,480
2. Increased amount of this period
(1) Provision
3. Decreased amount of this period
(1) Disposal
4. Closing balance
13,201,347
9,133
13,210,480
IV. Book value
1. Closing book value 867,353,165
157,708,871
549,491
7,952,160
1,033,563,687
2. Opening book value 877,546,435
157,825,336
749,812
11,100,824
1,047,222,407
At the end of the period, the intangible assets arising from internal research and development accounted for 12.98% of total ofintangible assets.
(2) Land use rights not licensed yet
Unit: RMBItem Book value Reason for not yet obtaining certificates of titleLand 5,351,068
in the processAs at June 30, 2018, ownership certificates of land use right (“Land ownership Certificates”) for certain land use rights of the Groupwith carrying amounts of approximately RMB 5,351,068 (cost: RMB 6,586,712) had not yet been obtained by the Group (as atDecember 31, 2017, carrying amount: RMB 5,473,442, cost: RMB 6,586,712). The Company’s management is of the view that thereis no legal restriction for the Group to apply for and obtain the Land Ownership Certificates and has no adverse effect on the Group’sbusiness operation.
12. Development expenditure
Unit: RMBItem Opening balance
The increased amount in the period
The decrease amount in the period
Closing balanceInternal development expenditure
Recognised as intangible assetsDevelopmentexpenditure
61,365,537
19,803,682
9,191,305
71,977,914
Total 61,365,537
19,803,682
9,191,305
71,977,914
During Jan.-Jun. 2018, the total amount of research and development expenditures of the Group was RMB 185,844,867 (Jan.-Jun.2017: RMB 166,809,377), including RMB 166,041,185 (Jan.-Jun. 2017: RMB 151,590,181) recorded in income statement forcurrent period and the research and development expenditure with the amount of RMB 9,191,305 recognised as intangible assets forthe current period (Jan.-Jun. 2017: 6,097,439). As at June 30, 2018, the intangible assets arising from internal research anddevelopment accounted for 12.98 % of total of intangible assets (31 December 2017: 12.37 %).
13. Goodwill(1) Book value of goodwill
Unit: RMBName of the companies or goodwill item Opening balance Increased this term
Decreased this term
Closing balance
Tianjin CSG Architectural Glass Co., Ltd. 3,039,946
3,039,946
Xianning CSG Photoelectric 4,857,406
4,857,406
Shenzhen CSG Display 389,494,804
389,494,804
Total 397,392,156
397,392,156
14. Long-term prepaid expenses
Unit: RMBItem Opening balance Increased this term Amortized this term Closing balanceExpenses to be amortized
2,223,397
10,823,584
794,984
12,251,997
Total 2,223,397
10,823,584
794,984
12,251,997
15. Deferred income tax asset/deferred income tax liabilities(1) Deferred income tax assets had not been off-set
Unit: RMBItem
Closing balance Opening balanceDeductible temporary
difference
Deferred income tax
assets
Deductible temporary
difference
Deferred income tax
assetsProvision for assetimpairments
358,728,456
53,970,832
361,149,562
55,552,592
Deductible loss 186,903,882
33,564,573
133,658,792
24,457,319
Government grants 174,742,139
27,365,959
128,189,967
20,424,022
Accrued expenses 49,145,573
7,371,836
50,193,405
7,529,011
Depreciation of fixed assets
20,764,321
4,607,204
33,762,174
8,000,331
Share payment 62,178,136
10,200,424
5,196,945
867,677
Total 852,462,507
137,080,828
712,150,845
116,830,952
(2) Deferred tax liabilities before offsetting
Unit: RMBItem
Closing balance Opening balanceDeductible temporary
difference
Deferred income tax
liabilities
Deductible temporary
difference
Deferred income tax
liabilitiesDepreciation of fixed assets
399,860,322
61,379,387
371,115,284
56,874,044
Total 399,860,322
61,379,387
371,115,284
56,874,044
(3) The net balances of deferred tax assets or liabilities
Unit: RMBItem
-set amount of
Offdeferred income tax
deferred income taxClosing balance of
Closing balance ofdeferred income tax
Off-set amount ofdeferred income tax
Opening balance ofdeferred income tax
at
assets and liabilitiesthe period
-end
the periodassetsor liabilities after
assetsor liabilities afteroff
-set
assets and liabilities atthe period-beginning
assetsor liabilities after
off-setDeferred tax assets 36,960,329
off
100,120,499
35,958,090
80,872,862
Deferred tax liabilities 36,960,329
24,419,058
35,958,090
20,915,954
(4) Details of unrecognised deferred income tax assets
Unit: RMBItem Closing balance Opening balanceDeductible losses 521,381,041
425,759,321
Total 521,381,041
425,759,321
(5) Deductible losses of unrecognized deferred income tax assets will due the following years
Unit: RMBYear Closing balance Opening balance Note
2018年 54,100,000
54,100,000
2019年 82,300,000
82,300,000
2020年 94,430,197
94,430,197
2021年 111,625,585
111,625,585
2022年 83,303,539
83,303,539
2023年 95,621,720
Total 521,381,041
425,759,321
--
16. Other non-current assets
Unit: RMBItem Closing balance Opening balancePrepayment of engineering equipment 79,656,620
45,431,352
Prepayment for lease of land use rights 6,510,000
6,510,000
Total 86,166,620
51,941,352
17. Short-term loans(1) Categories of short-term loans
Unit: RMBItem Closing balance Opening balance
Guaranteed loan 1,099,419,972
1,012,898,300
Unsecured loan2,850,000,000
2,691,732,609
Total 3,949,419,972
3,704,630,909
As at June 30, 2018, the interest of short-term borrowings varied from 2.95% to 6.18% (31 December 2017: 2.70% to 5.66%).
18. Notes payable
Unit: RMBCategory Closing balance Opening balanceBank acceptance notes
208,201,622
213,401,622
Total 208,201,622
213,401,622
19. Accounts payable(1) Particulars of accounts payable
Unit: RMBItem Closing balance Opening balanceMaterials payable 786,952,582
798,178,206
Equipment payable 293,681,363
329,926,045
Construction expenses payable 134,857,144
167,394,038
Freight payable 71,579,206
61,671,023
Utilities payable 31,002,278
35,973,405
Others 13,056,369
7,023,325
Total 1,331,128,942
1,400,166,042
(2) Significant accounts payable due for over one year
Unit: RMBItem Closing balance Unpaid reasonAccount payable for construction andequipments.
148,507,365
As the construction work had not passed the final
acceptance test yet, the balance was not yet settled.Total 148,507,365
As the construction work had not passed the final
--
20. Advances from customers(1) List of advance from customers
Unit: RMB
Item Closing balance Opening balanceAdvances from customers 183,976,533
195,563,465
Total 183,976,533
195,563,465
21. Employee benefits payable(1) List of Employee benefits payable
Unit: RMBItem Opening balance Increased this term Decreased this term Closing balanceI. Short-term employeebenefits payable
272,144,440
736,129,597
825,838,639
182,435,398
II. Welfare afterdeparture- definedcontribution plans
26,220
55,521,053
55,369,081
178,192
Total 272,170,660
791,650,650
881,207,720
182,613,590
(2) List of short-term employee benefits
Unit: RMBItem Opening balance
Increased this term Decreased this term Closing balance1. Wages and salaries, bonuses,allowances and subsidies
175,485,615
557,542,383
607,426,805
125,601,193
2. Social security contributions 13,752
22,071,046
21,990,590
94,208
Including: Medical insurance 12,358
18,579,525
18,510,496
81,387
Work injury insurance
2,270,598
2,261,771
9,811
Maternity insurance 410
1,220,923
1,218,323
3,010
3. Housing funds 2,758,371
23,814,977
24,343,892
2,229,456
4.Labour union funds andemployee education funds
15,280,702
8,234,381
6,081,286
17,433,797
5.Management bonus (i) 78,606,000
28,831,310
70,360,566
37,076,744
6. Share payment (ii)
95,635,500
95,635,500
Total 272,144,440
736,129,597
825,838,639
182,435,398
(3) List of defined contribution plans
Unit: RMBItem Opening balance Increased this term Decreased this term Closing balance
1. Basic pensions 25,388
53,602,090
53,455,510
171,968
2. Unemployment insurance 832
1,918,963
1,913,571
6,224
Total 26,220
55,521,053
55,369,081
178,192
Pursuant to the resolution at the 7th session in the 5th meeting of the board of directors of the Company on 31 March 2015, the boardof directors adopted a management bonus scheme which was based on the quarterly return on net assets and the net profit for thequarter. During the first half of 2018, management bonuses amounting to RMB 31,000,000 (Jan.-Jun. 2017: RMB 35,700,000) wereaccrued and charged to profit or loss.
