ANNUAL REPORT 2020
Chairman of the Board:
CHEN LIN
April 2021
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Section I Important Notice, Content and ParaphraseBoard 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 individual and joint legal responsibilities for the facticity, accuracy and completenessof 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 this Annual Report 2020 is true, accurate and complete.All directors were present at the meeting of the Board for deliberating the annual report of theCompany in person.The future plans, development strategies and other forward-looking statements mentioned in thisreport do not constitute a material commitment of the Company to investors. Investors and relevantparties should pay attention to investment risks, and understand the differences between plans,forecasts and commitments.The Company has described the risk factors and countermeasures of the Company's futuredevelopment in detail in this report. Please refer to Section IV. Business Discussion and Analysis.The Company shall comply with the disclosure requirements of "Shenzhen Stock ExchangeIndustry Information Disclosure Guidelines No. 13 - Listed Companies Engaged in Non-MetalBuilding Materials Related Business".The deliberated and approved plan of profit distribution in the Board Meeting is distributing cashdividend of RMB 1 yuan (tax included) for every 10 shares to all shareholders based on3,070,692,107 shares of the total current share capital. The actual amount of the cash dividenddistributed will be determined according to the total share capital on the registration date of theCompany's implementation of the profit distribution plan.This report is prepared both in Chinese and English. Should there be any inconsistency between theChinese and English versions, the Chinese version shall prevail.
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Content
Section I Important Notice, Content and Paraphrase..................................................................................... - 1 -Section II Company Profile& Financial Highlights ...................................................................................... - 4 -Section III Overview of the Company’s Business ........................................................................................ - 8 -Section IV. Business Discussion and Analysis ........................................................................................... - 13 -Section V. Important Events ........................................................................................................................ - 42 -Section VI. Changes in Shares and Particulars about Shareholders ............................................................ - 61 -Section VII. Particulars about Directors, Supervisors, Senior Executives and Employees ......................... - 68 -Section VIII. Corporate Governance ........................................................................................................... - 77 -Section IX. Corporate Bonds ....................................................................................................................... - 87 -Section X. Financial Report......................................................................................................................... - 91 -Section XI. Documents Available for Reference ...................................................................................... - 202 -
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Paraphrase
| Items | Refers to | Contents |
| Company, the Company, CSG or the Group | Refers to | CSG Holding Co., Ltd. |
| Foresea Life | Refers to | Foresea Life Insurance Co., Ltd. |
| Flat glass | Refers to | Including float glass, photovoltaic glass |
| Ultra-thin electronic glass | Refers to | The electronic glass with thickness between 0.1~1.1mm |
| Second-generation energy-saving glass | Refers to | Double silver coated glass |
| Third-generation energy-saving glass | Refers to | Triple silver coated glass |
| AG glass | Refers to | Anti-glare glass |
| AF glass | Refers to | Anti-fingerprint glass |
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Section II Company Profile& Financial HighlightsI. Company information
| Code for A-share | 000012 | Code for B-share | 200012 |
| Short form for A-share | Southern Glass A | Short form for B-share | Southern Glass B |
| Listing stock exchange | Shenzhen Stock Exchange | ||
| Legal Chinese name of the Company | 中国南玻集团股份有限公司 | ||
| Abbr. of legal Chinese name of the Company | 南玻集团 | ||
| Legal English name of the Company | CSG Holding Co., Ltd. | ||
| Abbr. of legal English name of the Company | CSG | ||
| Legal Representative | Chen Lin | ||
| Registered Add. | CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C. | ||
| Post Code | 518067 | ||
| Office Add. | CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C. | ||
| Post Code | 518067 | ||
| Internet website | www.csgholding.com | ||
| securities@csgholding.com | |||
II. Person/Way to contact
| Secretary of the Board | Representative of security affairs | |
| Name | Yang Xinyu | Chen Chunyan |
| Contacts add. | CSG Building, No.1 of the 6th Industrial Road, Shekou, Shenzhen, P. R.C. | CSG Building, No.1 of the 6th Industrial Road, Shekou, Shenzhen, P. R.C. |
| Tel. | (86)755-26860666 | (86)755-26860666 |
| Fax. | (86)755-26860685 | (86)755-26860685 |
| securities@csgholding.com | securities@csgholding.com |
III. Information disclosure and preparation place
| Newspapers for information disclosure | Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and Hong Kong Commercial Daily |
| Website assigned by CSRC to release the annual report | www.cninfo.com.cn |
| The place for preparation of the annual report | Office of the Board of Directors |
IV. Registration changes of the Company
| Organization code | Unified social credit code: 914403006188385775 |
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| Changes of main business since listing (if applicable) | No changes |
| Previous changes for controlling shareholders (if applicable) | No changes |
V. Other relevant information
CPA firm engaged by the Company
| Name of CPA firm | Asia Pacific (Group) CPAs (special general partnership) |
| Offices add. for CPA firm | 2001, 20th Floor, Building 3, No. 16, Lize Road, Fengtai District, Beijing |
| Signing Accountants | Zhou Xianhong, Sun Weijie |
Sponsor institute engaged by the Company for performing continuous supervision duties in the report period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in the report period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed andaccounting error correction or not
□Yes √No
| 2020 | 2019 | Changes over last year | 2018 | |
| Operating income (RMB) | 10,671,253,445 | 10,472,028,099 | 1.90% | 10,609,963,011 |
| Net profit attributable to shareholders of the listed company (RMB) | 779,325,592 | 536,430,818 | 45.28% | 452,965,935 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | 539,976,457 | 374,386,216 | 44.23% | 367,579,835 |
| Net cash flow arising from operating activities (RMB) | 2,730,619,636 | 2,379,036,320 | 14.78% | 2,130,378,100 |
| Basic earnings per share (RMB/Share) | 0.25 | 0.17 | 47.06% | 0.15 |
| Diluted earnings per share (RMB/Share) | 0.25 | 0.17 | 47.06% | 0.14 |
| Weighted average ROE (%) | 7.91% | 5.77% | 2.14% | 5.16% |
| As at 31 Dec. 2020 | As at 31 Dec. 2019 | Changes over the end of last year | As at 31 Dec. 2018 | |
| Total assets (RMB) | 17,882,914,898 | 18,201,235,959 | -1.75% | 19,114,234,184 |
| Net assets attributable to shareholders of the listed company (RMB) | 10,212,989,847 | 9,495,588,878 | 7.56% | 9,103,154,571 |
| The total share capital of the company as of the previous trading day of disclosure (share) | 3,070,692,107 |
| Fully diluted earnings per share calculated with latest share equity (RMB/share) | 0.25 |
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VII. Accounting Data Differences under Chinese Accounting Standards (CAS) andInternational Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Income and Equity Differences under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Report Period.
2. Net Income and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Report Period.
3. Reason of the difference between domestic and foreign accounting data
□ Applicable √ Not applicable
VIII. Main financial indexes by quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating income | 1,733,965,637 | 2,690,255,712 | 3,044,056,708 | 3,202,975,388 |
| Net profit attributable to shareholders of the listed company | 111,278,288 | 280,188,435 | 335,353,516 | 52,505,353 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses | 101,805,077 | 256,839,220 | 313,760,171 | -132,428,011 |
| Net cash flow arising from operating activities | -11,126,768 | 790,771,157 | 893,477,970 | 1,057,497,277 |
Whether there are significant differences between the above-mentioned financial index or its total number and therelevant financial index disclosed in the Company’s quarterly report and semi-annual report or not
□Yes √ No
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IX. Items and amounts of extraordinary gains/losses
√Applicable □ Not applicable
Unit: RMB
| Item | 2020 | 2019 | 2018 | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | -1,158,984 | -909,968 | -454,368 | |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 99,660,400 | 184,131,420 | 94,835,539 | |
| In addition to the normal business of the company effective hedging related business, tradable financial assets, derivative financial assets, tradable financial liabilities, changes in the fair value of the derivative financial liabilities to generate profits and losses, as well as the disposal of tradable financial assets, derivative financial assets, tradable financial liabilities, derivative financial liabilities and other creditor's rights investment returns. | 2,654,504 | |||
| Loss and profit from external entrusted loan | 5,546,384 | 11,894,654 | 534,591 |
| 179,911,200 | ||||
| Other non-operating income and expenditure except for the aforementioned items | -6,284,556 | -1,612,253 | 12,099,680 | |
| Less: Impact on income tax | 38,334,180 | 25,951,263 | 16,483,870 | |
| Impact on minority shareholders’ equity (post-tax) | 2,645,633 | 5,507,988 | 5,145,472 | |
| Total | 239,349,135 | 162,044,602 | 85,386,100 | -- |
Reason shall be provided for the non-recurring profit and loss items defined by the company according to the definitionin the No. 1 of Explanatory Announcement on Information Disclosure for Companies Offering their Securities to thePublic: Non-recurring Profit and Loss and the listed non-recurring profit and loss items defined into recurring profit andloss items
□ Applicable √ Not applicable
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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 and display devices.Its products and technologies are very popular at home and abroad. Its main business covers R&D, manufacturing andsales of high quality float glass and architectural glass, solar glass, silicon material, renewable energy products such asPV battery and modules, and new materials and information display products such as ultra-thin electronic glass anddisplay devices. It also provides one-stop services such as project development, construction, operation andmaintenance of solar photovoltaic power plants.Flat glass industry
CSG now has 10 float glass production lines representing the most advanced technology, 2 solar glass production linesand 12 solar glass deep processing production lines in Dongguan, Chengdu, Langfang, Wujiang, Xianning, and also hasquartz sand raw material processing and production bases in Sichuan Jiangyou and Guangdong Qingyuan. The annualcapacity of various high-grade float glass has reached more than 2.47 million tons and the annual capacity of solar glasshas reached over 0.43 million tons. The float glass products cover high-grade float glass and ultra-clear float glass withvarious thicknesses from 1.3mm to 25mm, and the performance of the products all reach the leading level in China.Solar glass has a capacity of 60 million square per year of deep processing, the products of which cover a variety ofthickness of 2-4mm deep processing products. Combining the rapid increase in the penetration rate of dual-glassmodules and the Company's future development needs, the Company was building a total of three lightweight and high-efficiency double-glass processing production lines in Wujiang and Dongguan, adding 36 million square meters ofphotovoltaic glass processing capacity, which is expected to be put into operation in 2021.To make up for theshortcomings of the Group's photovoltaic glass business capacity and large-scale layout, the Company signed aninvestment agreement with the Fengyang County Government of Anhui Province to build a manufacturing base oflightweight and high-permeability panels for solar energy equipment, which contains the construction of fourphotovoltaic glass production lines and supporting processing lines with a daily melting capacity of 1,200 tons per line.At present, the construction of the project is progressing smoothly as planned. In addition, with the approval of theBoard of Directors, the Group was going to build a photovoltaic glass production line and supporting processing lineswith a daily melting capacity of 1,200 tons in Xianning base.The glass of CSG is widely used in high-end architectural curtain walls, decoration and furniture, reflective mirror,automotive windshield, scanner and photocopier transparent panel, home appliance panel, display devices protectionand solar energy field. The Company’s products are sold all over the world, and it has established long-term, stablebusiness cooperation with many well-known processing enterprises.In order to overcome the adverse impact of the "epidemic" on production and operation, the Company vigorouslypromotes R&D innovation and upgrade and transformation business strategies, and continuously improves theprofitability of the flat glass business by implementing differentiated competitive strategies. In 2021, the Company willfocus on strengthening the development of the high-end ultra-white glass market and increase the proportion ofdifferentiated product sales; the photovoltaic glass business will accelerate the technological transformation andupgrading of the production line to increase production capacity of 1.6-2.5mm double-glass thin glass and photovoltaicglazed backpanel glass; on the market side, to strengthen strategic cooperation with industry-leading companies toensure stable sales; to further increase in high-end market share and establish long-term strategic partnerships withindustry-leading companies will further enhance the market competitiveness of CSG flat glass .
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Architectural glass industry
CSG Group is one of the largest suppliers of high-grade engineering and architectural glass in China. It has built fiveenergy-saving glass processing bases in Tianjin, Dongguan, Xianning, Wujiang and Chengdu. In order to better servethe construction needs of Beijing Tianjin Hebei, Yangtze River Delta, Guangdong, Hong Kong and Macao megalopolis,the Board of Directors of the Group successively approved the construction of Zhaoqing architectural glass base,Wujiang architectural glass intelligent factory and Tianjin architectural glass expansion project in 2020. The aboveprojects will be put into operation gradually from the third quarter of this year, which will further strengthen thecompetition and service capabilities of the Group's architectural glass business in the main battlefield of urbanconstruction, and it will accumulate valuable experience for the construction and operation of CSG's new-generationarchitectural glass processing base in the era of intelligent manufacturing. At the same time, in line with the trend ofurban construction extending to the mainland in depth, the Group has paid close attention to the layout of architecturalglass production capacity in the emerging central city group in the mainland. The Board of Directors of the Group hasapproved the construction of a new architectural glass base in Xi'an, and further seeks to lay out a class I or class IIarchitectural glass processing base suitable for its scale and demand in areas with similar conditions. In 2017, CSG low-E coated glass was awarded the title of Single Champion Product by the Ministry of Industry and InformationTechnology, and it passed the review again in 2020, which fully proves the leading position of CSG architectural glassin the industry.The Company has the world's leading glass deep processing equipment and testing equipment, and its products cover allkinds of engineering and construction glass. The Company's R&D and application of glass coating technology keepspace with the world and its technology of high-end product even leads the world. Following the second generation ofenergy-saving glass products, the Company has successively developed the third generation and multi-function energy-saving glass products with continuous improving energy-saving and heat-preservation effect. The domestic high-endmarket share of high-quality energy-saving and environment-friendly LOW-E insulating glass far exceeds that ofcompetitors. At present, the Company’s coated insulating glass and coated glass have reached annual capacity of morethan16.00 million square meters and 36.00 million square meters respectively.The Company’s quality management system for engineering and architectural glass has been respectively approved byorganizations of UK AOQC and Australia QAS. The product quality which meets the national standards of the US, theUK and Australia enables CSG has an advantage in the international tendering and bidding. Since 1988, CSG'sengineers and technicians have been continuously participating in the formulation and compilation of various nationalstandards and industry standards. Various high-quality architectural glass of the Company has been used in manylandmark buildings at home and abroad, such as Beijing Capital International Airport, CCTV, Shanghai OrientalFisherman’s Wharf, China Resources Headquarters Building, Shenzhen KingKey100 Building, Hong Kong-Zhuhai-Macao Bridge Zhuhai port, Hangzhou Yintai Plaza, Xiamen Yinglan International Financial Center, Gongga Airport inLhasa,Zhuhai Jinwan Aviation City HUAFA International Business Center, Beijing Dongzhimen Transportation Hub,Hangzhou Xiaoshan International Airport, Zhuhai International Convention and Exhibition Center Phase 2 Ping AnFinancial Center of China, National Convention Center, Beijing Deputy Administrative Center, Beijing DaxingInternational Airport, Hangzhou Hampton and other more than ten Hilton Hotels, Hong Kong Four Seasons Hotel,Melbourne Airport, Midtown, International Centre of Abu Dhabi, Egypt's new capital CBD, Korea LCT and MetropolisPhase 2B.
Electronic glass and display industry
In 2020, the Company's electronic glass business continued to develop. Its four subsidiaries, Hebei Panel, YichangPhotoelectric, Qingyuan New Energy-Saving Materials and Xianning Photoelectric continued to actively implementproduct upgrading and market upgrading in the application fields of intelligent electronic terminals, touch components,
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vehicle mounted display, industrial control and commercial display, military security and smart home, so that themarket share and brand effect of the Company's medium and high aluminum electronic glass products could improvegreatly. Rich product structure, reliable delivery guarantee and strong technical innovation help the Company’selectronic glass business maintain its dominant position in the fierce market competition. In 2020, the subsidiarycompany Xianning CSG Photoelectric Glass Co., Ltd. realized batch sales of second-generation high aluminumelectronic glass, and some performance indicators of the products have reached the international advanced level, whichcan meet the higher standard requirements of downstream end customers for basic materials in 3D curved surfacetechnology, 5G communication solutions and other fields. The successful development of the product marks thepromotion of the competitiveness of CSG’s electronic glass business in the high-end application market. Based on thecurrent products, the Company has laid out the research and development of the next generation electronic glassproducts, the third-generation high-aluminum products have been successfully developed in the laboratory, and theirperformance can be fully benchmarked against the new generation of competitive products of international brands,which will further enhance the competitive advantages of electronic glass products in the future. In addition, the secondphase of the Qingyuan CSG project "One Kiln and Two Lines" was transferred to commercial operation in December2020. This project is CSG’s key measure to actively implement the country’s advocacy of achieving leapfrogdevelopment by industrial transformation and upgrading. It effectively enhances the overall profitability of electronicglass while further consolidating and strengthening CSG's competitive advantage in the domestic electronic glass field.In 2020, CSG's ultra-thin electronic glass was awarded the title of Single Champion Product by the Ministry of Industryand Information Technology for the first time, fully demonstrating the Company's brand influence and product strengthin the electronic glass field. In March 2021, in order to strengthen the Company's high-end market competitiveness inthe field of ultra-thin electronic glass for touch applications, the Company's Board of Directors approved Hebei PanelGlass to invest in a new ultra-thin electronic glass production line with a daily melting capacity of 110 tons and asupporting R&D center. After the completion of the above-mentioned projects, CSG Electronic Glass will achievecomprehensive coverage of electronic glass products from the third generation of high aluminum to medium-aluminum,soda-calcium, and from high to middle and low-end electronic glass products, forming a more solid foundation formarket competition.CSG has long been committed to becoming the industry's leading electronic glass material solutionprovider, and it will continue to develop glass-based protective materials with higher strength and competitiveness inthe field of touch display, develop human-computer interaction interface materials meeting the requirements of materialinterconnection in the fields of smart home, vehicle display and advanced medical, and develop revolutionaryalternative materials in the fields of transportation and security.CSG has been engaged in the field of touch display since 2000, and now it has formed a complete touch industry chainfrom vacuum magnetron sputtering coating, fine pattern lithography processing, to touch display modules. Its mainbusiness includes ITO conductive glass, ITO conductive film, touch sensor and module. Among them, ITO conductiveglass and ITO conductive film, as the traditional business of the Company, are positioned at the middle and high-endcustomers at home and abroad. In 2020, the Company's ITO glass market had adequate orders, and both the productionand sales volume hit a record high, which created a good operating performance for the Company. In recent years, theCompany has focused on the layout of automotive business, and passed IATF16949 quality management systemcertification, its main business covers core products such as automotive AG glass, automotive multifunctionalcomposite cover, automotive TP-Sensor which are widely used in automotive intelligent terminals such as automotivecentral control screens, automotive rearview mirrors, automotive entertainment systems, etc. In 2020, the Company'svehicle business developed well, and its production and sales grew steadily. CSG has become a brand supplier ofelectronic application materials in the display touch industry, which can provide customers with all-round one-stoptouch screen material solutions. In the future, the Company will continue to optimize the layout in the vehicle field,
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further build the high-end manufacturing industry chain of vehicle touch display, and become a high-quality componentsupplier in the field of automotive electronics.Solar energy and other industriesCSG has entered solar photovoltaic industry since 2005 and is one of enterprises which firstly enter the field in China.After more than ten years of construction, operation and technological upgrading, CSG has built an industry chain in thefield, covering high-purity polycrystalline silicon materials, high-efficiency silicon wafer, silicon solar cell and modules,and the design and construction of solar photovoltaic power plants, by which the Company ensures the stable qualityand best cost-efficiency of its PV products to customers.The Company now produces 9,000 ton/year of high purity polycrystalline silicon, 2.2 GW/year of silicon wafer,1GW/year of solar cell, and 0.4GW/year of modules, and holds 130MW photovoltaic power station. Under thebackground of the era of grid parity, in order to meet the market's demand for low-cost silicon materials, the Companyhas taken the initiative to upgrade polysilicon parking technology and promote industrial upgrading throughtechnological upgrades. Although the market demand for polycrystalline silicon wafers has dropped significantly, theCompany continues to maintain R&D investment in polycrystalline ingot technology and insists on using high-qualityraw materials to keep the quality of polycrystalline silicon wafers at the leading level in the industry for a long time.The Company has completed the upgrade and transformation of PERC battery module technology, and the batteryquality has reached the advanced level in the industry.In order to respond to the epidemic and fulfill its social responsibility, during the critical period of the epidemic, theCompany invested and established Shenzhen CSG Medical Technology Co., Ltd., which produced masks, and took theinitiative to undertake the production task of materials reserved by Shenzhen Government for epidemic prevention andcontrol. At the same time, the Company made use of the existing cell workshop purification workshop and PV cell beat-type production and environmental purification production experience of Dongguan PV-tech Co., Ltd. to produce anti-epidemic materials such as masks to meet the urgent market demand for protective materials and achieved good socialand economic benefits.
II. Major changes in main assets
1. Details of major changes in main assets
| Main assets | Note of major changes |
| Equity assets | No major changes |
| Fixed assets | No major changes |
| Intangible assets | No major changes |
| Construction in progress | No major changes |
| Short term Loans | Part of the loan was repaid during the report period. |
| Long term Loans | During the report period, the medium-term notes were reclassified to non-current liabilities due within one year during the report period. |
2. Main overseas assets
□ Applicable √ Not applicable
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III. Core Competitiveness Analysis
1. The Company currently has built complete industrial chains in the involved industries, which has complementaryadvantage. For example in glass industry, the Company has set up the industry chain as quartz sand → high quality floatglass → architectural energy-saving glass. With continuous the improvement of technology in the chains, the industrialadvantages emerged.
2. The Company possesses a complete industry layout. At present, the Company has established large production basesin East China, West China, South China, North China and Central China, which enables the Company to be closer tothe market and serve the market better.
3. The Company has capability of technology innovation and product innovation. It owns independent intellectualproperty rights of high-end float glass production process. The technology level of ultra-thin electronic glass is in theleading position in China. The Company also keeps its R&D and production of energy-saving glass in line with theworld’s advanced level.
4. The Company possesses high anti-risk capability. It has established an effective internal control system. Meanwhile,the management and control ability of account receivable and inventory stand in a high level within the industry. CSG’snew management team has an international perspective and a more open management philosophy. It aims to achieve thetransfer of capacity and continues to expand new business fields along with the national policies of the Belt and Roadbased on the intensive development of CSG's main business, making the Company be bigger and stronger, so as to be acomprehensive industrial group.
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Section IV. Business Discussion and AnalysisI. Introduction
In 2020, the epidemic swept the world, bringing unprecedented shocks to the domestic economy and the world'seconomic development. The epidemic has led to a severe contraction of international trade, the world economy hasexperienced another severe recession since the financial crisis, and the domestic economy is facing a significantincrease in unstable and uncertain factors. Sino-US frictions have also escalated and spread from the economic andtrade level to other levels, and the international trade environment has become tense. However, with the timelyformulation of the Party Central Committee’s guidelines and policies for epidemic prevention and control and theeffective implementation of various regions and departments, the epidemic has been effectively controlled. The newdevelopment paradigm of "Dual Circulation", which allows the domestic and overseas markets to reinforce each otherwith the domestic market as the mainstay, is accelerating to form and the domestic economic recovery continues toimprove.According to data released by the National Bureau of Statistics, in 2020, the overall performance of China's nationaleconomy was stable and the quality of development was steadily improved. China's GDP reached RMB 101.60 trillion,a year-on-year increase of 2.3%, and fixed asset investment (excluding rural households) RMB 51.89 trillion, a year-on-year increase of 2.9%, real estate development investment was RMB 14.14 trillion, a year-on-year increase of 7.0%, andinfrastructure investment increased by 0.9%. In 2020, the cumulative output of flat glass was 946 million weight boxes,a year-on-year increase of 1.3%."Glass For World, CSG From China", facing the severe economic environment, competitive pressures and thechallenges posed by the epidemic, under the correct leadership of the Board of Directors, CSG aims to be a world-classenterprise and firmly follows the path of high-quality development, sticking to the right path and making innovations,focusing on its core business, glass business, to make the enterprise greater, preciser, and stronger, exercising theinternal works, forging the strengths and making up for the weaknesses, sharpening the competitive edge,systematically improving comprehensive operational capabilities, and the group management and operationcollectivization capabilities is being significantly improved. The Group’s annual operating performance achieved asubstantial year-on-year growth. During the report period, the Company achieved operating income of RMB10.671billion, a year-on-year increase of 1.90%. Based on prudent and moderate business principle, the Companyaccumulatively accrued asset impairment reserves of approximately RMB746 million during the report period. Afterasset impairment, the Company still achieved net profit of RMB 812 million in 2020, with a year-on-year increase of
44.88%; and net profit attributable to the parent company of RMB 779 million, with a year-on-year increase of 45.28%.I. Operation of each industry of the GroupIn 2020, the Company's three pieces of glass (float glass, photovoltaic glass and electronic glass) and one brand(architectural glass), four pieces of glass, were fleetly developed. The main business of glass achieved the bestperformance in the history of the Group. The total net profit of the four pieces of glass was RMB 1.65 billion. Amongthem, the total operating revenue of float glass, photovoltaic glass and architectural glass was RMB 8.71 billion, with ayear-on-year increase of RMB 730 million or 9%; the net profit was RMB 1.488 billion, with a year-on-year increase ofRMB 553 million or 59%.In recent years, the Group has designed differentiated business strategies based on the characteristics of variousbusinesses and the market environment. In 2020, the effects of these strategic adjustments gradually appeared andfruitful results were achieved, including:
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Float Glass focusing on the new demands brought about by the continuous improvement of building energyconservation, visual effects and safety, the Company lays out arrangements ahead of schedule and firmly follows theroute of high-end differentiated products: the production capacity of ultra-white glass is significantly increased, and thehigh-end series of CSG ultra-white "Blue Diamond" are created and the brand become a leader in subdivision of theindustry; through kiln line design, process setting adjustments, and transformation of some production equipment, theCompany has greatly improved the yield of ultra-thin and ultra-thick differentiated products with difficult productionprocess and high value-added. The proportion of differentiated products increase significantly, and market share of highgrade float glass enjoys continued leadership in subdivision; utilizing cooperation experience with First Solar in usingultra-thin float glass as the packaging material for thin-film photovoltaic modules, being the first to make abreakthrough this year by converting ultra-thin and ultra-white float glass into backpanel packaging materials forcrystalline silicon double-glass module which opens up new profit growth points. In 2020, another batch of national keyprojects used CSG ultra-white float glass original sheets represented by international image projects such as DaxingInternational Airport, Winter Olympic Stadium, Hong Kong-Zhuhai-Macao Bridge Border Inspection Building, etc.,which fully demonstrated CSG products Quality and technological accumulation. In 2020, the float glass businessrevenue increased by 5% compared with the same period last year, and the net profit increased by 76%.Photovoltaic Glass focuses on the increasing trend of double-glass module penetration rate. A few years ago, theCompany took the lead in researching the production process, processing technology and equipment of ultra-thinphotovoltaic glass below 2mm. The production capacity, quality and comprehensive manufacturing yield rate of ultra-thin photovoltaic glass below 2mm have a leading position in the industry. In 2020, the global photovoltaic installationspeed increased, the penetration rate of double-glass modules increased significantly compared with the previous year,and the insufficient market supply greatly enhanced the profitability of the photovoltaic glass business. Compared withthe same period last year, the revenue of photovoltaic glass business increased by 20%, and the net profit increased by137%. At the same time, in order to make up for the shortcomings of photovoltaic glass business capacity and large-scale layout, the Group took this window of opportunity. In March, the tensest month of epidemic prevention andcontrol, the Company signed an investment agreement with the Fengyang county government of Anhui to buildmanufacturing base project of lightweight and high-permeability panels for solar energy equipment, applied for non-public issuance of A shares to raise construction funds at the same time, and quickly obtained the approval of CSRC,which enabled the Company to take the lead in a new round of capacity expansion of domestic photovoltaic glass. Theconstruction of 4 photovoltaic glass production lines and supporting processing lines with a daily melting capacity of1,200 tons per line will enhance the Group's competitive advantage in this subdivision. At present, the construction ofthe project is progressing smoothly as planned. In addition, with the approval of the Board of Directors, the Group wasgoing to build a photovoltaic glass production line and supporting processing lines with a daily melting capacity of1,200 tons at Xianning base; a total of three photovoltaic glass processing lines were built at Wujiang base andDongguan base, further adding 36 million square meters of photovoltaic glass processing capacity. Under thebackground of the era of CO
emissions peak and carbon neutrality, the photovoltaic glass business will become thenew champion business of CSG.Architectural glass is the golden brand of CSG, and it has formed quality, service and continuous research anddevelopment capabilities that match the brand. Focusing on the Country's improvement of building energy-savingstandards and high-rise building safety standards during the 13th Five-Year Plan period, it strengthens brand buildingand adheres to the customized business strategy of trinity of technical service, marketing and R&D and manufacturing,relying on CSG's manufacturing and R&D strength to improve order quality, intensifies the market promotion ofcomplex composite products and high-end energy-saving glass products, and consolidates and expands market share.To promote equipment production efficiency by improving the automation and information level of production lines,and reduce production costs, material consumption, and energy consumption with technological advancement and
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process optimization. In 2020, under the influence of multiple unfavorable factors such as the sharp increase in theoverall price of float glass and the delay of downstream project progress caused by the epidemic, the architectural glassbusiness still achieved double growth in operating income and net profit, with year-on-year revenue growth of 9% andnet profit growth of 9%. In 2017, CSG low-E coated glass was awarded the title of Single Champion Product by theMinistry of Industry and Information Technology, and it passed the review again in 2020, which fully proves theleading position of CSG architectural glass in the industry. In order to better serve the construction needs of BeijingTianjin Hebei, Yangtze River Delta, Guangdong, Hong Kong and Macao megalopolis, the Board of Directors of theGroup successively approved the construction of Zhaoqing architectural glass base, Wujiang architectural glassintelligent factory and Tianjin architectural glass expansion project in 2020. The above projects will be put intooperation gradually from the third quarter of this year, which will further strengthen the competition and servicecapabilities of the Group's architectural glass business in the main battlefield of urban construction, and it willaccumulate valuable experience for the construction and operation of CSG's new-generation architectural glassproduction base in the era of intelligent manufacturing. At the same time, in line with the trend of urban constructionextending to the mainland in depth, the Group has paid close attention to the layout of architectural glass productioncapacity in the emerging central city group in the mainland. The Board of Directors of the Group has approved theconstruction of a new architectural glass base in Xi'an, and further seeks to lay out a class I or class II architectural glassprocessing base suitable for its scale and demand in areas with similar conditions. With the further improvement ofarchitectural glass production capacity and market service network layout, obstacles restricting the further increase inthe market share of CSG architectural glass will be gradually eliminated.Electronic glass and display business focusing on increasing R&D investment, the Company breaks through high-endmarket barriers with independent intellectual property rights and independent innovation, and firmly takes thedevelopment route of product upgrading and iteration to accelerate import substitution. In May 2020, XianningOptoelectronics, which had just emerged from the epidemic prevention and control blockade, overcame the newgeneration of high-aluminum electronic glass technology to achieve mass production and market sales of high-aluminum second-generation KK6 glass. This product has excellent performance in light transmittance, color reduction,secondary enhanced ion exchange depth, enhanced drop resistance, scratch resistance, and process ability, which canmeet the higher standard requirements and technical level of basic materials for downstream end customers in the fieldsof 3D surface technology, 5G communication solutions, etc., and its technical level is comparable to the advanced levelof foreign countries, reaching the standard requirements for the flagship models of domestic mainstream mobile phonemanufacturers. CSG's electronic glass has experienced ten years of intensive and pioneering effort, from soda-calciumto medium-aluminum to high-aluminium and then to the second generation of high-aluminum. Every product upgrademeans a comprehensive upgrade of production equipment and process systems, after being well-grounded it finallybreaks the technical barriers and market monopoly of international giants on high-end electronic glass, and fills the gapof domestic high-end electronic glass industry. At present, CSG's third-generation high-aluminum products have beensuccessfully developed in the laboratory, and their performance can be fully benchmarked against the new generation ofcompetitive products of international brand. In order to rapidly industrialize the third-generation high-aluminumproducts, the Company took the initiative to carry out cold repair and technical upgrades on CSG's first high-aluminumelectronic glass production line, the Line I of Qingyuan, in April 2020. If the technological transformation is successful,it will further enhance the competitiveness of CSG electronic glass in the high-end electronic glass market. In addition,the Line II of the Qingyuan CSG project "One Kiln and Two Lines" was transferred to commercial operation inDecember 2020. This project is CSG’s key measure to actively implement the country’s advocacy of achieving leapfrogdevelopment by industrial transformation and upgrading. It effectively enhances the overall profitability of electronicglass while further consolidating and strengthening CSG's competitive advantage in the domestic electronic glass field.In 2020, CSG's ultra-thin electronic glass was awarded the title of Single Champion Product by the Ministry of Industry
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and Information Technology for the first time, making CSG the only "Double Champion " in China's glass industry andone of the few in the national manufacturing industry that has two single championship products, and fullydemonstrating the Company's brand influence and product strength in the electronic glass field. In March 2021, in orderto strengthen the Company's high-end market competitiveness in the field of ultra-thin electronic glass for touchapplications, the Company's Board of Directors approved Hebei Panel Glass to invest in a new ultra-thin electronicglass production line with a daily melting capacity of 110 tons and a supporting R&D center. After the completion ofthe above-mentioned projects, CSG Electronic Glass will achieve comprehensive coverage of electronic glass productsfrom the third generation of high aluminum to medium-aluminum, soda-calcium, and from high to middle and low-endelectronic glass products, forming a more solid foundation for market competition.The display business relies on the production capacity advantages of CSG electronic glass and the accumulation ofmore than 20 years of research and development experience in the processing and manufacturing of yellow light touchcomponents. It has built core competitiveness around vehicle display and ITO touch products, and has graduallytransformed into an important force for domestic suppliers of automotive display packaging materials, touchcomponents and modules. Although the production base is located in Yichang, Hubei Province, it was affected by theepidemic and did not gradually resume production until May. However, with the active ITO market and the trialproduction of the newly constructed AG production line, it has achieved steady growth in production and sales withdifferentiated product innovation ideas.There are three production bases of CSG's electronic glass and display business located in Hubei Province, theoperations of which were greatly affected by the epidemic prevention and control situation in the first half of the year.After May, the production and operation gradually returned to normal. At the same time, the Line I of Qingyuan beganto undergo cold repair and technical renovation in April, while the Line II of Qingyuan only transferred to commercialoperation at the end of December, unable to contribute revenue and net profit. Even under such adverse circumstances,with the smooth progress of new product market development and the unremitting efforts of all colleagues in itssubsidiaries, the electronic glass and display business still achieved double growth of operating revenue and net profitafter deducting non-recurring gains and losses, with an increase of 4% in operating revenue and 18% in net profit afterdeducting non-recurring gains and losses. Among them, the operating revenue and net profit after deducting non-recurring gains and losses of the electronic glass business increased by 11% and 30% respectively compared with thesame period last year.Solar and other businessesSilicon material base of solar energy industry, located in the high-risk area in the early stage of the epidemic, wasseriously affected by the epidemic. Apart from stopping production of polysilicon for technological upgrading, siliconwafer was out of production before April, and gradually resumed production after April. As the overseas PV marketwas also affected by the epidemic, the delivery speed of PV products slowed down, but the production and salesgradually recovered in the second half of the second quarter and the market gradually improved. PV industry has thecharacteristics of rapid technological iteration and obvious late-comer advantages, and the market competition isextremely fierce. Therefore, the Company achieves the goal of reducing costs and increasing efficiency by improvingthe ability of lean production management, and continuously improving, optimizing and adjusting technology andprocesses to reduce the energy consumption of various materials, thereby reducing production costs; creating adiversified product structure and improving product quality to enhance profitability.In addition, by making use of the production experience, facilities and rhythmic production experience of the cleanplant of photovoltaic manufacturing enterprises, the Company started crossover production of anti-epidemic masks anddisinfection products (84 disinfectant) during the epidemic period to meet the urgent market demand for protectivematerials and donated more than 10 million self-produced masks to Shenzhen and other places for fully fulfilling theCompany's social responsibility, which achieved good social and economic benefits as well.