Pursuant to the resolution at the 7th session in the temporary conference of the board of directors of the Company on 11 December2017, to implemented equity incentive plans of restricted stock for the Company directors and senior management, core managementteam, backbones of technology and busines. The company first awarded 97,511,654 restricted shares to 454 incentive objects for thefirst time at RMB 4.28 per share. The total fair value of the equity instruments granted to the incentive object by the company for thefirst time is RMB 289,519,900. The total value of such fair value as the total cost of the company's equity incentive plan will beconfirmed in stages according to the ratio of unlocking/exercising in the implementation of the equity incentive plan, and it isincluded in the cost in the term of "management fees" and "capital reserves - other capital reserves".
In the first half of 2018, and the cost associated with equity incentive plan is confirmed at RMB 95,635,500 in this phase.
22. Tax payable
Unit: RMBItem Closing balance Opening balanceValue-added-tax payable 37,724,917
48,496,225
Corporate income tax payable 41,970,446
35,100,800
Individual income tax payable 5,768,179
5,177,080
City maintenance and construction tax 2,888,985
4,261,902
Property tax payable 8,058,999
8,617,044
Education surcharge payable 2,430,091
3,348,566
environmental protection tax 2,926,779
Others 5,844,303
6,995,147
Total 107,612,699
111,996,764
23. Interest payable
Unit: RMBItem Closing balance Opening balanceInterest of long-term borrowin
interest and return of principal at maturity
976,143
| gs with periodic payments of | ||
938,950
Interest payable for short-term borrowings 6,110,565
5,471,325
Interest payable for medium term notes 66,284,488
27,622,465
Total 73,371,196
34,032,740
24. Dividends payable
Unit: RMBItem Closing balance Opening balanceRestricted shares dividend 4,875,583
Total 4,875,583
25. Other account payable(1) List of other account payable by nature
Unit: RMBItem Closing balance Opening balanceGuarantee deposits re
contractors
60,768,771
| ceived from construction | ||
49,624,256
Accrued cost of sales (i) 25,927,613
58,584,562
transfer
55,496,000
| Temporary collection of payment for land | ||
56,196,000
Payable for contracted labour costs 17,614,260
17,568,695
Temporary receipts 15,621,231
7,964,070
Deposit for disabled 5,280,590
5,230,110
Restricted share repurchases obligation (ii) 412,474,296
417,349,879
Industrial production scheduling funds 15,000,000
Others 12,357,872
6,806,782
Total 620,540,633
619,324,354
(i) It represented the payment made to external third parties arising from undertaking the rights of debtor and creditor, comprisingwater and electricity, professional service fee and travelling expenses etc.(ii) In this item, the repurchase obligation of restricted shares is recognized by the company as liabilities and meanwhile thetreasury stock will be recognized in terms of corresponding amount.
26. Current portion of non-current liabilities
Unit: RMBItem Closing balance Opening balanceCurrent portion of long-term borrowings 234,000,000
194,880,000
Current portion of finance lease 707,647,396
709,381,397
Total 941,647,396
904,261,397
27. Other current liabilities
Unit: RMBItem Closing balance Opening balanceOthers 300,000
300,000
Total 300,000
300,000
28. Long-term borrowings(1) Categories of long-term loans
Unit: RMBItem Closing balance Opening balanceGuaranteed 364,000,000
354,120,000
Medium term notes 2,000,000,000
1,200,000,000
Total 2,364,000,000
1,554,120,000
Approved by file No. [2015] MTN225 of Inter-bank Market Trading Association, the Company is entitled to issue medium termnotes with the limit of RMB 1,200,000,000, which expires on 28 May 2017.
On 14 July 2015, the Company issued the Phase I medium term notes of RMB 1,200,000,000 for 2015, with the maturity data of 14July 2020 and annual rate of 4.94%.
Approved by file No. [2018] MTN157 of Inter-bank Market Trading Association, the Company is entitled to issue medium termnotes with the limit of RMB 800,000,000, which expires on 20 March 2020.
On 4 May 2018, the Company issued the Phase I medium term notes of RMB 800,000,000 for 2018, with the maturity data of 4 May2021 and annual rate of 7%.
As at 30 June 2018, the interest of long-term borrowings varied from 4.75%-7% (31 December 2017: 4.75%-5.94%).
29. Long-term account payable(1) List of Long-term account payable by nature
Unit: RMBItem Closing balance Opening balanceFinacial lease 866,214,017
1,161,794,247
The sale and leaseback lease of the group in this phase is a mortgage loan with a lease term of 36 months. On June 30, 2018, the realinterest rate of financing lease loans is 4.49%-7.8%.
30. Deferred income
Unit: RMBItem Opening balance
Increase in current
period
decrease in current
period
Closing balance ReasonGovernment grants 562,701,103
2,680,000
15,354,638
550,026,465
Total 562,701,103
2,680,000
15,354,638
550,026,465
--Government grants are analysed below:
Unit: RMB
Item in debt
Openingbalance
Increase in
currentperiod
Included innon-busines
s income
Account toother income in this
period
Amount of
cost andexpensewrittendown incurrentperiod
Otherchanges
Closingbalance
Related to assets
or income
Tianjin CSG Golden
Sun Project (i)
53,717,119
| Tianjin CSG Golden | ||||||
1,687,446
52,029,673
Assets related
Donggua
n CSGGolden Sun
Project (ii)
43,328,250
| Golden Sun | |||
1,375,500
41,952,750
Assets related
Hebei CSG Golden
Sun Project (iii)
44,000,000
| Hebei CSG Golden | ||||||
1,375,000
42,625,000
Assets related
Xianning CSGGolden Sun
Project (iv)
47,982,917
| Golden Sun | |||
1,515,250
46,467,667
Assets related
Infrastructure
compensation forWujiang CSGGlass Co., Ltd (v)
39,628,898
2,020,769
37,608,129
Assets related
QingyuanEnergy-
saving project
(vi)
20,789,167
| saving project | |||
1,235,000
19,554,167
Assets related
Yichang Silicon
Yichang Siliconproducts project
(vii)
21,796,875
| products project | |||
1,406,250
20,390,625
Assets related
Yichang CSG silicon
12,662,876
Yichang CSG silicon
613,867
12,049,009
Assets related
project (viii)Sichuan
energy-savingglass project (ix)
10,475,460
slice auxiliary
827,010
9,648,450
Assets related
Group coating film
experimentalproject (x)
7,526,280
Group coating film
941,880
6,584,400
Assets related
Yichang expert
silicon project (xi)
Yichang expert
3,599,883
153,331
3,446,552
Assets related
Yichang
semiconductorsilicon project (xii)
3,400,000
133,333
3,266,667
Assets related
Yichang CSG D
isplay
project (xiii)
50,836,604
| isplay | ||||||
1,267,239
49,569,365
Assets related
Xianning
Photoelectricproject (xiv)
7,800,000
7,800,000
Assets related
Group talent fund
project (xv)
171,000,000
| Group talent fund | ||||||||||||
171,000,000
Income related
Others
24,156,774
2,680,000
716,775
85,988
26,034,011
Assets related/Income
relatedTotal562,701,103
2,680,000
15,268,650
85,988
550,026,465
——
(i)The allowance was granted by Tianjin Municipal Government. The allowance was used for establishing PV power station byTianjin CSG Architectural Glass Co., Ltd. The facilities belonged to Tianjin CSG upon completion. The allowance will be credited toincome statement in 20 years, the useful life of the PV power station.