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Affected by the stagnant production and shrinking polycrystalline market share during the epidemic period, theoperating revenue of solar and other industries decreased year on year. During the report period, based on prudent andmoderate business principle, the Company made a provision of RMB 642 million for impairment of some assets ofsilicon materials with backward technology and high energy consumption. After impairment, the net profit of solarenergy and other industries was RMB - 525 million.II. Other management workIn recent years, in order to ensure the rapid and healthy development of the Group's various industries, the Group hasmade careful arrangements for building and strengthening CSG's core competitiveness after prudent and comprehensiveanalysis and detailed and objective benchmarking, and strictly supervised the implementation, mainly as follows:
Systematic comprehensive management is the guarantee of product quality and operating efficiency, covering allaspects of the entire work process and the entire work cycle of the Company's production and operation, one changemaking all change, and it is CSG's core competitive advantage which is the most difficult to be completely copied byother enterprises. In order to further improve the systematic and comprehensive management level of the group, theGroup launched the evaluation of CSG's five-star factory in 2020, taking this as an opportunity to drive all employees toparticipate in the basic management, solidified and promoted outstanding experience, improved management level, andlaid a good foundation for CSG's capacity expansion and management output. In 2020, a number of CSG subsidiarieswon the local government quality award.The iterative ability of technology, technology and product R&D is the key guarantee for sustainable and healthydevelopment of enterprises, and the core element of CSG for forming high value-added business line barriers, keepingthe industry leading continuously, and realizing the core element of "we have while others don't; when they have, oursare better, even if theirs are better, ours are much stronger". In recent years, the Group has targeted on building aninnovative enterprise and has continued to increase R&D investment. In 2020, the R&D expenditure was approximatelyRMB 405 million, an increase of 10.35% over the previous year. It built professional core R&D teams in differentbusiness fields through talent introduction and independent training, and at the same time, it integrated resources andestablishes in-depth cooperation in production, education and research with domestic silicate major universities such asSouth China University of Technology, Beijing University of Technology, Wuhan University of Technology, YanshanUniversity, etc., to accelerate the transformation of scientific research results and strengthen basic research. In 2020, anumber of CSG's subsidiaries won the awards of science and technology progress at or above the provincial level, smallgiant specializing in special and new technology, invisible champion demonstration enterprise and technologicalinnovation demonstration enterprise. In 2020, the number of patent applications and authorizations of the companyreached a record high, with a total of 340 patent applications submitted (1.5% higher than that in 2019), including 146invention patent applications (37.7% higher than that in 2019); 263 new patent authorizations (10.04% higher than thatin 2019), including 30 invention patents (11% higher than that in 2019).Team accumulation is the fundamental guarantee for the inheritance of CSG's spirit and business. In 2020, the Groupincreased investment in the construction of talent echelon, building an internal lecturer team through the "DandelionPlan" to increase training efforts; encouraging and supporting the growth of talents discovered through selecting andcultivating youth reserve cadres; reflecting the value of front-line outstanding employees through the selection ofinvisible craftsmen's deeds. During the year, the Group emerged 3 national-level industry model workers and advancedindividuals, and 5 provincial-level and above model workers and advanced individuals.Environmental protection is the lifeline for the survival and development of glass enterprises, and it is a concentratedexpression of corporate social responsibility in energy-intensive industries. As early as more than ten years ago, CSGtook the lead in the entire industry to use natural gas for all production lines. At the same time, it was the first in theindustry to use waste heat power generation, distributed photovoltaic power generation and other methods to achievecomprehensive energy utilization. Through comprehensive exhaust gas treatment such as desulfurization, denitrification
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and dust removal, it realized ultra-low emission, far lower than the national standard pollutant emission value. In the eraof the era of CO
emissions peak and carbon neutrality, energy saving and emission reduction, relatively low energyconsumption and high energy efficiency will bring enterprises higher competitiveness and greater living space. TheStrategy Department of the Group sets up an energy management group to supervise the energy consumptionmanagement of its subsidiaries, and the Safety and Environmental Protection Department of the Group is responsiblefor the supervision and management of the pollutant emission of the Group, so as to ensure that the energy consumptioncontrol and emission control per unit capacity of CSG is always at the leading level in the industry under the premise ofthe same tonnage and kiln age. In 2020, the Company's waste heat power generation, distributed photovoltaic powergeneration and other self-generated electricity had reached 32% of the Group's total electricity consumption, and theGroup's overall annual CO
emissions decreased by 1.64% compared with the previous year. In 2020, many of theGroup's subsidiaries were rated as environmental protection A-level enterprises and national and provincial greenfactories.CSG brand is the witness and crystallization of CSG's more than 30 years of history, and is deeply recognized andrespected by the society. It represents the quality and spirit of CSG, and contains great value and influence. In recentyears, the Group has strengthened its brand operations and has cultivated sub-brands such as the "Blue Diamond" brandof ultra-white glass, the "Kirin King" brand of electronic glass, and the "Yinglang" brand of jade glass in subdivisions,forming a brand matrix. At the same time, the Group has strengthened brand maintenance, and spared no effort to crackdown on illegal acts in the market that falsely use the brand of CSG to damage the reputation and interests of CSG, soas to protect the brand and polish the CSG's golden signs.Large-scale scientific layout CSG previously took architectural glass as the center and formed a national layout of sixbases in the East, West, north, South and middle according to the concentration of urban construction. However, theproduction capacity of float glass and photovoltaic glass is relatively dispersed, which is not conducive to the formationof economies of scale in the manufacture of bulk products, especially photovoltaic glass, the existing two productionlines of which are located in Dongguan and Wujiang respectively. Therefore, the Group has decided to choose areaswhere resource advantages or market advantages are concentrated in the layout of the new production base, and focuson a large-scale layout to maximize the overall competitiveness of the Company. Therefore, the construction of thephotovoltaic glass manufacturing base in Fengyang, Anhui Province, with a one-time layout of four photovoltaic glassproduction lines and supporting processing lines with a daily melting capacity of 1,200 tons, is a strategic measure forthe scientific layout adjustment of the Group.Strategic resource reserves and solid supply chain guarantee are the material basis for the Group's strategicdevelopment. With the current increase in the Group's production capacity of ultra-white float glass, photovoltaic glass,and electronic glass, the demand for ultra-white low-iron quartz sand and other mineral raw materials continues toincrease. While the Group is deploying a photovoltaic glass manufacturing base in Fengyang, it will also build an ultra-white quartz sand production base locally to ensure the project and the Group's strategic needs. Meanwhile, CSGestablished Group Procurement Management Center in 2020, comprehensively established a hierarchical procurementsystem, vigorously expanded procurement channels, implemented supplier inspections and follow-up evaluations, andreduced procurement costs through large-scale centralized procurement. Group first-level centralized procurementprojects involved more than 30 categories, the amount of which accounted for about 70% of the total purchase amountof the Group, which further consolidated the foundation of the Group's supply chain guarantee.
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II. Main business analysis
1. Overview
Unit: RMB
| Items | 2020 | 2019 | Range of Change | Analysis of reasons |
| Operating income | 10,671,253,445 | 10,472,028,099 | 1.90% | |
| Operating costs | 7,444,465,731 | 7,743,129,614 | -3.86% |
| Sales expenses | 233,918,938 | 389,269,235 | -39.91% | Mainly due to the implementation of the new revenue standard in the current period to reclassify transportation costs to operating costs. |
| Administration expenses | 666,976,561 | 602,590,650 | 10.68% |
| R&D expenses | 404,842,498 | 366,871,283 | 10.35% | |
| Financial expenses | 224,011,920 | 290,417,403 | -22.87% | Mainly due to the decrease in interest expenses |
| Net cash flow arising from operating activities | 2,730,619,636 | 2,379,036,320 | 14.78% | |
| Net cash flow arising from investment activities | -789,792,826 | -733,075,474 | ||
| Net cash flow arising from financing activities | -1,644,587,036 | -2,040,156,870 | Mainly due to the increase in cash inflow from financing activities |
2. Revenue and cost
(1) Constitution of operation revenue
Unit: RMB
| 2020 | 2019 | Increase/decrease y-o-y | |||
| Amount | Ratio in operation revenue | Amount | Ratio in operation revenue | ||
| Total of operating income | 10,671,253,445 | 100% | 10,472,028,099 | 100% | 1.90% |
| According to industry | |||||
| Glass industry | 8,709,771,261 | 81.62% | 7,979,780,615 | 76.20% | 9.15% |
| Electronic glass & Display industry | 1,087,361,814 | 10.19% | 1,044,208,070 | 9.97% | 4.13% |
| Solar energy and other industries | 988,782,926 | 9.27% | 1,542,206,620 | 14.73% | -35.89% |
| Undistributed | 217,971,560 | 2.04% | 82,205,712 | 0.79% | 165.15% |
| Amount of unutilized | -332,634,116 | -3.12% | -176,372,918 | -1.69% | 88.60% |
| According to product | |||||
| Glass products | 8,709,771,261 | 81.62% | 7,979,780,615 | 76.20% | 9.15% |
| Electronic glass & Display products | 1,087,361,814 | 10.19% | 1,044,208,070 | 9.97% | 4.13% |
| Solar energy and other products | 988,782,926 | 9.27% | 1,542,206,620 | 14.73% | -35.89% |
| Undistributed | 217,971,560 | 2.04% | 82,205,712 | 0.79% | 165.15% |
| Amount of unutilized | -332,634,116 | -3.12% | -176,372,918 | -1.69% | 88.60% |
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| According to region | |||||
| Mainland China | 9,538,506,225 | 89.39% | 9,123,825,213 | 87.13% | 4.55% |
| Overseas | 1,132,747,220 | 10.61% | 1,348,202,886 | 12.87% | -15.98% |
(2) List of the industries, products or regions exceed 10% of the operating income or operating profits ofthe Company
√Applicable □ Not applicable
Unit: RMB
| Operating revenue | Operating cost | Gross profit ratio | Increase/decrease of operating revenue y-o-y | Increase/decrease of operating cost y-o-y | Increase/decrease of gross profit ratio y-o-y | |
| According to industry | ||||||
| Glass industry | 8,709,771,261 | 5,977,946,913 | 31.37% | 9.15% | 3.20% | 3.96% |
| Electronic glass & Display industry | 1,087,361,814 | 755,633,963 | 30.51% | 4.13% | 2.56% | 1.07% |
| Solar energy and other industries | 988,782,926 | 831,458,581 | 15.91% | -35.89% | -36.99% | 1.48% |
| According to product | ||||||
| Glass products | 8,709,771,261 | 5,977,946,913 | 31.37% | 9.15% | 3.20% | 3.96% |
| Electronic glass & Display products | 1,087,361,814 | 755,633,963 | 30.51% | 4.13% | 2.56% | 1.07% |
| Solar energy and other products | 988,782,926 | 831,458,581 | 15.91% | -35.89% | -36.99% | 1.48% |
| According to region | ||||||
| Mainland China | 9,538,506,225 | 6,650,965,989 | 30.27% | 4.55% | -0.97% | 3.88% |
| Overseas | 1,132,747,220 | 793,499,742 | 29.95% | -15.98% | -22.72% | 6.11% |
Under the circumstances that the statistical standards for the Company’s main business data adjusted in the reportperiod, the Company's main business data in the recent year is calculated based on adjusted statistical standards at theend of the report period
□ Applicable √ Not applicable
(3) Whether the Company’s goods selling revenue higher than the service revenue
Whether the Company’s goods selling revenue higher than the service revenue
√Yes □ No
| Industry | Item | Unit | 2020 | 2019 | Increase/decrease y-o-y (%) |
| Flat glass | Sales volume | 10,000-ton | 299 | 292 | 2.40% |
| Output | 10,000-ton | 296 | 294 | 0.68% | |
| Inventory | 10,000-ton | 6 | 9 | -33.33% | |
| Architectural glass | Sales volume | 10,000-M2 | 3,441 | 2,879 | 19.52% |
| Output | 10,000-M2 | 3,445 | 2,916 | 18.14% | |
| Inventory | 10,000-M2 | 118 | 114 | 3.51% | |
| Electronic glass | Sales volume | ton | 57,651 | 50,497 | 14.17% |
| Output | ton | 49,405 | 61,722 | -19.96% |
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| Inventory | ton | 9,232 | 17,478 | -47.18% | |
| Silicon wafer | Sales volume | 10,000-piece | 15,497 | 36,782 | -57.87% |
| Output | 10,000-piece | 15,353 | 36,990 | -58.49% | |
| Inventory | 10,000-piece | 386 | 530 | -27.17% | |
| Solar cell | Sales volume | MW | 457 | 784 | -41.71% |
| Output | MW | 429 | 890 | -51.80% | |
| Inventory | MW | 6 | 34 | -82.35% |
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
1. Flat glass: The decrease in inventory was mainly due to changes in the company's sales rhythm.
2. Electronic glass: The decline in inventory was affected by the technical transformation of the Line I of Qingyuan, andalso benefited from the Company's efforts to increase market promotion.
3. Silicon wafer: The decrease in production and sales was mainly due to the epidemic and structural changes in marketdemand.
4. Cells: The decrease in production and sales was mainly due to the epidemic and structural changes in market demand.
(4) Fulfillment of significant sales contracts signed by the Company up to the report period
√Applicable □ Not applicable
| Name of company signing the contract | Name of the other party signing the contract | Subject matter | Total contract amount | Progress of contract performance | Amount of sales revenue recognized in the current period and accumulated | Collection of accounts receivable |
| Wujiang CSG Glass Co., Ltd., Dongguan CSG Solar Glass Co., Ltd. | LONGi Solar Technology Ltd., Zhejiang LONGi Solar Technology Ltd., Taizhou LONGi Solar Technology Ltd., Yinchuan LONGi Solar Technology Ltd., Chuzhou LONGi Solar Technology Ltd., Datong LONGi Solar Technology Ltd., LONGi (H.K.) Trading Limited, LONGi (KUCHING) SDN. BHD., Xianyang LONGi Solar Technology Ltd., Jiangsu LONGi Solar Technology Ltd., Jiaxing LONGi Solar Technology Ltd.,Xi'an LONGi Green Building Technology Ltd. | Photovoltaic glass | RMB 6,500 million (tax included) | In progress | The recognized income was RMB 134.36 million in this period, and the accumulated recognized income wasRMB134.36 million. | RMB 75.94 million |
(5) Constitution of operation cost
Main business cost structureIndustry classification
Unit: RMB
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| Industry | Item | 2020 | 2019 | Increase/decrease y-o-y | ||
| Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
| Glass industry | Materials | 4,677,850,685 | 78.25% | 4,558,141,051 | 78.98% | 2.63% |
| Labor wages | 560,650,194 | 9.38% | 560,930,664 | 9.72% | -0.05% | |
| Costs | 739,910,129 | 12.37% | 652,239,422 | 11.30% | 13.44% | |
| Electronic glass & Display industry | Materials | 525,267,357 | 69.53% | 482,812,079 | 65.57% | 8.79% |
| Labor wages | 95,305,488 | 12.62% | 97,520,763 | 13.24% | -2.27% | |
| Costs | 134,913,713 | 17.85% | 155,953,711 | 21.18% | -13.49% | |
| Solar energy and other industries | Materials | 589,781,853 | 76.76% | 1,058,197,056 | 82.17% | -44.27% |
| Labor wages | 72,529,031 | 9.44% | 109,535,172 | 8.51% | -33.78% | |
| Costs | 106,015,979 | 13.80% | 120,118,749 | 9.33% | -11.74% | |
Note: The cost includes the transportation cost included in the cost according to the new revenue standard.Product classification
Unit: RMB
| Product | Item | 2020 | 2019 | Increase/decrease y-o-y | ||
| Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
| Glass products | Materials | 4,677,850,685 | 78.25% | 4,558,141,051 | 78.98% | 2.63% |
| Labor wages | 560,650,194 | 9.38% | 560,930,664 | 9.72% | -0.05% | |
| Costs | 739,910,129 | 12.37% | 652,239,422 | 11.30% | 13.44% | |
| Electronic glass & Display products | Materials | 525,267,357 | 69.53% | 482,812,079 | 65.57% | 8.79% |
| Labor wages | 95,305,488 | 12.62% | 97,520,763 | 13.24% | -2.27% | |
| Costs | 134,913,713 | 17.85% | 155,953,711 | 21.18% | -13.49% | |
| Solar energy and other products | Materials | 589,781,853 | 76.76% | 1,058,197,056 | 82.17% | -44.27% |
| Labor wages | 72,529,031 | 9.44% | 109,535,172 | 8.51% | -33.78% | |
| Costs | 106,015,979 | 13.80% | 120,118,749 | 9.33% | -11.74% | |
(6) Whether the consolidated scope changed during the report period
√ Yes □No
On January 7, 2020, the Group set up a subsidiary, CSG (Thailand) Co., Ltd. As of December 31, 2020, the Group hasnot actually contributed capital, and the Group holds 100% of its shares.
On February 5, 2020, the Group set up a subsidiary, Anhui CSG New Energy Materials Technology Co., Ltd(Abbreviated as "Anhui New Energy Company"). As of December 31, 2020, the Group has invested RMB 20 million.The Group owns 100% of its equity.
On February 8, 2020, the Group set up a subsidiary, Anhui CSG New Quartz Material Co., Ltd (Abbreviated as "AnhuiQuartz Company"). As of December 31, 2020, the Group has invested RMB 3 million. The Group owns 100% of itsequity.
On February 10, 2020, the Group set up a subsidiary, Shenzhen CSG Medical Technology Co., Ltd (Abbreviated as"Shenzhen CSG Medical Company"). As of December 31, 2020, the Group has invested RMB 20 million. The Groupowns 100% of its equity.
On August 31, 2020, the Group set up a subsidiary, CSG (Suzhou) Corporate Headquarters Management Co., Ltd. Asof December 31, 2020, the Group has not actually contributed capital, and the Group holds 100% of its shares.
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(7) Major changes or adjustment in business, product or service of the Company in the report period
□ Applicable √ Not applicable
(8) Major customers and major suppliers
Major customers of the Company
| Total sales to the top five customers (RMB) | 977,950,348 |
| Proportion in total annual sales volume for top five customers | 9.17% |
Information of the top five customers of the Company
| Serial | Name of customer | Sales volume (RMB) | Proportion in total annual sales |
| 1 | Customer A | 221,585,033 | 2.08% |
| 2 | Customer B | 218,171,404 | 2.04% |
| 3 | Customer C | 206,530,744 | 1.94% |
| 4 | Customer D | 181,568,127 | 1.70% |
| 5 | Customer E | 150,095,040 | 1.41% |
| Total | 977,950,348 | 9.17% |
Other statement of main customers
□ Applicable √ Not applicable
Major suppliers of the Company
| Total purchase amount from the top five suppliers (RMB) | 1,266,310,007 |
| Proportion in total annual purchase amount from the top five suppliers | 16.23% |
Information of the top five suppliers of the Company
| Serial | Name of supplier | Purchase amount (RMB) | Proportion in total annual purchase |
| 1 | Supplier A | 386,428,072 | 4.95% |
| 2 | Supplier B | 238,639,110 | 3.06% |
| 3 | Supplier C | 231,779,015 | 2.97% |
| 4 | Supplier D | 211,515,585 | 2.71% |
| 5 | Supplier E | 197,948,225 | 2.54% |
| Total | 1,266,310,007 | 16.23% |
Other statement of major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB
| 2020 | 2019 | Increase/decrease y-o-y | Note of major changes | |
| Sales expense | 233,918,938 | 389,269,235 | -39.91% | Mainly due to the implementation of the new revenue standard in the current period and the re-entry of the transportation cost. |
| Management expense | 666,976,561 | 602,590,650 | 10.68% | |
| Financial expense | 224,011,920 | 290,417,403 | -22.87% | Mainly due to the reduction of interest costs. |
| R&D expenses | 404,842,498 | 366,871,283 | 10.35% |
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4. R&D expenses
√Applicable □ Not applicable
The Company always emphasizes R&D of new products, new technology and new craft, and R&D aims tostay close tothe market, production and industry.
R&D investment of the Company
| 2020 | 2019 | Ratio of change | |
| Number of R & D personnel (person) | 170 | 184 | -7.61% |
| Ratio of number of R&D personnel | 1.61% | 1.76% | -0.15% |
| Amount of R & D investment (RMB) | 434,641,497 | 440,884,641 | -1.42% |
| Ratio of the R&D investment to the operating income | 4.07% | 4.21% | -0.14% |
| Amount of the capitalized R&D investment (RMB) | 29,798,999 | 74,013,358 | -59.74% |
| Ratio of the capitalized R&D investment to the R&D investment | 6.86% | 16.79% | -9.93% |
Reason of remarkable changes over the last year of the ratio of the total R&D investment amount to the operatingincome
□ Applicable √ Not applicable
Reason of substantial change of the ratio of the R&D investment capitalization and its reasonable explanation
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB
| Item | 2020 | 2019 | Increase/decrease y-o-y |
| Subtotal of cash in-flow from operation activity | 11,975,699,992 | 11,798,483,075 | 1.50% |
| Subtotal of cash out-flow from operation activity | 9,245,080,356 | 9,419,446,755 | -1.85% |
| Net cash flow from operation activity | 2,730,619,636 | 2,379,036,320 | 14.78% |
| Subtotal of cash in-flow from investment activity (1) | 439,718,884 | 37,590,251 | 1069.77% |
| Subtotal of cash out-flow from investment activity (2) | 1,229,511,710 | 770,665,725 | 59.54% |
| Net cash flow from investment activity | -789,792,826 | -733,075,474 | |
| Subtotal of cash in-flow from financing activity(3) | 4,422,844,911 | 3,471,013,352 | 27.42% |
| Subtotal of cash out-flow from financing activity | 6,067,431,947 | 5,511,170,222 | 10.09% |
| Net cash flow from financing activity(4) | -1,644,587,036 | -2,040,156,870 | |
| Net increased amount of cash and cash equivalent(5) | 292,193,166 | -393,291,883 |
Relevant data year-on-year major changes in the main influencing factors
√Applicable □ Not applicable
(1) Mainly due to the recovery of entrusted loans.
(2) Mainly due to the increase in cash paid for the purchase and construction of fixed assets, intangible assets and otherlong-term assets.
(3) Mainly due to the increase in cash received from the issuance of bonds.
(4) Mainly due to the increase in cash inflow from financing activities.
(5) Mainly due to the increase in net cash from operating activities and the change in net cash from financing activities.
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Notes to the reason of the significant differences between the net cash flow from the operating activities and the netprofits of the year during the report periodApplicable √ Not applicableIII. Analysis of the non-core business
√Applicable □ Not applicable
Unit: RMB
| Amount | Ratio in total profit | Note for the reason | Sustainable or not | |
| Investment income | 2,654,504 | 0.24% | Income from structured deposit | No |
| Changes in fair value gains and losses | 179,911,200 | 16.27% | Changes in fair value of investment real estate | No |
| Asset impairment | 738,508,094 | 66.79% | Mainly due to long-term asset impairment losses | No |
| Non-operating income | 14,369,839 | 1.30% | Mainly claim income and unpaid payments, etc. | No |
| Non-operating expenses | 20,554,395 | 1.86% | Mainly due to donations | No |
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IV. Assets and liabilities
1. Major changes of assets and liabilities composition
The company implemented the new revenue standard or the new lease standard for the first time from 2020 andadjusted and implemented the relevant items of the financial statement at the beginning of the yearApplicable
Unit: RMB
| As at 31 Dec. 2020 | As at 31 Dec. 2019 | Change of proportion | Notes of major changes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary funds | 2,125,788,903 | 11.89% | 1,986,980,418 | 10.92% | 0.97% | |
| Notes receivable | 207,966,892 | 1.16% | 297,023,380 | 1.63% | -0.47% | Mainly due to changes in the collection methods of some subsidiaries |
| Accounts receivable | 681,467,133 | 3.81% | 649,681,177 | 3.57% | 0.24% | |
| Inventory | 815,156,318 | 4.56% | 812,321,690 | 4.46% | 0.10% | |
| Receivables financing | 382,527,782 | 2.14% | 258,296,826 | 1.42% | 0.72% | Mainly due to the increase in receipt of bank acceptance bills |
| Other current assets | 140,031,544 | 0.78% | 447,995,931 | 2.46% | -1.68% | Mainly due to the recovery of entrusted loans |
| Investment real estate | 383,084,500 | 2.14% | 2.14% | Mainly due to the conversion of self-use real estate into investment real estate by some subsidiaries | ||
| Fix assets | 9,145,644,569 | 51.14% | 9,783,037,301 | 53.75% | -2.61% | |
| Construction in process | 1,893,380,611 | 10.59% | 1,902,140,035 | 10.45% | 0.14% | |
| Development expenditure | 49,153,407 | 0.27% | 85,240,356 | 0.47% | -0.20% | Mainly due to the conversion of development expenditures to intangible assets |
| Deferred income tax assets | 194,979,414 | 1.09% | 205,792,587 | 1.13% | -0.04% | |
| Other Non-Current Assets | 193,359,445 | 1.08% | 120,399,893 | 0.66% | 0.42% | Mainly due to the advance payment of engineering equipment for the construction of some subsidiaries |
| Short-term loans | 352,895,571 | 1.97% | 2,240,969,137 | 12.31% | -10.34% | Mainly due to the repayment of part of the loan |
| Notes payable | 144,851,192 | 0.81% | 232,063,968 | 1.27% | -0.46% | Due to the decrease in the number of newly opened bills and the maturity of the original bills |
| Advance receipt | 292,803,811 | 1.61% | -1.61% | Mainly due to the reclassification of advance receipts to contract liabilities | ||
| Contract liabilities | 296,776,624 | 1.66% | 1.66% | Mainly due to the reclassification of advance receipts to contract liabilities | ||
| Taxes payable | 194,921,071 | 1.09% | 115,425,044 | 0.63% | 0.46% | Mainly due to the increase in corporate income tax and value-added tax payable |
| Other payables | 287,332,992 | 1.61% | 351,374,775 | 1.93% | -0.32% | |
| Non-current liabilities due | 927,531,709 | 5.19% | 1,712,456,928 | 9.41% | -4.22% | Mainly due to the repayment of medium-term notes |
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| within one year | ||||||
| Other current liabilities | 34,586,292 | 0.19% | 300,000 | 0.00% | 0.19% | Mainly due to the taxation of contract liabilities listed in this subject according to the new income standard |
| Long-term loans | 853,253,983 | 4.77% | 1,320,225,000 | 7.25% | -2.48% | Mainly due to the reclassification of medium-term notes to non-current liabilities due within one year |
| Bonds payable | 1,994,020,348 | 11.15% | 11.15% | Mainly due to newly issued corporate bonds | ||
| Long-term payables | 87,240,529 | 0.48% | -0.48% | Mainly due to the repayment of financial lease payments | ||
| Deferred income tax liabilities | 102,619,932 | 0.57% | 30,197,657 | 0.17% | 0.40% | Mainly due to the conversion of self-use real estate into investment real estate by some subsidiaries |
| Capital reserve | 596,997,085 | 3.34% | 683,219,358 | 3.75% | -0.41% | |
| Treasury stock | 118,066,397 | 0.65% | -0.65% | Mainly due to the repurchase of restricted stocks | ||
| Other Comprehensive Income | 161,816,819 | 0.90% | 6,565,864 | 0.04% | 0.86% | Mainly due to the conversion of self-use real estate into investment real estate by some subsidiaries |
| Special Reserve | 10,269,002 | 0.06% | 11,102,921 | 0.06% |
2. Assets and liabilities measured at fair value
√Applicable □ Not applicable
Unit: RMB
| Item | Opening balance | Gains and losses from changes in fair value for the current period | Cumulative changes in fair value included in equity | Impairment accrued in the current period | Purchase amount for this period | Amount sold in this period | Other changes | Closing balance |
| Investment real estate | 0 | 179,911,200 | 189,590,349 | 13,582,951 | 383,084,500 |
During the report period, whether the company’s main asset measurement attributes have changed significantly
□Yes √No
3. Limited asset rights as of the end of the report period
| Item | Limited amount | Limited reason |
| Monetary funds | 1,760,707 | Limited margin transfer |
| Fix assets | 238,490,675 | Limited of Leveraged lease and Mortgage loan |
| Total | 240,251,382 |
V. Investment
1. Overall situation
√Applicable □ Not applicable
| Investment in the report period (RMB) | Investment in the same period of last year ( RMB) | Changes |
| 1,229,511,710 | 770,665,725 | 59.54% |
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2. The major equity investment obtained in the report period
□ Applicable √ Not applicable
CSG Annual Report 2020
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3. The major ongoing non-equity investment in the report period
√Applicable □ Not applicable
Unit: RMB 0,000
| Project | Way of investment | Fixed asset investment or not | Industry involved | Amount invested in the report period | Accumulative amount actually invested by the end of the report period | Source of funds | Progress of project (ongoing projects) | Expected return | Accumulative revenue achieved by the end of the report period | Reasons for not achieving the planned progress and the expected return | Date of disclosure (if applicable) | Index of disclosure (if applicable) |
| Anhui Fengyang Lightweigh & high-permeability panel for solar energy equipment manufacturing base project | Self-built | Yes | Manufacturing industry | 1,504 | 1,504 | Non-public issuance of stocks, own funds and loans from financial institutions | CSG plans to invest in Anhui Province for the project of lightweight &high-permeability panel for solar energy equipment manufacturing base in 2020-2022.The project is still under preparation. | 43,566 | No income as the project is in the construction period. | March 6, 2020 | Notice number: 2020-010 | |
| Anhui Fengyang quartz sand project in Anhui Province | Self-built | Yes | Manufacturing industry | 178 | 178 | Own funds and loans from financial institutions | CSG plans to build a new production base of low iron (ultra-white) quartz sand with an annual output of 600,000 tons in Fengyang, Anhui Province, and obtain the raw ore right of quartz sand. | 8,238 | No income as the project is in the construction period. | March 6, 2020 | Notice number: 2020-010 | |
| Zhaoqing CSG high-grade automotive glass production line project | Self-built | Yes | Manufacturing industry | 340 | 340 | Own funds and loans from financial institutions | CSG plans to invest in the construction of high-end automotive glass production line in Zhaoqing from 2019 to 2021. The project is still under construction. | 5,800 | No income as the project is in the construction period. | December 13, 2019 | Notice number: 2019-077 | |
| Zhaoqing CSG high-grade energy conservation glass production line project | Self-built | Yes | Manufacturing industry | 4,774 | 4,774 | Own funds and loans from financial institutions | CSG plans to invest in the construction of energy-saving glass production project in Zhaoqing from 2019 to 2021. After the production, the company will produce 2.5 million square meters of energy-saving insulating glass and 3.5 million square meters of coated energy-saving products. The project is still under | 7,000 | No income as the project is in the construction period. | December 13, 2019 | Notice number: 2019-077 |
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| construction. | ||||||||||||
| Qingyuan CSG ultra-clear electronic glass and ultra-clear special glass product line construction project | Self-built | Yes | Manufacturing industry | 52,830 | 61,703 | Own funds and loans from financial institutions | CSG plans to build a two-line ultra-white electronic glass and ultra-white special glass production line in Qingyuan CSG with a daily melting capacity of 700 tons/day. The project uses a unique one-kiln two-line process to simultaneously produce 0.33～1.1mm ultra-white ultra-thin electronic glass, 3～4mm and 15～22mm ultra-white special glass. The project has been transferred to fixed assets in December 2020. | 16,420 | The project was transferred to fixed assets in December 2020,the revenue will be realized in 2021. | December 22, 2018 | Notice number: 2018-072 | |
| Dongguan solar light and high-efficiency double-glass processing production line construction project | Self-built | Yes | Manufacturing industry | 524 | 524 | Own funds and loans from financial institutions | CSG plans to build a lightweight and high-efficiency double-glass processing production line in Dongguan Solar. After the production line is completed, it is expected to add 1 million square meters of double-glass production capacity per month, with an annual production capacity of 12 million square meters. The project is under construction. | 2,341 | No income as the project is in the construction period. | August 24, 2020 | Notice number: 2020-061 | |
| Wujiang Float Lightweight and High-efficiency double-glass processing production line construction project | Self-built | Yes | Manufacturing industry | 357 | 357 | Own funds and loans from financial institutions | CSG plans to build two lightweight and high-efficiency double-glass processing production lines in Wujiang Float. After the production line is completed, it is expected to add 2 million square meters of double-glass production capacity per month, with an annual production capacity of 24 million square meters. After the project is completed, it will give full play to the technical advantages of Wujiang Float double-glass, enhance market competitiveness, and expand the scale of the Company's benefits. The project is under construction. | 4,785 | No income as the project is in the construction period. | August 24, 2020 | Notice number: 2020-061 |
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| Tianjin Energy-saving Coating Production Line Purchase and Upgrade Project | Self-built | Yes | Manufacturing industry | Own funds and loans from financial institutions | CSG intends to invest in a new coating production line in Tianjin CSG, and at the same time upgrade and transform the existing coating line B and line C. The project plans to increase the annual production capacity of 2.76 million square meters through the purchase of coating lines and the upgrading and transformation of existing production lines. | 1,640 | The project has no profit for the time being. | April 30, 2020 | Notice number: 2020-023 | |||
| Wujiang Architectural Glass newly building intelligent manufacturing plant construction project | Self-built | Yes | Manufacturing industry | 76 | 76 | Own funds and loans from financial institutions | CSG plans to build a full-process flexible automated production line covering cutting, edging, tempering, hollowing and other processes in Wujiang CSG East China Architectural Glass Co., Ltd., using the reserved industrial land in the factory area. The new factory building area is 31,968 square meters, and the new intelligent manufacturing production line has an annual output of LOW- E 1.2 million square meters of energy-saving insulating glass. The project is under construction. | 5,049 | June 24, 2020 | Notice number: 2020-051 | ||
| Xi'an CSG Energy-saving glass production line project | Self-built | Yes | Manufacturing industry | Own funds and loans from financial institutions | CSG Group plans to invest in the establishment of "Xi'an CSG Energy-saving Glass Co., Ltd." (tentative name) ("Xi'an CSG Energy-saving") in Xi'an, Shaanxi Province, to build a high-end energy-saving glass production line with an annual output of 2.1 million square meters of hollow energy-saving glass. A 3.5 million square meter energy-saving glass production line with coated energy-saving products. | 4,222 | November 7, 2020 | Notice number: 2020-070 | ||||
| PV power plant investment | Self-built | Yes | Manufacturing industry | 26,214 | Own funds and loans from | CSG plans to invest in the construction of photovoltaic power stations in the two years | 4,344 | Part of the project has been | January 22, 2016 | Notice number: 2016-006 |
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| financial institutions | from 2016 to 2017, of which the wholly-owned subsidiary Shenzhen CSG Photovoltaic Energy Co., Ltd. will build 200MW by itself, and CSG and Kibing Group will jointly build 140MW. From 2016 to 2020, Shenzhen Photovoltaic has developed and constructed a total of 82MW of photovoltaic power plants, including 62MW distributed photovoltaic power plants and 20MW centralized photovoltaic power plants. | completed. The income of the completed project has been reflected in the profit. | ||||||||||
| Hebei Panel Glass project of medium-alumina ultra-thin electronic glass | Self-built | Yes | Manufacturing industry | 1,266 | Own funds | Plan to establish a production line for medium-alumina ultra-thin electronic glass in Hebei Panel Glass, using clean natural gas as the fuel, and produce 0.33mm～1.1mm medium-alumina ultra-thin glass with float process. The project was still in preparation. | The project has no income at present | October 29, 2014 | Notice number: 2014-030 | |||
| Yichang CSG 700MW crystalline silicon solar cell project | Self-built | Yes | Manufacturing industry | -- | Plan to build a crystalline silicon solar cell production line with annual capacity of 700MW. The project was suspended and further investment will be based on actual industry situations. | The project was suspended. | December 25, 2010 | Notice number: 2010-046 | ||||
| Expanding 500MW solar module project in Dongguan | Self-built | Yes | Manufacturing industry | -- | Plan to expand the solar module production line with annual capacity of 500MW. The project was suspended and further investment will be based on actual industry situations. | The project was suspended. | January 19, 2011 | Notice number: 2011-003 | ||||
| Relocation and equipment upgrading of the solar module production line in Dongguan | Self-built | Yes | Manufacturing industry | -- | The Company plans to construct a module workshop in Xianning, Hubei Province, of which the final capacity will be 500MW. By relocation of some of the module equipment of its subsidiary, Dongguan CSG PV Technology Co., Ltd. and purchase of some new equipment, the first stage capacity of the Xianning | The project was suspended. | April 16, 2016 | Notice number: 2016-018 |
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| workshop will be 300MW and, afterwards, it will be expanded to 500MW as required upon the market conditions. | ||||||||||||
| Solar online self-cleaning coated glass project of Dongguan CSG | Self-built | Yes | Manufacturing industry | -- | The Company plans to construct an online self-cleaning coated glass line in Dongguan. | The project was suspended. | April 16, 2016 | Notice number: 2016-018 | ||||
| Malaysia-invested architectural glass plant | Self-built | Yes | Manufacturing industry | -- | The Company plans to construct an architectural glass plant in Negeri Sembilan, Malaysia. The Phase I capacity of the newly-built plant will be 1,200,000 square meters insulating glass and 1,000,000 square meters single coated glass. | The project was suspended. | April 16, 2016 | Notice number: 2016-018 | ||||
| Total | -- | -- | -- | 60,583 | 96,936 | -- | -- | 103,405 | -- | -- | -- |
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4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
There was no securities investment during the report period.
(2) Derivative investment
□ Applicable √ Not applicable
There was no derivative investment during the report period.
5. Use of raised fund
√Applicable □ Not applicable
(1)Overall use of raised funds
√Applicable □ Not applicable
| Year of Raising | Method of Raising | The total amount of funds raised | The total amount of funds raised in the current period has been used | The total amount of funds raised has been used | Total amount of raised funds changed in use during the reporting period | Accumulated total amount of raised funds with changed purposes | Cumulative proportion of total amount of raised funds with changed purposes | The total amount of funds raised has not been used | The purpose and destination of the raised funds not yet used | Amount of funds raised after being idle for more than two years |
| 2020 | Corporate bonds | 199,168 | 199,168 | 199,168 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | -- | 199,168 | 199,168 | 199,168 | 0 | 0 | 0 | 0 | 0 | 0 |
| Description of the overall use of raised funds | ||||||||||
| Approved by China Securities Regulatory Commission Securities Regulatory Commission [2019] No. 1140,the Company publicly issues corporate bonds with a total face value of no more than RMB 2 billion to qualified investors, and issues them by stages. The first issue shall be completed within 12 months from the date of approval, and the other issues shall be completed within 24 months from the date of approval. On March 24, 2020, the Company issued a three-year corporate bond with a total amount of RMB 2 billion. After deducting the underwriting expenses of RMB 8.32 million, the Company received a net raised fund of RMB 1991.68 million as of March 25, 2020, which was used to repay the interest bearing liabilities of the Company and its subsidiaries. | ||||||||||
(2)Committed projects of raised funds
√Applicable □ Not applicable
Unit: RMB0’000
| Committed investment projects and over raised funds | Whether the project has been changed (including some | Total committed investment of raised funds | Total investment after adjustment (1) | Investment amount in this report period | Accumulated investment amount by the end of | Investment progress by the end of the period | The date when the project is ready for use | Benefits achieved during the report period | Whether the expected benefits are achieved | Whether the feasibility of the project has changed |
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| changes) | the period (2) | (3)＝(2)/(1) | significantly | |||||||
| Commitment to investment projects | ||||||||||
| Repayment of bank loans | No | 199,168 | 199,168 | 199,168 | 199,168 | 100% | N/A | N/A | N/A | No |
| Subtotal of committed investment projects | -- | 199,168 | 199,168 | 199,168 | 199,168 | -- | -- | N/A | -- | -- |
| Investment direction of over raised funds | ||||||||||
| Nil | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| -- | 0 | 0 | 0 | 0 | 0 | -- | -- | -- | -- | |
| Repayment of bank loans (if any) | -- | 0 | 0 | 0 | 0 | 0 | -- | -- | -- | -- |
| Over-raised funds invested in subtotal | -- | 0 | 0 | 0 | 0 | -- | -- | 0 | -- | -- |
| Total | -- | 199,168 | 199,168 | 199,168 | 199,168 | -- | -- | 0 | -- | -- |
| Repayment of bank loans (if any) | N/A | |||||||||
| Description of major changes in the feasibility of the project | N/A | |||||||||
| The amount, purpose and use progress of over-raised funds | N/A | |||||||||
| Changes in the implementation location of fund-raising investment projects | N/A | |||||||||
| Adjustments to the implementation of fund-raising investment projects | N/A | |||||||||
| Preliminary investment and replacement of raised funds investment projects | N/A | |||||||||
| Temporarily supplement liquidity with idle raised funds | N/A | |||||||||
| The amount and reason of the fund-raising balance in the implementation of the project | N/A | |||||||||
| Use and destination of unused raised funds | N/A | |||||||||
| Problems or other circumstances in the use and disclosure of raised funds | N/A | |||||||||
CSG Annual Report 2020
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(3) Changes in raised funds
□ Applicable √ Not applicable
The Company did not have any changes in raised funds during the report period.VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
No significant assets were sold during the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding companies 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 over10%
Unit: RMB
| Name of company | Type | Main business | Registered capital | Total assets | Net Assets | Operating revenue | Operating profit | Net profit |
| Chengdu CSG Glass Co., Ltd. | Subsidiary | Development, manufacture and sales of various special glass | 260 million | 1,058,072,110 | 820,544,285 | 1,202,087,717 | 314,183,483 | 273,591,632 |
| Hebei CSG Glass Co., Ltd. | Subsidiary | Manufacture and sales of various special glass | USD 48.06million | 1,028,524,648 | 722,829,822 | 902,816,892 | 174,494,318 | 150,308,378 |
| Xianning CSG Glass Co., Ltd. | Subsidiary | Development and manufacture and sales of various special glass | 235 million | 710,055,430 | 571,431,134 | 755,070,013 | 115,913,323 | 101,120,526 |
| Wujiang CSG Glass Co., Ltd. | Subsidiary | Manufacture and sales of various special glass | 565.04 million | 1,628,285,442 | 984,190,804 | 1,735,766,077 | 397,752,740 | 346,183,242 |
| Dongguan CSG Solar Glass Co., Ltd. | Subsidiary | Manufacture and sales of Solar-Energy Glass products | 480 million | 1,658,896,151 | 926,994,040 | 1,304,845,878 | 267,671,870 | 232,302,617 |
| Dongguan CSG Architectural Glass Co., Ltd. | Subsidiary | Deep processing of glass | 240 million | 1,036,549,477 | 555,442,566 | 1,122,559,074 | 110,960,988 | 97,807,922 |
| Sichuan CSG Energy Conservation Glass Co., Ltd. | Subsidiary | Development, production and sales of various special glass and glass deep processing | 180 million | 572,317,015 | 326,065,777 | 747,627,677 | 98,110,256 | 85,691,419 |
| Wujiang CSG East China Architectural | Subsidiary | Deep processing of glass | 320 million | 791,966,532 | 516,253,539 | 878,257,160 | 102,375,030 | 89,722,471 |
CSG Annual Report 2020
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| Glass Co., Ltd. | ||||||||
| Shenzhen Nanbo Display Technology Co., Ltd. | Subsidiary | Manufacture and sales of display device products | 143 million | 1,709,492,383 | 998,036,943 | 621,866,879 | 99,580,797 | 87,177,194 |
| Yichang CSG Polysilicon Co., Ltd. | Subsidiary | Production and sales of high-purity silicon material products | 1,467.98million | 1,986,147,898 | 62,274,390 | 263,404,280 | -691,343,743 | -697,065,509 |
| Shenzhen CSG Application Technology Co., Ltd. | Subsidiary | R&D, design, technical consultation and technology transfer of glass products | 69.12 million | 589,220,032 | 449,484,109 | 28,016,797 | 188,099,353 | 161,337,051 |
Particulars about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
Description of the main holding and shareholding companies:
In the second half of 2020, the flat glass industry ushered in a good opportunity. Based on the continuous promotion ofdifferentiated business strategy, the Company made a new breakthrough in the performance, especially in the frontlayout of double glass field, fully reflected the product premium ability, and effectively control the superimposed cost.The performance of each subsidiary had achieved new breakthroughs.VIII. Structured main bodies controlled by the Company
□ Applicable √ Not applicable
IX. Outlook of the Company’s future development
1. Tendency of development of the industries the Company involved
Flat glass industryIn recent years, under the policy of supply-side reform and other policies, the supply and demand structure of theindustry has been optimized, and the state of overcapacity has been improved. A series of policies implemented by thestate, such as industrial guidance catalogue, air pollution treatment, elimination of non-standard products andproduction control, have effectively controlled industrial capacity, improved product quality and accelerated theelimination of backward production capacity. In 2020, despite the impact of the “epidemic”, demand in the real estatesector was slightly weak in the first half of the year, but the market recovered significantly in the second half of the year.At the same time, with the expansion of the use of flat glass and the improvement of the production capacity structure,the market supply and demand structure were generally stable.In 2021, the regulation policy of real estate is expected to be considerably relaxed, the data of completed real estate areais expected to be revised, and the market supply and demand environment are expected to be stable. With the continuedimplementation of the policy of further capacity reduction and the possible implementation of stricter emissionstandards, it is expected that the overall market supply and demand relationship will shift to a tight supply situation, andthe industry leader will benefit significantly. The improvement of the industry and market structure will benefit theCSG Group which has been paying attention to environmental protection and has complete environmental protectionfacilities.In order to achieve the goal of "CO
Emissions Peak" by 2030 and "Carbon Neutrality" by 2060, the Country isaccelerating the green low-carbon energy development plan. In the future, the national energy structure will change, andthe proportion of renewable energy will continue to increase. According to the forecast of the "China PhotovoltaicIndustry Association", during the 14th Five-Year Plan period, photovoltaics will become the mainstay of new electricity
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installations, and the domestic photovoltaic industry will usher in a new period of development opportunities. Theincrease in photovoltaic installations will increase the demand for photovoltaic glass. , Thus driving the rapiddevelopment of the photovoltaic glass industry.
Architectural glass industryThe outbreak of the epidemic in 2020 had a greater impact on the domestic and international economy. CSG activelyresponded to the Country’s dual-cycle goal of “Domestic and International”, strictly and accurately formulated controlmeasures based on the development of the epidemic, and actively utilized its own brand, quality, service, and marketrefined operation capabilities accumulated over the years, while vigorously developing equipment automation andinformatization, reducing costs and increasing efficiency, further consolidating CSG’s market position, looking foropportunities in the crisis, and achieved performance growth in 2020 in the continuous fluctuation of the high price ofupstream float glass.In the long run, energy-saving glass, as the key to building energy conservation, has a penetration rate of more than 80%in developed countries in Europe and the United States, while the current utilization rate in China is less than 15%.However, the total construction volume in China continues to grow. Every year, 16 billion square meters of newbuildings are high energy consuming buildings with an energy utilization rate of only 33%,in order to achieve the goalof " CO
Emissions Peak " by 2030 and " Carbon Neutrality " by 2060 proposed by the Chinese government, it is urgentto reduce building energy consumption and carbon emissions, and vigorously develop green buildings, that alsoprovides a broad market space for building energy-saving glass manufacturing enterprises.Electronic glass and display industryWith the popularization and development of 5G technology, smart home, smart car, smart factory, advanced medicaltreatment and other application segments are about to enter a high-speed development stage, which provide a broadermarket prospect and market space for the electronic glass industry. At the same time, it also provides a marketopportunity for leapfrog development for upstream material manufacturers with leading technological innovationcapabilities and healthy operations.In the field of automotive electronics, market research organization Auto Data believes that the continuous deepening ofautomotive electrification, intelligence, and interconnection trends indirectly drives the development and growth of theautomotive display market, which is widely used in instrument panels, central control displays, and rear-seatentertainment In-vehicle displays in automotive interiors such as systems are about to usher in a huge market increase.Especially when smart cars start to hit the road in 2022, the on-board central control screen, as the main human-computer interaction window, is also given more functional requirements. The trend of multi-screen, large screen,curved surface and abnormal shape of automobile is obvious, and the demand for on-board central control will furthergrow. In the next few years, on-board central control is expected to continue double-digit growth, with an averageannual compound growth rate of more than 10%.The core products such as automotive AG glass, automotivemultifunctional cover and automotive touch sensor for automotive central control screens will have broad marketprospects in the future.Solar energy industryIn the past two years, subsidies have declined, and the generation side has entered the era of grid parity. The powermarket has continuously forced the cost of photovoltaic industry to decline. With the rapid development of photovoltaictechnology, the production equipment is continuously upgraded, and the competition is becoming fiercer. Somebackward production capacity has been eliminated, and some new capital has entered. In recent years, oligarchs haveemerged in all links of the industrial chain, and the industrial concentration has increased, and capital has beenconcentrated in companies with resource advantages or technological advantages. In order to strengthen the ability toresist risks, various leading enterprises have extended the industrial chain upstream and downstream, or formed
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alliances with enterprises in other links of the industrial chain. The Company already has the entire industry chain andhas certain anti-risk capabilities. The entire industry chain makes the Company more sensitive and can respond to subtlechanges in the industry in a timely manner. Compared with its peers, the Company's competitive advantage is mainly inthe upstream of the industrial chain. The Company entered the polysilicon industry early, with large investment, maturetechnology, stable team, independent research and development capabilities and intellectual property rights. In thefuture, the Company will give full play to its own advantages, integrate multiple resources, focus on the development ofthe polysilicon industry, and provide high-quality raw materials for the photovoltaic industry.
2. Company Development Strategy
2021 is the 37th anniversary of the establishment of CSG. The Company will follow the development path of "Polishingthree pieces of glass (float glass, photovoltaic glass, electronic glass) to forge a brand (architectural glass)", firmlyexpand and strengthen the main glass business, persist in high-quality development, adhere to the purpose of "BusinessFirst", continue to enhance the Company's core competitiveness and strengthen strategic support for the development ofthe industry, occupy the commanding heights of the industry, strengthen the advantage of raw material resources,improve technology and R&D strength, expand market share and market influence, integrate industrial resources,comprehensively improve the credibility and influence of the CSG brand, plan the layout of the CSG industry from aglobal and macro perspective, and build the CSG into a transnational enterprise group with international influencerelated to the upstream and downstream of the glass industry.
3. Business Plan of 2021
①Strengthen the ability of group operation and management, realize general planning management, promote measuressuch as supply chain management and lean management, exploit its potential and increase efficiency, and ensure thecompletion of operation construction objective of the Company in 2021;
② Improve R&D capacity, build up R&D talent team, and maintain the technical innovation advantage of the Companyin the industry;
③ Create open, equal, fair and initiative enterprise culture, and strengthen core cohesion of the Company;
④ Strengthen talent management, establish remuneration incentive system related to the performance, improvecompany incentive mechanism, strengthen employee training, Select and train reserve cadres and introduce high-qualitytalents;
⑤ Rationally plan asset-liability ratio level and ensure financial risk under control;
⑥ Vigorously conduct potential exploiting and efficiency increase activity, realize energy saving and consumptionreduction, and strengthen competitiveness of the Company;
⑦ Improve information level of the Company, and create the world first-class information management platform.
4. Capital Requirements, Plan and Sources
The Company's budgeted capital expenditure in 2021 is approximately RMB 4.129 billion, mainly for projects such aslightweight and high-permeability panels for solar energy equipment, construction of electronic glass production lines,technology upgrades in the solar energy industry, automation of architectural glass workshops, and capacity expansion.The main sources of funds are funds raised through non-public offering of stocks, self-owned funds, and loans fromfinancial institutions.
5. Risks and Countermeasures
In 2021, in the face of “New Normal” of domestic economic development and the task of building a “Hundred yearsCSG”, the Company will face the following risks and challenges:
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① In 2020, under the efforts of the Board of Directors and all employees, daily operation of the Company enterednormal and stable operation. However, the Company still faces the risk of insufficient reserves of senior talents for thelong-term development of the Company. To cope with aforesaid risks, the Company will take the following measures:
A. Establish an open, equal, fair and enterprising corporate culture, strengthen the 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 external high-quality talent, and rapidly establish a high-qualitytalent team;D. Establish sustainable talent recruitment, cultivation, utilization, retaining, and development management system;create a future-oriented human resource production, development, supply system that can support the futuredevelopment of CSG.
②The glass industry is facing fierce competition of similar products and rising pressure of raw materials and fuels. Thesolar photovoltaic industry is facing the risk of product price fluctuations and a shrinking market share for polysiliconproducts. The electronic glass and display industry is facing the risk of accelerating the upgrading of materialtechnology due to the continuous rapid iterative upgrading of the technical requirements of downstream applicationscenarios. To cope with aforesaid risks, the Company will take the following measures:
A. In the flat glass industry, the Company will improve its profitability through continuous lean management anddifferentiated operation, product structure optimization and other ways; expand the scale of the industry by investing innew production lines, enhance the competitiveness of the industry;B. In the architectural glass industry, the Company will strengthen the development of high-end market and overseasmarket, actively develop traditional residence market, and at the same time, maintain the industrial advantageousposition of the Company through market-oriented extension of industrial chain;C. In the solar photovoltaic industry, the shortage of raw materials in the short and medium term in the future may leadto an increase in production costs and even affect production. As the Company entered the industry early and theproportion of old equipment is relatively high, the Company will face the impact of advanced production equipment inits peers after the release of a large number of new capacity in the future, resulting in a decline in its profitability. TheCompany will continue to maintain continuous investment in research and development, accelerate the developmentand introduction of new technologies, and appropriately upgrade equipment and replace them with new ones tomaintain corporate competitiveness.D. In electronic glass and display devices industry, the Company will strengthen research and development of newtechnology and new product, maintain its technical leading advantage in the industry, and rapidly develop terminalmarket and improve industrial profitability.
③ The market price of glass and solar energy PV industrial has fluctuated greatly. At the same time, the prices ofupstream raw materials have fluctuated, and the current rising labor costs have brought risks to the Company'soperations.To cope with risk, the Company will take the following measures:
A. Vigorously exploit potential and increase efficiency, and effectively implement energy saving and consumptionreduction;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 10.70% of the sales revenue of the Company is fromoverseas, in the future, the Company will further develop overseas business, and therefore, the fluctuation of exchangerate will bring certain risk to the operation of the Company. To cope with such risk, the Company will settle exchange
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in time and use safe and effective risk evading instrument and product to relatively lock exchange rate and reduce therisk caused by fluctuation of exchange rate.X. Reception of research, communication and interview
1. Particulars about research, communication and interview in the report period
√Applicable □ Not applicable
| Reception time | Reception location | Reception method | Reception object type | Reception object | The main content of the discussion and the information provided | Index of the basic situation of the survey | |
| June 12, 2020 | CSG Headquarters | Field research | institution | Dongfang securities, Guohai Securities, Great Wall Securities, Jingshun Great Wall, RONGTONG fund, China CITIC construction investment securities, Bank of China International Securities | The Company communicated with the investors on the company's strategic development direction, raised investment projects, capital expenditure, electronic glass, photovoltaic glass, etc.; no information was provided. | For details, please refer to the record of investor relations activities disclosed on Juchao information website on June 15, 2020. | |
| November 9, 2020 | CSG Headquarters | Field research | institution | Western securities, Xingzheng Global Fund, Ruijun asset, Weide investment, Hengtai securities, southern fund, Shenzhen haifuling capital, Shenzhen qianhaisheng Beile investment, foxtail pine asset, shenuo investment, Yixing investment, GuotaiJunan, Great Wall Fund, Dayan capital, Hua'an securities, Liyan investment | The Company communicated with the investors on the company's strategic development direction, raised investment projects, production capacity of various businesses, new electronic glass products, etc.; no information was provided. | For details, please refer to the record of investor relations activities disclosed on Juchao information website on November 11, 2020. | |
| Reception times | 2 | ||||||
| Number of institutions received | 23 | ||||||
| Number of individuals received | 0 | ||||||
| Number of other objects received | 0 | ||||||
| Whether to disclose, disclose or divulge undisclosed material information | No | ||||||
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Section V. Important EventsI. Profit distribution plan of common shares and capitalization of capital reserve plan of theCompanyImplementation or adjustment of profit distribution plan in the report period, cash dividend plan and converting capitalreserve into share capital in particular
√ Applicable □Not applicable
The profit distribution plan for 2019 was approved by Annual General Shareholders’ Meeting of 2019 held on 21 May2020 which distributed distributing cash dividend of RMB 1 (tax included) for every 10 shares to all shareholders.Notice of the distribution was published on China Securities Journal, Securities Times, Shanghai Securities News andHong Kong Commercial Daily on 20 June 2020, and the profit has been distributed.
| Special explanation on cash dividend policy | |
| Satisfy regulations of General Meeting or requirement of Article of Association (Yes/No) | Yes |
| Well-defined and clearly dividend standards and proportion (Yes/No) | Yes |
| Completed relevant decision-making process and mechanism (Yes/No) | Yes |
| Independent directors perform duties completely and play a proper role (Yes/No) | Yes |
| Minority shareholders have ample opportunities and their legitimate rights and interests are effectively protected (Yes/No) | Yes |
| Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed (Yes/No) | Yes |
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in nearly three years(including the report period)Statement on profit distribution preplan in 2020：Based on the current total share capital of 3,070,692,107 shares,distributing cash dividend of RMB 1(tax included) for every 10 shares to all shareholders.Statement on profit distribution plan in 2019：Based on the current total share capital of 3,106,915,005 shares,distributing cash dividend of RMB 0.7 (tax included) for every 10shares to all shareholders.Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2018: based on2,825,632,877 shares of the total share capital while dividends will be distributed, distributing cash dividend of RMB
0.5 (tax included) for every 10 shares to all shareholders. Meanwhile the Company will transfer capital reserve intocapital with 1 share for every 10 shares to all shareholders based on 2,825,632,877 shares of the total share capital.
Cash dividend in latest three years (including the report period)
Unit: RMB
| Year for bonus shares | Amount for cash dividend (tax included) | Net profit attributable to shareholders of listed company in consolidation statement for bonus year | Ratio in net profit attributable to shareholders of listed company contained in consolidation statement | Cash dividend by other ways (such as repurchase shares) | Proportion for cash dividends in other ways to the net profit attributable to ordinary shareholders of listed companies in the consolidated statements | Amount for cash dividend (including other ways) | Net profit attributable to shareholders of listed company in consolidation statement for bonus year (including other ways) |
| 2020 | 307,069,211 | 779,325,592 | 39.40% | 0 | 0% | 307,069,211 | 39.40% |
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| 2019 | 214,948,447 | 536,430,818 | 40.07% | 0 | 0% | 214,948,447 | 40.07% |
| 2018 | 141,281,644 | 452,965,935 | 31.19% | 0 | 0% | 141,281,644 | 31.19% |
Note:
The actual amount of the cash dividend distributed and capital reserve transferred will be determined according to thetotal share capital on the capital reserved registration date for profit distribution implementation.
The Company gains profits in the report period and the retained profit of parent company is positive but no plan of cashdividend proposed
□ Applicable √ Not applicable
II. Proposal of profit distribution preplan or share conversion from capital public reserve inthe report period
√Applicable □ Not applicable
| Distributing bonus shares for every 10 shares (share) | 0 |
| Distributing cash dividend for every 10 shares (tax included) (RMB) | 1 |
| Shares added for every 10-share base (Share) | 0 |
| Equity base for distribution preplan (share) | 3,070,692,107 |
| Total amount distribution in cash (RMB) (tax included) | 307,069,211 |
| Cash dividend amount in other ways (such as repurchasing shares) (RMB) | 0 |
| Total cash dividends (including other methods) (RMB) | 307,069,211 |
| Profit available for distribution (RMB) | 1,100,790,694 |
| Cash distributing accounted for the proportion of the total amount of profit distribution (including other methods) | 100% |
| Particular about cash dividend in the period | |
| If the Company's development stage is not easy to distinguish but there are major capital expenditure arrangements, when the profit is distributed, the proportion of cash dividends in this profit distribution should be at least 20%. | |
| Details of proposal of profit distribution preplan or share conversion from capital public reserve | |
| According to the financial report audited by Asia Pacific (Group) CPAs (special general partnership), the net profit attributable to equity holders of the Company in consolidated statement was RMB 779,325,592 in 2020, and the net profit of the parent company’s financial statements was RMB 906,971,361. Since cash dividend distribution bases on the distributable profit of parent company, the Company took 10% of the net profit as stationary surplus reserve which was RMB 90,697,136 based on the net profit RMB 906,971,361 of parent company statement 2020. The allocation for Shareholders in 2020 was RMB 1,100,790,694. The deliberated and approved plan of profit distribution in the Board Meeting is distributing cash dividend of RMB 1 yuan (tax included) for every 10 shares to all shareholders based on 3,070,692,107 shares of the total currently share capital., and the total amount distribution is RMB307,069,211 (including tax).The actual amount of the cash dividend distributed will be determined according to the total share capital on the registration date of the Company's implementation of the profit distribution plan. The profit distribution plan complies with the "Company Law", "Listed Company Supervision Guidelines No. 3-Cash Dividends for Listed Companies", the "Articles of Association" and the company's shareholder return plan, and other relevant regulations. It is in line with the company's actual situation and future development plans. Taking into account the interests of shareholders. The above profit distribution proposal must be submitted to the 2020 Annual General Meeting of shareholders. | |
III. Implementation of commitment
1. Commitments completed by the actual controllers, the shareholders, the related parties, the purchasers,the Company or the other related parties during the report period and those hadn’t been completedexecution by the end of the report period
√Applicable □ Not applicable
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| Commitments | Promisee | Type of commitments | Content of commitments | Commitment date | Commitment term | Implementation |
| Commitments for Share Merger Reform | The original non-tradable shareholder Shenzhen International Holdings (SZ) Limited and Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd. | Commitment of share reduction | The Company has implemented share merger reform in May 2006. Till June 2009, the share of the original non-tradable shareholders which holding over 5% total shares of the Company had all released. Therein, the original non-tradable shareholder Shenzhen International Holdings (SZ) Limited and Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd. both are wholly-funded subsidiaries to Shenzhen International Holdings Limited (hereinafter Shenzhen International for short) listed in Hong Kong united stock exchange main board. Shenzhen International made commitment that it would strictly carry out related regulations of Securities Law, Administration of the Takeover of Listed Companies Procedures and Guiding Opinions on the Listed Companies’ Transfer of Original Shares Released from Trading Restrictions issued by CSRC during implementing share decreasingly-held plan and take information disclosure responsibility timely. | 2006-5-22 | N/A | By the end of the report period, the above shareholders of the Company had strictly carried out their promises. |
| Commitments in report of acquisition or equity change | Foresea Life Insurance Co., Ltd, Shenzhen Jushenghua Co., Ltd. and Chengtai Group Co., Ltd. | Commitment of horizontal competition, affiliate Transaction and capital occupation | Foresea Life Insurance Co., Ltd., Shenzhen Jushenghua Co., Ltd. and Chengtai Group Co., Ltd. issued detailed report of equity change on 29 June 2015, in which, they undertook to keep independent from CSG in aspects of personnel, assets, finance, organization set-up and business as long as Foresea Life Insurance | 2015-6-29 | During the period when Foresea Life remains the largest shareholder of the Company | By the end of the report period, the above shareholders of the Company had strictly carried out their promises. |
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| remained the largest shareholder of CSG. Meanwhile, they made commitment on regularizing related transaction and avoiding industry competition. | ||||||
| Commitments in assets reorganization | Not applicable | |||||
| Commitments in initial public offering or re-financing | Not applicable | |||||
| Equity incentive commitment | The listed company | CSG has promised not to provide loans and other forms of financial assistance for restricted stocks for the incentive targets under this plan, including providing guarantees for their loans. | 2017-10-10 | During the implementation of the equity incentive plan | The commitment is in normal performance. | |
| Other commitments for medium and small shareholders | Not applicable | |||||
| Completed on time(Yes/No) | Yes | |||||
| If the commitments is not fulfilled on time, explain the reasons and the next work plan | Not applicable | |||||
Note: Shenzhen Jushenghua Co., Ltd. transferred its 86,633,447 unrestricted tradable A shares of CSG Group to itswholly-owned sub-subsidiary Zhongshan Runtian Investment Co., Ltd. through agreement transfer on March 16, 2020.Zhongshan Runtian Investment Co., Ltd. is obliged to continue to fulfill the commitments made by ShenzhenJushenghua Co., Ltd. As of the end of the report period, the above-mentioned shareholders had strictly fulfilled therelevant commitments.
2. If there are assets or projects of the Company, which has profit forecast and the report period is still inforecasting period, the Company should explain reasons why they reach the original profit forecast
□ Applicable √ Not applicable
IV. Particulars about non-operating fund of listed company which is occupied by controllingshareholder and its affiliated enterprises
□ Applicable √ Not applicable
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There was no non-operating fund of listed company which is occupied by controlling shareholder and its affiliatedenterprises in the report period.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. Particulars about the changes in aspects of accounting policy, accounting estimate andcalculation method compared with the financial report of last year
√Applicable □ Not applicable
| The content and reason of accounting policy change | Approval procedures |
| The Ministry of Finance issued the new "Accounting Standards for Business Enterprises No. 14-Revenue" (CK [2017] No. 22)on July 5, 2017. According to the provisions, the enterprises listed at the same time at home and abroad and those listed abroad and prepared financial statements by adopting international financial reporting standards or enterprise accounting standards shall be implemented as of January 1, 2018; other domestic listed enterprises shall be implemented as of January 1, 2020. The implementation of the new income standard is not expected to have a significant impact on the Company's operating results, nor will it lead to a significant change in the Company's income recognition method, nor will it have a significant impact on the financial statements. | The 11th meeting of the 8th Board of Directors held on April 28, 2020 deliberated and passed the proposal on accounting policy changes. |
VII. Description of major accounting errors within report period that need retrospectiverestatement
□ Applicable √ Not applicable
There were no major accounting errors within report period that need retrospective restatement.VIII. Description of changes in consolidation statement’s scope compared with the financialreport of last year
√Applicable □ Not applicable
On January 7, 2020, the Group set up a subsidiary, CSG (Thailand) Co., Ltd. As of December 31, 2020, the Group hasnot actually contributed capital, and the Group holds 100% of its shares.
On February 5, 2020, the Group set up a subsidiary, Anhui CSG New Energy Materials Technology Co., Ltd(Abbreviated as "Anhui New Energy Company"). As of December 31, 2020, the Group has invested RMB 20 million.The Group owns 100% of its equity.
On February 8, 2020, the Group set up a subsidiary, Anhui CSG New Quartz Material Co., Ltd (Abbreviated as "AnhuiQuartz Company"). As of December 31, 2020, the Group has invested RMB 3 million. The Group owns 100% of itsequity.