(ii)The allowance was granted by Dongguan Municipal Government. The allowance was used for establishing PV power station byDongguan CSG Architectural Glass Co., Ltd. The facilities belonged to Dongguan CSG upon completion. The allowance will becredited to income statement in 20 years, the useful life of the PV power station.
(iii)The allowance was granted by Langfang Municipal Government. The allowance was used for establishing PV power station byHebei CSG Glass Co., Ltd. ("Hebei CSG"). When the facilities were set up, they belonged to Hebei CSG. The allowance will becredited to income statement in 20 years, the useful life of the PV power station.
(iv)The allowance was granted by Xianning Municipal Government. The allowance was used for establishing PV power station byXianning CSG Glass Co Ltd. The facilities belonged to Xianning CSG upon completion. The allowance will be credited to incomestatement in 20 years, the useful life of the PV power station.
(v)The allowance was infrastructure compensation granted by Wujiang municipal government, and will be credited to incomestatement in 15 years, the shortest operating period as committed by the Group.
(vi)The allowance was a pilot project for strategic emerging industry clusters development, which was used to establish highperformance ultra-thin electronic glass production lines by Qingyuan CSG. The allowance will be credited to income statement in 10years, the useful life of the production line.
(vii)The balance represented amounts granted to Yi Chang CSG Silicon Materials Co., Ltd. by Yichang City Dongshan DevelopmentCorporation under the provisions of the investment contract signed between the Group and the Municipal Government of Yi Chang.The proceeds were designed for the construction of electricity transformer and the pipelines. Yichang Silicon is entitled to theownership of the facilities, which will be amortised by 16 years according to the useful life of the converting station.
(viii)It represented the government supporting fund obtained by Yichang Silicon from the acquiring of the assets and liabilities ofCrucible project of Yichang Hejing Photoelectric Ceramic Co., Ltd. The proceeds would be amortised and credited to incomestatement by 16 years after related assets were put into use.
(ix)It represented the funds granted by Chengdu local government for energy glass project. It will be amortised and credited toincome statement in 15 years, in accordance with the minimum operating period committed by the Group.
(x)The allowance was granted by Shenzhen City Development and Reform Commission for the development of Group Coating Filmexperimental project. The grant will be amortised and credited to income statement by 20 years in the estimated useful life of therelevant fixed assets.
(xi) It represented the funds granted by Hubei local government for inport discount complement and international corporation specialsubsidy. The grant will be amortised and credited to income statement by 12 and 15 years
(xii) It represented the funds granted by Yichang Municipal Government for Yichang CSG Display Company's flat projectconstruction support funds and construction of coil coating three-line project. The grant will be amortised and credited to incomestatement by 15 years
(xiii) It represented the funds granted by Yichang Municipal Government for Yichang CSG Display Company's flat projectconstruction support funds and construction of coil coating three-line project. The grant will be amortised and credited to incomestatement by 15 years.
(xiv) It represented the funds granted by Xianning Government of the Project supporting fund for photoconductive glass of lightguide plate production line, which is used to pay for Xianning CSG Glass Co. Ltd. constructing the project of photoelectric opticalglass of light guide plate production line. After the completion of the production line, the ownership belongs to Xianningphotoelectric. The allowance will be credited to income statement in 8 years, the useful life of the production line.
(xv)The allowance was granted by Administrative Commission of Yichang High-tech Industrial Development Zone. For seniormanagement personnel, engineering technical personnel and senior professional technical team which is working at Yichang or planeto introduction, RMB171 million fund was set up, as a special fund for talent introduction and housing resettlement.
31. Share Capital
Unit: RMB
Openingbalance
Changed in the report period (+,-)
Closingbalance
New issues Bonus issue
Transferredfrom reserves
Others Sub-totalTotal of capital
shares
2,484,147,547
372,622,131
372,622,131
2,856,769,678
32. Capital surplus
Unit: RMBItem Opening balance
Increased this term Decreased this term
Closing balanceCapital premium (Share premium)
1,353,802,562
372,622,131
981,180,431
Other capital surplus
-47,420,797
95,635,500
48,214,703
Total
1,306,381,765
95,635,500
372,622,131
1,029,395,134
(i)The Company passed the 2017 annual general meeting of shareholders held on May 14, 2018 and transferred 1.5 shares to every10 shares for all shareholders. The total share capital before the distribution was 2,484,147,547 shares, and the total share capitalafter the dividend was increased to 2,856,769,678 shares. Capital reserve decreased by RMB 372,622,131;
(ii) This year, due to the equity incentive plan, the share payment fee of RMB 95,635,500 was confirmed.
33. Treasury shares
Unit: RMBItem Opening balance Increased this term
Decreased this term
Closing balance
Obligations of restricted share buybacks417,349,879
4,709,630
412,640,249
Total
417,349,879
4,709,630
412,640,249
The Company calculated the amount determined based on the number of restricted stocks issued and the corresponding repurchaseprice, and confirmed the liabilities and treasury stocks. The decrease in treasury stocks was mainly due to the transfer of the restrictedstock stocks during the report period.
34. Other comprehensive income
Unit: RMBItem
Openingbalance
Occuring in current period
Closingbalance
Amountincurred
before
Less: Amounttransferred into
profit and loss in the
Less:
income
tax
After-taxattribute tothe parent
After-taxattribute to
minority
income
tax
current period that
recognized into
othercomprehensiveincome in prior
period
expense
company
shareholder
I. Other comprehensive income notreclassified into profit and loss infutur
II. Other comprehensive incomereclassified into profit and loss infuture
1,948,943
692,018
692,018
2,640,961
Differences on translation of foreigncurrency financial statements
-601,057
692,018
692,018
90,961
Finance incentives for energy andtechnical transformation
2,550,000
2,550,000
Total of other comprehensive income
1,948,943
692,018
692,018
2,640,961
35. Special reserves
Unit: RMBItem Opening balance Increased this term Decreased this term Closing balanceSafety production cost 3,224,938
4,150,167
3,387,069
3,988,036
Total 3,224,938
4,150,167
3,387,069
3,988,036
36. Surplus reserves
Unit: RMBItem Beginning of term Increased this term Decreased this term
End of termStatutory surplus reserve
792,739,764
792,739,764
Discretionary surplus reserve
127,852,568
127,852,568
Total 920,592,332
920,592,332
37. Undistributed profits
Unit: RMBItems The current period The same period of last yearRetained earnings at the end of the previous termbefore adjustment
4,159,642,227
3,576,949,573
Retained earnings at the beginning of this term4,159,642,227
3,573,871,573
after adjustmentAdd: net profits belonging to equity holders of theCompany
352,837,153
392,992,163
Less: Appropriations to statutory surplus reserve
common stock dividends payable
124,041,424
207,533,556
Retained earnings in the end
4,388,437,956
3,759,330,180
38. Revenue and cost of sales
Unit: RMBItem
Occurred in current term Occurred in previous termRevenue Cost Revenue CostRevenue from main operations
5,427,330,622
4,086,213,828
4,914,535,874
3,730,914,851
Revenue from other operations
43,838,976
13,282,926
29,801,987
6,599,611
Total 5,471,169,598
4,099,496,754
4,944,337,861
3,737,514,462
39. Tax and surcharge
Unit: RMBItemOccurred in current term Occurred in previous term
City maintenance and construction tax20,205,850
15,364,494
Educational surcharge 16,053,678
11,927,211
Housing property tax 15,231,539
14,797,102
Land use rights10,028,066
11,043,223
Business tax2,733,716
2,411,686
Environmental protection tax 5,879,730
Others 1,797,967
6,202,059
Total71,930,546
61,745,775
40. Selling Expenses
Unit: RMBItem Occurred in current term Occurred in previous termFreight expenses 83,319,840
76,391,481
Employee benefits 56,534,666
49,496,703
Entertainment expenses 6,061,293
5,674,868
Business travle expenses 4,909,377
5,113,500
Vehicle use fee 3,839,779
3,531,901
Rental expenses 3,085,489
3,029,551
Compensation 765,215
532,240
General office expenses 1,492,596
1,536,282
Depreciation expenses 494,202
482,108
Others 11,714,797
10,556,097
Total 172,217,254
156,344,731