On February 10, 2020, the Group set up a subsidiary, Shenzhen CSG Medical Technology Co., Ltd (Abbreviated as"Shenzhen CSG Medical Company"). As of December 31, 2020, the Group has invested RMB 20 million. The Groupowns 100% of its equity.
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On August 31, 2020, the Group set up a subsidiary, CSG (Suzhou) Corporate Headquarters Management Co., Ltd. Asof December 31, 2020, the Group has not actually contributed capital, and the Group owns 100% of its equity.IX. Engaging and dismissing of CPA firmCPA firm engaged
| Name of domestic CPA firm | Asia Pacific (Group) CPAs (special general partnership) |
| Remuneration for domestic CPA firm (RMB 0,000) | 300 |
| Continuous life of auditing service for domestic CPA firm | 3 |
| Name of domestic CPA | Zhou Xianhong, Sun Weijie |
| Continuous life of auditing service for domestic CPA | Zhou Xianhong(3years), Sun Weijie(1year) |
Whether changed accounting firms in this period or not
□ Yes √No
Whether changed the accounting firm during the audit period or not
□ Yes √No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
Asia Pacific (Group) CPAs (special general partnership) was engaged as audit institute of internal control for theCompany in the report period, and contracted charges was RMB 0.30 million (not including traveling andaccommodation expenses).
X. Particular about the Company suspended from the stock market listing and delisting afterthe disclosure of the annual report
□ Applicable √ Not applicable
XI. Issues related to bankruptcy and reorganization
□ Applicable √ Not applicable
XII. Significant lawsuits and arbitrations
□ Applicable √ Not applicable
XIII. Penalty and rectification
□ Applicable √ Not applicable
XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the Company’s stock incentive plan, employee stock ownership planor other employee incentives
√Applicable □ Not applicable
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On Oct. 10, 2017, the 3
rd Meeting of the 8
thBoard of Directors of the Company deliberated and approved 2017Restricted A- shares Incentive Plan of CSG Holding Co., Ltd (Draft )and its summary, the Management Method of theImplementation and Review of 2017 Restricted A-shares Incentive Plan of CSG Holding Co., Ltd and the Resolution onApplying the General Meeting of Shareholders to Authorize the Board of Directors to Deal With the Related Matters onthe Company’s 2017 Restricted A-shares Incentive Plan. The above contents are detailed in the Announcement of theResolution on the Third Meeting of the Eighth Session of the Board of Directors published on Juchao informationwebsite (www.cninfo.com.cn) on Oct.11, 2017. (Announcement No.: 2017-063). The Company’s independent directorsissued independent opinions on the issues involved with restricted A- shares incentive plan.On Oct. 26, 2017, the Company convened the 5
thExtraordinary General Meeting in 2017, which deliberated andapproved the above three proposals. The Resolution on Adjusting the Object and Quantity Granted of 2017 RestrictedA-share Incentive Plan and the Resolution on Firstly Granted Restricted Shares to the Object of 2017 Restricted A-sharewere deliberated and approved on the extraordinary meeting of the eighth session board of directors convened on Dec.
th, 2017. It determined to grant 97,511,654 restricted shares to 454 objects on Dec. 11, 2017, with price atRMB4.28/share. The reserved restricted shares were 17,046,869 shares.The granting of shares was completed on Dec. 25, 2017 and the specific content was detailed in the Announcement onCompleting the First Granting of 2017 Restricted A-shares disclosed on Juchao information website(www.cninfo.com.cn) on Dec. 22, 2017 (Announcement No.:2017-079).On July 20, 2018, the Company held the extraordinary meeting of the 8th Board of Directors and the extraordinarymeeting of the 8th Board of Supervisors, and reviewed and approved the Proposal on Repurchase and RestrictingPartially Restricted Stocks of Restricted Stock Incentive Plan, considered and agreed to repurchase and cancel the totalof 3,319,057 shares of 15 incentive targets of all that have been granted to them who have not been eligible with stockstill under restriction, and the independent directors of the Company issued a consent. And on August 6, 2018, thesecond extraordinary shareholders meeting in 2018 was approved. As of September 10, 2018, the Company hascompleted the cancellation procedures for the above-mentioned restricted stocks at China Securities Depository andClearing Co., Ltd. Shenzhen Branch. The total number of shares of the Company was changed from 2,856,769,678shares to 2,853,450,621 shares.On September 13, 2018, the Company convened an extraordinary meeting of the 8th Board of Directors and an ad hocmeeting of the 8th Board of Supervisors, and reviewed and approved the Proposal on Granting Restricted Stocks to the2017 Restricted Stock Incentive Plan for Incentive Objects. The grant date for the second reserved restricted stock wasSeptember 13, 2018, and the Company agreed to grant a total of 9,826,580 reserved restricted stocks to 75 incentivetargets at a price of 3.68 yuan/share. The independent directors have issued independent opinions on the above proposal,and the Company's supervisory board has once again verified the list of incentive targets on the grant date. The sharesgranted have been registered in the Shenzhen Branch of China Registration and Clearing Corporation and listed onSeptember 28, 2018. The total number of shares of the Company has changed from 2,853,450,621 shares to2,863,277,201 shares.On December 12, 2018, the Company held the extraordinary meeting of the 8th Board of Directors and theextraordinary meeting of the 8th Board of Supervisors, and reviewed and approved the Proposal on Repurchase andRestricting Partially Restricted Stocks of Restricted Stock Incentive Plan, and reviewed and agreed to repurchase andwrite-off of a total of 436,719 shares of all restricted shares granted but not yet unrestricted to sale by 8 unqualifiedoriginal incentive subjects, The total number of all restricted stocks that were not eligible for the original incentives butnot yet released was limited to 436,719 shares, and was approved by the third extraordinary general meeting of 2018 onDecember 28, 2018. As of June 18, 2019, the Company has completed the cancellation procedures of the above-
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mentioned restricted stock at the Shenzhen branch of China securities registration and clearing co., Ltd. For details,please refer to the notice on completion of cancellation of partial restricted stock repurchase (notice No.: 2019-040)published on Juchao information website (www.cninfo.com.cn) on June 19, 2019.On December 12, 2018, the Company held the extraordinary meeting of the 8th Board of Directors and the 8thExtraordinary Meeting of the Board of Supervisors, and reviewed and approved the first release of the Company's 2017A-share restricted stock incentive plan for the first time. In addition to the fact that the eight incentive targets have notbeen able to lift the restrictions on sales, the total number of incentives for the conditions for lifting the restrictions is431, and the number of restricted stocks that can be unlocked is 43,353,050 shares, accounting for the current Company.
1.51% of the total share capital. The board of supervisors, independent directors, and law firms issued separate opinions.The date of the restricted stock release date is December 21, 2018.On April 16, 2019, the Company held the 8th meeting of the 8th board of directors, and the 8th meeting of the 8th boardof supervisors. The meetings approved the “Proposal concerning the repurchase and cancellation of some restrictedshares from the ‘incentive plan’ of restricted shares”, and the “Proposal concerning the repurchase and cancellation ofrestricted shares failing to meet the second-term unlocking condition”. The meetings approved to repurchase and cancela total of 3,473,329 restricted shares which have already been granted to and held by 14 recipients who are unqualifiedfor the “incentive plan”, and repurchase and cancel a total of 33,734,276 restricted shares failing to meet the second-term unlocking condition from 483 “incentive” recipients. Independent directors agreed with this and it was approvedby the annual general meeting of shareholders on May 9 2019. By June 18 2019, the cancellations procedure of aboverestricted shares has been accomplished. For details, please refer to the notice on completion of cancellation of partialrestricted stock repurchase (notice No.: 2019-040) published on Juchao information website (www.cninfo.com.cn) onJune 19, 2019.On September 16, 2019, the Company convened an extraordinary meeting of the 8th Board of Directors and anextraordinary meeting of the 8th Board of Supervisors, and reviewed and approved the “Proposal on Repurchase andCancelation part of Restricted Stocks of Restricted Stock Incentive Plan”, considered and agreed to repurchase andcancel the total of 1,281,158 shares of 18 incentive targets of all restricted stocks that have been granted to them whohave not been eligible with stock still under restriction. It was approved by the fourth extraordinary general meeting ofshareholders in 2019, held on October 10, 2019. By June 16, 2020, the cancellations procedure of above restrictedshares has been accomplished. For details, please refer to the notice on completion of cancellation of partial restrictedstock repurchase (notice No.: 2020-049) published on Juchao information website (www.cninfo.com.cn) on June 17,2020.On September 16, 2019, the Company convened an extraordinary meeting of the 8th Board of Directors and anextraordinary meeting of the 8th Board of Supervisors, and reviewed and approved the "proposal on the achievement ofcondition for unlock the first restriction period stock of the 2017 a-share restricted stock incentive plan of theCompany". Except the 3 incentive objects who have left the Company and are no longer qualified for unlocking, thetotal number of incentive objects who meet the condition for unlocking is 71, and the number of restricted shares thatcan be unlocked is 3,909,350, accounting for 0.13% of the total share capital of the Company at present. The board ofsupervisors, the independent directors and the law firm have expressed their express consents. The unlock date/ listingdate of these restricted stock is September 25, 2019.On April 28, 2020, the Company held the 11th meeting of the 8th board of directors, and the 11th meeting of the 8thboard of supervisors. The meetings approved the “Proposal concerning the repurchase and cancellation of somerestricted shares from the ‘incentive plan’ of restricted shares”, and the “Proposal concerning the repurchase andcancellation of restricted shares failing to meet the third-term unlocking condition”. The meetings approved to
CSG Annual Report 2020
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repurchase and cancel a total of 909,936 restricted shares which have already been granted to and held by 14 recipientswho are unqualified for the “incentive plan”, and repurchase and cancel a total of 35,312,962 restricted shares failing tomeet the third-term unlocking condition from 451 “incentive” recipients. Independent directors agreed with this and itwas approved by the annual general meeting of shareholders 2019 on May 21, 2020. By June 16, 2020, thecancellations procedure of above restricted shares has been accomplished. For details, please refer to the notice oncompletion of cancellation of partial restricted stock repurchase (notice No.: 2020-049) published on Juchaoinformation website (www.cninfo.com.cn) on June 17, 2020.XVI. Major related transaction
1. Related transaction with routine operation concerned
□ Applicable √ Not applicable
There was no related transaction with routine operation concerned in the report period.
2. Related transaction with acquisition of assets or equity, sales of assets or equity concerned
□ Applicable √ Not applicable
There was no related transaction with acquisition of assets or equity, sales of assets or equity concerned in the reportperiod.
3. Related transaction with jointly external investment concerned
□ Applicable √ Not applicable
There was no related transaction with jointly external investment concerned in the report period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
There were no credits and liabilities with related parties in the report period.
5. Other major related transaction
□ Applicable √ Not applicable
There was no other major related transaction in the report period.XVII. Significant contracts and their implementation
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in the report period.
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(2) Contract
□ Applicable √ Not applicable
No contract for the Company in the report period.
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in the report period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantee
Unit: RMB 0,000
| Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries) | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party (Yes or no) |
| Guarantee of the Company for the subsidiaries | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party (Yes or no) |
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2016-8-16 | 30,000 | 2017-1-3 | 9,330 | Joint liability guarantee | 3 years | No | No |
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2020-12-5 | 3,000 | Joint liability guarantee | 1 year | No | No | ||
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2020-12-19 | 5,000 | Joint liability guarantee | 1 year | No | No | ||
| Xianning CSG Energy-Saving Glass Co., Ltd. | 2020-4-30 | 3,000 | 2020-7-10 | 2,000 | Joint liability guarantee | 1 year | No | No |
| Xianning CSG Energy-Saving Glass Co., Ltd. | 2020-5-23 | 50,000 | 2020-10-21 | 1,500 | Joint liability guarantee | 1 year | No | No |
| Yichang Nanbo Photoelectric Glass Co., Ltd. | 2020-5-23 | 2,000 | 2020-5-29 | 1,200 | Joint liability guarantee | 1year | No | No |
| Dongguan CSG PV-tech Co., Ltd. | 2020-3-6 | 5,500 | 2020-4-14 | 2,000 | Joint liability guarantee | 1 year | No | No |
| Dongguan CSG PV-tech Co., Ltd. | 2019-8-23 | 30,500 | 2019-12-17 | 1,520 | Joint liability guarantee | 2 years | No | No |
| Xianning CSG Glass Co., Ltd. | 2020-6-24 | 4,000 | Joint liability guarantee | 1 year | No | No | ||
| Hebei Panel Glass Co., Ltd. | 2020-2-25 | 3,000 | Joint liability guarantee | 1year | No | No | ||
| Hebei CSG Glass Co., Ltd. | 2020-2-25 | 5,000 | Joint liability guarantee | 1 year | No | No | ||
| Qingyuan CSG New Energy-Saving Materials Co.,Ltd. | 2019-3-19 | 20,000 | 2019-3-19 | 12,698 | Joint liability guarantee | 3 years | Yes | No |
| Hebei CSG Glass Co., Ltd. | 2017-10-10 | 20,000 | 2017-10-30 | 7,252 | Joint liability guarantee | 3 years | Yes | No |
| Dongguan CSG Architectural Glass Co., Ltd. | 2019-12-20 | 18,000 | 2020-3-11 | 8,100 | Joint liability guarantee | 1 year | Yes | No |
| Wujiang CSG Glass Co., Ltd. | 2019-10-28 | 6,000 | 2019-10-28 | Joint liability guarantee | 1 year | Yes | No | |
| Yichang CSG Display Co., Ltd. | 2019-2-26 | 2,432 | 2019-6-25 | 300 | Joint liability guarantee | 1 year | Yes | No |
| Xianning CSG Glass Co., | 2017-9-16 | 25,000 | 2017-9-18 | 6,488 | Joint liability | 3 years | Yes | No |
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| Ltd. | guarantee | |||||||
| Wujiang CSG Glass Co., Ltd. | 2017-8-28 | 30,000 | 2017-9-13 | 10,261 | Joint liability guarantee | 3 years | Yes | No |
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2017-8-1 | 20,000 | 2017-9-7 | 8,100 | Joint liability guarantee | 3 years | Yes | No |
| Zhanjiang CSG New Energy Co., Ltd. | 2017-7-31 | 9,000 | 2017-9-26 | 4,781 | Joint liability guarantee | 3 years | Yes | No |
| Yichang Nanbo Photoelectric Glass Co., Ltd. | 2017-5-22 | 5,472 | 2017-5-26 | 1,824 | Joint liability guarantee | 3 years | Yes | No |
| Dongguan CSG PV-tech Co., Ltd. | 2017-11-27 | 20,000 | 2017-12-20 | 7,252 | Joint liability guarantee | 3years | Yes | No |
| Chengdu CSG Glass Co., Ltd. | 2020-8-24 | 5,000 | 2020-8-24 | 4,500 | Joint liability guarantee | 1 year | No | No |
| Chengdu CSG Glass Co., Ltd. | 2020-2-25 | 8,000 | 2020-3-4 | 980 | Joint liability guarantee | 1 year | No | No |
| Sichuan CSG Energy Conservation Glass Co., Ltd. | 2020-8-24 | 5,000 | 2020-8-24 | 4,500 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG Glass Co., Ltd. | 2019-9-18 | 10,000 | 2019-9-20 | 1,780 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG Glass Co., Ltd. | 2020-12-5 | 10,000 | 2020-12-9 | 866 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG Glass Co., Ltd. | 2020-2-25 | 8,000 | 2020-3-4 | 1,000 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG Glass Co., Ltd. | 2019-12-10 | 5,000 | 2020-4-30 | Joint liability guarantee | 1 year | No | No | |
| Wujiang CSG Glass Co., Ltd. | 2020-2-25 | 10,000 | 2020-5-11 | 1,000 | Joint liability guarantee | 1 year | No | No |
| Dongguan CSG Architectural Glass Co., Ltd. | 2019-4-17 | 6,000 | 2019-8-29 | 1,000 | Joint liability guarantee | 1 year | Yes | No |
| Dongguan CSG Architectural Glass Co., Ltd. | 2020-6-24 | 6,000 | 2020-8-18 | 2,000 | Joint liability guarantee | 1 year | No | No |
| Dongguan CSG Architectural Glass Co., Ltd. | 2020-9-22 | 20,000 | 2020-12-25 | Joint liability guarantee | 1year | No | No | |
| Dongguan CSG Architectural Glass Co., Ltd. | 2020-2-25 | 10,000 | 2020-3-26 | Joint liability guarantee | 1 year | No | No | |
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2020-12-5 | 10,000 | 2020-12-9 | Joint liability guarantee | 1 year | No | No | |
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2019-9-18 | 10,000 | 2019-9-20 | 3,648 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2020-9-22 | 5,000 | Joint liability guarantee | 1 year | Yes | No | ||
| Dongguan CSG Solar Glass Co., Ltd. | 2019-10-28 | 10,000 | 2019-12-17 | 2,625 | Joint liability guarantee | 2 years | No | No |
| Dongguan CSG Solar Glass Co., Ltd. | 2020-2-25 | 8,000 | 2020-3-4 | 730 | Joint liability guarantee | 1 year | No | No |
| Dongguan CSG Solar Glass Co., Ltd. | 2020-2-25 | 7,288 | 2020-12-1 | Joint liability guarantee | 1 year | No | No | |
| Dongguan CSG Solar Glass Co., Ltd. | 2020-9-22 | 4,500 | 2020-11-11 | Joint liability guarantee | 3 years | No | No | |
| Dongguan CSG Solar Glass Co., Ltd. | 2020-9-22 | 20,000 | 2020-12-25 | Joint liability guarantee | 1 year | No | No | |
| Dongguan CSG Solar Glass Co., Ltd. | 2020-4-30 | 5,000 | 2020-5-18 | Joint liability guarantee | 1 year | No | No | |
| Qingyuan CSG New Energy-Saving Materials Co.,Ltd. | 2019-12-10 | 4,330 | 2019-12-10 | 1,425 | Joint liability guarantee | 1 year | No | No |
| Qingyuan CSG New Energy-Saving Materials Co.,Ltd. | 2019-12-10 | 5,000 | 2020-4-26 | Joint liability guarantee | 1 year | No | No | |
| Qingyuan CSG New Energy-Saving Materials Co.,Ltd. | 2019-12-10 | 50,000 | 2020-4-26 | 14,449 | Joint liability guarantee | 5 years | No | No |
| Yichang CSG Display Co., Ltd. | 2020-5-23 | 5,000 | 2020-6-22 | 51 | Joint liability guarantee | 1 year | No | No |
| Yichang CSG Display Co., | 2020-5-23 | 5,000 | 2020-5-29 | 3,000 | Joint liability | 1 year | No | No |
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| Ltd. | guarantee | |||||||
| Tianjin CSG Energy-Saving Glass Co., Ltd. | 2019-12-24 | 3,000 | 2020-4-9 | 30 | Joint liability guarantee | 1 year | No | No |
| Tianjin CSG Energy-Saving Glass Co., Ltd. | 2020-4-30 | 5,000 | 2020-6-30 | 2,150 | Joint liability guarantee | 1 year | No | No |
| ZhaoqingCSG Energy-Saving GlassCo., Ltd. | 2020-9-22 | 34,000 | 2020-9-25 | 4,362 | Joint liability guarantee | 5 years | No | No |
| China Southern Glass (Hong Kong) Limited | 2020-2-25 | 48,000 | 2020-4-4 | 6,312 | Joint liability guarantee | 1 year | No | No |
| Dongguan CSG Architectural Glass Co., Ltd. | 2020-6-24 | 2020-8-20 | 326 | Joint liability guarantee | 1 year | No | No | |
| Dongguan CSG Solar Glass Co., Ltd. | 2020-6-24 | 2020-8-20 | Joint liability guarantee | 1 year | No | No | ||
| Dongguan CSG PV-tech Co., Ltd. | 2020-6-24 | 2020-8-20 | 970 | Joint liability guarantee | 1 year | No | No | |
| Qingyuan CSG New Energy-Saving Materials Co.,Ltd. | 2020-6-24 | 2020-8-20 | 803 | Joint liability guarantee | 1 year | No | No | |
| Hebei Panel Glass Co., Ltd. | 2020-6-24 | 2020-8-20 | Joint liability guarantee | 1 year | No | No | ||
| Chengdu CSG Glass Co.,Ltd. | 2020-6-24 | 2020-8-20 | Joint liability guarantee | 1 year | No | No | ||
| Sichuan CSG Energy Conservation Glass Co., Ltd. | 2020-6-24 | 2020-8-20 | 610 | Joint liability guarantee | 1 year | No | No | |
| Xianning CSG Glass Co., Ltd. | 2020-6-24 | 2020-8-20 | Joint liability guarantee | 1 year | No | No | ||
| Xianning CSG Energy-Saving Glass Co., Ltd. | 2020-6-24 | 2020-8-20 | 130 | Joint liability guarantee | 1 year | No | No | |
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2020-6-24 | 2020-8-20 | 543 | Joint liability guarantee | 1 year | No | No | |
| Tianjin CSG Energy-Saving Glass Co., Ltd. | 2020-6-24 | 2020-8-20 | 2,971 | Joint liability guarantee | 1 year | No | No | |
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2020-2-25 | 2020-6-24 | Joint liability guarantee | 1 year | No | No | ||
| Dongguan CSG Jingyu New Material Co., Ltd. | 2020-2-25 | Joint liability guarantee | 1 year | No | No | |||
| Total amount of approving guarantee for subsidiaries in report period (B1) | 245,436 | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 67,083 | |||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 472,118 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 79,311 | |||||
| Total amount of guarantee of the Company( total of three abovementioned guarantee) | ||||||||
| Total amount of approving guarantee in report period (A1+B1+C1) | 245,436 | Total amount of actual occurred guarantee in report period (A2+B2+C2) | 67,083 | |||||
| Total amount of approved guarantee at the end of report period (A3+B3+C3) | 472,118 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 79,311 | |||||
| The proportion of the total amount of actual guarantee in the net assets of the Company(that is A4+ B4+C4) | 7.77% | |||||||
| Including: | ||||||||
| Total amount of the aforesaid three guarantees(D+E+F) | 0 | |||||||
| Amount of guarantee for shareholders, actual controller and its related parties(D) | 0 | |||||||
| The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly(E) | 0 | |||||||
| Proportion of total amount of guarantee in net assets of the Company exceed 50%(F) | 0 | |||||||
| Total amount of the aforesaid three guarantees(D+E+F) | 0 | |||||||
| Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if any) | N/A | |||||||
| Explanations on external guarantee against regulated procedures(if any） | N/A | |||||||
| Explanations on Guarantee of the Company for the subsidiaries | The total Guarantee limit was RMB 2,454.36million in the report period. The Company and its wholly-owned subsidiary Yichang CSG Polysilicon Co., Ltd. jointly guaranteed for Dongguan CSG PV-tech Co., Ltd. The Company has carried out the bill pool business of 400 million. The Company and its holding subsidiaries can adopt various | |||||||
CSG Annual Report 2020
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(2) Illegal external guarantee
□ Applicable √ Not applicable
No Illegal external guarantee in the report period.
3. Entrust others to manage cash assets
(1)Entrusted Financing
□Applicable √Not applicable
No entrusted financing in the report period.
(2) Entrusted loans
√ Applicable □ Not applicable
Unit: RMB 0,000
guarantee methods such as pledge of maximum amount, generalpledge, pledge of certificates of deposit, pledge of bills, pledge ofsecurity deposit and so on for the establishment and use of the billpool.Accrued of loan
| Accrued of loan | Amount of loan | Unexpired balance | Overdue outstanding amount |
| 30,000 | Own funds | 0 | 0 |
Note：
After deliberated and approved by the company's eighth interim meeting of the board of directors held on December 20,2019, the Company issued entrusted loans to Tengchong Yuezhou Water Investment and Development Co., Ltd., with atotal amount of entrusted loans of RMB 300 million. The validity period of the entrusted loan was 3 months, and theannualized interest rate of the entrusted loan was 8.5%. On March 24, 2020, the principal and income of the entrustedloan had been recovered according to the contract.
The specific circumstances of high-risk entrusted loan with large individual amount or low security, poor liquidity, andno cost protection
□ Applicable √ Not applicable
Entrusted loan appears to be unable to recover the principal or there may be other circumstances that may result inimpairment
□ Applicable √ Not applicable
4. Major contracts for daily operation
√Applicable □ Not applicable
| Name of company signing the contract | Name of the other party signing the contract | Subject matter | Total contract amount | Progress of contract performance | Amount of sales revenue recognized in the current period and accumulated | Collection of accounts receivable |
| Wujiang CSG Glass Co., Ltd., | LONGi Solar Technology Ltd., | Photovoltaic glass | RMB 6,500 million (tax | In progress | The recognized income was | RMB 75.94million |
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| Dongguan CSG Solar Glass Co., Ltd. | Zhejiang LONGi Solar Technology Ltd., Taizhou LONGi Solar Technology Ltd., Yinchuan LONGi Solar Technology Ltd., Chuzhou LONGi Solar Technology Ltd., Datong LONGi Solar Technology Ltd., LONGi (H.K.) Trading Limited, LONGi (KUCHING) SDN. BHD., Xianyang LONGi Solar Technology Ltd., Jiangsu LONGi Solar Technology Ltd., Jiaxing LONGi Solar Technology Ltd.,Xi'an LONGi Green Building Technology Ltd. | included) | RMB 134.36 million in this period, and the accumulated recognized income wasRMB134.36million. |
There is a significant difference between the progress of the major contract and the contract agreement, which affectsmore than 30% of the contract amount
□ Applicable √ Not applicable
5. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in the report period.XVIII. Social responsibilities
1. Performance of social responsibilities
2020 Annual Social Responsibilities Report of CSG is the 13th annual report released by the Company consecutively.The report focusing on the year of 2020, systemically formulated the Company concrete actions of how to positivelyperform the social responsibilities, and the efforts to implement the “Scientific Development Perspective”, building up aharmonious society, and advancing the sustainable development of economic and society. See the full report onwww.cninfo.com.cn.
2. Circumstances related to environmental protection
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by theenvironmental protection departmentYes
| Name of Company or subsidiary | Name of major pollutants and characteristic contaminants | Way of emission | Number of Exhaust vent | Exhaust vent distribution | Emission concentration | Implementation of pollutant emission standards | Total emission | Approved total emission | Excessive emissions |
| Xianning | Dust\Soot\ | Discharge after | 16 | Chimney, | Dust≤30mg/m?； | 《Emission standard | Particulates:17.0 | Particulates： | Reach the |
CSG Annual Report 2020
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| CSG Glass Co., Ltd. | SO2\ Nitrogen oxide | the treatment of denitrification and dust removal | Exhaust vent | Soot≤40 mg/m?；SO2≤300 mg/m?；NOx≤350 mg/m?. | of air pollutants for flat glass industry》(GB26453-2011) | 0t；SO2:136.05t；NOx:324.91t. | 96.82t/a；SO2:636.5t/a Nitrogen oxides：1113.89t/a | discharge standard | |
| Chengdu CSG Glass Co., Ltd | Dust＼Soot＼SO2＼Nitrogen oxide | Discharge after the treatment of denitrification and dust removal | 15 | Chimney,exhaust vent | Dust≤30mg/m?；Soot≤20mg/m?；SO2≤200mg/m?；NOx≤350mg/m?. | 《Emission standard of air pollutants for flat glass industry》(GB26453-2011) | Particulates:21.52t；SO2: 361.69t；NOx :627.89t. | Particulates：142.114t/a；SO2:1136.917t/a；NOx：1989.609t/a. | Reach the discharge standard |
| Hebei CSG Glass Co., Ltd. | Dust＼Particulates＼SO2＼Nitrogen oxide | Dischargeafter denitrification, desulfurization and dust removal treatment | 12 | Chimney,exhaust vent | Dust≤10mg/m?；Particulates≤10mg/m?；SO2≤50mg/m?；NOx≤200mg/m?. | 《Emission standard of air pollutants for flat glass industry》DB13/2168-2015Hebei local standard | Particulates:4.133t；SO2:28.543t；NOx :201.192t. | Particulates：59.78t/a；SO2:498.18t/a；NOx：982.2t/a. | Reach the discharge standard |
| Wujiang CSG Glass Co., Ltd | Particulates＼SO2＼Nitrogen oxide | Discharge after the treatment of denitrification and dust removal | 39 | Chimney,exhaust vent | Particulates≤15mg/m?；SO2≤50 mg/m?；NOx≤150 mg/m?. | 《Emission standard of air pollutants for flat glass industry》(GB26453-2011) | Particulates：44.026t；SO2:175.27t；NOx :559.75t. | Particulates：76.91t/a；SO2:238.28t/a；NOx：818.04t/a. | Reach the discharge standard |
| Dongguan CSG Solar Glass Co., Ltd. | dust＼soot＼SO2＼Nitrogen oxide | Discharge after the treatment of denitrification and dust removal | 22 | Chimney,exhaust vent | dust≤20mg/m?；soot≤20 mg/m?；SO2≤400 mg/m?；NOx≤550 mg/m?。 | 《Emission standard of air pollutants for flat glass industry》(GB26453-2011) | Particulates9.72t；SO2: 209.22t；NOx :359.88tt. | Particulates：34.85t/a；SO2:300.99t/a；NOx：535.67t/a. | Reach the discharge standard |
| Dongguan CSG Architectural Glass Co., Ltd. | PH＼COD＼Ammonia nitrogen | Discharged to the sewage treatment plant after being treated by the Company's sewage treatment station. | 1 | Sewage vent | PH：6~9；COD≤5mg/L；Ammonia nitrogen≤0.537mg/L. | 《Guangdong Province water pollutant emission limit》（DB44/26-2001）Second period Level 1 Standard | COD:0.257；Ammonia nitrogen:0.047t. | COD:5.4t/a；Ammonia nitrogen:0.6t/a. | Reach the discharge standard |
| Dongguan CSG PV-tech Co., Ltd. | waste water：Fluoride＼COD＼Ammonia nitrogen：HF＼NOx | The wastewater is discharged after being treated by the sewage station, and the exhaust gas is discharged after being treated by the exhaust gas treatment tower. | 20 | Sewage vent，Exhaust vent | COD≤70 mg/L；exhaust：NOx≤30mg/m?；HF≤30 mg/m?. | 《Guangdong Province water pollutant emission limit》（DB44/26-2001）Second period first level standard；《Battery industry pollutant discharge standards》（GB30484-2013）. | waste water：COD：2.05t；Exhuast：Nitrogen oxide：8.91t；VOC：0.89t. | waste water：COD：14.04t/a； exhaust：Nitrogen oxide：8.91t；VOC：0.89t. | Reach the discharge standard |
| Hebei Panel Glass Co., Ltd. | Dust＼Soot＼SO2＼Nitrogen oxide | Discharge after the treatment of denitrification and dust removal | 5 | Chimney,exhaust vent | dust≤30mg/m?；soot≤10 mg/m?；SO2≤50 mg/m?；NOx≤200mg/m?。 | 《Electrical Glass Industry Air Pollutant Emission Standards》(GB29495-2013) | Particulates:0.191t；SO2：0.982t；NOx：8.339tt. | Particulates：8.2125t/a；SO2：22t/a；NOx：39.4t/a. | Reach the discharge standard |
| Yichang CSG Display Co., Ltd. | COD＼Ammonia nitrogen＼Nitrogen oxide | The waste water is discharged after being treated by the sewage station, and the exhaust gas is discharged after being treated by the exhaust gas treatment tower. | 2 | Sewage vent，Exhaust vent | COD≤500mg/；NOx<240mg/m?.。 | 《Sewage Integrated Emission Standards》Level 3 Standard (GB8978-1996)；《The Integrated Emission Standard of Air Pollutants》（GB16297-1996） | COD:51.94t. | COD：99.5t/a； Nitrogen oxide：22.4t/a。 | Reach the discharge standard |
| Xianning CSG Photovoltaic Glass Co., Ltd | Dust＼Soot＼SO2＼Nitrogen oxide | Discharge after the treatment of denitrification and dust removal | 6 | Chimney,Exhaust vent | Dust≤20mg/m?； Soot≤15 mg/m?；SO2≤10 mg/m?；NOx≤350 mg/m?. | 《Electrical Glass Industry Air Pollutant Emission Standards》(GB29495-2013) | Particulates:2.16t；2.065t； NOx：63.571t。 SO2：0.101t. | Particulates：117.656t/a；SO2：65.6t/a； Nitrogen oxide：163.81t/a. | Reach the discharge standard |
Construction and operation of pollution prevention and control facilities
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The 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 standard.The environmental impact assessment of construction projects and other environmental protection licenseAG+AF glass cover expansion project of Yichang CSG Display Co., Ltd. had completed the environmental impactassessment work and obtained approval in 2019, and is currently in the construction stage. The easy-clean glass coatingproduction line project of Xianning CSG Energy-saving Glass Co., Ltd. had undergone an environmental impactassessment and obtained approval in 2018. The construction of the project has been completed and is currently in thetrial production stage. Qingyuan CSG Energy-saving New Materials Co., Ltd. has an annual production capacity of200,000 tons of special glass expansion project in 2019. The environmental impact assessment and approval wereobtained. The project is in the trial production stage. Anhui CSG New Energy Material Technology Co., Ltd. hadalready carried out an environmental impact assessment and obtained approval in 2020 for the project of manufacturingbase for lightweight and high-transparent panels for solar equipment. Zhaoqing CSG Energy-saving Glass Co., Ltd.Zhaoqing Energy-saving CSG Group's energy-saving project had conducted an environmental impact assessment andobtained approval in 2020, and the project is in the construction stage. The expansion project of special glass with anannual production capacity of 300,000 tons of Sichuan CSG Energy Conservation Glass Co., Ltd. had undergone anenvironmental impact assessment and obtained approval in 2020, and the project is in the construction stage. Other newprojects of the subsidiary that do not involve changes in production capacity have also carried out the "threesimultaneous" work of environmental protection in construction projects, and have obtained pollutant discharge permitswithin the validity period. In accordance with relevant national regulations, all subsidiaries have timely carried outpollution discharge declarations, carried out pollution discharge declaration monitoring and paid environmental taxes.Emergency response plan system of environment incidentIn accordance with the national requirements, all subsidiaries prepared emergency environmental response plan forenvironment incident, organized and carried out expert evaluation and filed with the local environmental protectiondepartment as required, conducted the emergency drill against environmental incidents. And there were no majorenvironmental incidents occurred in 2020.Environmental self-monitoring schemeSubsidiaries have built wastewater and exhaust gas online monitoring devices in accordance with the requirements ofnational laws and regulations, construction project environmental impact assessment documents and their approvals,and are operating normally. They have regularly carried out effectiveness comparison audits of online monitoringfacilities, and entrusted third-party units to carry out Manual environmental monitoring is implemented tocomprehensively monitor the discharge of pollutants, and the monitoring frequency shall be implemented in accordancewith relevant monitoring technical guidelines or pollution discharge permits.Other environmental information to be disclosedNil.Other information related to environment protectionNil.XIX. Statement on other important matters
√Applicable □ Not applicable
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1. Ultra-short-term financing bills
On May 14, 2018, the company’s 2017 annual shareholders’ meeting deliberated and approved the resolution on theapplication for registration and issuance of ultra-short-term financing bills. It agreed that the company should registerand issue ultra-short-term financing bills with a registered amount not exceeding 4 billion yuan (not subject to therestriction that the amount of ultra-short-term issued shall not exceed 40% of net assets). With the period of validity ofthe quota not longer than two years, such ultra-short-term financing bills will be issued by installments in accordancewith the actual capital needs of the company and the situation of inter-bank market funds. On Sep. 17, 2018, theChinese Association of Interbank Market Traders held its 63rd registration meeting in 2018, and decided to approve theregistration of the ultra-short-term financing bills with a total amount of 1.5 billion yuan and a validity period of twoyears. The ultra-short-term financing bills are underwritten jointly by Minsheng Bank of China Limited and IndustrialBank Co., Ltd, and can be issued by installments within the validity period of registration. On February 21, 2020, thecompany issued ultra-short-term financing bonds with a total amount of 300 million yuan and a term of 270 days in thefirst phase of 2020, with an interest rate of 4% and a payment date of November 21, 2020.On June 15, 2020, the Company the third extraordinary general meeting of shareholders 2020 deliberated and approvedthe proposal on application for registration and issuance of ultra-short-term financing bills and medium-term notes,which agreed that the Company should register and issue ultra-short-term financing bills with a registered amount notexceeding 1.5 billion yuan (the limit is not subject to the limit of 40% of net assets).With the period of validity of thequota not longer than two years, such ultra-short-term financing bills will be issued by installments in accordance withthe actual capital needs of the Company and the situation of inter-bank market funds. On September 4, 2020, theNAFMII held its 102nd registration meeting in 2020 and decided to accept the registration of ultra-short-term financingbills with a total of 1.5 billion yuan and a validity period of two years.
2. Medium-term notes
On 10 December 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltddeliberated and approved the proposal of application for registration and issuance of medium-term notes with totalamount of RMB 1.2 billion at most. On 21 May 2015, National Association of Financial Market Institutional Investors(NAFMII) held the 32nd registration meeting of 2015, in which NAFMII decided to accept the registration of theCompany’s medium-term notes, amounting to RMB 1.2 billion and valid for two years. China Merchants Bank Co., Ltd.and Shanghai Pudong Development Bank Co., Ltd. were joint lead underwriters of these medium-term notes whichcould be issued by stages within period of validity of the registration on July 14, 2015, the Company issued the firstbatch of medium-term notes with total amount of RMB 1.2 billion and valid term of 5 years at the issuance rate of
4.94%, which will be redeemed on 14 July 2020.
On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal ofapplication for registration and issuance of medium-term notes with total amount of RMB 0.8 billion, which could beissued by stages within period of validity of the registration according to the Company’s actual demands for funds andthe status of inter-bank funds. On 2 March 2018, National Association of Financial Market Institutional Investors(NAFMII) held the 14th registration meeting of 2018, in which NAFMII decided to accept the registration of theCompany’s medium-term notes, amounting to RMB 0.8 billion and valid for two years. Shanghai Pudong DevelopmentBank Co., Ltd. and China CITIC Bank Corporation Limited were joint lead underwriters of these medium-term noteswhich could be issued by stages within period of validity of the registration. On May 4, 2018, the company issued thefirst medium-term notes with a total amount of 800 million yuan and a term of three years. The issue rate was 7%, andthe redemption date was May 4, 2021.
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On June 15, 2020, the Third Extraordinary Shareholders’ General Meeting 2020 of CSG deliberated and approved theproposal on application for registration and issuance of ultra-short-term financing bills and medium-term notes, whichagreed that the Company should register and issue medium-term notes with a registered amount not exceeding 1.5billion yuan. With the period of validity of the quota not longer than two years, such ultra-short-term financing bills willbe issued by installments in accordance with the actual capital needs of the Company and the situation of inter-bankmarket funds. On September 4, 2020, the NAFMII held the 102nd registration meeting in 2020 and decided to acceptthe company's registration of medium-term notes with a total of 1.5 billion yuan and a validity period of two years.For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.
3. Public issuance of corporate bonds
On March 2, 2017, the 2nd Extraordinary General Meeting of Shareholders in 2017 reviewed and approved “theProposal on the Public Issuance of Corporate Bonds for Qualified Investors". On February 27, 2019, the FirstExtraordinary General Meeting of Shareholders in 2019 The “Proposal on Extending the Validity Period of theShareholders' Meeting for the Public Offering of Corporate Bonds to Qualified Investors” agreed to issue corporatebonds with a total issue of no more than RMB 2 billion and a term of no more than 10 years. On June 26, 2019, theCompany received the “Approval of Approving CSG Holding Co., Ltd. to Issue Corporate Bonds to Qualified Investors”issued by China Securities Regulatory Commission (ZJXK [2019] No. 1140). On March 24, 2020 and March 25, 2020,the Company issued the first batch of corporate bonds with total amount of RMB 2 billion and valid term of 3 years atthe issuance rate of 6%, which will be redeemed on March 25, 2023(for details, please refer to "Section IX CorporateBonds").On March 12, 2020, the First Extraordinary General Meeting of Shareholders in 2020 reviewed and approved “theProposal on the Public Issuance of Corporate Bonds for Qualified Investors", agreed to issue corporate bonds with atotal issue of no more than RMB 1.8 billion and a term of no more than 10 years. On April 22, 2020, the Companyreceived the “Approval of Approving CSG Holding Co., Ltd. to Issue Corporate Bonds to Qualified Investors” issuedby China Securities Regulatory Commission (ZJXK[2020] No. 784).
4. The situation of meeting of medium term note holders during the report period
On May 29, 2020, the Company issued “Announcement on Holding 2015 First-term Medium-term Noteholders'Meeting of CSG in 2020” and “Announcement on Holding 2018 First-term Medium-term Noteholders' Meeting of CSGin 2020”due to capital reduction caused by repurchase and cancellation of part of restricted stocks of restricted stockincentive plan and repurchase and cancellation of restricted stocks that had not reached the unlocking condition of thethird unlock period. On June12, 2020, the Company's 2015 first-term medium-term noteholders' meeting, 2018 first-term medium-term noteholders' meeting was held off-site and voted. The 2015 first mid-term note holders meeting andthe 2018 first mid-term noteholders' meeting was not effective as the total voting rights held by the holders attendingthe meeting did not reach two-thirds of the total voting rights as required.
5. Entrusted loans
With the approval of the interim meeting of the 8th board of directors of the Company held on December 20, 2019, theCompany issued RMB 300 million entrusted loans to Tengchong Yuezhou Water Investment and Development Co., Ltd,with valid term of three months and annual interest rate at 8.5%. By March 24, 2020, the principal and income of theentrusted loan had been recovered as agreed in contract.
6. Non-public issuance of A shares
The interim meeting of the 8th board of directors of the Company held on March 5, 2020 deliberated and approved therelated proposals of non-public issuance of A shares, and agreed the Company to issue A shares privately. Theproposals were deliberated and approved by the 2nd Extraordinary General Meeting of Shareholders of 2020 which
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held on April 16, 2020. In May 2020, the Company received the first feedback notice on the examination ofadministrative licensing projects of China Securities Regulatory Commission (No. 200819) issued by the ChinaSecurities Regulatory Commission, and published “Announcement on Reply to the Feedback of Application DocumentsFor Non-public Offering of A shares” and “Announcement on the Revised Reply to the Feedback of ApplicationDocuments For Non-public Offering of A shares” on June 8, 2020 and June 29, 2020 respectively. On June 5, 2020, theCompany held an interim meeting of the 9th board of directors, deliberated and approved the relevant proposals onadjusting the Company's non-public issuance of A shares. On July 6, 2020, the Issuance Audit Committee of ChinaSecurities Regulatory Commission reviewed the Company's application for non-public issuance of A shares. Accordingto the audit results, the Company's application for non-public issuance of A shares was approved. On July 22, 2020, theCompany received the “Reply on the Approval of Non-public Issuance of Shares of CSG” (ZJXK [2020] No. 1491)issued by China Securities Regulatory Commission.XX. Significant events of subsidiaries of the Company
□ Applicable √ Not applicable
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Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
Unit: Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| Amount | Proportion (%) | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | Amount | Proportion (%) | |
| I. Restricted shares | 41,770,770 | 1.34% | -38,446,792 | -38,446,792 | 3,323,978 | 0.11% | |||
| 1. State-owned shares | |||||||||
| 2. State-owned legal person’s shares | |||||||||
| 3. Other domestic shares | 41,770,770 | 1.34% | -38,446,792 | -38,446,792 | 3,323,978 | 0.11% | |||
| Including: Domestic legal person’s shares | |||||||||
| Domestic natural person’s shares | 41,770,770 | 1.34% | -38,446,792 | -38,446,792 | 3,323,978 | 0.11% | |||
| 4. Foreign shares | |||||||||
| Including: Foreign legal person’s shares | |||||||||
| Foreign natural person’s shares | |||||||||
| II. Unrestricted shares | 3,066,425,393 | 98.66% | 942,736 | 942,736 | 3,067,368,129 | 99.89% | |||
| 1. RMB Ordinary shares | 1,957,059,361 | 62.96% | 939,708 | 939,708 | 1,957,999,069 | 63.76% | |||
| 2. Domestically listed foreign shares | 1,109,366,032 | 35.69% | 3,028 | 3,028 | 1,109,369,060 | 36.13% | |||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total shares | 3,108,196,163 | 100% | -37,504,056 | -37,504,056 | 3,070,692,107 | 100% | |||
Note: The number of shares before the change in the report was adjusted compared with the ending amount in the Annual Report2019, which was due to the adjustment of the current restricted shares by China Securities Depository and Clearing CorporationLimited before the opening of the first trading day in 2020.Reasons for equity changes
√Applicable □Not applicable
1.The company's total shares were reduced by 37,504,056 due to the repurchase of some restricted stock in therestricted stock incentive program and the repurchase of restricted stock that did not meet the unlocking conditions ofthe third unlocking period.
2.942,736 shares locked by the outgoing supervisors and senior executives were unlocked at maturity.
3. Due to the change of the company's senior management and the lockup of their shareholding, the Shenzhen branch ofChina securities registration and clearing Co., Ltd. shall adjust the restricted shares held by the senior management inaccordance with relevant regulations, and the company’s restricted shares and unrestricted shares changed accordingly.Approval on equity changes
√Applicable □Not applicable
1. The Company’s Proposal on Repurchase and Cancellation of Part of Restricted Stocks of Restricted Stock IncentivePlan was deliberated and approved by the interim meeting of the Eighth Board of Directors and the interim meeting ofthe Eighth Board of Supervisors held on September16, 2019, and was deliberated and approved by the FourthExtraordinary General Meeting of Shareholders of 2019.
2. The Company’s Proposals on Repurchase and Cancellation of Part of Restricted Stocks of Restricted Stock IncentivePlan and Repurchase and Cancellation of Restricted Stocks That Had Not Reached The Unlocking Condition of The
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Third Unlock Period were deliberated and approved by the 11
th meeting of the Eighth Board of Directors and the 11
th
meeting of the Eighth Board of Supervisors held on April 28, 2020, and were deliberated and approved by the 2019Annual General Meeting of Shareholders.Transfer of ownership of changes in shares
√Applicable □Not applicable
1. The Company repurchased and cancelled all restricted stocks held by 32 unqualified original incentive objects andthe restricted stocks held by 451 incentive objects that did not meet the unlocking conditions of the third unlock period.As of June 16, 2020, the Company had completed the cancellation procedures for the above-mentioned restricted stocksin Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.
2.For the change of senior management and lockup of their shareholdings, Shenzhen Branch of China SecuritiesDepository and Clearing Corporation Limited adjusted the Company’s restricted shares and unrestricted sharesaccordingly in accordance with relevant regulations.Implementation progress of share repurchase
□Applicable √Not applicable
Implementation progress of share buyback reduction through centralized bidding
□Applicable √Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable tocommon shareholders of Company in the latest year and period
√Applicable □ Not applicable
Please refer to the main accounting data and financial indicators in this report for the details of the impact of stockchanges.Other information necessary to be disclosed or need to be disclosed under requirement from security regulators
□Applicable √ Not applicable
2. Changes of restricted shares
√Applicable □ Not applicable
Unit: Share
| Shareholders’ name | Number of shares restricted at the beginning of the period(Note 1) | Number of shares released in the Period | Number of shares repurchased in the period(Note2) | Number of new shares restricted in the Period | Number of shares restricted at the end of the Period | Reason for restriction | Released date |
| Chen Lin | 2,130,274 | 1,217,300 | 912,974 | Executive lockup stocksof912,974shares | Releasing of executive lockup stocks will be implemented according to relevant policies. | ||
| Wang Jian | 1,328,250 | 759,000 | 569,250 | Executive lockup stocks | Releasing of executive lockup stocks will be |
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| of569,250shares | implemented according to relevant policies. | ||||||
| Lu Wenhui | 1,597,705 | 912,975 | 684,730 | Executive lockup stocks of684,730shares | Releasing of executive lockup stocks will be implemented according to relevant policies. | ||
| He Jin | 1,178,100 | 673,200 | 504,900 | Executive lockup stocksof504,900shares | Releasing of executive lockup stocks will be implemented according to relevant policies. | ||
| Yang Xinyu | 1,521,623 | 869,499 | 652,124 | Executive lockup stocksof652,124shares | Releasing of executive lockup stocks will be implemented according to relevant policies. | ||
| Core Management Team | 22,729,518 | 22,729,518 | 0 | -- | -- | ||
| Technology and Business Backbone | 9,389,997 | 9,389,997 | 0 | -- | -- | ||
| Others | 1,895,303 | 942,736 | 952,567 | 0 | |||
| Total | 41,770,770 | 942,736 | 37,504,056 | 3,323,978 | -- | -- |
Note1: The number of shares restricted at the beginning of the period in the above table was adjusted compared with theending amount in the Annual Report 2019, which was due to the adjustment of the current restricted shares by ChinaSecurities Depository and Clearing Corporation Limited before the opening of the first trading day in 2020.Note2: The Company repurchased and cancelled all restricted stocks held by 32 unqualified original incentive objectsand the restricted stocks, a total of 37,504,056 shares held by 451 incentive objects that did not meet the unlockingconditions of the third unlock period. As of June 16, 2020, the Company had completed the cancellation procedures forthe above-mentioned restricted stocks in Shenzhen Branch of China Securities Depository and Clearing CorporationLimited.Note 3:942,736 shares locked by the outgoing supervisors and senior executives were unlocked at maturity.II. Issuance and listing of Securities
1. Security issued (excluding preferred stock) in the report period
□Applicable √Not applicable
2. Particulars about changes of total shares and shareholder structure as well as changes of assets andliability structure
√Applicable □ Not applicable
1. On September 16, 2019, the company convened an extraordinary meeting of the 8th Board of Directors and anextraordinary meeting of the 8th Board of Supervisors, and reviewed and approved the “Proposal on Repurchase andCancelation part of Restricted Stocks of Restricted Stock Incentive Plan”, considered and agreed to repurchase andcancel the total of 1,281,158 shares of 18 incentive targets of all restricted stocks that have been granted to them whohave not been eligible with stock still under restriction. It was approved by the forth extraordinary general meeting ofshareholders in 2019, held on October 10, 2019. By June 16, 2020, the cancellations procedure of above restrictedshares has been accomplished.
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2. On April 28, 2020, the company held the 11th meeting of the 8th board of directors, and the 11th meeting of the 8thboard of supervisors. The meetings approved the “Proposal concerning the repurchase and cancellation of somerestricted shares from the ‘incentive plan’ of restricted shares”, and the “Proposal concerning the repurchase andcancellation of restricted shares failing to meet the third-term unlocking condition”. The meetings approved torepurchase and cancel a total of 909,936 restricted shares which have already been granted to and held by 14 recipientswho are unqualified for the “incentive plan”, and repurchase and cancel a total of 35,312,962 restricted shares failing tomeet the third-term unlocking condition from 451“incentive” recipients. Independent directors agreed with this and itwas approved by the annual general meeting of shareholders 2019 on May 21, 2020. By June 16, 2020, thecancellations procedure of above restricted shares has been accomplished.
3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
Unit: Share
| Total shareholders at the end of the report period | 146,594 | Total shareholders at the end of the month before this annual report disclosed | 139,532 | Total preference shareholders with voting rights recovered at end of report period (if applicable) | 0 | Total preference shareholders with voting rights recovered at end of the month before this annual report disclosed (if applicable) | 0 | |||||||
| Shareholder with above 5% shares hold or top 10 shareholders | ||||||||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held (%) | Total shares held at the end of report period | Changes in report period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged/frozen | |||||||
| Share status | Amount | |||||||||||||
| Foresea Life Insurance Co., Ltd. – HailiNiannian | Domestic non state-owned legal person | 15.19% | 466,386,874 | 466,386,874 | ||||||||||
| Foresea Life Insurance Co., Ltd. – Universal Insurance Products | Domestic non state-owned legal person | 3.86% | 118,425,007 | 118,425,007 | ||||||||||
| Zhongshan Runtian Investment Co., Ltd. | Domestic non state-owned legal person | 2.82% | 86,633,447 | 86,633,447 | 86,633,447 | Pledged | 67,650,000 | |||||||
| Hong Kong Securities Clearing Co., Ltd. | Foreign legal person | 2.75% | 84,292,647 | 48,968,321 | 84,292,647 | |||||||||
| Foresea Life Insurance Co., Ltd. – Own Fund | Domestic non state-owned legal person | 2.11% | 64,765,161 | 64,765,161 | ||||||||||
| Central Huijin Asset Management Ltd. | State-owned legal person | 1.89% | 57,915,488 | 57,915,488 | ||||||||||
| China Galaxy International Securities (Hong Kong) Co., Limited | Foreign legal person | 1.35% | 41,349,778 | -194,592 | 41,349,778 | |||||||||
| China Merchants Securities (HK) Co., Limited | State-owned legal person | 1.15% | 35,243,630 | 2,784,693 | 35,243,630 | |||||||||
| Shenzhen International Holdings (SZ) Limited | State-owned legal person | 0.95% | 29,095,000 | 29,095,000 | ||||||||||
| VANGUARD EMERGING | Foreign legal | 0.64% | 19,584,997 | 264,764 | 19,584,997 | |||||||||
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| MARKETS STOCK INDEX FUND | person | ||||||
| Strategic investors or general legal person becomes top 10 shareholders due to shares issued (if applicable) | N/A | ||||||
| Explanation on associated relationship among the aforesaid shareholders | Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-HailiNiannian, Foresea Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related legal person of Foresea Life Insurance Co., Ltd, which held 40,187,904 shares via China Galaxy International Securities (Hong Kong) Co., Limited. Except for the above-mentioned shareholders, it is unknown whether other shareholders belong to related party or have associated relationship regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies. | ||||||
| Particular about top ten shareholders with un-restrict shares held | |||||||
| Shareholders’ name | Amount of un-restrict shares held at year-end | Type of shares | |||||
| Type | Amount | ||||||
| Foresea Life Insurance Co., Ltd. – HailiNiannian | 466,386,874 | RMB ordinary shares | 466,386,874 | ||||
| Foresea Life Insurance Co., Ltd. – Universal Insurance Products | 118,425,007 | RMB ordinary shares | 118,425,007 | ||||
| Zhongshan Runtian Investment Co., Ltd. | 86,633,447 | RMB ordinary shares | 86,633,447 | ||||
| Hong Kong Securities Clearing Co., Ltd. | 84,292,647 | RMB ordinary shares | 84,292,647 | ||||
| Foresea Life Insurance Co., Ltd. – Own Fund | 64,765,161 | RMB ordinary shares | 64,765,161 | ||||
| Central Huijin Asset Management Ltd. | 57,915,488 | RMB ordinary shares | 57,915,488 | ||||
| China Galaxy International Securities (Hong Kong) Co., Limited | 41,349,778 | Domestically listed foreign shares | 41,349,778 | ||||
| China Merchants Securities (HK) Co., Limited | 35,243,630 | Domestically listed foreign shares | 35,243,630 | ||||
| Shenzhen International Holdings (SZ) Limited | 29,095,000 | RMB ordinary shares | 29,095,000 | ||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | 19,584,997 | Domestically listed foreign shares | 19,584,997 | ||||
| Statement on associated relationship or consistent action among the above shareholders: | Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-HailiNiannian, Foresea Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related legal person of Foresea Life Insurance Co., Ltd, which held 40,187,904 shares via China Galaxy International Securities (Hong Kong) Co., Limited. Except for the above-mentioned shareholders, it is unknown whether other shareholders belong to related party or have associated relationship regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies. | ||||||
| Explanation on shareholders involving margin business (if applicable) | N/A | ||||||
Whether the company’s top 10 common shareholders and the top 10 shareholders of ordinary shares subject tounlimited sales have agreed to buy back transactions during the reporting period
□Yes √ No
2. Controlling shareholder of the Company
The nature of controlling shareholders: No holding bodyThe type of controlling shareholder: Not existExplanation on the Company without controlling shareholderCurrently the Company has no controlling shareholder. Foresea Life Insurance Co., Ltd.is the Company's largestshareholder that has totally held 657,577,954shares of the Company via Foresea Life Insurance Co., Ltd.–HailiNiannian,Foresea Life Insurance Co., Ltd.–universal insurance products, Foresea Life Insurance Co., Ltd.–own fund, ForeseaLife Insurance Co., Ltd.–a combination of its own funds together with Huatai till the end of the report period, which
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accounts for 21.41% of the Company’s total shares; its person acting in concert Zhongshan Runtian Investment Co., Ltd.held 86,633,447 shares, which accounts for 2.82% of the Company’s total shares; its person acting in concert ChengtaiGroup Co., Ltd. held 51,709,088 shares of B-share via China Galaxy International Securities (Hong Kong) Co., Ltd andGuosen Securities (Hong Kong) Brokerage Co., Limited, which accounts for 1.68% of the Company’s total shares.Foresea Life Insurance and its persons acting in concert totally held 25.92% of the Company’s total shares, which is lessthan 30%, meanwhile, the number of directors recommended by Foresea Life Insurance and its persons acting inconcert l persons was no more than half of total number of the Company’s board of directors.Other shareholders of the Company hold less than 5% of the shares.Changes of controlling shareholders in the report period
□ Applicable √ Not applicable
3. Actual controller of the Company
The nature of actual controller: no actual controllerThe type of actual controller: Not existExplanation on the Company without actual controllerCurrently the Company has no controlling shareholder. Foresea Life Insurance Co., Ltd. is the Company's largestshareholder that has totally held 657,577,954 shares of the Company via Foresea Life Insurance Co., Ltd.–HailiNiannian, Foresea Life Insurance Co., Ltd.–universal insurance products, Foresea Life Insurance Co., Ltd.–ownfund,Foresea Life Insurance Co., Ltd.–a combination of its own funds together with Huatai till the end of the reportperiod, which accounts for 21.41% of the Company’s total shares; its person acting in concert Zhongshan RuntianInvestment Co., Ltd. held 86,633,447 shares, which accounts for 2.82% of the Company’s total shares; its person actingin concert Chengtai Group Co., Ltd. held 51,709,088 shares of B-share via China Galaxy International Securities (HongKong) Co., Ltd and Guosen Securities (Hong Kong) Brokerage Co., Limited, which accounts for 1.68% of theCompany’s total shares. Foresea Life Insurance and its persons acting in concert totally held 25.92% of the Company’stotal shares, which is less than 30%, meanwhile, the number of directors recommended by Foresea Life Insurance andits persons acting in concert was no more than half of total number of the Company’s board of directors.Shareholders with over 10% shares held in ultimate controlling level
√Yes □No
Natural personShares held in ultimate controlling level
| Shareholders | Nationality | Whether to obtain the right of abode in other countries or regions |
| Yao Zhenhua | China | No |
| Major occupations and duties | Chairman of Shenzhen Baoneng Investment Group Co., Ltd. | |
| Situation of holding domestic and abroad listed companies over the past 10 years | N/A | |
Changes of actual controller in the report period
□ Applicable √ Not applicable
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Property right and controlling relationship between the largest shareholder and the Company is as follow:
Actual controller controlling of the Company by entrust or other assets management
□Applicable √Not applicable
4. Particulars about other legal person shareholders holding over 10% shares
□ Applicable √ Not applicable
5. Limitation on share reduction of controlling shareholders, actual controllers, recombination party andother commitment subjects
□ Applicable √ Not applicable
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Section VII. Particulars about Directors, Supervisors, Senior
Executives and EmployeesI. Changes of shares held by directors, supervisors and senior executives
| Name | Title | Working status | Sex | Age | Start dated of office term | End date of office term | Shares held at period-begin (Share) | Amount of shares increased in this period (Share) | Amount of shares decreased in this period (Share) | Other changes (share) | Shares held at period-end (Share) |
| Chen Lin | Chairman of the Board | Currently in office | Female | 49 | 2016-11-19 | 2023-05-21 | 2,840,365 | -1,217,300 | 1,623,065 | ||
| Wang Jian | Secretary of the Party Committee, Director of the Board, CEO | Currently in office | Male | 57 | 2016-01-21 | 2023-05-21 | 1,771,000 | -759,000 | 1,012,000 | ||
| Zhu Guilong | Independent Director | Currently in office | Male | 57 | 2017-05-02 | 2023-05-21 | |||||
| Zhu Qianyu | Independent Director | Currently in office | Female | 46 | 2019-04-10 | 2023-05-21 | |||||
| Xu Nianhang | Independent Director | Currently in office | Male | 43 | 2020-05-21 | 2023-05-21 | |||||
| Zhang Jinshun | Director | Currently in office | Male | 56 | 2017-05-02 | 2023-05-21 | |||||
| Cheng Xibao | Director | Currently in office | Female | 39 | 2016-01-21 | 2023-05-21 | |||||
| Cheng Jinggang | Director | Currently in office | Male | 40 | 2020-05-21 | 2023-05-21 | |||||
| Yao Zhuanghe | Director | Currently in office | Male | 62 | 2020-05-21 | 2023-05-21 | |||||
| Li Jianghua | Chairman of the Supervisory Board, Employee Supervisor | Currently in office | Male | 44 | 2019-03-27 | 2023-05-21 | |||||
| Gao Changkun | Employee Supervisor | Currently in office | Female | 52 | 2018-08-30 | 2023-05-21 | |||||
| Meng Lili | Supervisor | Currently in office | Male | 43 | 2020-05-21 | 2023-05-21 | |||||
| Lu Wenhui | Executive Vice President | Currently in office | Male | 58 | 2017-02-23 | 2023-05-21 | 2,130,273 | -912,975 | 1,217,298 | ||
| He Jin | Vice president | Currently in office | Male | 49 | 2018-04-08 | 2023-05-21 | 1,570,800 | -673,200 | 897,600 | ||
| Yang Xinyu | Secretary of the Board | Currently in office | Male | 41 | 2017-05-02 | 2023-05-21 | 2,028,831 | -869,499 | 1,159,332 | ||
| Zhan Weizai | Independent Director | Post leaving | Male | 57 | 2016-12-14 | 2020-05-21 | |||||
| Ye Weiqing | Director | Post leaving | Female | 49 | 2016-01-21 | 2020-05-21 | |||||
| Li Xinjun | Supervisor | Post leaving | Male | 53 | 2017-01-13 | 2020-05-21 | |||||
| Total | -- | -- | -- | -- | -- | -- | 10,341,269 | -4,431,974 | 5,909,295 |
Note: Due to the Company's failure to meet the performance conditions for unlocking restricted shares in the third release period of the Incentive Planfor A-share Restricted Shares in 2017, the restricted shares held by the above directors Chen Lin, Wang Jian and senior executives Lu Wenhui, He Jinand Yang Xinyu which expected to be released from the restrictions in the third unlocking period could not be unlocked and were repurchased andcancelled by the Company, with a total of 4,431,974 shares.
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II. Changes of directors, supervisors and senior executives
√Applicable □ Not applicable
| Name | Title | Type | Date | Reason |
| Xu Nianhang | Independent Director | Be Elected | 21 May 2020 | Election of the Board of Directors |
| Cheng Jinggang | Director | Be Elected | 21 May 2020 | Election of the Board of Directors |
| Yao Zhuanghe | Director | Be Elected | 21 May 2020 | Election of the Board of Directors |
| Meng Lili | Supervisor | Be Elected | 21 May 2020 | Election of the Board of Supervisors |
| Zhan Weizai | Independent Director | Post leaving | 21 May 2020 | Left the post when the term expired |
| Ye Weiqing | Director | Post leaving | 21 May 2020 | Left the post when the term expired |
| Li Xinjun | Supervisor | Post leaving | 21 May 2020 | Left the post when the term expired |
III. Post-holdingMajor professional background, working experience of directors, supervisors and senior executive and their majorresponsibility in the Company at presentChen Lin: took posts of Department Manager, General Manager Assistant in Shenzhen Shum Yip Logistics Group Co.,Ltd. At present, she is the Senior Vice President of Shenzhen Baoneng Investment Group Co., Ltd., Deputy GeneralManager in Shenzhen Shum Yip Logistics Group Co., Ltd., Chairman of Board of Supervisors of Foresea LifeInsurance Co., Ltd., Chairman of Board of Supervisors of Xinjiang Qianhai United Property & Casualty Insurance Co.,Ltd., Supervisors of Shenzhen Jushenghua Co., Ltd., Director of Guangdong Shaoneng Group Co., Ltd., Director ofNanning department store Co., Ltd., Chairman of the Board of Jonjee Hi-tech Industrial & Commercial Holding Co.,Ltd., Chairman of the Board of Baoneng Automobile Co., Ltd., and Chairman of the Board of the Company.
Wang Jian: took posts of General Manager and Executive Director of China North Industries Tianjin Corporation,General Manager of China North Vehicle Co., Ltd., and Deputy Chairman and Chairman of Shanghai NonferrousMetals E-Commerce Co., Ltd., General Manager of investment management department of China North IndustriesCorporation, Chairman of the Board of Chengdu Yinhe Dynasty Hotel Co., Ltd., Deputy Chairman of the Board ofShenzhen Baoyin Electricity Co., Ltd., Chairman of the Board of North Property Development Company Limited. Atpresent he is Secretary of the Party Committee, Director of the Board and CEO of the Company.
Zhu Guilong: took posts of researcher of the Institute of Forecasting and Development at Hefei University ofTechnology, Independent Director of Jiangsu Saifutian Steel Cable Co., Ltd. Currently, he is a professor and doctoraltutor of the School of Business Administration, South China University of Technology, Executive Director of ChineseAssociation For Science of Science and S&T Policy, Vice Chairman of Guangdong Institute of Technical Economy andManagement Modernization, Vice Chairman of Guangdong Economic Society, Independent Director of GRGBANKING EQUIPMENT CO., Ltd., Independent Director of Guangzhou Kingmed Diagnostics Group Co., Ltd.,Independent Director of Guangzhou bank Co., Ltd., Director of Jiangxi Jiufeng Energy Co., Ltd. Director ofGuangdong Yiji Network Co., Ltd., Director of CS Richland Asset Co., Ltd., Director of Guangzhou NuochengBiological Products Co., Ltd., and Independent Director of the Company.
Zhu Qianyu: took posts of lecturer and associate professor of School of Finance of South-Central University ForNationalities, Postdoctoral in Finance Department of Guanghua School of Management at Peking University, andresearcher of Peking University Finance and Securities Research Center. At present, she is associate professor atRenmin University of China, independent director of Kingfa SCI.&TECH. Co., Ltd., independent director ofLandOcean Energy Services Co., Ltd. and independent director of the Company.
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Xu Nianhang: took posts of postdoctoral researcher in the Department of finance, Guanghua School of management,Peking University, lecturer and associate professor in the Business School of Renmin University of China, independentdirector of Danhua Chemical Technology Co., Ltd., and independent director of Leador Spatial Information TechnologyCorporation; At present, he isthe director, professor and doctoral advisor of the Department of Finance and finance,Business School of Renmin University of China, an independent director of Xinsteel Group Co., Limited, independentdirector of Fujian Newchoice Pipe Technology Co., Ltd., independent director of Chongqing Three Gorges Bank Co.,Ltd. (unlisted company), independent director of Beijing iHandy Mobile Inc. (unlisted company), independent directorof Inner Mongolia Dazhong Mining Co., Ltd. (unlisted company) and independent director of the Company.
Zhang Jinshun: took posts of member of the Party Committee and Deputy President of the head office of Ping AnBank, Secretary of the Party Committee and Chairman of Board of Ping An Trust Co., Ltd., General Manager ofChang’an International Trust Co., Ltd..At present, he is Deputy Chairman of the Board of Shenzhen BaonengInvestment Group Co., Ltd., President and CEO of Shenzhen Jushenghua Co., Ltd., Chairman of Board of Foresea LifeInsurance Co., Ltd., Chairman of Board of Baoneng Logistics Group Co., Ltd. and director of the Company.
Cheng Xibao: took posts of Deputy Manager and Manager of financial department of Huizhou Olympic Garden Co.,Ltd., which is a subsidiary of China Sports Group Industry, Manager of financial department of Shenzhen XuanshengInvestment Co., Ltd., which is a subsidiary of Foxconn, and Manager, Vice President, Executive Vice President offinancial department, President Assistant, Vice President of Shenzhen Baoneng Investment Group Co., Ltd..At present,she is Senior Vice President of Shenzhen Baoneng Investment Group Co., Ltd., Executive Vice President of BaonengCity Development and Construction Group Co., Ltd., the Supervisor of Xinjiang Qianhai United Property & CasualtyInsurance Co., Ltd., Director of Foresea Life Insurance Co., Ltd. Director of Baoneng Automobile Co., Ltd., Director ofQoros Automobile Co., Ltd., Director of Guizhou Baoneng Automobile Co., Ltd., Director of ShenzhenShenzhenBaoneng Travel Co., LTD., Supervisor of Guizhou Baoneng Automobile Co., Ltd., and Director of theCompany.