41. Administrative Expenses
Unit: RMBItem Occurred in current term Occurred in previous termResearch and development expenses 166,041,185
151,590,181
Employee benefits 237,887,025
135,166,127
Depreciation expenses 31,624,004
31,885,617
Amortisation of intangible assets 23,153,773
19,756,528
General office expenses 10,595,047
12,640,569
Labour union funds 7,756,982
7,083,212
Entertainment fees 7,056,600
4,800,751
Business travel expenses 5,348,267
4,486,643
Utility fees 4,734,267
4,529,626
Canteen costs 4,046,654
4,404,253
Vehicle use fee 3,268,588
2,966,987
Rental expenses 2,273,435
2,457,132
Consulting advisers 14,334,351
6,015,614
Others 22,433,824
14,771,100
Total 540,554,002
402,554,340
42. Finance Expenses
Unit: RMBItem Occurred in current term Occurred in previous termInterest expenses 203,531,507
143,194,586
Less: Interest income 23,033,418
4,186,712
Exchange losses
-1,568,225
2,109,890
Others6,947,562
2,256,263
Total 185,877,426
143,374,027
43. Asset impairment losses
Unit: RMBItem Occurred in current term Occurred in previous termBad debt loss 3,653,609
1,108,695
Total 3,653,609
1,108,695
44. Asset disposal income
Unit: RMBSource of income from assets disposal Occurred in current term Occurred in previous termGains on disposal of non-current assets -567,830
-71,756
45. Other income
Unit: RMBSource of other gains Occurred in current term Occurred in previous termGovernment subsidy amortization
15,268,650
Industry support funds
236,000
12,600,000
Research grants
1,423,460
6,479,492
support funds
7,000
Energy conservation and utilization
128,116
Government incentive funds
4,239,400
4,323,546
Others 689,290
143,080
Total 21,863,800
23,674,234
46. Non-operating income
Unit: RMBItem
Occurred in current
term
Occurred in previous
term
Amount of non-recurring gain and lossincluded in the report periodGovernment grants 150,000
14,826,965
150,000
Default income 75,000
75,000
Compensation income 837,396
146,436
837,396
Amounts unable to pay 282,061
282,061
Others 1,251,338
997,941
1,251,338
Total 2,595,795
15,971,862
2,595,795
Government subsidy included in current profit and loss
Unit: RMBItem Occurred in current term Occurred in previous term
Related to assets or incomeGovernment grants amortisation
14,826,965
Assets related/Income related
Government awards fund 150,000
Income related
Total 150,000
14,826,965
--
47. Non-operating expenses
Unit: RMBItem
Occurred in current
term
Occurred in previous
term
Amount of non-recurringgain and loss included in the report periodDonation
199,999
Others 878,551
403,103
878,551
Total 878,551
603,102
878,551
48. Income tax expenses(1) List of income tax expenses
Unit: RMBItem Occurred in current term Occurred in previous termCurrent income tax77,115,637
74,283,293
Deferred income tax-15,744,533
6,169,728
Total 61,371,104
80,453,021
(2) Adjustment process of accounting profit and income tax expense
Unit: RMBItem Occurred in current termTotal profit 420,453,221
Current income tax expense accounted by tax and relevant regulations 58,805,863
Costs, expenses and losses not deductible for tax purposes 493,030
The impact of the application of the deductible losses of of the deferredincome tax not recognized in the previous periods
-2,047,668
Influence of deductible temporary difference or deductible losses of23,905,430
unrecognized deferred income tax assetsBalance the previous year income tax adjustment -14,815,121
Impact of tax incentives -4,036,456
Non-taxable income -933,974
Income tax expenses 61,371,104
49. Other comprehensive income
The details can be found in notes to the financial statements.
50. Items of the cash flow statement(1)Cash generated by other operating activities
Unit: RMBItem Occurred in current term Occurred in previous termGovernment grant6,745,150
23,674,234
Interest income23,033,418
4,186,712
Others 34,088,357
40,349,756
Total 63,866,925
68,210,702
(2)Cash paid relating to other operating activities
Unit: RMBItem Occurred in current term Occurred in previous termFreight expenses 88,366,623
68,348,981
Canteen costs 18,797,322
21,140,169
General office expenses 15,300,093
16,993,639
Research and development expenses 32,721,683
26,795,302
Business travel expenses 12,947,259
12,971,903
Entertainment fees 13,644,421
11,650,156
Vehicle use fee 7,827,828
7,589,416
Maintenance fee 15,974,559
9,445,635
Rental expenses 5,358,924
4,103,767
Insurance 9,642,870
6,679,946
Bank fees 6,947,562
2,256,263
Consulting fees 8,397,822
6,015,614
Others 74,446,270
57,271,418
Total 310,373,236
251,262,209
(3)Cash generated by other investing activities
Unit: RMBItem Occurred in current term
Occurred in previous termGovernment grants related to assets received 2,680,000
12,800,000
Collection trusted
11,239,200
Income from trial production of construction in progress 1,045,277
Total 3,725,277
24,039,200
(4)Cash paid relating to other investing activities
Unit: RMBItem Occurred in current term Occurred in previous termPayment for deposit and margin 4,673,145
31,475,182
Trial production expenditure in construction
54,018,834
Total 58,691,979
31,475,182
(5) Cashgenerated byother financing activities
Unit: RMBItem Occurred in current term Occurred in previous termReceived interest free loan
1,381,000,000
Received mortgage loan
278,400,000
Collection of income tax of dividends ofA-share & B-share
1,276,534
Collection
2,490,239
Collect industrial production schedulingfund
15,000,000
4,701,291
Total 16,276,534
1,666,591,530
(6) Cashpaidrelating to other financing activities
Unit: RMBItem Occurred in current term Occurred in previous term
Payment of income tax of dividends of
1,701,507
A-share & B-shareCash paid for Commission fee 1,920,000
1,750,000
Repay financing leases 347,964,797
Payment for deposit and margin 12,116,876
Total 362,001,673
3,451,507
51. Supplement information to the cash flow statement(1) Supplement information to the cash flow statement
Unit: RMBSupplementary Info. Amount of this term Amount of last term1. Reconciliation from net profit to cash flows from operatingactivities
-- --Net profit 359,082,117
400,214,048
Add: Provisions for assets impairment 3,653,609
1,108,695
Depreciation of fixed assets, gas and petrol depreciation,production goods depreciation
497,530,356
480,563,388
Amortisation of intangible assets 23,153,773
19,756,528
Amortisation of long-term prepaid expenses
Losses on disposal of fixed assets intangible assets andother long-term assets (“- “for gains)
567,830
71,756
Losses on scrapping of fixed assets (“- “for gains)
Loss from changes in fair value (“- “for gains)
Finance expenses (“- “for gains) 203,531,507
143,194,586
Investment loss (“- “for gains)
Decrease in deferred tax assets (“- “for increase) -19,247,637
11,754,644
Increase of deferred income tax liability (“- “for decrease)
3,503,104
-5,584,916
Decrease of inventory (“- “for increase) -27,723,994
-152,812,851
Decrease of operational receivable items (“- “for increase)
-288,368,392
-132,167,898
Increase of operational payable items (“- “for decrease) -86,753,685
253,791,474
Others 95,635,500
Net cash flow generated by business operation 764,564,088
1,019,889,454
2. Net change of cash and cash equivalents -- --Balance of cash at period end 3,358,253,346
932,050,522
Less: Initial balance of cash 2,459,753,165
584,566,990
Net increasing of cash and cash equivalents 898,500,181
347,483,532
(2) Formation of cash and cash equivalents
Unit: RMBItem Closing balance Opening balanceI. Cash 3,358,253,346
2,459,753,165
Incl: Cash on hand 14,984
36,182
Bank deposits that can be readily drawn on demand 3,358,238,362
2,409,716,983
Other cash balances that can be readily drawn on demand
50,000,000
II. Cash equivalents
III. Balance of cash and cash equivalents at th end of the period 3,358,253,346
2,459,753,165
52. Assets with restricted ownership or use rights
Unit: RMBItem Ending book value Reason for restrictionMonetary assets 13,791,823
Restricted deposit flow
Fixed assets 2,369,789,041
Limited finance lease
Total 2,383,580,864
--
53. Foreign currency monetary items(1) Foreign currency monetary items
Unit: RMBItem
Closing balance of foreign
currency
Exchange rate
Closingbalance convert to RMBCash at bank and on hand -- -- 52,567,315
Incl: USD 7,509,132
6.6166
49,684,923
EUR 676
7.6515
5,172
HKD 3,309,892
0.8431
2,790,570
AUD 17,443
4.8633
84,831
JPY 30,367
0.0599
1,819
Accounts receivable -- -- 159,975,673
Incl: USD 22,876,273
6.6166
151,363,148
EUR 989,154
7.6515
7,568,512
HKD 1,238,303
0.8431
1,044,013
Short-term borrowings
63,232,500
Incl: HKD 75,000,000
0.8431
63,232,500
Accounts payable
59,173,980
Incl: HKD 307
0.8431
USD 6,386,858
6.6166
42,259,285
EUR 1,964,778
7.6515
15,033,499
JPY 31,401,285
0.0599
1,880,937
VIII. The changes of consolidation scope
1. Other
On March 9, 2017, The Group established a subsidiary company, Chengdu CSG PV Energy Co., Ltd. As of June 30, 2018, the Grouphas not invested yet. The Company holds 100% of its shares.