Cheng Jinggang: took posts of credit analyst of Dagong Global Credit Rating Co., Ltd., senior credit analyst of thefixed income department of Funde Sino Life Insurance Co., Ltd., senior manager of the credit evaluation department ofSino Life Asset Management Co., Ltd., and supervisor of Guangdong Shaoneng Group Co., Ltd.; At present, he isDeputy Director of the Asset Management Center of Foresea Life Insurance Co., Ltd., Chairman of the Board ofSupervisors of Nanning Baihuo Co., Ltd., Director of Guangdong Shaoneng Group Co., Ltd., and Director of theCompany.
Yao Zhuanghe: took posts of deputy director of Food Engineering Department of South China University oftechnology, deputy general manager and general manager of Guangdong United Food Enterprise Center, director ofGuangdong Yuehua International Trade Group, deputy general manager of Guangdong Guangye EconomicDevelopment Group, director and general manager of Guangdong Guangye Investment Consulting Co., Ltd., directorand Party Member of Guangdong Guangye Environmental Construction Group (former Guangdong Guangye RealEstate Group) Deputy secretary；At present, he is director of the Company.
Li Jianghua: took posts of assistant of general manager and deputy general manager of the Operation ServiceDepartment of the Information Management Center of Foresea Life Insurance, deputy general manager of IT
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Department of Xinjiang Qianhai United Property & Casualty Insurance Co., Ltd., general manager of IntegratedFinancial Development Department of Foresea Life Insurance, and chairman of the supervisory board of the Company.
Meng Lili: took posts of Deputy Manager of Human Resources Department of Huafu Fashion Co., Ltd., Manager ofHuman Resources Department of Baoneng Zhiye Co., Ltd., Supervisor of Foresea Century Insurance Brokers Co., Ltd.;At present, she is Deputy Director and Employee Supervisor of Human Resources Center of Foresea Life Insurance Co.,Ltd., General Manager of the Office of the Board of Directors, Supervisor of Guangdong Shaoneng Group Co., Ltd.,and Supervisor of the Company.
Gao Changkun: took the post of the operation director of Beijing Lianxingketong Microelectronics Co., LTD., and theinvestment specialist of Pintree (Shanghai) Equity investment and management Co., Ltd. At present, he is the Presidentof the solar energy business division and the supervisor of the employees of the Company.Lu Wenhui: took posts of Vice General Manager of the Company and General manager of Float Glass BusinessDepartment of the company, the vice president of the company and the general manager of the Engineering andAutomotive Glass Business Department of the company, the chief economy expert of the company, the director ofEnterprise Operation Department, the vice president of the Solar Business Department, the vice president of thecompany and the president of the Fine Glass Business Department, and the president of Shenzhen Monitor Company, asubsidiary company. At present, he is the vice president and the president of the Overseas Business Division of theCompany.He Jin: took posts of general manager of CSG (Shenzhen) Float Glass Co., Ltd., the vice president of Float GlassDepartment, the general manager of CSG (Dongguan) Solar Glass Co., Ltd., the general manager of CSG (Chengdu)Co., Ltd. and the general manager of CSG (Qingyuan) Energy Saving New Material Co., Ltd. He is currently presidentof the Flat Panel and Electronic Glass Division and the vice president of the company.
Yang Xinyu: took posts of the Securities Department of Beijing KWM Law Firm, the risk control director, the assistantof the chairman of the board and head of the Law Department of Honghua International Medical Holding Co., Ltd., andthe director of the Audit and Supervision Department, the director of the Stock affairs Department of the company. Heis currently the secretary of the board of directors of the company, Deputy Vice Director.
Post-holding in shareholder’s unit
√Applicable □ Not applicable
| Name | Name of shareholder’s unit | Position in shareholder’s unit | Start dated of office term | End date of office term | Received remuneration from shareholder’s unit or not |
| Chen Lin | Foresea Life Insurance Co., Ltd. | Chairman of Supervisory Board | Apr. 2012 | Yes | |
| Shenzhen Jushenghua Co., Ltd. | Supervisor | July 2016 | No | ||
| Zhang Jinshun | Shenzhen Jushenghua Co., Ltd. | President & CEO | Jan. 2016 | Yes | |
| Foresea Life Insurance Co., Ltd. | Chairman of Board | Sep. 2017 | No | ||
| ChengXibao | Foresea Life Insurance Co., Ltd. | Director | Oct. 2017 | No | |
| Cheng Jinggang | Foresea Life Insurance Co., Ltd. | Deputy Director of the Asset Management Center | Apr. 2012 | Yes | |
| Meng Lili | Foresea Life Insurance Co., Ltd. | Deputy Director and Employee Supervisor of Human Resources | June 2013 | Yes |
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| Center General Manager of the Office of the Board of Directors | |||
| Note of post-holding in shareholder’s unit | N/A | ||
Post-holding in other unit
√Applicable □Not applicable
| Name | Name of other units | Position in other unit | Start dated of office term | End date of office term | Received remuneration from other unit or not |
| Chen Lin | Shenzhen Shum Yip Logistics Group Co., Ltd. | Deputy General Manager | May 2003 | No | |
| Shenzhen Baoneng Investment Group Co., Ltd. | Executive Vice Present | Oct. 2014 | No | ||
| Xinjiang Qianhai United Property&Casualty Insurance Co.,Ltd. | Chairman of the Supervisory board | May 2016 | No | ||
| Guangdong Shaoneng Group Co., Ltd. | Director | Nov. 2015 | Yes | ||
| Nanning department store co., Ltd. | Director | Apr. 2018 | Yes | ||
| Jonjee Hi-tech Industrial & Commercial Holding Co., Ltd. | Chairman of the Board | Nov. 2018 | Yes | ||
| Baoneng Automobile Co., Ltd. | Chairman of the Board | Dec. 2017 | No | ||
| Zhu Guilong | South China University of Technology | Professor and Doctoral tutor | Aug. 2000 | Yes | |
| GRG BANKING EQUIPMENT CO., Ltd. | Independent director | Jan. 2018 | Yes | ||
| Guangzhou Kingmed Diagnostics Group Co., Ltd. | Independent director | Nov. 2015 | Yes | ||
| Guangzhou bank Co.,Ltd. | Independent director | Apr. 2019 | Yes | ||
| Jiangxi Jiufeng Energy Co.,Ltd. | Director | Jan. 2019 | Yes | ||
| Guangdong Yiji Network Co., Ltd. | Director | Nov.2018 | No | ||
| CS Richland AssetCo.,Ltd. | Director | Jul.2019 | Yes | ||
| Guangzhou Nuocheng Biological Products Co., Ltd. | Director | Sep.2020 | No | ||
| Zhu Qianyu | Renmin University of China | Associate Professor | Mar. 2010 | Yes | |
| Kingfa SCI.&TECH. Co.,Ltd. | Independent director | Jan.2021 | Yes | ||
| LandOcean Energy Services Co.,Ltd | Independent director | Jan.2021 | Yes | ||
| Xu Nianhang | Business School of Renmin University of China | Director, professor and doctoral advisor | Nov.2014 | Yes | |
| Xinyusteel Group Co., Limited | Independent director | Apr.2018 | Yes | ||
| Fujian Newchoice Pipe | Independent director | Jan.2018 | Yes |
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| Technology Co., Ltd. | |||||
| Chongqing Three Gorges Bank Co., Ltd. | Independent director | May 2019 | Yes | ||
| Beijing iHandy Mobile Inc. (unlisted company) | Independent director | Oct.2018 | Yes | ||
| Inner Mongolia Dazhong Mining Co., Ltd. (unlisted company) | Independent director | May 2020 | Yes | ||
| Leador Spatial Information Technology Corporation | Independent director | Aug.2018 | Dec.2020 | Yes | |
| Zhang Jinshun | Shenzhen Baoneng Investment Group Co., Ltd. | Deputy Chairman of the Board | Mar. 2017 | No | |
| Baoneng Logistics Group Co., Ltd. | Chairman of Board | Oct.2020 | No | ||
| Cheng Xibao | Shenzhen Baoneng Investment Group Co., Ltd. | Senior Vice President | Nov. 2020 | No | |
| Baoneng City Development and Construction Group Co., Ltd. | Executive Vice President | Oct. 2018 | Yes | ||
| Xinjiang Qianhai United Property & Casualty Insurance Co., Ltd. | Supervisor | Sep. 2016 | No | ||
| Baoneng Automobile Co., Ltd. | Director | Mar. 2017 | No | ||
| Qoros Automobile Co., Ltd. | Director | Dec. 2017 | No | ||
| Shenzhen Baoneng Travel Co.,LTD. | Director | Sep. 2019 | No | ||
| Guizhou Baoneng Automobile Co., Ltd. | Supervisor | Jan. 2018 | No | ||
| Cheng Jinggang | Asset Management Center of Foresea Life Insurance Co., Ltd. | Chairman of the Board of Supervisors | Apr. 2018 | Yes | |
| Nanning Baihuo Co., Ltd. | Chairman of the Board | Dec. 2020 | Yes | ||
| Meng Lili | Human Resources Center of Foresea Life Insurance Co., Ltd. | Deputy Director and Employee Supervisor | Dec.2020 | Yes | |
| Note of post-holding in shareholder’s unit | N/A | ||||
Punishment of securities regulatory authority in the last three years to the Company’s current and retired directors,supervisors and senior management during the report period
□ Applicable √ Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
1. Decision-making procedures: The allowances for independent directors, external directors from non-shareholder’sunit and external supervisors are planned and proposed by the Remuneration &Assessment Committee of the Board andapproved by the Shareholders’ General Meeting after deliberation of the Board. Remuneration for senior executives isproposed by the Remuneration &Assessment Committee of the Board and decided by the Board after discussion.
2. Confirmation basis of remuneration: The allowances for independent directors and external supervisors are confirmedbased on industry standards and real situation of the Company. The remuneration for senior executives implements
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floating reward mechanism with reference to basic salary and business performance. Bonus for performance rewards iswithdrawal by proportion quarterly according to return on equity and based on the total net profit after taxation.
3. Actual remuneration payment: The allowances for each of the Company’s independent directors, external directorfrom non-shareholder’s unit and each external supervisor are RMB 0.15 million per year, paid by actual month ofservice. The total remuneration for directors, supervisor and senior executives in the report period was RMB 26.8515million.Remuneration for directors, supervisors and senior executives of the Company within the report period
Unit: RMB0,000
| Name | Title | Sex | Age | Post-holding status | Total remuneration obtained from the Company before taxation | Received remuneration from related party of the Company or not |
| Chen Lin | Chairman of the Board | Female | 49 | Currently in office | Yes | |
| Wang Jian | Secretary of the Party Committee, Director of the Board, CEO | Male | 57 | Currently in office | 538.21 | No |
| Zhu Guilong | Independent Director | Male | 57 | Currently in office | 15 | No |
| Zhu Qianyu | Independent Director | Female | 46 | Currently in office | 15 | No |
| Xu Nianhang | Independent Director | Male | 43 | Currently in office | 10 | No |
| Zhang Jinshun | Director | Male | 56 | Currently in office | Yes | |
| Cheng Xibao | Director | Female | 39 | Currently in office | Yes | |
| Cheng Jinggang | Director | Male | 40 | Currently in office | Yes | |
| Yao Zhuanghe | Director | Male | 62 | Currently in office | 10 | No |
| Li Jianghua | Chairman of the Supervisory Board Employee Supervisor | Male | 44 | Currently in office | 134.51 | No |
| Meng Lili | Supervisor | Female | 52 | Currently in office | Yes | |
| Gao Changkun | Employee Supervisor | Male | 43 | Currently in office | 182.83 | No |
| Lu Wenhui | Executive Vice President | Male | 58 | Currently in office | 680.24 | No |
| He Jin | Vice president | Male | 49 | Currently in office | 695.26 | No |
| Yang Xinyu | Secretary of the Board | Male | 41 | Currently in office | 394.10 | No |
| Zhan Weizai | Independent Director | Male | 57 | Post leaving | 5 | No |
| Ye Weiqing | Director | Female | 49 | Post leaving | Yes | |
| Li Xinjun | Supervisor | Male | 53 | Post leaving | 5 | No |
| Total | 2,685.15 |
Directors and senior management of the company were granted equity incentives during the reporting period
√Applicable □Not applicable
Unit: Share
| Name | Title | Number | Number | The | Market | The | Number | Numbe | The granting | The |
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| of shares outstanding during the report period | of shares already exercised during the report period | exercise price of the exercised shares during the report period (RMB / share) | price at the end of the report period (RMB / share) | number of restricted stocks held at the beginning of the period | of shares unlocked in this period | r of restricted shares newly granted during the report period | price of restricted stock (RMB / share) | number of restricted stocks held at the end of the period | ||
| Chen Lin | Chairman of the Board | 0 | 0 | 1,217,300 | 0 | 0 | 4.28 | 0 | ||
| Wang Jian | Secretary of the Party Committee, Director of the Board, CEO | 0 | 0 | 759,000 | 0 | 0 | 3.68 | 0 | ||
| Lu Wenhui | Executive Vice President | 0 | 0 | 912,975 | 0 | 0 | 4.28 | 0 | ||
| He Jin | Vice president | 0 | 0 | 673,200 | 0 | 0 | Awarded for the first time:4.28 The reserved awarded:3.68 | 0 | ||
| Yang Xinyu | Secretary of the Board | 0 | 0 | 869,499 | 0 | 0 | 4.28 | 0 | ||
| Total | -- | 0 | 0 | -- | -- | 4,431,974 | 0 | 0 | -- | 0 |
| Remarks (if any) | ①In case the unlocking conditions of the restricted stock incentive plan is satisfied, the restricted shares Unlock in three phases after 12 months from the date of grant: 40% of the restricted stocks will be available for circulation within the period (from the first trading day following the lock-up period of 12 months to the last trading day of lock-up period of 24 months), 30% of the restricted stocks will be available for circulation within the period (from the first trading day following the lock-up period of 24 months to the last trading day of the lock-up period of 36 months), and 30% of the restricted stocks will be available for circulation within the period (from the first trading day following the lock-up period of 36 months to the last trading day of the lock-up period of 48 months). ②For the Company did not meet the performance conditions for the third unlocking period of the 2017 a-share restricted stock incentive plan, the restricted shares held by the above directors and senior managers that can be released during the third unlocking period shall not be released and shall be repurchased and cancelled by the Company, totaling4,431,974 shares. | |||||||||
V. Particulars of workforce
1. Number, professional composition and educational background of employees
| Number of employees in the parent company (person) | 543(Note) |
| Number of employees in major subsidiaries of the Company (person) | 10,015 |
| Total number of employees (person) | 10,558 |
| Total number of employees received salaries in the period (person) | 10,558 |
| Number of retired employees whose costs borne by the parent company and its main subsidiaries (person) | 0 |
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| Professional composition | |
| Category of professional composition | Number of professional composition (person) |
| Production personnel | 7,205 |
| Salesman | 662 |
| Technician | 1,489 |
| Financial personnel | 128 |
| Administrative personnel | 1,074 |
| Total | 10,558 |
| Educational background | |
| Category of educational background | Number (person) |
| Doctor | 7 |
| Master | 160 |
| Undergraduate | 2,400 |
| Junior college | 1,951 |
| Degree below junior college | 6,040 |
| Total | 10,558 |
Note: Among them, there are 359 employees sent by the headquarters to the subsidiary.
2. Staff remuneration policy
In 2020，the Company continue to emphasize the principle of "performance orientation" in compensation management,through strengthening the concept of organizational performance and strengthening the application of performanceresults, we advocate that salary incentives should be inclined to high-performing organizations and high-performingindividuals, to improve the work enthusiasm of employees, and then improve the overall performance of theorganization, to achieve the business objectives.
3. Staff training plan
The Company has always attached great importance to the talent team construction and staff training and development.Every year, the Company sets up a special fund for the employees' skills training, capacity development and qualityimprovement. The Company has established a comprehensive training and development system for all kinds ofemployees, and developed personalized training and development systems for senior, middle and grass-roots employees,so as to stimulate the drive of employees, enhance the competitiveness of the enterprise, and provide a strong guaranteefor the development of CSG Group. Based on the strategy of sustainable development of human resources, theCompany will continue to deepen the scientific and systematic operation of training and development, so as to energize,promote management and increase benefits, and achieve a win-win situation for the growth of employees and thedevelopment of the enterprise.
4. Labor outsourcing
□ Applicable √ Not applicable
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Section VIII. Corporate Governance
I. Corporate governance of the Company
In strict compliance with the requirements of the relevant laws and regulation including The Company Law, SecuritiesLaw and Rule of Governance for Listed Company, the Company has been putting efforts in improving the corporategovernance, strengthening management of information disclosure, regulating operation activities and establishing amodern corporate system. At present, the system for corporate governance of the Company is basically perfect,operation is regulated, corporate governance is consummated, which accord with the requirements of relevantdocuments on corporate governance of listed company issued by CSRS.The Company has established the Information Disclosure Management System and promptly improved it in accordancewith newly issued laws and regulations, clarified the standards of insider information, and established insideinformation insider registration system and record management system. In order to further strengthen the Company'sinternal information disclosure control, enhance the disclosure consciousness of relevant personnel, and improve thequality of corporate information disclosure, in 2016, the Company set up information Disclosure Committee, andformulate Rules for the implementation of the information disclosure Committee. During the report period, theCompany disclosed information with facticity, completeness, timeliness and fairness, strictly fulfilled theresponsibilities and obligations of information disclosure of listed companies to ensure that investors are able to keepabreast of the Company's operation and development strategies. There was no regulatory punishment caused byinformation disclosure in the report period. Meanwhile, the Company delivered the Inside Information Insider Table toShenzhen Stock Exchange when submitting periodic reports. It didn’t exist that insiders used the inside information totrade the Company’s shares before the major sensitive information which could affect the Company’s share price wasdisclosed.The Company has seriously implemented the requirements of the relevant regulatory to cash dividends. The Companyformulated the Return plan for Shareholders of CSG Holding Co., Ltd. in the Next Three Years (2018- 2020) accordingto relevant regulations of the Notice of Further Implementation of Cash Dividends of the Listed Companies (ZJF No.:
[2012] 37) and the Regulatory Guidelines of Listed Companies No. 3 - Cash Dividends of Listed Companies(ZGZJHGG No. [2013] 43) issued by China Securities Regulatory Commission, further improved the Company’sdecision-making and supervision mechanism for distribution of profits, and protected the interests of investors.During the report period, it did not exist that the Company provided the undisclosed information to the largestshareholder and actual controller. And it did not exist that non-operating fund of listed company was occupied by thelargest shareholder and its affiliated enterprises.Is there any difference between the actual condition of corporate governance and relevant regulations about corporategovernance for listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporategovernance for listed company from CSRC.
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II. Independency of the Company relative to the largest shareholder’ in aspect of businesses,personnel, assets, organization and finance
The Company has been absolutely independent in business, personal, assets, organization and financial from itssubstantial shareholders ever since its establishment. The Company had an independent and complete business systemand independent management capability.
1. In terms of business: The Company owns independent purchase and supply system of the raw resources, completeproduction systems, independent sale system and customers. The Company is completely independent from thesubstantial shareholders in business. The substantial shareholders and their subsidiaries do not engage any identicalbusiness or similar business as the Company.
2. In terms of personnel: The Company established integrated management system of labor, personnel, salaries and thesocial security, which were absolutely independent from its holding shareholder’s. Personnel of the managers, person incharge of the financial and other executive managers are obtained remuneration from the Company since on duty in theCompany, and never received remuneration or take part-time jobs in large shareholders’ company and other enterprisescontrolled by large shareholders. The recruitment and dismissal of Directors are conducted through legal proceduresince the Company was listed and the manager has been appointed or dismissed by Board of Directors. The Board ofDirectors and the Shareholders’ General Meeting have not received any interference of decisions on personnelappointment and removal from the largest shareholders.
3. In terms of asset: the Company is able to operate business independently and enjoys full control over the productionsystem, auxiliary production system and facilities, land use right, industry property and non-patent technology owned orused by the Company. The investments to the Company from largest shareholder are monetary assets, and the largestshareholder has never occupied, damaged or intervened to operation on these assets.
4. In terms of organization: The Company possessed sound corporate governance structure, established Shareholders’General Meeting, Board of Directors, Supervisory Committee, appointed general manager, and fixed related functiondepartments. The Company had been totally independent from its large shareholders in organization structure. TheCompany has its own office and production sites that are different from those of the large shareholders. The largestshareholder and its related parties didn’t deliver any operation plan and order to the Company, neither influence theindependence on management of the Company by any forms.
5. In terms of finance: The Company has set up independent financial department, established independent accountingcalculation system and financial management system (included management system of its subsidiaries). The financialpersonnel of the Company didn’t take part-time jobs in units of large shareholder or its subordinate units. The Companyhad independent bank accounts, separated from the large shareholders. The Company is independent taxpayer, paidtaxes independently according the laws and didn’t pay mixed taxes with the large shareholders. The financial decision-making of the Company was independent, and the large shareholders never interfered the usage of the Company’scapital. The Company never offered guarantee to their large shareholders and its subordinate units and other relatedparty. The largest shareholder and its related has never occupy or occupy disguised the capital.III. Horizontal competition
□ Applicable √ Not applicable
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IV. Annual shareholders’ general meeting and extraordinary shareholders’ general meetingconvened in the report period
1. Annual Shareholders’ General Meeting in the report period
| Session of meeting | Type | Ratio of investor participation | Date | Date of disclosure | Index of disclosure |
| The First Extraordinary General Shareholders’ Meeting of 2020 | Extraordinary General Shareholders’ Meeting | 29.04% | 2020-3-12 | 2020-3-13 | Announcement No.:2020-016（www.cninfo.com.cn） |
| The Second Extraordinary General Shareholders’ Meeting of 2020 | Extraordinary General Shareholders’ Meeting | 29.18% | 2020-4-16 | 2020-4-17 | Announcement No.:2020-022（www.cninfo.com.cn） |
| Annual General Shareholders’ Meeting of 2019 | Annual General Shareholders’ Meeting | 28.91% | 2020-5-21 | 2020-5-22 | Announcement No.:2020-034 （www.cninfo.com.cn） |
| The Third Extraordinary General Shareholders’ Meeting of 2020 | Extraordinary General Shareholders’ Meeting | 28.99% | 2020-6-15 | 2020-6-16 | Announcement No.:2020-048（www.cninfo.com.cn） |
| The Fourth Extraordinary General Shareholders’ Meeting of 2020 | Extraordinary General Shareholders’ Meeting | 29.67% | 2020-7-23 | 2020-7-24 | Announcement No.:2020-059（www.cninfo.com.cn） |
| The Fifth Extraordinary General Shareholders’ Meeting of2020 | Extraordinary General Shareholders’ Meeting | 29.64% | 2020-11-11 | 2020-11-12 | Announcement No.:2020-071 （www.cninfo.com.cn） |
2. The preference shareholders convening the general meeting whose right to vote has been resumed
□ Applicable √ Not applicable
V. Responsibility performance of independent directors in the report period
1. The attending of independent directors to Board meetings and general shareholders’ meeting
| The situation of independent directors attending the board of directors and shareholders' meetings | |||||||
| Name of independent director | Times of Board meeting supposed to attend in the report period | Times of Presence on the scene | Times of attending by communication way | Times of entrusted presence | Times of Absence | Whether absent the Meeting for the second time in a row or not | Times of Presence |
| Zhu Guilong | 16 | 2 | 14 | 0 | 0 | No | 5 |
| Zhu Qianyu | 16 | 0 | 16 | 0 | 0 | No | 0 |
| Xu Nianhang | 11 | 0 | 11 | 0 | 0 | No | 0 |
| Zhan Weizai | 5 | 1 | 4 | 0 | 0 | No | 1 |
Explanation of absence for the Board Meeting twice in a rowNot applicable
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2. Objection for relevant events from independent directors
Whether independent directors came up with objection about the Company’s relevant matters or not
□ Yes √No
During the report period, the independent directors did not raise objections to the Company's related matters.
3. Other explanation about responsibility performance of independent directorsWhether the opinions from independent directors were adopted or not
√Yes □ No
Explanation of the opinions from independent directors which were adopted or not adoptedIn the report period, independent directors of the Company attended the board meetings and general shareholders’meetings, conscientiously performed their duties, and put forward constructive opinions or suggestions for thedevelopment of the Company strictly according to the requirements of the Guidelines for Operation of the ListedCompanies on Main Board of Shenzhen Stock Exchange, the Listing Rules of Shenzhen Stock Exchange Stock, theGuidelines for Establishment of Independent Director Mechanism for Listed Companies and the Article of Association.Each independent director seriously deliberated all motions of the board of directors, and gave independent opinions onsignificant operating management issues, general election of the board of directors, distribution of profits, Equityincentive restricted stock repurchase and unlock, issues related to non-public offering of A shares, Engagement of auditinstitution, internal control construction and so on. The suggestions about the company of the independent directorshave been adopted, and they have played an active role in safeguarding the interests of the company and minorityshareholdersVI. Duty performance of the special committees under the board during the reporting period
1. Performance of the audit committee of the Board
The Audit Committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them areindependent directors. The convoker is independent director. During the report period, according to demands of CSRCand Shenzhen Stock Exchange, and regulations of Rules of Procedure of the Audit Committee of the Board of Directors,Procedure for Annual Report Work of the Audit Committee, the committee paid attention to the construction ofcorporate internal control system, audited the internal audit report and financial report periodically, diligently andfaithfully. They performed the following duties:
①Deliberate the Company’s financial statement and issue opinions
During the reporting period, in accordance with the requirements of the CSRC, the Audit Committee reviewed therelevant annual work plan for the audit of annual reports submitted by certified public accountants before the annualaudited certified public accountants entered the market, and provided guidance opinions; At the same time, the basis,principles, and methods for the preparation of the Company's accounting statements are in compliance with the relevantprovisions of national laws and regulations, and in all major respects they fairly reflect the financial status of theCompany on December 31, 2020 and its operating results in 2020.
②Supervise the audit works conducted by the accountant firm
The Audit Committee communicated with the accounting firms and provides guidance and requirements for the annualfinancial report audit work and the plans and arrangements for the internal control report audit work. After the CPAcame into the audit, the members of the Audit Committee kept close contact with the Company and the main projectresponsible personnel to understand the progress of the audit work and the concerns of the accountants, and timely
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feedback to the company’s relevant departments to ensure that the annual audit and information disclosure work wasconducted as scheduled.
③ Summarize report on the audit works conducted by the accountant firm in previous yearAsia Pacific (Group) CPAs (special general partnership) strictly follows the China Auditing Standards and practicesdiligently, paying attention to the communication with the management and the audit committee, which reflects strongprofessional knowledge, good professional ethics and risk awareness. The firm successfully completed the company’s2020 financial statement audit work and internal control audit work, and the audit quality is trustworthy.
2. Performance of the remuneration and examination committee of the Board
The remuneration and examination committee of the Board of Directors of the Company is constituted with 5 directors,and 3 of them are independent directors. The convoker is independent director.According to regulations of Rules of Procedure of The Remuneration and Appraisal Committee, the Remuneration andAppraisal Committee makes examination on the disclosed remuneration of the directors, supervisors and seniorexecutives and thought it accorded with the relevant laws and regulations of the remuneration and appraisal system ofthe Company.
②The remuneration and examination committee reviewed the proposals on the allowance of external supervisors andthe allowance of external directors (except for the incumbents of shareholder units), and reported the results to the boardof directors.
③The remuneration and examination committee considered a bill to repurchase and cancel some restricted stock underthe restricted stock incentive program and reported the results to the Board.
④The remuneration and examination committee deliberated the repurchase and cancellation of restricted stocks in therestricted stock incentive plan, the repurchase and cancellation of restricted stocks that did not meet the unlockingconditions of the third unlocking period, and other relevant proposals, and reported the results of the review to the boardof directors.
3. Performance of the nomination committee of the Board
The nomination committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them areindependent directors. The convoker is independent director.The nominating committee considered the motion on recommending candidates for the general election of the board ofdirectors and reported the result to the Board. Nomination committee of the Board performed evaluation on the work ofthe Board, and believed that the directors of the Board abided by the State laws, administrative rules and regulation ofArticle of Association since they took office. They attended or delegated to attend the Board Meeting and generalmeeting of shareholders on time, performed voting rights based on relevant regulations, actively kept eyes on themanagement situation of the Company, and performed the duty of Directors diligently.
4. Performance of the strategy committee of the Board
The strategy committee of the Board of Directors of the Company is constituted with 5 directors, and 2 of them areindependent directors.
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As the special institution responsible for the long-term development strategy and significant investment decision-making, the strategy committee made earnest research on the significant decisions affecting the Company’sdevelopment and issued relevant recommendations according to the procedure rules of the strategy committee. Duringthe reporting period, the strategy committee considered on the profit distribution plan and held the view that the majorissues above confirm to the requirement of the Company Law, the Enterprise Accounting Principles and the Articles ofAssociation, and agreed to submit the same to the board and general meeting for consideration. At the same time, thestrategy committee considered issues concerning significant operation management, guarantee for controllingsubsidiaries, related transaction, and investment projects of the Company, which were submitted to the board forconsideration.VII. Performance of the Supervisory CommitteeDuring the report period, the Supervisory Committee found whether there was risk in the Company in the supervisoryactivities.
□ Yes √ No
The Supervisory Committee had no objection on the supervised events during the report period.VIII. Performance examination and incentives of senior management
In order to maximize the company's operating efficiency, fully mobilize the enthusiasm of the management team toensure the completion of the company's various operational indicators, the board of directors agreed to adopt an annualsalary system for the company's management team. The annual salary system consists of a fixed annual salary andperformance bonus. The performance bonus is an incentive income. The company conducts accounting according to theoverall business situation and individual assessment. The specific payment rules are implemented according to thecompany's annual assessment plan. These measures have been implemented since 2018.IX. Internal Control
1. Particulars about significant defects found in the internal control during the report period
□ Yes √ No
2. Self-appraisal report of internal control
| Disclosure date of full text of self-appraisal report of internal control | April 15, 2021 | ||
| Disclosure index of full text of self-appraisal report of internal control | More details found in “Report of Internal Control of CSG for year of 2020” published on Juchao Website (http://www.cninfo.com.cn) | ||
| The ratio of the total assets of the units included in the scope of evaluation to the total assets of the Company's consolidated financial statements | 94% | ||
| The ratio of the operating income of the units included in the scope of evaluation to the operating income of the Company's consolidated financial statements | 95% | ||
| Standards of Defects Evaluation | |||
| Category | Financial Reports | Non-financial Reports | |
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| Qualitative criteria | Major defects: A. Fraud of directors, supervisors and senior management; B. Ineffective control environment; C. Invalid internal supervision; D. Major internal control defects found and reported to the management but haven’t been corrected after a reasonable time; E. Material misstatements are found by the external audit but haven’t been found in the process of internal control; F. Financial reports submitted during the reporting period completely cannot meet the needs and are severely punished by regulatory agencies; G. Other major defects that may affect the report users’ correct judgment. Significant defects: A. Defects or invalidation of important financial control procedures; B. Significant misstatements are found by the external audit but haven’t been found in the process of internal control; C. Financial reports submitted during the reporting period have mistakes frequently; D. Other significant defects that may affect the report users’ correct judgment. Common defects: Other control defects except for major defects and significant defects. | Major defects: A. Major decision-making mistakes caused by decision-making process of key business; B. Serious violation of state laws and regulations; C. Serious brain drain of senior and middle management and or personnel at key technological posts; D. Major or significant defects found in the internal control evaluation have not been rectified and reformed; E. The company's major negative news frequently appears on media; Significant defects: A. Big deviation of execution caused by executive routine of key business; B. Regulatory authorities impose large amount of fines because the violation of laws and regulations; C. Defects or invalidation of important business’ internal control procedures; Common defects: Other control defects except for major defects and significant defects. |
| Quantitative standard | Major defects: A. Amount of net profit affected by misstatements (based on consolidated statements): amount affected by misstatements is equal to or greater than 3% of net profit and the absolute amount is no less than 30 million yuan; B. Amount of assets and liabilities affected by misstatements (based on consolidated statements): amount affected by misstatements is equal to or greater than 1% of total assets. Significant defects: A. Amount of net profit affected by misstatements (based on consolidated statements): not belong to major defects and amount affected by misstatements is equal to or greater than 2% of net profit and the absolute amount is no less than 20 million yuan; B. Amount of assets and liabilities affected by misstatements (based on consolidated statements): amount affected by misstatements is equal to or greater than 0.5% of total assets but less than 1% of total assets. Common defects: Defects except for major and significant defects. | Major defects: A. Amount of direct property loss: the direct loss amount is equal to or greater than 30 million yuan; B. Group's reputation: major negative news spreads in numerous business areas or is widely reported by national media and causes significant damages to the corporate reputation which takes more than six months to be restored. Significant defects: A. Amount of direct property loss: the direct loss amount is equal to or greater than 20 million yuan but less than 30 million yuan; B. Group's reputation: negative news spreads inside the industry or is reported or focused by local media and causes certain damages to the corporate reputation which takes more than three months but less than six months to be restored. Common defects: A. Amount of direct property loss: defects except for major and significant defects. B. Group's reputation: negative news spreads within the group and causes minor damages to the corporate reputation which takes less than three months to be restored. |
| Amount of significant defects in financial reports | 0 | |
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| Amount of significant defects in non-financial reports | 0 |
| Amount of important defects in financial reports | 0 |
| Amount of important defects in non-financial reports | 0 |
X. Audit report of internal control
√Applicable □ Not applicable
| Deliberations in Internal Control Audit Report | |
| According to Guidelines of Enterprise Internal Control Audit and the relevant requirements of CICPA auditing standards, Asia Pacific (Group) CPAs (special general partnership) (hereinafter referred to as AP) audited the effectiveness of internal control over financial statements of the Company up to 31 December 2020, issued AP Ya-Kuai- A-Zhuan-Zi （2021）No. 01320010 Internal Control Audit Report and made the following opinions: AP thought that CSG Holding Co., Ltd. maintained effective internal control over financial statements in all major aspects according to the Fundamental Norms of Enterprise Internal Control and relevant rules on December 31, 2020. | |
| Disclosure of internal control audit report | Disclosure |
| Date of disclosing the internal control audit reports | 15 April 2021 |
| Disclosure index of internal control audit report | More details can be found in 2020 Internal Control Audit Report of CSG released on Juchao Website (http://www.cninfo.com.cn) |
| Type of the auditor’s opinion | Standard unqualified opinion |
| Whether there are major flaws in the non-financial report or not | No |
Whether the CPAs firm issued an Audit Report on Internal Control with non-standard opinion or not
□Yes √ No
Whether the Audit Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal Report fromthe Board or not
√ Yes □ No
Section IX. Corporate Bonds
Whether the company has a public offering and is listed on the stock exchange, and the company bonds that have notbeen fully paid or matured on the date of approval of the annual reportYes
I.Basic information about corporate bonds
| Name | Short name | Bond code | Issue date | Maturity date | Bond balance (RMB 0,000) | Interest rate | Way of repayment of principal and interest |
| CSG Holding Co., Ltd. Public issue of corporate bonds to qualified investors in 2020 (phase I) | 20 CSG 01 | 149079 | 2020-3-24 to 2020-3-25 | 2023-3-25 | 200,000 | 6% | Use simple interest to calculate the annual interest, excluding compound interest. Interest is paid once a year, principal is repaid once due, and the last installment of interest is paid together with the principal. |
| Corporate bond listing or transfer trading place | Shenzhen Stock Exchange | ||||||
| Appropriate arrangements for investors | Corporate bonds shall be publicly issued to qualified institutional investors who have opened qualified A-share securities accounts in the Shenzhen branch of China securities registration and clearing Co., Ltd., in accordance with the provisions of the "measures for the administration of corporate bond issuance and trading". | ||||||
| Interest payment and encashment of corporate bonds during the reporting period | The bond has not entered the first interest payment date. | ||||||
II. Informantion of bond trustee and credit rating institution
Not applicable
Bond trustee:
| Bond trustee: | ||||||||
| Name | Western Securities Co., Ltd | Office adds. | Room 10000, building 8, 319 dongxin street, xincheng district, xi 'an city, shaanxi province | Contact person | Lv Yue | Tel. | 010-68086722 | |
| Credit ratinginstitution which tracks rating corporate bonds in the report period: | ||||||||
| Name | China Chengxin International Credit Rating Co., Ltd. | Office adds. | Building 5, Yinhe SOHO, 2 nanzhugan Hutong, Chaoyang mennei street, Dongcheng District, Beijing | |||||
| If bond trustee and credit rating institution engaged by the Company changed in the | The bond rating agency China Chengxin Securities Rating Co., Ltd. (hereinafter referred to as "CCXR") is a wholly-owned subsidiary | |||||||
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| report period, explain the reason of the change, performance of the procedure, and the impact on the interest of investors etc. (if applicable) | ofChina Chengxin International Credit Rating Co., Ltd. (hereinafter referred to as "CCXI"). According to the notice of CCXI, on February 25, 2020, China credit international received the reply of China securities regulatory commission on the approval of China Chengxin International Credit Rating Co., Ltd. to engage in the credit rating business of the securities market (license no. [2020] 267).According to this reply, CCXI carried out credit rating business of securities market from February 26, 2020;Credit rating business in securities market of CCXR, a wholly-owned subsidiary of CCXI, is inherited by CCXI. |
III. The use of fund raised by corporate bonds
| The use of fund raised by corporate bonds and performance of the procedure | The raised fund is in strict accordance with the relevant provisions. |
| Balance at the end of year (RMB0,000) | 0 |
| The operation of the special account for raised fund | The operation of the special account for raised fund is in strictly accordance with the relevant provisions of prospectus commitment. |
| Whether the use of raised fund is consistent with the purpose, plan of use and other agreements of prospectus commitment | Consistent |
IV. Information of the rating of corporation bonds
According to The Tracking Rating Report of CSG Issuing Corporate Bonds To Qualified Investors In 2020 (Phase I)([2020] tracking 0596)issued by CCXI on June 10, 2020, the Company's subject credit rating is AA+, rating outlook isstable, and the bonds credit rating of the current period is evaluated as AA+.CCXI will conduct tracking rating during the term of validity of the bonds: it will complete the regular tracking ratingof the year within two months after the release of the Company's annual report, and disclose the bond tracking ratingreport of the previous year within six months from the end of each fiscal year according to the listing rules; Issuerandom tracking ratings as appropriate. The rating results and other relevant information will be published on thewebsite of China credit international (www.ccxi.com.cn) and the website of the exchange to draw the attention ofinvestors.V. Trust mechanism, debt repayment plans and other debt repayment safeguards ofcorporation bondsDuring the report period, the trust mechanism, debt repayment plans and other debt repayment safeguards have not beenchanged which are the same as the relevant commitments of raising instruction manual.I. Credit promotion measuresThe bonds are unsecured.
II. Debt repayment plan"20 CSG 01" will pay interest once a year during its duration, and the principal will be repaid once upon maturity. Theinterest of the last period will be paid together with the repayment of the principal. The payment date of "20 CSG 01" is
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March 25 of each year from 2021 to 2023, and the payment date is March 25, 2023 (in case of a statutory holiday or restday, it will be postponed to the first trading day thereafter).The Company established the annual and monthly plan for application of funds based on the payment arrangement forcoming due principal and interest of the corporation bonds, reasonably managed and allocated the funds so as to makesure the due principal and interest be paid in time. The capital sources for paying the corporation bonds in the reportperiod were mainly the cash flow generated by the Company’s operating activities and the bank loans. The financialstructure of the company remains stable, and the stable cash inflow provides a strong guarantee for the repayment ofprincipal and interest of the company's bonds. The repayment plan has not changed and is consistent with the relevantcommitments in the prospectus.
Ⅲ. Repayment safeguardsIn order to fully and effectively maintained the interests of the bondholders, the Company has made a series plans forthe timely and sufficient repayment for bonds in the report period, including confirming the specialized departments andpersonnel, arranging the funds for repayment, strictly implement the use of the raised funds, give full play to the role ofbond trustee, set the rules for bondholders' meetings, strictly fulfil the obligation of information disclosure, so as todevelop a set of safeguards to ensure that bonds are repaid safely. The guarantee measures for debt repayment have notchanged and are consistent with the relevant commitments in the prospectus.
VI. Information about the bondholder meeting during the reporting periodThere was no bond-holder meeting of "20 CSG 01" convened in the report period.
VII. Information about the obligations fulfilled by the bond trustee in the report period
As the bond trustee of “20 CSG 01”, Western Securities Co., Ltd. strictly complies with relevant laws and regulationsand the provisions of the Prospectus and Bond Trustee Management Agreement to perform the duties of the bondtrustee, and continues to pay attention to the company’s daily routine. Production and operation and financial status,supervise the use of raised funds, the operation of special accounts, and the repayment of principal and interest, andstrive to safeguard the legitimate rights and interests of bondholders. The trustee has no conflict of interest whenperforming its duties.VIII. The key accounting data and financial indicators of the latest two years to the end of the report period
RMB 0,000
| Item | 2020 | 2019 | Rate of change over the same period |
| Earnings before interest tax depreciation and amortiation | 230,229 | 195,447 | 17.8% |
| Current ratio | 121% | 74% | 47% |
| Assets liabilities rate | 41% | 46% | -5% |
| Quick ratio | 100% | 61% | 39% |
| Total debt ratio of EBITDA | 32% | 23% | 9% |
| Interest coverage ratio | 4.88 | 2.99 | 63.21% |
| Cash interest coverage ratio | 11.83 | 8.91 | 32.77% |
| Interest coverage ratio of EBITDA | 8.15 | 5.95 | 36.97% |
| Loan repayment rate | 100% | 100% |
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| Interest coverage ratio | 100% | 100% |
The above accounting data and financial indicators year-on-year change more than 30% of the main reasons
√Applicable □Not applicable
Current ratio: Mainly due to the decrease in current liabilities.Quick ratio: Mainly due to the decrease in current liabilities.Interest coverage ratio: Mainly due to the increase in net profit and the decrease in interest expenses.Cash interest coverage ratio: Mainly due to the increase in net cash flow from operating activities and the decrease ininterest expenses.Interest coverage ratio of EBITDA: Mainly due to the increase in net profit.IX. Payment of principle and interest for other bonds and debt financing instruments duringthe report periodOn May 4, 2020, the Company paid the second installment of the first phase of 2018 medium-term notes with an annualinterest rate of 7% and a total amount of RMB 800 million issued on May 4, 2018.On July 14, 2020, the Company completed the payment of the principal and interest of the first phase of 2015 medium-term notes with a total amount of RMB 1.2 billion and an annual interest rate of 4.94% issued on July 14, 2015.On November 21, 2020, the Company completed the payment of the principal and interest of the first phase of 2020ultra short term financing bonds with a total amount of RMB 300 million and an annual interest rate of 4% issued onFebruary 21, 2020.X. Information about of bank credit and use, as well as repayment of bank loans during thereport periodThe Company's credit status was good during the report period, and it established long-term and stable credit businessrelationships with banking institutions. As of December 31, 2020, the Company has obtained a bank credit ofRMB14.352 billion, has used a quota of RMB2.270 billion, and has an available quota of RMB12.082 billion.XI. Information about fulfillment of the stipulations or commitments specified in theProspectus of the issuance of the bonds during the report periodThe Company strictly abides by the relevant provisions in the "20 CSG 01" bond prospectus and fulfils the relevantcommitments.XII. Major matters occurring during the report periodOn April 8, 2020, the Company disclosed the “Announcement on Cumulative New loans in 2020of CSG on the websiteof Shenzhen Stock Exchange. The above-mentioned new loans are required by the Company's business development,conform to the provisions of relevant laws and regulations, belong to the normal business activities of the Company,and will not have a significant adverse impact on the Company's production and operation and debt paying ability. Thebond trustee Western Securities Co., Ltd. disclosed the Interim Report on entrusted management affairs of CSG IssuingCorporate Bonds To Qualified Investors In 2020 (Phase I) on the website of Shenzhen Stock Exchange for the abovedmatters simultaneously.XIII. Whether there is a guarantor of corporate bonds
□ Yes √ No
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Section X. Financial Report
I. Report of the Auditors
| Type of Auditor’s Opinion | Standard and unqualified |
| Issue date of Report of the Auditors | 13April 2021 |
| Name of Auditor’s organization | Asia Pacific (Group) CPAs (special general partnership) |
| Reference number of Report of the Auditors | Ya-Kuai- A-Shen-Zi (2021) No. 01320009 |
| Name of CPA | Zhou Xianhong, Sun Weijie |
Auditor’s Report
Ya-Kuai- Shen-Zi (2021) No. 01320009
To the shareholders of CSG Holding Co., Ltd.,
I. Opinion
We have audited the accompanying financial statements of CSG Holding Co., Ltd.(hereinafter“the Company”), which comprise the Separate/Consolidated Statements ofFinancial Position as at 31 December 2020, and the Separate/Consolidated Statements ofprofit or loss, the Separate/Consolidated Statements of changes in equity and theSeparate/Consolidated Statements of cash flows for the year then ended, and the notes tothe financial statements.
In our opinion, the financial statements attached were prepared in line with the regulationsof Accounting Standards for Business Enterprises in all significant aspects which gave atrue and fair view of the consolidated and parent financial position of the Company as atDec. 31, 2020 and the consolidated and parent business performance and cash flow of theCompany for 2020.
II. Basis of Opinion
We conducted our audit in accordance with Standards on Auditing for Certified PublicAccountants. Our responsibility is to express an opinion on these financial statementsbased on our audit. Those standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of mostsignificance in our audit of the financial statements of the current period. These matters
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were addressed in the context of our audit of the financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.We determine the followings are key audit matters in need of communication in our report.
I) Impairment of Long-term assets
1. Matter description
As disclosed in the financial statements, by 31st December 2020 , Impairment provisionfor construction in progress of The Company was RMB 639.21 million yuan, Impairmentprovision the fixed assets was RMB 835.93 million yuan. As the domestic market is highlycompetitive in the polycrystalline silicon industry and the cost of subsidiary Yichang SiliconMaterials Company is high, the management of the company (hereinafter referred to asthe management layer) has identified and conducted impairment tests for some relatedassets which show a sign of impairment. During the test, the management has engagedan independent valuer to assist in the identification and valuation of the recoverableamount of relevant asset and compared it with the book value of the corresponding assets.The results showed that the recoverable amount of related assets was lower than its bookvalue. According to the differences in amount, the provision for impairment of fixed assetsand construction in progress should be noted by the company. The impairment testinvolves confirming key parameters including discount rate and assumptions for futureadministration, such as the revenue growth rate, the gross profit margin etc. Due to theprocedure of related assets impairment involved significant decisions and predictionsmade by the management team, we therefore have confirmed this as a key audit matter.
2. Countermeasures of Audit
1 Understood and tested the effectiveness of design and operation of CSG internal controlsystem relating to the provision for impairment of the fixed assets and the construction inprogress;
2 Checked the fixed asset and construction in progress in field survey and implemented ofphysical procedures
3 Evaluated management's identification of the relevant asset groups assertions and theamount of assets allocated to each asset group and assessed the reasonableness ofmanagement's method of impairment of related assets.
4 Communicated with management and evaluated impairment of fixed assets andconstruction in progress key assumptions , Valuation method, Cash flow forecast andother key parameters for obtaining significant management estimates and judgments, suchas the revenue growth rate, the gross profit margin, the expense growth rate and thediscount rate etc, to be reviewed;
5 Assessed the professional competency ,objectivity, and independence of the thirdparties of independent valuer and reviewed the evaluation methods, evaluationassumptions, discount rates and other key parameters of valuation reports and reviewedthe reasonableness of the calculation of evaluation data;
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6 Checked the provision of impairment of fixed asset and construction in progress relevantpresents and disclosures whether is appropriate and complete in the presentation offinancial statements following accounting standards.
II) Impairment of Goodwill
1. Matter description
As disclosed in the report: by 31st December 2020, the goodwill of The Company is theoriginally valued at RMB 397.39 million yuan, mainly included goodwill RMB 389.49 millionyuan from the acquisition of Shenzhen CSG Display Device Technology Co., Ltd.Themanagement conducts an impairment test on goodwill at least once a year. In this year’stest, the management has engaged an independent valuer to assist in the identificationand valuation of the recoverable amount of asset groups. The management tests goodwillfor impairment by estimating the recoverable amounts of the asset groups thatgoodwill is allocated to, and then comparing these recoverable amounts with the carryingvalue of those asset groups and goodwill . The result of the impairment test indicatedthat the recoverable amount of the relevant asset groups of goodwill is lower than the bookvalue, and the provision for goodwill impairment should be noted by company. As thegoodwill impairment test involved a complex process and the significant judgments of thecompany’s management, we consider this matter as key audit matters.
2. Countermeasures of Audit
1 Understood and evaluated the effectiveness of design and operation of the internalcontrol system of the provision of impairment in goodwill;
2 Compared the relevant asset groups actual results in 2020 with their correspondingestimates made in the prior year to evaluate the reliability of the management’s estimateson cash flows;
3 Obtained and reviewed the report of goodwill impairment issued by the externalvaluer,and assessed the independence, professional competency and objectivity of theindependent valuer;
4 Discussed with the management, compared and analyzed historical data and industrylevel of relevant asset groups; evaluated key assumptions and assessed its rationality,including the key parameters for obtaining significant management estimates andjudgments, such as the revenue growth rate, the gross profit margin, the expense growthrate and the discount rate etc;
5 Checked whether the goodwill was allocated to each of the cash-generating units in areasonable methods; Checked the goodwill impairment test model calculation accuracy ;
6 Checked whether the impairment of goodwill have been properly presented anddisclosed in the financial statements as required.
IV. Other information
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The management layer of the Company shall be responsible for other information,including the information covered in the financial report, but excludes financial statementsand our audit report.
Our audit opinion on financial statements does not include other information; we will notmake the authentication conclusion on other information in any form.
In connection with our audit of the financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
If based on the work we have performed, we conclude that there is a materialmisstatement of this other information, we are required to report that fact. We havenothing to report in this regard.
V. Responsibilities of Managementand Governance for Financial Statements
Management of the Company is responsible for the preparation and fair presentation ofthese financial statements in accordance with the requirements of the AccountingStandards for Business Enterprises, and for such internal control as management.
determines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing financial statements, the management layer is responsible for assessing thecompany's sustained business capability, disclosing matters related to continue operating，using the going-concern assumption unless management either intends.
to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The governance layer is responsible for supervising the financial reporting process of thecompany.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance as to whether there are no majormisstatements due to fraud or errors in the overall financial statements, and to issue anaudit report containing audit opinions. Reasonable assurance is the high-level assurance,but it can’t assure that a certain major misstatement can be always found when auditingaccording to the audit standard. The misstatement may be caused by malpractices or error.If the misstatements within the rational expectations may affect the economic decision ofthe financial statement user according to the financial statement, it shall be deemed thatthe misstatement is significant.
During the process of conducting the audit work according to audit standards, we applyprofessional judgment and keep professional skepticism. Meanwhile, we also perform thefollowing tasks:
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(1) Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive to thoserisks, and obtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.
(2) Understand the internal control related to audit, so as to design appropriate auditprocedures.
(3)Estimate the appropriateness of the accounting policies selected by the managementlayer, and the rationality of making accounting estimate and relevant disclosures.
(4)Draw a conclusion on the appropriateness of the going concern assumption used by themanagement layer. Meanwhile, according to the obtained audit evidence,it may cause tocome to the conclusion that there are substantial doubtable events or major uncertainty forthe sustainable operation ability of the Company. In case that we come to the conclusionthat there is a significant uncertainty, the audit standards
require us to remind the users of the statements to pay attention to relevant disclosures inthe financial statements in the audit report; In case of any insufficient disclosure, we shallgive modified opinions. Our conclusion is based on the available information up to theaudit report day. However, the future events or circumstances may cause the Companycannot continue to operate.
(5) Estimate the overall presentation, structure and content (disclosure included) of thefinancial statements, and Estimate whether the financial statements fairly reflect relevanttransactions and matters.
(6) Acquire adequate and appropriate audit evidences on the financial information of theentity or business activities of the Company, and give audit opinions on the consolidatedfinancial statements. We are responsible for guiding, supervising and executing the auditof the Group, and take all responsibilities for the audit opinions.
We communicate with the governance layer about the audit scope, schedule, significantaudit findings and other matters within the plan, including the noteworthy internal controldefects recognized by us during the audit.
We also provide statements to the governance layer on the compliance with theprofessional ethics requirement related to the independence, and communicate withthe governance layer on all relationships and other matters that may reasonably beconsidered to affect our independence, as well as relevant preventive measures.
From the matters that we have communicated with the governance layer, we confirm themost important matters for the audit of the current financial statements, and thus constitutethe key audit matters. We describe these matters in our audit report, unless laws andregulations prohibit the public disclosure of these matters, or in rare cases, if it isreasonably expected that the negative consequences of communicating a matter in the
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audit report will surpass the benefits in the public interests, we confirm that the matter shallnot be communicated in the audit report.
| Asia-Pacific (Group) Certified Public Accountants | Certified Public Accountant of China |
| (special general partnership) | |
| Beijing, China | Certified Public Accountant of China |
13April 2021
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CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETSAS AT 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| 31 December 2020 | 31 December 2019 | 31 December 2020 | 31 December 2019 | ||
| ASSETS | Note | Consolidated | Consolidated | Company | Company |
| Current assets | |||||
| Cash at bank and on hand | 4(1) | 2,125,788,903 | 1,986,980,418 | 1,072,875,571 | 1,560,798,731 |
| Notes receivable | 4(2) | 207,966,892 | 297,023,380 | - | - |
| Accounts receivable | 4(3) | 681,467,133 | 649,681,177 | - | - |
| Receivables Financing | 4(4) | 382,527,782 | 258,296,826 | - | - |
| Advances to suppliers | 4(5) | 85,928,641 | 78,196,027 | 1,650,184 | 1,799,222 |
| Other receivables | 4(6)/17(1) | 200,969,854 | 202,854,864 | 3,803,908,369 | 3,179,500,967 |
| Inventories | 4(7) | 815,156,318 | 812,321,690 | - | - |
| Other current assets | 4(8) | 140,031,544 | 447,995,931 | 66,321 | 300,000,000 |
| Total current assets | 4,639,837,067 | 4,733,350,313 | 4,878,500,445 | 5,042,098,920 | |
| Non-current assets | |||||
| Long-term receivables | 17(3) | - | - | - | 1,200,000,000 |
| Long-term equity investments | 17(2) | - | - | 5,844,507,870 | 5,079,465,574 |
| Investment properties | 4(9) | 383,084,500 | - | - | - |
| Fixed assets | 4(10) | 9,145,644,569 | 9,783,037,301 | 19,769,193 | 19,550,442 |
| Construction in progress | 4(11) | 1,893,380,611 | 1,902,140,035 | - | - |
| Intangible assets | 4(12) | 1,139,718,255 | 1,044,826,287 | 140,836 | 370,484 |
| Development expenditure | 4(12) | 49,153,407 | 85,240,356 | - | - |
| Goodwill | 4(13) | 233,375,693 | 315,097,756 | - | - |
| Long-term prepaid expenses | 10,381,937 | 11,351,431 | - | - | |
| Deferred tax assets | 4(14) | 194,979,414 | 205,792,587 | - | - |
| Other non-current assets | 4(15) | 193,359,445 | 120,399,893 | 4,546,275 | 1,407,535 |
| Total non-current assets | 13,243,077,831 | 13,467,885,646 | 5,868,964,174 | 6,300,794,035 | |
| TOTAL ASSETS | 17,882,914,898 | 18,201,235,959 | 10,747,464,619 | 11,342,892,955 |
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CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETS (CONT'D)AS AT 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| 31 December 2020 | 31 December 2019 | 31 December 2020 | 31 December 2019 | ||
| LIABILITIES AND OWNERS' EQUITY | Note | Consolidated | Consolidated | Company | Company |
| Current liabilities | |||||
| Short-term borrowings | 4(17) | 352,895,571 | 2,240,969,137 | 49,800,000 | 1,687,000,000 |
| Notes payable | 4(18) | 144,851,192 | 232,063,968 | - | 170,000,000 |
| Accounts payable | 4(19) | 1,237,833,051 | 1,100,531,779 | 249,721 | 236,346 |
| Advances from customers | 4(20) | - | 292,803,811 | - | - |
| Contract liabilities | 4(21) | 296,776,624 | - | - | - |
| Employee benefits payable | 4(22) | 342,352,166 | 337,866,246 | 46,504,458 | 53,040,982 |
| Taxes payable | 4(23) | 194,921,071 | 115,425,044 | 9,457,159 | 2,901,358 |
| Other payables | 4(24) 17(4) | 287,332,992 | 351,374,775 | 1,002,135,702 | 1,643,156,452 |
| Current portion of non-current liabilities | 4(25) | 927,531,709 | 1,712,456,928 | 800,000,000 | 1,200,000,000 |
| Other current liabilities | 4(26) | 34,586,292 | 300,000 | - | - |
| Total current liabilities | 3,819,080,668 | 6,383,791,688 | 1,908,147,040 | 4,756,335,138 | |
| Non-current liabilities | |||||
| Long-term borrowings | 4(27) | 853,253,983 | 1,320,225,000 | 700,000,000 | 1,130,000,000 |
| Debentures payable | 4(28) | 1,994,020,348 | - | 1,994,020,348 | - |
| Long-term payables | 4(29) | - | 87,240,529 | - | - |
| Deferred tax liabilities | 4(14) | 102,619,932 | 30,197,657 | - | - |
| Deferred income | 4(30) | 498,056,081 | 513,925,557 | 180,496,249 | 182,386,537 |
| Total non-current liabilities | 3,447,950,344 | 1,951,588,743 | 2,874,516,597 | 1,312,386,537 | |
| Total liabilities | 7,267,031,012 | 8,335,380,431 | 4,782,663,637 | 6,068,721,675 | |
| Shareholders’ equity | |||||
| Share capital | 4(31) | 3,070,692,107 | 3,106,915,005 | 3,070,692,107 | 3,106,915,005 |
| Capital surplus | 4(32) | 596,997,085 | 683,219,358 | 741,824,399 | 828,046,672 |
| Less:Treasury shares | 4(33) | - | (118,066,397) | - | (118,066,397) |
| Other comprehensive income | 4(34) | 161,816,819 | 6,565,864 | - | - |
| Special reserve | 4(35) | 10,269,002 | 11,102,921 | - | - |
| Surplus reserve | 4(36) | 1,036,948,422 | 946,251,286 | 1,051,493,782 | 960,796,646 |
| Undistributed profits | 4(37) | 5,336,266,412 | 4,859,600,841 | 1,100,790,694 | 496,479,354 |
| Total equity attributable to shareholders of parent company | 10,212,989,847 | 9,495,588,878 | 5,964,800,982 | 5,274,171,280 | |
| Minority interests | 402,894,039 | 370,266,650 | - | - | |
| Total shareholders' equity | 10,615,883,886 | 9,865,855,528 | 5,964,800,982 | 5,274,171,280 | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 17,882,914,898 | 18,201,235,959 | 10,747,464,619 | 11,342,892,955 | |
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
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CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S INCOME STATEMENTSAS AT 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
| 2020 | 2019 | 2020 | 2019 | ||
| Item | Note | Consolidated | Consolidated | Company | Company |
| Revenue | 4(38) | 10,671,253,445 | 10,472,028,099 | 217,297,219 | 82,205,712 |
| Less: Cost of sales | 4(38) | (7,444,465,731) | (7,743,129,614) | - | - |
| Taxes and surcharges | 4(39) | (121,898,522) | (115,813,768) | (2,292,619) | (639,077) |
| Selling and distribution expenses | 4(40) | (233,918,938) | (389,269,235) | - | - |
| General and administrative expenses | 4(41) | (666,976,561) | (602,590,650) | (273,626,323) | (131,340,380) |
| Reseach and development expenses | 4(42) | (404,842,498) | (366,871,283) | (1,047,802) | (794,864) |
| Financial expenses - net | 4(43) | (224,011,920) | (290,417,403) | (167,576,428) | (121,920,540) |
| Inclouding: interest expenses | (273,308,059) | (319,591,750) | (214,088,327) | (151,864,568) | |
| Interest income | 53,404,661 | 36,942,509 | 49,221,299 | 32,612,794 | |
| Add：Other Income | 4(47) | 99,560,400 | 184,131,420 | 4,228,915 | 3,775,711 |
| Gains/(Losses) arising from changes in fair value | 4(45) | 179,911,200 | - | - | - |
| Investment income | 4(46)17(5) | 2,654,504 | - | 1,136,439,598 | 390,105,325 |
| Credit impairment loss | 4(48) | (5,722,619) | (20,114,033) | (1,571,191) | - |
| Asset impairment loss | 4(49) | (738,508,094) | (463,324,685) | - | 51,454 |
| Income on disposal assets | 4(50) | (1,158,984) | (909,968) | 15,761 | 502,000 |
| Operating profit | 1,111,875,682 | 663,718,880 | 911,867,130 | 221,945,341 | |
| Add: Non-operating revenue | 4(51) | 14,369,839 | 7,827,834 | - | 2,403,225 |
| Less: Non-operating expenses | 4(52) | (20,554,395) | (9,440,087) | (4,895,769) | (4,889,460) |
| Total profit | 1,105,691,126 | 662,106,627 | 906,971,361 | 219,459,106 | |
| Less: Income tax (expenses)/revenue | 4(53) | (293,738,145) | (101,687,050) | - | |
| Net profit | 811,952,981 | 560,419,577 | 906,971,361 | 219,459,106 |
| （一）Classified by continuous operation: | |||||
| Net income from continuing operations (“-” for net loss) | 811,952,981 | 560,419,577 | 906,971,361 | 219,459,106 | |
| Net income from discontinued operations (“-” for net loss) | - | - | - | - | |
| （二）Classified by equity ownership: | |||||
| Attributable to shareholders of parentcompany | 779,325,592 | 536,430,818 | - | - | |
| Minority interests | 32,627,389 | 23,988,759 | - | - | |
| Other comprehensive income net after tax | 155,250,955 | 1,485,630 | - | - | |
| Other comprehensive income net after tax attributable to shareholders of parentcompany | 155,250,955 | 1,485,630 | - | - | |
| Other comprehensive income items which will be reclassified subsequently to profit or loss | 155,250,955 | 1,485,630 | - | - | |
| Differences on translation of foreign currency financial statements | (5,900,842) | 1,485,630 | - | - | |
| Income generated when self-property and land use rights are converted into investment property | 161,151,797 | - | - | - | |
| Other comprehensive income net after tax attributable to minority interests | - | - | - | - | |
| Total comprehensive income | 967,203,936 | 561,905,207 | 906,971,361 | 219,459,106 | |
| Total comprehensive income attributable to shareholders of parent company | 934,576,547 | 537,916,448 | |||
| Total comprehensive income attributable to minority interests | 32,627,389 | 23,988,759 | |||
| Earnings per share | 4(54) | ||||
| Basic earnings per share (RMB Yuan) | 4(54) | 0.25 | 0.17 | ||
| Diluted earnings per share (RMB Yuan) | 4(54) | 0.25 | 0.17 | ||
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CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S CASH FLOW STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| 2020 | 2019 | 2020 | 2019 | ||
| Item | Note | Consolidated | Consolidated | Company | Company |
| 1. Cash flows from operating activities | |||||
| Cash received from sales of goods or rendering of services | 11,736,154,948 | 11,615,107,734 | 223,086,978 | 74,350,543 | |
| Refund of taxes and surcharges | 61,780,834 | 24,913,216 | 613,918 | 582,881 | |
| Cash received relating to other operating activities | 4(55)(a) | 177,764,210 | 158,462,125 | 58,247,245 | 51,436,379 |
| Sub-total of cash inflows | 11,975,699,992 | 11,798,483,075 | 281,948,141 | 126,369,803 | |
| Cash paid for goods and services | (6,674,993,246) | (6,831,844,733) | - | - | |
| Cash paid to and on behalf of employees | (1,377,255,224) | (1,316,636,342) | (255,127,287) | (109,657,156) | |
| Payments of taxes and surcharges | (769,776,963) | (667,769,135) | (8,844,083) | (2,766,954) | |
| Cash paid relating to other operating activities | 4(55)(b) | (423,054,923) | (603,196,545) | (30,178,208) | (34,547,014) |
| Sub-total of cash outflows | (9,245,080,356) | (9,419,446,755) | (294,149,578) | (146,971,124) | |
| Net cash flows from/(used in) operating activities | 2,730,619,636 | 2,379,036,320 | (12,201,437) | (20,601,321) | |
| 2. Cash flows from investing activities | |||||
| Cash received from returns on investments | - | - | 411,387,134 | - | |
| Cash received from returns on invest income | 2,654,504 | - | 862,091,239 | 390,105,325 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 1,887,056 | 940,791 | 10,571 | 2,000 | |
| Cash received relating to other investing activities | 4(55)(c) | 435,177,324 | 36,649,460 | 300,000,000 | - |
| Sub-total of cash inflows | 439,718,884 | 37,590,251 | 1,573,488,944 | 390,107,325 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | (1,110,769,762) | (715,488,350) | (8,306,897) | (5,044,017) | |
| Cash paid to acquire investments | - | - | (1,151,168,328) | (131,402,000) | |
| Cash paid relating to other investing activities | 4(55)(d) | (118,741,948) | (55,177,375) | - | (86,952) |
| Sub-total of cash outflows | (1,229,511,710) | (770,665,725) | (1,159,475,225) | (136,532,969) | |
| Net cash flows (used in)/from investing activities | (789,792,826) | (733,075,474) | 414,013,719 | 253,574,356 | |
| 3. Cash flows from financing activities | |||||
| Cash received from borrowings | 2,277,466,685 | 3,271,013,352 | 1,582,799,801 | 2,675,000,000 | |
| Cash received from issuing debentures | 1,991,680,000 | - | 1,991,680,000 | - | |
| Cash received relating to other financing activities | 4(55)(e) | 153,698,226 | 200,000,000 | 74,599,652 | - |
| Sub-total of cash inflows | 4,422,844,911 | 3,471,013,352 | 3,649,079,453 | 2,675,000,000 | |
| Cash repayments of borrowings | (5,024,614,676) | (3,712,064,157) | (4,049,999,801) | (2,658,000,000) | |
| Cash payments for interest expenses and distribution of dividends or profits | (438,591,829) | (468,314,362) | (336,840,490) | (232,336,010) | |
| Cash payments relating to other financing activities | 4(55)(f) | (604,225,442) | (1,330,791,703) | - | (309,952,407) |
| Sub-total of cash outflows | (6,067,431,947) | (5,511,170,222) | (4,386,840,291) | (3,200,288,417) | |
| Net cash flows (used in)/from financing activities | (1,644,587,036) | (2,040,156,870) | (737,760,838) | (525,288,417) | |
| 4. Effect of foreign exchange rate changes on cash | (4,046,608) | 904,141 | (66,943) | 16,911 | |
| 5. Net increase/(decrease) in cash and cash equivalents | 4(56)(b) | 292,193,166 | (393,291,883) | (336,015,499) | (292,298,471) |
| Add: Cash and cash equivalents at beginning of year | 1,831,835,030 | 2,225,126,913 | 1,407,215,863 | 1,699,514,334 | |
| 6. Cash and cash equivalents at end of year | 4(56)(c) | 2,124,028,196 | 1,831,835,030 | 1,071,200,364 | 1,407,215,863 |
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
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CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| Attributable to shareholders of parentcompany | |||||||||||||
| Item | Share capital | Capital surplus | Less: Treasury share | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Sub-total | Minority interests | Total shareholders' equity | |||
| Note | 4(31) | 4(32) | 4(33) | 4(34) | 4(35) | 4(36) | 4(37) | ||||||
| Balance at 1 January 2019 | 2,863,277,201 | 1,095,339,421 | (277,180,983) | 5,080,234 | 6,068,600 | 924,305,375 | 4,486,264,723 | 9,103,154,571 | 346,277,891 | 9,449,432,462 | |||
| Movements for the year ended 31 December 2019 | |||||||||||||
| Total comprehensive income | |||||||||||||
| Net profit | - | - | - | - | - | - | 536,430,818 | 536,430,818 | 23,988,759 | 560,419,577 | |||
| Other comprehensive income | 4(34) | - | - | - | 1,485,630 | - | - | - | 1,485,630 | - | 1,485,630 | ||
| Total comprehensive income | - | - | - | 1,485,630 | - | - | 536,430,818 | 537,916,448 | 23,988,759 | 561,905,207 | |||
| Capital contribution and withdrawal by shareholders | (38,925,482) | (129,556,777) | 159,114,586 | - | - | - | - | (9,367,673) | - | (9,367,673) | |||
| Share-based payments | (38,925,482) | (129,556,777) | 159,114,586 | - | - | - | - | (9,367,673) | - | (9,367,673) | |||
| Profit distribution | - | - | - | - | - | 21,945,911 | (163,094,700) | (141,148,789) | - | (141,148,789) | |||
| Appropriation to surplus reserve | 4(36) | - | - | - | - | - | 21,945,911 | (21,945,911) | - | - | - | ||
| Distribution to the shareholders | 4(37) | - | - | - | - | - | - | (141,148,789) | (141,148,789) | - | (141,148,789) | ||
| Special reserve | - | - | - | - | 5,034,321 | - | - | 5,034,321 | - | 5,034,321 | |||
| Special reserve appropriate | 4(35) | - | - | - | - | 7,293,766 | - | - | 7,293,766 | - | 7,293,766 | ||
| Special reserve used | 4(35) | - | - | - | - | (2,259,445) | - | - | (2,259,445) | - | (2,259,445) | ||
| Internal transfer of shareholders' equity | 282,563,286 | (282,563,286) | - | - | - | - | - | - | - | - | |||
| Capital reserve to share capital | 282,563,286 | (282,563,286) | - | - | - | - | - | - | - | - | |||
| Balance at 31 December 2019 | 3,106,915,005 | 683,219,358 | (118,066,397) | 6,565,864 | 11,102,921 | 946,251,286 | 4,859,600,841 | 9,495,588,878 | 370,266,650 | 9,865,855,528 | |||
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CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)FOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| Attributable to shareholders of parentcompany | |||||||||||||
| Item | Share capital | Capital surplus | Less: Treasury share | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Sub-total | Minority interests | Total shareholders' equity | |||
| Note | 4(31) | 4(32) | 4(33) | 4(34) | 4(35) | 4(36) | 4(37) | ||||||
| Balance at 1 January 2020 | 3,106,915,005 | 683,219,358 | (118,066,397) | 6,565,864 | 11,102,921 | 946,251,286 | 4,859,600,841 | 9,495,588,878 | 370,266,650 | 9,865,855,528 | |||
| Movements for the year ended 31 December 2020 | |||||||||||||
| Total comprehensive income | |||||||||||||
| Net profit | - | - | - | - | - | - | 779,325,592 | 779,325,592 | 32,627,389 | 811,952,981 | |||
| Other comprehensive income | 4(34) | - | - | - | 155,250,955 | - | - | - | 155,250,955 | - | 155,250,955 | ||
| Total comprehensive income | - | - | - | 155,250,955 | - | - | 779,325,592 | 934,576,547 | 32,627,389 | 967,203,936 | |||
| Capital increase or decrease from shareholder | (36,222,898) | (86,222,273) | 118,066,397 | - | - | - | - | (4,378,774) | - | (4,378,774) | |||
| Share-based payments | (36,222,898) | (86,222,273) | 118,066,397 | - | - | - | - | (4,378,774) | - | (4,378,774) | |||
| Profit distribution | - | - | - | - | - | 90,697,136 | (302,660,021) | (211,962,885) | - | (211,962,885) | |||
| Appropriation to surplus reserve | 4(36) | - | - | - | - | - | 90,697,136 | (90,697,136) | - | - | - | ||
| Distribution to the shareholders | 4(37) | - | - | - | - | - | - | (211,962,885) | (211,962,885) | - | (211,962,885) | ||
| Special reserve | - | - | - | - | (833,919) | - | - | (833,919) | - | (833,919) | |||
| Special reserve appropriate | 4(35) | - | - | - | - | - | - | - | - | - | - | ||
| Special reserve used | 4(35) | - | - | - | - | (833,919) | - | - | (833,919) | - | (833,919) | ||
| Internal transfer of shareholders' equity | - | - | - | - | - | - | - | - | - | - | |||
| Capital reserve to share capital | - | - | - | - | - | - | - | - | - | - | |||
| Balance at 31 December 2020 | 3,070,692,107 | 596,997,085 | - | 161,816,819 | 10,269,002 | 1,036,948,422 | 5,336,266,412 | 10,212,989,847 | 402,894,039 | 10,615,883,886 | |||
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
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CSG HOLDING CO., LTD.