On March 2, 2017, The Group established a subsidiary company, Xianning CSG PV Energy Co., Ltd. As of June 30, 2018, the Grouphas not invested yet. The Company holds 100% of its shares.
On February 22, 2017, The Group established a subsidiary company, Yichang CSG PV Energy Co., Ltd. As of June 30, 2018, theGroup has not invested yet. The Company holds 100% of its shares.
IX. Interest in other entities
1. Interest in subsidiary(1) Composition of the Group
Name of subsidiary
Major business
location
Place ofregistration
Scope of business
Shareholding (%)
Way of acquicition
Direct IndirectChengdu CSG Chengdu, PRC
Chengdu,
PRC
Chengdu,
Development, production and sales of special
Development, production and sales of specialglass
75%
| glass |
25%
EstablishmentSichuan CSG Energy Conservation Chengdu, PRC
Chengdu,
PRC
Chengdu,
Development, production and sales of special
Development, production and sales of specialglass and processing of glass
75%
| glass and processing of glass |
25%
Split-offTianjin Energy Conservation Tianjin, PRC
Tianjin, PRC
Development, production and sales of specialglass
75%
| glass |
25%
EstablishmentDongguan CSG Dongguan, PRC
Donggua
n,
PRC
n,
| Intensive processing of glass |
75%
25%
EstablishmentDongguan CSG Solar Dongguan, PRC
| Dongguan, | Production and sales of solar glass |
75%
25%
Establishment
PRC
Dongguan CSG PV-tech Dongguan, PRC
Dongguan,
PRC
Dongguan,
Production and sales of hi-tech green bat
tery
teryand components
| and components |
100%
EstablishmentYichang CSG Silicon Yichang, PRC
Yichang,
PRC
Yichang,
Production and sales of high-
purity silicon
purity siliconmaterials
75%
| materials |
25%
EstablishmentWujiang CSG Wujiang, PRC
Wujiang,
PRC
Wujiang,
| Intensive processing of glass |
75%
25%
EstablishmentHebei CSG Yongqing, PRC
Yongqing,
PRC
Yongqing,
| Production and sales of special glass |
75%
25%
EstablishmentWujiang CSG Wujiang, PRC
Wujiang,
PRC
Wujiang,
| Production and sales of special glass |
100%
Establishment
LimitedHong Kong, PRC
China Southern Glass (Hong Kong)
Hong
Kong,
PRC
Kong,
| Investment holding |
100%
EstablishmentHebei Shichuang Yongqing, PRC
Yongqing,
PRC
Yongqing,
Production and sales of ultra-
thin electronic
thin electronicglass
100%
| glass | |||
EstablishmentXianning CSG Xianning, PRC
Xianning,
PRC
Xianning,
| Production and sales of special glass |
75%
25%
EstablishmentXianning CSG Energy-Saving Xianning, PRC
Xianning,
PRC
Xianning,
| Intensive processing of glass |
75%
25%
Split-offQingyuan CSG Energy-Saving Qingyuan, PRC
Qingyuan,
PRC
Qingyuan,
Production and sales of ultra-
thin electronic
thin electronicglass
100%
| glass | |||
EstablishmentShenzhen
Ltd. Shenzhen, PRC
CSG Financial Leasing Co.,
Shenzhen,
PRC
Shenzhen,
| Finance leasing, etc. |
75%
25%
Establishment
Ltd. Jiangyou, PRC
Jiangyou CSG Mining Development Co.
Jiangyou,
PRC
Jiangyou,
Production and sales of silica and its
by-
Production and sales of silica and itsproducts
100%
| products | |||
EstablishmentShenzhen CSG PV Energy Co., Ltd. Shenzhen, PRC
Shenzhen,
PRC
Shenzhen,
| Investment management of photovoltaic plant |
100%
EstablishmentShenzhen Nanbo Display Shenzhen, PRC
Shenzhen,
PRC
Shenzhen,
Production and sales of display component
Production and sales of display componentproducts
60.80%
| products | |||
AcquisitionXianning CSG Photoelectric Xianning, PRC
Xianning,
PRC
Xianning,
| Photoelectric glass and high aluminium glass |
37.50%
62.50%
Acquisition
(2)The significant non-fully-owned subsidiaries of the Group
Unit: RMBSubsidiaries
Shareholding
of minorityshareholders
Total profit or lossattributable to minorityshareholders for the year
ended 30 June 2018
Dividends distributedto minority interestsfor the year ended 30
June 2018
Minority interest
as at 30 June
2018
Shenzhen Nanbo
Ltd.
39.20%
| Display Technology Co., | ||
4,388,860
307,291,224
(3) The major financial information of the significant non-fully-owned subsidiaries of the Group
Unit: RMBName of
Subsidiary
Closing balanceCurrent
assets
Non-current
assets
Total assets Current liabilities
Non-current liabilities
Total liabilitiesShenzhen
NanboDisplayTechnologyCo., Ltd.
260,907,161
1,405,303,159
1,666,210,320
621,330,169
238,708,875
860,039,044
Opening balanceCurrent
assets
Non-current
assets
Total assets Current liabilities
Non-current liabilities
Total liabilities230,735,047
1,384,202,485
1,614,937,532
588,962,555
237,351,982
826,314,537
Unit: RMBName of
Subsidiary
Occurred in current term Occurred in previous termRevenue Net profit
Totalcomprehensi
ve income
Cash flows from
operatingactivities
Revenue Net profit
Cash flows from
Totalcomprehensiv
e income
Cash flows
| from operating |
activitiesShenzhenNanboDisplayTechnologyCo., Ltd.
240,861,525
11,154,553
11,154,553
30,440,528
228,993,498
14,924,574
14,924,574
27,884,582
X. Risk related to financial instrument
The Group's activities expose it to a variety of financial risks: market risk (primarily currency risk and interest rate risk), credit risk andliquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks tominimise potential adverse effects on the Group's financial performance.
(1) Market risk
(a) Foreign exchange risk
The Group’s major operational activities are carried out in Mainland China and a majority of the transactions are denominated inRMB. However, some of the export business is settled in foreign currency. Besides, the Group is exposed to foreign exchange riskarising from the recognised assets and liabilities, and future transactions denominated in foreign currencies, primarily with respect toUS dollars and HKD. The Group monitors the scale of foreign currency transactions, foreign currency assets and liabilities, andadjust settlement currency of export business, to furthest reduce the currency risk.
As at 30 June 2018 the carrying amounts in RMB equivalent of the Group’s assets and liabilities denominated in foreign currenciesare summarized below:
30 June 2018
USD
HKD
Others
Total
Financial assets denominated in foreign currency-
Cash at bank and on hand 49,684,923
2,790,570
91,822
52,567,315
Receivables 151,363,148
1,044,013
7,568,512
159,975,673
Total201,048,071
3,834,583
7,660,334
212,542,988
Financial liabilities denominated in foreigncurrency
Short-term borrowings
63,232,500
63,232,500
Payables 42,259,285
16,914,436
59,173,980
Total42,259,285
63,232,759
16,914,436
122,406,480
31 December 2017
USD
HKD
Others
Total
Financial assets denominated in foreign currency-
Cash at bank and on hand 74,120,750
6,114,383
112,007
80,347,140
Receivables 127,354,518
9,654,366
7,387,101
144,395,985
Total201,475,268
15,768,749
7,499,108
224,743,125
Financial liabilities denominated in foreigncurrency
Short-term borrowings
62,692,500
62,692,500
Payables 104,040,185
36,939,407
140,979,849
Total104,040,185
62,692,757
36,939,407
203,672,349
As at 30 June 2018, if the currency had strengthened/weakened by 10% against the USD while all other variables had been heldconstant, the Group’s net profit for the year would have been approximately RMB13,497,047 lower/higher (31 December 2017:
approximately RMB8,281,982 lower/higher) for various financial assets and liabilities denominated in USD.
As at 30 June 2018, if the currency had strengthened/weakened by 10% against the HKD while all other variables had been heldconstant, the Group’s net profit for the year would have been approximately RMB5,048,845 higher/lower (31 December 2017:
approximately RMB3,988,541higher/lower ) for various financial assets and liabilities denominated in HKD.
Other changes in exchange rate had no significant influence on the Group's operating activities.
(b) Interest rate risk
The Group's interest rate risk arises from long-term interest bearing borrowings including long-term borrowings and bonds payable.Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued at fixed ratesexpose the Group to fair value interest rate risk. The Group determines the relative proportions of its fixed rate and floating ratecontracts depending on the prevailing market conditions. As at 30 June 2018, the Group’s long-term interest-bearing debt at variablerates and fixed rates as illustrated below:
30 June 2018
31 December 2017
Debt at fixed rates 2,274,000,000
1,425,000,000
Debt at variable rates 90,000,000
129,120,000
Total2,364,000,000
1,554,120,000
The Group continuously monitors the interest rate position of the Group. Increases in interest rates will increase the cost of newborrowing and the interest expenses with respect to the Group’s outstanding floating rate borrowings, and therefore could have amaterial adverse effect on the Group’s financial position. The Group makes adjustments timely with reference to the latest marketconditions, which includes increasing/decreasing long-term fixed rate debts at the anticipation of increasing/decreasing interest rate.
(2) Credit risk
Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bank, notes receivable, accounts receivable, otherreceivables.
The Group expects that there is no significant credit risk associated with cash at bank since they are mainly deposited at state-ownedbanks and other medium or large size listed banks. Management does not expect that there will be any significant losses fromnon-performance by these counterparties. Furthermore, as the Group’s bank acceptance notes receivable are generally accepted bythe state-owned banks and other large and medium listed banks, management believes the credit risk should be limited.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables and trade acceptance notesreceivable. The Group assesses the credit quality of and sets credit limits on its customers by taking into account their financialposition, the availability of guarantee from third parties, their credit history and other factors such as current market conditions. The
credit history of the customers is regularly monitored by the Group. In respect of customers with a poor credit history, the Group willuse written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to acontrollable extent.
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’s finance department in itsheadquarters. The Group’s finance department at its headquarters monitors rolling forecasts of the Group's short-term and long-termliquidity requirements to ensure it has sufficient cash reserve, while maintaining sufficient headroom on its undrawn committedborrowing facilities from major financial institutions so that the Group does not breach borrowing limits or covenants on any of itsborrowing facilities to meet the short-term and long-term liquidity requirements.
As at 30 June 2018, the Group had net current liabilities of approximately RMB 1,466 million and committed capital expenditures ofapproximately RMB 218 million. Management will implement the following measures to ensure the liquidation risk limited to acontrollable extent:
(a) The Group will have steady cash inflows from operating activities;(b) The Group will pay the debts that mature and finance the construction projects through the existing bank facilities;(c) The Group will closely monitoring the payment of construction expenditure in terms of payment time and amount.
The financial liabilities of the Group at the balance sheet date are analysed by their maturity date below at their undiscountedcontractual cash as follows:
30 June 2018Within 1 year 1 to 2 years 2 to 5 years Over 5 years TotalShort-term borrowings
| 4,044,317,738 | 4,044,317,738 |
Notes payable
| 208,201,622 |
208,201,622
Accounts payable
1,331,128,942
| 1,331,128,942 |
1,331,128,942
Other payables 620,540,633
620,540,633
Interest payable
73,371,196
| 73,371,196 |
73,371,196
Dividend payable
4,875,583
| 4,875,583 |
4,875,583
Other current liabilities
300,000
| 300,000 |
300,000
Non-current liabilities duewithin one year
945,751,458
| 945,751,458 |
945,751,458
Long-term payables
| 641,223,971 |
| 224,990,046 |
866,214,017
Long-term borrowings
124,645,000
| 124,645,000 | 124,645,000 |
| 2,417,851,740 |
2,667,141,740
Total 7,353,132,172
| 765,868,971 |
2,642,841,7
| 86 |
10,761,842,929
31 December 2017
Within 1 year 1 to 2 years 2 to 5 years Over 5 years TotalShort-term borrowings 3,810,013,826
3,810,013,826
Notes payable 213,401,622
213,401,622
Accounts payable 1,400,166,042
1,400,166,042
Interest payable 34,032,740
34,032,740
Other payables 619,324,354
619,324,354
Other current liabilities 300,000
300,000
Non-current liabilities duewithin one year
911,348,902
911,348,902
Long-term payables
600,436,759
561,357,488
1,161,794,247
Long-term borrowings 80,169,450
117,889,436
1,580,649,809
1,778,708,695
Total7,068,756,936
718,326,195
2,142,007,297
9,929,090,428
XI. Disclosure of fair value
1. Fair value of financial assets and financial liabilities not measured at fair value
The Group’s financial assets and financial liabilities measured at amortized cost mainly include: accounts receivable, short-termborrowings, accounts payable, long term borrowings, bonds payable , long-term payables, ect.
Except for financial liabilities listed below, book value of the other financial assets and liabilities not measured at fair value is areasonable approximation of their fair value.
30 June 2018
31 December 2017
Carrying amount
| Carrying amount |
Fair value
| Carrying amount |
Fair valueFinancial liabilities -
Medium term notes
2,000,000,000
2,005,577,600
1,200,000,000
1,171,444,800Total
2,000,000,000
2,005,577,600
1,200,000,000
1,171,444,800The fair values of payables and medium-term notes are the present value of the contractually determined stream of future cash flows
at the rate of interest applied at that time by the market to instruments of comparable credit status and providing substantially thesame cash flows on the same terms, thereinto bonds payable belongs to Level 1 and medium term notes belong to Level 2.
XII. Related party and related Transaction
1. The subsidiaries
The general information and other related information of the subsidiaries are set out in attached note.
2. Joint venture of the Company
On June 30, 2018, the Company has no joint venture.
3. Other related parties
Name of other related parties Relations between other related parties and the CompanyShenzhen Jushenghua Co. Ltd.
Persons acting in concert with the first majority shareholder of theGroupYichang Hongtai Real Estate Co. Ltd Other related parties and their affiliates.
4. Receivables from related parties(1) Receivable item
Name of the
item
Related parties
Closing banlance Opening banlanceBook balance Bad debt provision Book balance Bad debt provision
Otherreceivables
Yichang Hongtai Real
Estate Co. Ltd
Yichang Hongtai Real
171,000,000
3,420,000
171,000,000
3,420,000
5. Related party commitment
The commitments in relation to related parties contracted for but not yet necessary to be recognised on the balance sheet by theGroup as at the balance sheet date are as follows:
On 22 November 2016, the Company received a letter from its shareholder, Jushenghua, stating that to support the Group’s steadyoperation and development, Jushenghua, as the shareholder of the Company, would like to offer interest-free borrowings with thetotal amount of RMB2 billion to the Company or through related parties designated by it. For any borrowing drawn, its repaymentdate is negotiated by the Company and Jushenghua upon withdrawal. When a borrowing is due, if an extension is needed, theCompany can apply to the actual lender based on the Company’s operation; where the actual lender agrees with the extensionapplication, the term of the borrowing is extended accordingly.
XIII. Share Payment
1. Overall situation of share payment
√ Applicable □ Non-applicable
On December 11, 2017, reviewed and approved by the Group's eighth session of the Board of Directors, the Group implemented the2017 A Share Restricted Stock Incentive Plan. The incentive targets for the restricted shares granted under this plan include companydirectors and senior management personnel. A total of 454 core management teams, company technology members and mainemployees. The first grant date of this restricted stock was December 11, 2017. The company granted 97,511,654 restricted shares forthe first time to 454 incentive targets. The initial grant price was 4.28RMB per share. Reserved restricted stock ending balance17,046,869 shares, the grant price has not been determined. The shares granted of the first time has been registered and listed.
This incentive plan is valid for 48 months from the date of grant of the restricted stock to the date of unlocking of all restricted stocks
or the completion of repurchase and cancellation. During the unlocking/exercise period, if the unlocking/exercise condition specifiedin the incentive plan is reached, the restricted stock granted is unlocked in three phases after 12 months from the grant date.
Unlock Schedule Unlock Time Unlock Ratio
First unlock from the date of the first transaction 12 months after the award date to the date of
the last transaction within 24 months from the grant date.
40%
Second unlock from the date of the first trading day 24 months after the grant date to the date of
the last trading day within 36 months from the grant date
30%
Third unlock from the date of the first trading day 36 months after the grant date to the day of
the last trading day within 48 months from the grant date
30%
2. Equity-settled share payment
√ Applicable □ Non-applicable
Method for Determining the Fair Value of EquityInstruments on the Grant Date
Black-Scholes Model
Determination of the number of vesting equityinstruments
Based on the latest information on the change in the number ofexercisable rights and the completion of performance indicators, thenumber of equity instruments that are expected to be exercised isrevised.Reasons for significant differences between currentestimates and previous estimates
Not applicable
Cumulative amount of equity-settled share-basedpayment in capital reserves
103,830,195Total equity confirmed by equity-settled
share-based payment in this period
95,635,500
According to the relevant provisions of Accounting Standards for Business Enterprises No. 11 - Share Payment and EnterpriseAccounting Standard No. 22 - Recognition and Measurement of Financial Instruments, the Group uses the Black-Scholes model (BSmodel) as a pricing model, deducting incentive objects. The fair value of the restricted stock will be used after the lock-in costs thatare required to obtain the rational expected return from the sales restriction period are lifted in the future. The Group will, on eachbalance sheet date of the lock-in period, revise the number of restricted stocks that are expected to be unlockable based on the newlyobtained changes in the number of unlockable persons and performance indicators, and follow the fair value of the restricted stockgrant date. The services obtained during the current period are included in the relevant costs or expenses and capital reserves.
The Group actually granted restricted stocks of 97,511,654 shares in 2017, and the total fair value of the equity instruments grantedto the incentive target for the first day of grant was RMB 289,519,900, the total fair value as the total cost of the company's equityincentive plan will be confirmed in stages according to the unlocking/exercise ratio during the implementation of the equity incentiveplan, and will be included in the “management fees” and “capital” of each period accordingly.
In the first half of 2018, the Group achieved conditions for unlocking restricted stocks. In the current period, the relevant cost sharingamount of the incentive plan was recognized as RMB 95,635,500.
3. Share payment in cash
□Applicable √ Non-applicable
XIV. Commitments and contingencies
1. Significant commitments
Important commitments on balance sheet date.
(1) Capital commitments
Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessary to be recognized on the balancesheet are as follows:
30 June 2018
31 December 2017
Buildings, machinery and equipment 217,726,070
150,418,893
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarized as follows:
30 June 2018
31 December 2017
Within 1 year
2,911,953
3,675,748
1 to 2 years
1,944,336
1,914,948
2 to 3 years
1,300,108
1,472,224
Over 3 years
2,656,252
3,443,641
Total
8,812,649
10,506,561
XV. Other significant events
1. Segment information(1) Definition foundation and accounting policy of segment
The Group's business activities are categorised by product and service as follows:
- Glass segment, engaged in production and sales of float glass and engineering glass and other building energy -
saving materials, the silica for the production thereof, etc.- Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solar battery and
applications, etc.
- Electronic glass and display segment is responsible for production and sales of display components and special
ultra-thin glass products, etc.
The reportable segments of the Group are the business units that provide different products or service. Different businesses requiredifferent technologies and marketing strategies. The Group, therefore, separately manages the production and operation of eachreportable segment and Estimates their operating results respectively, in order to make decisions about resources to be allocated tothese segments and to assess their performance.
Inter-segment transfer prices are measured by reference to selling prices to third parties.
The assets are allocated based on the operations of the segment and the physical location of the asset. The liabilities are allocatedbased on the operations of the segment. Expenses indirectly attributable to each segment are allocated to the segments based on theproportion of each segment’s revenue.
(2)Financial information of segment
Unit: RMB
Glass industry
Electronic glass
and displays
Solar energy industry
Others
Unallocated
Elimination
Total
Revenue from externalcustomers
3,612,878,032
436,685,900
1,420,997,880
607,786
5,471,169,598
Inter-segment revenue
52,785,600
242,621
16,016,462
30,101,282
-99,145,965
Interest income1,136,795
87,494
162,504
21,646,314
23,033,418
Interest expenses93,306,653
10,576,695
50,461,160
49,186,999
203,531,507
Asset impairmentlosses
3,069,970
-136,967
766,724
-46,118
3,653,609
Depreciation andamortisation expenses
296,233,712
64,199,352
157,440,200
12,005
3,593,844
521,479,113
Total profit/(loss)515,942,875
62,163,871
-58,388,826
-13,019
-96,162,032
-3,089,648
420,453,221
Income tax(expenses)/income
72,809,465
4,251,301
-13,871,995
-1,817,667
61,371,104
Net profit/(loss)443,133,410
57,912,570
-44,516,831
-13,019
-94,344,365
-3,089,648
359,082,117
Total assets8,890,658,347
3,147,841,600
5,031,590,904
653,411
3,454,067,494
20,524,811,756
Total liabilities3,288,898,941
754,504,302
1,506,784,163
2,504,400
5,855,655,900
11,408,347,706
Increase in non-currentassets (i)
106,223,491
146,160,834
19,499,210
3,892,727
275,776,262
(3) Other statement
The Group’s revenue from external customers domestically and in foreign countries or geographical areas, and the total non-currentassets other than financial assets and deferred tax assets located domestically and in foreign countries or geographical areas are asfollows:
Revenue from external customers Jan.-Jun. 2018
Jan.-Jun. 2017
Mainland 4,691,225,341
4,453,794,331
Hong Kong 152,221,834
159,110,247
Europe 37,480,049
10,469,923
Asia (other than Mainland and Hong Kong) 538,291,685
284,803,871
Australia 29,949,405
23,668,506
North America 18,072,258
9,235,672
Other regions 3,929,026
3,255,311
Total5,471,169,598
4,944,337,861
Total non-current assets30 June 2018
31 December 2017
Mainland
| 14,273,593,858 | 14,505,740,522 |
Hong Kong
| 12,915,627 | 12,798,642 |
Total
14,518,539,
| 14,286,509,485 | 164 |
The Group has a large number of customers, but no revenue from a single customer exceed 10% or more of the Group’s revenue.
XVI. Notes to Financial Statements of the Parent Company
1. Other accounts receivable(1) Other accounts receivable disclosed by category:
Unit: RMB
Category
Closing balance Openning balanceBook balance
Bad debtprovision
Book value
Book balance Bad debt provision
Book value
Amount Proportion
Amount
Propor
tion
Amount Proportion
Amount
Proportion
Other accountsreceivablewithdrawn baddebt provisionaccording tocredit riskscharacteristics
2,814,602,307
100%
3,462,906
2,811,139,401
2,403,843,840
100%
3,509,024
2,400,334,816
Total2,814,602,307
100%
3,462,906
2,811,139,401
2,403,843,840
100%
3,509,024
2,400,334,816
Other accounts receivable with large amount and were provided bad debt provisions individually at end of period.□ Applicable √ Non-applicableOther accounts receivable in the portfolio on which bad debt provisions were provided on aging analysis basis□ Applicable √ Non-applicableOther accounts receivable in the portfolio on which bad debt provisions were provided on percentage basis√ Applicable □ Non-applicable
Unit: RMBName of portfolio
Closing balanceOther receivable accounts Bad debt provision proportion%portfolio 1 2,145,321
42,906
2%
portfolio 2 2,812,456,986
3,420,000
Total 2,814,602,307
3,462,906
Other receivable accounts in the portfolio on which bad debt provisions were provided on other basis□ Applicable √ Non-applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The amount of provision for bad debts during the report period was RMB760. The amount of the reversed or collected part during thereport period was RMB 46,878.
(3) Other accounts receivable classified by the nature of accounts
Unit: RMBNature of accounts Ending book balance Beginning book balanceAccounts receivable of related party 2,812,456,986
2,399,392,648
Others 2,145,321
4,451,192
Total 2,814,602,307
2,403,843,840
(4) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party
Unit: RMBName of the company
Nature ofaccounts
Closing balance
Ages
Proportion of the totalyear end balance of theaccounts receivable (%)
Closingbalance of bad
| debt provision | |
Yichang CSG Polysilicon Co., Ltd. Subsidiary 1,377,570,600
Within 1 year
49%
Yichang CSG Display Co.,Ltd.. Subsidiary 307,293,852
Within 1 year
11%
New Meterials Co., Ltd.
Subsidiary
256,179,923
Qingyuan CSG Energy Conservation
Within 1 year
9%
Yichang Hongtai Real Estate Co. Ltd
Related party 171,000,000
4 to 5 years 6%
3,420,000
Shenzhen Nanbo
Subsidiary 144,702,069
| Display Technology | |
Within 1 year
5%
Co., Ltd.Total -- 2,256,746,444
-- 80%
3,420,000
2. Long-term equity investment
Unit: RMBItem
Closing balance Opening balanceBook balance
Impairment
provision
Book value Book balance
Impairment
provision
Book valueInvestment in
subsidiaries
4,911,117,578
15,000,000
4,896,117,578
4,810,987,652
15,000,000
4,795,987,652
Total 4,911,117,578
15,000,000
4,896,117,578
4,810,987,652
15,000,000
4,795,987,652
(1) Inventment in subsidiaries
Unit: RMBInvested company
Openingbalance
Increase in
the term
Decrease in
the term
Closing balance
Provision forimpairment of the
current period
Closing balance
of impairment
provision
Chengdu CSG Glass Co., Ltd.146,977,347
3,480,978
150,458,325
Sichuan CSG Energy Conservation115,546,714
2,989,152
118,535,866
Tianjin Energy Conservation Glass Co. Ltd243,191,428
3,366,378
246,557,806
Dongguan CSG Architectural Glass Co., Ltd.
193,916,049
3,467,028
197,383,077
Dongguan CSG Solar Glass Co., Ltd.349,801,154
4,135,152
353,936,306
Yichang CSG Polysilicon Co., Ltd.633,464,168
5,906,676
639,370,844
Wujiang CSG North-
Co., Ltd.
251,516,189
| east Architectural Glass | ||
2,363,622
253,879,811
Hebei CSG Glass Co., Ltd.262,265,341
3,115,692
265,381,033
China Southern Glass (Hong Kong) Limited85,802,602
704,790
86,507,392
Wujiang CSG Glass Co., Ltd.562,527,754
4,063,524
566,591,278
Hebei Panel Glass Co., Ltd.
243,271,470
2,435,250
245,706,720
Jiangyou CSG M
Ltd.
100,837,599
| ining Development Co. | ||
1,313,604
102,151,203
Xianning CSG Glass Co Ltd.177,295,494
2,960,502
180,255,996
Ltd.
161,543,844
| Xianning CSG Energy Conservation Glass Co | ||
3,060,774
164,604,618
Co.,Ltd
300,376,848
| Qingyuan CSG Energy Saving New Materials | ||
2,231,838
302,608,686
Shenzhen CSG Financial Leasing Co., Ltd.
133,500,000
133,500,000
Shenzhen CSG PV Energy Co., Ltd.100,052,985
618,360
100,671,345
Shenzhen Nanbo Display Technology Co., Ltd.
542,691,888
6,393,726
549,085,614
Xianning CSG Photoelectric Glass Co., Ltd.38,470,534
39,323,724
77,794,258
Others(ii)167,938,244
8,199,156
176,137,400
15,000,000
Total4,810,987,652
100,129,926
4,911,117,578
15,000,000
(2) Other notes
(i) As at June 30, 2018, long-term equity investment in subsidiaries contained the restricted stocks granted by the Company to the
Employees of subsidiaries of the company, and the Company did not charge any fees for the restricted stocks which was deemed asan increase of costs of Long-term equity investment for subsidiaries by RMB 177,962,267 (31 December 2017: RMB114,582,341).
(ii) The subsidiaries which have made provision for impairment were basically closed down in the previous year, and the provision forimpairment for the long-term equity investment of them had been made by the Company according to the recoverable amount.
3. Operating income and operating costs
Unit: RMBItem
Occurred in this term Occurred in previous termIncome Costs Income CostsMain business
Other business 30,709,068
27,295,266
Total 30,709,068
27,295,266
4. Investment income
Unit: RMBItem Occurred in this term Occurred in previous term
Long-term equity investment accounted by cost method 231,537,606
Total 231,537,606
XVII. Supplementary Information
1. Statement of non-recurring gains and losses
√Applicable □ Not applicable
Unit: RMBItemAmount Note
Gains or losses on disposal of non-current assets -567,830
Government grants recognised in profit or loss for current period (not including the subsidy enjoyed inquota or ration according to national standards, which are closely relevant to enterprise’s business)
22,013,800
Non-operating income and expenses other than aforesaid items 1,567,244
Less: Effect of income tax 3,453,960
Effect of minority interests 771,819
Total 18,787,435
--Explain reasons for the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure forCompanies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/lossaccording to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss.□Applicable √ Not applicable
2. Return on net assets and earnings per share
Profit in the report period
The weighted
average netassets ratio
Earnings per share
Basic earnings pershare (RMB/share)
Diluted earnings pershare (RMB/share)
Net profit attributable to shareholders of the listed company(RMB)4.09%
0.13
0.12
Net profit attributable to shareholders of the listed company afterdeducting non-recurring gains and losses(RMB)
3.87%
0.12
0.12
3. Difference of accounting data under domestic and overseas accounting standards
(1) Differences of the net profit and net assets disclosed in financial report prepared under internationaland Chinese accounting standards
□ Applicable √ Not applicable
(2) Difference of the net profit and net assets disclosed in financial report prepared under overseas andChinese accounting standards
□ Applicable √ Not applicable
Section IX. Documents available for Reference
I. Text of the Semi-annual Report carrying the legal representative’s signature;II. Text of the financial report carrying the signatures and seals of the legal representative,
responsible person in charge of accounting and person in charge of financial institution;
III. All texts of the Company’s documents and original public notices disclosed in the papers
appointed by CSRC in the report period.
Board of Directors ofCSG Holding Co., Ltd.28 August 2018