COMPANY'S STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| Attributable to shareholders of parent company | |||||||
| Item | Share capital | Capital surplus | Less: Treasury share | Surplus reserve | Undistributed profits | Total shareholders' equity | |
| Balance at 1 January 2019 | 2,863,277,201 | 1,240,166,735 | (277,180,983) | 938,850,735 | 440,114,948 | 5,205,228,636 | |
| Movements for the year ended 31 December 2019 | |||||||
| Total comprehensive income | |||||||
| Net profit | - | - | - | - | 219,459,106 | 219,459,106 | |
| Total comprehensive income | - | - | - | - | 219,459,106 | 219,459,106 | |
| Capital increase or decrease from shareholder | (38,925,482) | (129,556,777) | 159,114,586 | - | - | (9,367,673) | |
| Share-based payments | (38,925,482) | (129,556,777) | 159,114,586 | - | - | (9,367,673) | |
| Profit distribution | - | - | - | 21,945,911 | (163,094,700) | (141,148,789) | |
| Appropriation to surplus reserve | - | - | - | 21,945,911 | (21,945,911) | - | |
| Distribution to the shareholders | - | - | - | - | (141,148,789) | (141,148,789) | |
| Capital reserve to share capital | 282,563,286 | (282,563,286) | - | - | - | - | |
| Balance at 31 December 2019 | 3,106,915,005 | 828,046,672 | (118,066,397) | 960,796,646 | 496,479,354 | 5,274,171,280 | |
| Balance at 1 January 2020 | 3,106,915,005 | 828,046,672 | (118,066,397) | 960,796,646 | 496,479,354 | 5,274,171,280 | |
| Movements for the year ended 31 December 2020 | |||||||
| Total comprehensive income | |||||||
| Net profit | - | - | - | - | 906,971,361 | 906,971,361 | |
| Total comprehensive income | - | - | - | - | 906,971,361 | 906,971,361 | |
| Capital increase or decrease from shareholder | (36,222,898) | (86,222,273) | 118,066,397 | - | - | (4,378,774) | |
| Share-based payments | (36,222,898) | (86,222,273) | 118,066,397 | - | - | (4,378,774) | |
| Profit distribution | - | - | - | 90,697,136 | (302,660,021) | (211,962,885) | |
| Appropriation to surplus reserve | - | - | - | 90,697,136 | (90,697,136) | - | |
| Distribution to the shareholders | - | - | - | - | (211,962,885) | (211,962,885) | |
| Capital reserve to share capital | |||||||
| Balance at 31 December 2020 | 3,070,692,107 | 741,824,399 | - | 1,051,493,782 | 1,100,790,694 | 5,964,800,982 | |
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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1 General information
CSG Holding Co.,LTD (the “Company”) was incorporated in September 1984, known as China SouthGlass 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 Building Materials 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) and Guangdong International Trustand 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 the People's Republic of China. The Company issued RMB-denominatedordinary shares (“A-share”) and foreign shares (“B-share”) publicly in October 1991 and January 1992respectively, and was listed on Shenzhen Stock Exchange on February 1992. As at 31 December2020, the registered capital was RMB3,070,692,107, with nominal value of RMB1 per share.
The Company and its subsidiaries (collectively referred to as the “Group”) are mainly engaged in themanufacture and sales of flat glass, specialised glass, engineering glass, energy saving glass, siliconrelated materials, polycrystalline silicon and solar components and electronic-grade display deviceglass and the construction and operation of photovoltaic plant etc.
Details on the majors subsidiaries included in the consolidated scope in current year were stated inNote .
The financial statements were authorised for issue by the Board of Directors on 13 April 2021.
2 Summary of significant accounting policies and accounting estimates
The Group determines its specific accounting policies and accounting estimates to manufacturing andoperation feature. It mainly reflected in expected credit impairment losses of receivables wasmeasured, inventory costing method, Depreciation of fixed assets and amortization of intangibleassets, criteria for determining capitalised development expenditure, and timing for revenuerecognition .
Please see the key judgements adopted by the Group in applying important accounting policies.
(1) Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for BusinessEnterprises - Basic Standard, and the specific accounting standards and other relevant regulationsissued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereaftercollectively referred to as “the Accounting Standard for Business Enterprises” or “CAS”), andInformation Disclosure Rule No. 15 for Companies with Public Traded Securities - Financial ReportingGeneral Provision issued by China Security Regulatory Commission.
The financial statements have been prepared on a going concern basis.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(1) Basis of preparation (Cont’d)
Accordingly, the directors of the Company had adopted the going concern basis in the preparation ofthe financial statements of the Company and the Group.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2020 are in compliancewith the Accounting Standards for Business Enterprises, and truly and completely present the financialposition of the consolidated and the Company as at 31 December 2020 and their financialperformance, cash flows for the year then ended.
(3) Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Recording currency
The recording currency is Renminbi (RMB).
(5) Business combinations
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the absorbing party in a business combination aremeasured at book value.If the merged party was acquired by the ultimate controlling party from a thirdparty in the previous year, the assets and liabilities of the merged party (including the goodwill formedby the ultimate controlling party’s acquisition of the merged party). The difference between bookvalue 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 to absorb the difference, the remaining balance is adjusted againstretained earnings. Costs directly attributable to the combination are included in profit or loss in theperiod 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 ordebt securities.
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business combinationare measured at fair value at the acquisition date. Where the cost of the combination exceeds theacquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognisedas goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value of theacquiree’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 theyare incurred. Transaction costs associated with the issue of equity or debt securities for the businesscombination are included in the initially recognised amounts of the equity or debt securities.
(6) Preparation method of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of itssubsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a businesscombination involving enterprises under common control, it is included in the consolidated financialstatements from the date when it, together with the Company, comes under common control of the
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(6) Preparation of consolidated financial statements (Cont’d)
ultimate controlling party. The portion of the net profits realised before the combination date ispresented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and the accountingperiods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiariesare adjusted in accordance with the accounting policies and the accounting period of the Company.For subsidiaries acquired from business combinations involving enterprises not under common control,the individual financial statements of the subsidiaries are adjusted based on the fair value of theidentifiable net assets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in theconsolidated financial statements. The portion of subsidiaries’ equity and the portion of a subsidiaries’net profits and losses and comprehensive incomes for the period not attributable to Company arerecognised as minority interests and presented separately in the consolidated financial statementsunder equity, net profits and total comprehensive income respectively. Unrealised profits and lossesresulting from the sales of assets by the Company to its subsidiaries are fully eliminated against netprofit attributable to shareholders of the parent company. Unrealised profits and losses resulting fromthe 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 withthe allocation proportion of the parent company in the subsidiary. Unrealised profits and lossesresulting from the sales of assets by one subsidiary to another are eliminated and allocated betweennet 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 thesubsidiary owned by minority shareholders are acquired from the subsidiary’s minority shareholders.In the consolidated financial statements, the subsidiary's assets and liabilities are reflected withamount 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 equityinvestment arising from acquisition of minority equity and the share of net assets calculated based oncurrent shareholding ratio that the parent company is entitled to. The share is subject to continuouscalculation 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 isadjusted against retained earnings.
If the accounting treatment of a transaction which considers the Group as an accounting entity isdifferent from that considers the Company or its subsidiaries as an accounting entity, it is adjustedfrom the perspective of the Group.
(7) Cash and cash equivalents
Cash and cash equivalents refer to cash in hand, deposits that can be used for payment at any time,and investments with short holding periods, strong liquidity, easy conversion into known amounts ofcash, and low risk of value changes.
(8) Foreign currency conversion
(a) Foreign currency transaction
Foreign currency transactions are translated into RMB using the exchange rates prevailing at thedates of the transactions.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(8) Foreign currency conversion (Cont’d)
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMBusing the spot exchange rates on the balance sheet date. Exchange differences arising from thesetranslations are recognised in profit or loss for the current period, except for those attributable toforeign currency borrowings that have been taken out specifically for the acquisition or construction ofqualifying assets, which are capitalised as part of the cost of those assets. Non-monetary itemsdenominated in foreign currencies that are measured at historical costs are translated at the balancesheet date using the spot exchange rates at the date of the transactions. The effect of exchange ratechanges 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 spotexchange rates on the balance sheet date. Among the shareholders’ equity items, the items other than“undistributed profits” are translated at the spot exchange rates of the transaction dates. The incomeand 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 arepresented separately in the shareholders’ equity. The cash flows of overseas operations are translatedat the spot exchange rates on the dates of the cash flows. The effect of exchange rate changes oncash is presented separately in the cash flow statement.
(9) Financial instrument
A financial instrument is any contract that gives rise to a financial asset of one entity and afinancial liability or equity instrument of another entity. A financial asset or a financial liabilityis recognised when the Group becomes a party to the contractual provisions of the instrument.
(a) Financial assets
(i) Classification and measurement
Based on the business model for managing the financial assets and the contractual cash flowcharacteristics of the financial assets, financial assets are classified as: (1) financial assets atamortised cost; (2) financial assets at fair value through other comprehensive income; (3) financialassets at fair value through profit or loss.
The financial assets are measured at fair value at initial recognition. Related transaction coststhat are attributable to the acquisition of the financial assets are included in the initially recognisedamounts, except for the financial assets at fair value through profit or loss, the related transactioncosts of which are recognised directly in profit or loss for the current period. Accountsreceivable or notes receivable arising from sales of products or rendering of services(excluding or without regard to significant financing components) are initially recognised at theconsideration that is entitled to be charged by the Group as expected.
Debt instruments
The debt instruments held by the Group refer to the instruments that meet the definition of financialliabilities from the perspective of the issuer, and are measured in the following ways.
Measured at amortised cost
The objective of the Group's business model is to hold the financial assets to collect thecontractual cash flows, and the contractual cash flow characteristics are consistent with a
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument(Cont’d)
basic lending arrangement, which gives rise on specified dates to the contractual cash flows that aresolely payments of principal and interest on the principal amount outstanding. The interest income ofsuch financial assets is recognised using the effective interest method.Such financial assets mainlycomprise cash at bank and on hand, placements with and loans to banks and other financialinstitutions measured at amortised cost,accounts receivable, factoring receivables, loans andadvances,other receivables and long-term receivables. Long-term receivables that are due within oneyear (inclusive) as from the balance sheet date are included in the current portion of non-currentassets.
Financial assets at fair value through other comprehensive income:
The objective of the Group's business model is to hold the financial assets to collect the contractualcash flows and selling as target, and the contractual cash flow characteristics are consistent witha basic lending arrangement.Such financial assets are measured at fair value and their changes areincluded in other comprehensive income, but impairment losses or gains, exchange gains and losses,and interest income calculated by the effective interest rate method are all included in the current profitand loss.Such financial assets mainly comprise receivable financing and other financial debtinvestment.Other financial debt investment that are due within one year (inclusive) as from the balancesheet date are included in the current portion as other current assets.
Measured at fair value through profit or loss:
Debt instruments held by the Group that are not divided into those at amortised cost, or thosemeasured at fair value through other comprehensive income, are measured at fair value throughprofit or loss and included in financial assets held for trading. At initial recognition, the Groupdesignates a portion of financial assets as at fair value through profit or loss to eliminate orsignificantly reduce an accounting mismatch. Financial assets that are due within one year(inclusive) as from the balance sheet date and are expected to be held over one year are included inother non-current financial assets.
Equity instruments
Investments in equity instruments, over which the Group has no control, joint control or significantinfluence, are measured at fair value through profit or loss under financial assets held fortrading; investments in equity instruments expected to be held over one year as from the balancesheet date are included in other non-current financial assets.
In addition, a portion of certain investments in equity instruments not held for trading are designated asfinancial assets at fair value through other comprehensive income under other investments inequity instruments. The relevant dividend income of such financial assets is recognised in profitor loss for the current period.
(ii) Impairment
The Group confirms the loss provision based on expected credit losses for financial assets measuredat amortised cost.
Giving consideration to reasonable and supportable information on past events, currentconditions and forecasts of future economic conditions, as well as the default risk weight , theexpected credit loss was confirmed .
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument(Cont’d)
As at each balance sheet date, the expected credit losses of financial instruments at differentstages are measured respectively. 12-month ECL provision is recognised for financialinstruments in Stage 1 that have not had a significant increase in credit risk since initialrecognition; lifetime ECL provision is recognised for financial instruments in Stage 2 that havehad a significant increase in credit risk yet without credit impairment since initial recognition; andlifetime ECL provision is recognised for financial instruments in Stage 3 that have had creditimpairment since initial recognition.
For the financial instruments with lower credit risk on the balance sheet date, the Groupassumes there is no significant increase in credit risk since initial recognition and recognisesthe 12-month ECL provision.
For the financial instruments in Stage 1, Stage 2 and with lower credit risk, the Group calculates theinterest income by applying the effective interest rate to the gross carrying amount (beforededuction of the impairment provision). For the financial instrument in Stage 3, the interestincome is calculated by applying the effective interest rate to the amortised cost (after deduction of theimpairment provision from the gross carrying amount).
For notes and accounts receivables and factoring receivables arising from daily business activitiessuch as selling commodities and providing labor services, the Group recognises the lifetime expectedcredit loss provision regardless of whether there exists a significant financing component
In case the expected credit losses of an individually assessed financial asset cannot be evaluated withreasonable cost, the Group divides the receivables into certain groupings based on credit riskcharacteristics, and calculates the expected credit losses for the groupings. Basis fordetermined groupings and method for provision are as follows:
| Notes receivables Portfolio 1 | Bank acceptance Notes | Expected credit loss method |
| Notes receivables Portfolio 2 | Trade acceptance Notes | Expected credit loss method |
| Accounts receivables Portfolio 1 | Receivables non-related third party | Expected credit loss method |
| Accounts receivables Portfolio 2 | Receivables related party | Expected credit loss method |
| Other receivables Portfolio 1 | Receivables non-related third party | Expected credit loss method |
| Other receivables Portfolio 2 | Receivables related party | Expected credit loss method |
For notes and accounts receivables and receivable financing arising from daily business activitiessuch as selling commodities and providing labor services, the Group refers to historical credit lossexperience, combined with current conditions and predictions of future economic conditions . Inaddition to notes receivable, factoring receivables and other receivables classified as a combination,the Group refers to historical credit loss experience, combines current conditions and predictions offuture economic conditions, and passes default risk exposure and future 12 The expected credit lossrate within a month or the entire duration is calculated as the expected credit loss.
The Group recognises the loss provision made or reversed into profit or loss for the currentperiod. For debt instruments that are held at fair value and whose changes are included in othercomprehensive income, the Group adjusts other comprehensive income while accounting forimpairment losses or gains in the current profit or loss.
(iii) Derecognition
A financial asset is derecognised when any of the below criteria is met: (1) the contractual rights toreceive the cash flows from the financial asset expire; (2) the financial asset has been transferred
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument(Cont’d)
and the Group transfers substantially all the risks and rewards of ownership of the financialasset to the transferee; or (3) the financial asset has been transferred and the Group has notretained control of the financial asset, although the Group neither transfers nor retains substantiallyall the risks and rewards of ownership of the financial asset.
(b) Financial liabilities
Financial liabilities are classified as financial liabilities at amortised cost and financial liabilities atfair value through profit or loss at initial recognition.
The Group's financial liabilities are mainly comprise financial liabilities at amortised cost, including billspayable, accounts payable, and other payables. This type of financial liability is initially measured at itsfair value after deducting transaction costs, and is subsequently measured using the actual interestrate method. If the maturity is less than one year (including one year), it is listed as current liabilities;Those with a maturity of less than one year (including one year) are listed as current liabilities; thosewith a maturity of more than one year but due within one year (including one year) from the balancesheet date are listed as non-current liabilities due within one year. The rest are listed as non-currentliabilities.
A financial liability is derecognised or partly derecognised when the underlying presentobligation is discharged or partly discharged. The difference between the carrying amount ofthe derecognised part of the financial liability and the consideration paid is recognised in profit orloss for the current period.
(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 thequoted price in the active market. The fair value of a financial instrument that is not traded in anactive market is determined by using a valuation technique. In valuation, the Group adopts valuationtechniques applicable in the current situation and supported by adequate available data andother information, selects inputs with the same characteristics as those of assets or liabilitiesconsidered in relevant transactions of assets or liabilities by market participants, and givespriority to the use of relevant observable inputs. When relevant observable inputs are notavailable or feasible, unobservable inputs are adopted.
(10) Inventories
(a) Classification
Inventories refer to manufacturing sector, including raw materials, work in progress, finished goodsand turnover materials, and are measured at the lower of cost and net realisable value.
(b) Issued Inventory costing method
Cost is determined using the weighted average method. The cost of finished goods and work inprogress comprise raw materials, direct labour and systematically allocated production overheadbased on the normal production capacity.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(10) Inventories (Cont’d)
(c) Amortisation methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are expensedwhen issued.
(d) The determination of net realisable value and the method of provision for decline in the value of
inventories
Provision for decline in the value of inventories is determined at the excess amount of book values ofthe inventories over their net realisable value. Net realisable value is determined based on theestimated selling price in the ordinary course of business, less the estimated costs to completion andestimated costs necessary to make the sale and related taxes.
(e) The Group adopts the perpetual inventory system.
(11) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries,and the Group’s long-term equity investments in its associates.
Subsidiaries are the investees over which the Company is able to exercise control. Associates are theinvestees that the Group has significant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in the Company’s financialstatements, and adjusted by using the equity method when preparing the consolidated financialstatements. Investments in associates are accounted for using the equity method.
(a) Initial recognition of investment cost
For long-term equity investments formed in business combination: when obtained from businesscombinations involving entities under common control, the long-term equity investment is stated atcarrying amount of equity for the combined parties at the time of merger; when the long-term equityinvestment obtained from business combinations involving entities not under common control, theinvestment is measured at combination cost.
For long-term equity investments not formed in business combination: the one paid by cash is initiallymeasured at actual purchase price; the long-term investment obtained by issuing equity securities isstated at fair value of equity securities as initial investment cost..
(b) Subsequent measurement and recognition of related profit or loss
For long-term equity investments accounted for using the cost method, they are measured at the initialinvestment costs, and cash dividends or profit distribution declared by the investees are recognised asinvestment income in profit or loss.
For long-term equity investments accounted for using the equity method, where the initial investmentcost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’s
identifiable net assets at the acquisition date, the long-term equity investment is measured at the initialinvestment cost; where the initial investment cost is less than the Group’s share of the fair value of theinvestee’s identifiable net assets at the acquisition date, the difference is included in profit or loss andthe cost of the long-term equity investment is adjusted upwards accordingly.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Long-term equity investments (Cont’d)
Under the equity method, the Group recognises the investment income according to its share of netprofit or loss of the investee. The Group discontinues recognising its share of the net losses of aninvestee after book values of the long-term equity investment together with any long-term interests thatin substance form part of the investor’s net investment in the investee are reduced to zero. However, ifthe Group has obligations for additional losses and the criteria with respect to recognition of provisions
under the accounting standards on contingencies are satisfied, the Group continues recognising theinvestment losses and the provisions. For changes in owners’ equity of the investee other than thosearising from its net profit or loss, its proportionate share is directly recorded into capital surplus,provided that the proportion of the shareholding of the Group in the investee remains unchanged.Book value of the investment is reduced by the Group’s share of the profit distribution or cashdividends declared by an investee. The unrealised profits or losses arising from the intra-grouptransactions amongst the Group and its investees are eliminated in proportion to the Group’s equityinterest in the investees, and then based on which the investment gains or losses are recognised. Anylosses resulting from transactions between the Group and its investees attributable to assetimpairment losses are not eliminated.
(c) Basis for determining existence of control, jointly control or significant influence over investees
The term "control" refers to the power in the investees, to obtain variable returns by participating in therelated business activities of the investees, and the ability to affect the returns by exercising its powerover the investees.
The term "significant influence" refers to the power to participate in the formulation of financial andoperating policies of an enterprise, but not the power to control, or jointly control, the formulation ofsuch policies with other parties.
(d) Impairment of long-term equity investments
Book value of long-term equity investments in subsidiaries and associates is reduced to therecoverable amount when the recoverable amount is less than book value.
(12) Investment property
Investment property includes leased land use rights, land use rights held and provided for to transferafter appreciation and leased building and construction.
Investment properties are initially measured at acquisition cost. The cost of outsourcing Investmentproperty includes the purchase price, relevant taxes and other expenditures that can be directlyattributable to the asset; the cost of self-built Investment property is determined by the construction ofthe asset. The composition of the necessary expenditures incurred before the usable state.
Investment property adopts the fair value model for subsequent measurement without depreciation oramortization. On the balance sheet date, the book value of the investment properties are initiallymeasured at acquisition cost is adjusted based on the fair value of the investment properties areinitially measured at acquisition cost. The difference between the fair value and the original book valuewill be calculated into the current profit and loss.
When the use of an Investment property is changed to self-use, the investment property is convertedinto fixed assets or intangible assets from the date of change, and the book value and fair value of thefixed assets and intangible assets are determined based on the fair value of the investment propertyon the conversion date. The difference with the original book value of the investment property isincluded in the current profit and loss. When the purpose of self-use real estate is changed to earningrent or capital appreciation, from the date of change, the fixed assets or intangible assets areconverted into investment properties are initially measured at acquisition cost, and the fair value on the
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Investment property (Cont’d)
day of conversion is used as the book value of the investment properties are initially measured atacquisition cost, and the fair value on the day of conversion If the value is less than the original bookvalue of fixed assets and intangible assets, the difference is included in the current profit and loss. Ifthe fair value on the day of conversion is greater than the original book value of fixed assets andintangible assets, the difference is included in other comprehensive income.
When an investment property is disposed of or permanently withdrawn from use and it is expected thatno economic benefits can be obtained from its disposal, the confirmation of the investment real estateshall be terminated. The disposal income from the sale, transfer, scrapping or destruction ofinvestment real estate shall deduct its book value and relevant taxes and shall be included in thecurrent profits and losses. If there is an amount included in other comprehensive income on theoriginal conversion date, it will also be carried forward and included in the current profit and loss.
(13) Fixed assets
(a) Recognition and initial measurement
Fixed assets comprise buildings, machinery and equipment, motor vehicles and others.
Fixed assets are recognised when it is probable that the related economic benefits will probably flow tothe Group and the costs can be reliably measured. Fixed assets purchased or constructed by theGroup are initially measured at cost at the acquisition date.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when itis probable that the associated economic benefits will flow to the Group and the related cost can bereliably measured. Book value of the replaced part is derecognised. All the other subsequentexpenditures are recognised in profit or loss in the period in which they are incurred.
(b) Depreciation methods
Fixed assets are depreciated using the life average method to allocate the cost of the assets to theirestimated residual values over their estimated useful lives. For the fixed assets that have beenprovided for impairment loss, the related depreciation charge is prospectively determined based uponthe adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated net residual values expressed as a percentage of cost andthe annual depreciation rates of fixed assets are as follows:
Estimated useful lives Estimated net residual value Annual depreciation rate
Buildings 20 to 35 years 5% 2.71% to 4.75%Machinery and equipment 8 to 20 years 5% 4.75% to 11.88%Transportation and others 5 to 8 years 0% 12.50% to 20.00%
The estimated useful life, the estimated net residual value of a fixed asset and the depreciationmethod applied to the asset are reviewed, and adjusted as appropriate at each year-end.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(13) Fixed assets (Cont’d)
(c) Book value of a fixed asset is reduced to the recoverable amount when the recoverable amount is
below book value.
(d) Disposal
A fixed asset is derecognised on disposal or when no future economic benefits are expected from itsuse or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of afixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss forthe current period.
(14) Construction in progress
Construction in progress is recorded at actual cost. Actual cost comprises construction cost,installation cost, borrowing costs eligible for capitalised condition and necessary expenditures incurredfor its intended use. Actual cost also includes net of trial production cost and trial production incomebefore 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 from the following month.
Book value of construction in progress is reduced to the recoverable amount when the recoverableamount is below book value.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(15) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of an asset thatneeds a substantially long period of time for its intended use commence to be capitalised andrecorded as part of the cost of the asset when expenditures for the asset and borrowing costs havebeen incurred, and the activities relating to the acquisition and construction that are necessary toprepare the asset for its intended use have commenced. The capitalisation of borrowing costs ceaseswhen the asset under acquisition or construction becomes ready for its intended use and theborrowing costs incurred thereafter are recognised in profit or loss for the current period. Capitalisationof 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 orconstruction is resumed.
For the specific borrowings obtained for the acquisition or construction of an asset qualifying forcapitalisation, the amount of borrowing costs eligible for capitalisation is determined by deducting anyinterest income earned from depositing the unused specific borrowings in the banks or any investmentincome arising on the temporary investment of those borrowings during the capitalisation period.
For the general borrowings obtained for the acquisition or construction of an asset qualifying forcapitalisation, the amount of borrowing costs eligible for capitalisation is determined by applying theweighted average effective interest rate of general borrowings, to the weighted average of the excessamount of cumulative expenditures on the asset over the amount of specific borrowings. The effectiveinterest rate is the rate at which the estimated future cash flows during the period of expected durationof the borrowings or applicable shorter period are discounted to the initial amount of the borrowings.
(16) Intangible assets
Intangible assets, mainly including land use rights, patents and proprietary technologies, exploitationrights and others, are measured at cost.
(a) Land use rights
Land use rights are amortised on the straight-line basis over their approved use period of 30 to 70years. If the acquisition costs of the land use rights and the buildings located thereon cannot bereasonably allocated between the land use rights and the buildings, all of the acquisition costs arerecognised 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 theexploitation 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 isperformed at each year-end, with adjustment made as appropriate.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Intangible assets (Cont’d)
(e) Research and development
The expenditure on an internal research and development project is classified into expenditure on theresearch phase and expenditure on the development phase based on its nature and whether there ismaterial uncertainty that the research and development activities can form an intangible asset at endof the project.
Expenditure on the research phase related to planned survey, evaluation and selection for research onmanufacturing technique is recognised in profit or loss in the period in which it is incurred. Prior tomass production, expenditure on the development phase related to the design and testing phase inregards to the final application of manufacturing technique is capitalised only if all of the followingconditions 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 lossin the period in which they are incurred. Development costs previously recognised as expenses arenot recognised as an asset in a subsequent period. Capitalised expenditure on the developmentphase 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.
(f) Impairment of intangible assets
Book value of intangible assets is reduced to the recoverable amount when the recoverable amount isbelow book value.
(17) Long-term prepaid expenses
Long-term prepaid expenses include the expenditures that have been incurred but should berecognised as expenses over more than one year in the current and subsequent periods. Long-termprepaid expenses are amortised on the straight-line basis over the expected beneficial period and arepresented at actual expenditure net of accumulated amortisation.
(18) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives and long-term equityinvestments in joint ventures and associates are tested for impairment if there is any indication that theassets may be impaired at the balance sheet date; intangible assets not ready for their intended useare tested at least annually for impairment, irrespective of whether there is any indication that theymay be impaired. If the result of the impairment test indicates that the recoverable amount of an assetis less than its carrying amount, a provision for impairment and an impairment loss are recognised forthe amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverableamount is the higher of an asset’s fair value less costs to sell and the present value of the future cashflows expected to be derived from the asset. Provision for asset impairment is determined andrecognised on the individual asset basis. If it is not possible to estimate the recoverable amount of anindividual asset, the recoverable amount of a group of assets to which the asset belongs is determined.A group of assets is the smallest group of assets that is able to generate independent cash inflows.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(18) Impairment of long-term assets (Cont’d)
Goodwill that is separately presented in the financial statements is tested at least annually forimpairment, irrespective of whether there is any indication that it may be impaired. In conducting thetest, book value of goodwill is allocated to the related asset groups or groups of asset groups whichare 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 theallocated goodwill, is lower than its book value, the corresponding impairment loss is recognised. Theimpairment loss is first deducted from book value of goodwill that is allocated to the asset group orgroup of asset groups, and then deducted from book values of other assets within the asset groups orgroups 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 inthe subsequent periods.
(19) Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits, terminationbenefits and other long-term employee benefits provided in various forms of consideration in exchangefor service rendered by employees or compensations for the termination of employment relationship.
(a) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staffwelfare, medical care, work injury insurance, maternity insurance, housing funds, labour union funds,employee education funds and paid short-term leave, etc. The employee benefit liabilities arerecognised 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 are non-monetary benefits shall be measured at fair value.
(b) Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or definedbenefit plans. Defined contribution plans are post-employment benefit plans under which the Grouppays fixed contributions into a separate fund and will have no obligation to pay further contributions;and defined benefit plans are post-employment benefit plans other than defined contribution 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.
(c) Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by localauthorities of Ministry of Human Resource and Social Security. Monthly payments of premiums on thebasic pensions are calculated according to prescribed bases and percentage by the relevant localauthorities. When employees retire, local labour and social security institutions have a duty to pay thebasic pension insurance to them. The amounts based on the above calculations are recognised asliabilities in the accounting period in which the service has been rendered by the employees, with acorresponding charge to the profit or loss for the current period or the cost of relevant assets..
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Employee benefits (Cont’d)
(d) Termination benefits
The Group provides compensation for terminating the employment relationship with employees beforethe end of the employment contracts or as an offer to encourage employees to accept voluntaryredundancy before the end of the employment contracts. The Group recognises a liability arising fromcompensation for termination of the employment relationship with employees, with a correspondingcharge to profit or loss at the earlier of the following dates: 1) when the Group cannot unilaterallywithdraw the offer of termination benefits because of an employment termination plan or a curtailmentproposal; 2) when the Group recognises costs or expenses related to the restructuring that involvesthe payment of termination benefits.
The termination benefits expected to be paid within one year since the balance sheet date areclassified as current liabilities.
(20) Dividend distribution
Cash dividend is recognised as a liability for the period in which the dividend is approved by theshareholders’ meeting.
(21) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differencesarising between the tax bases of assets and liabilities and their carrying amounts (temporarydifferences). Deferred tax asset is recognised for the deductible losses that can be carried forward tosubsequent 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. Nodeferred tax asset or deferred tax liability is recognised for the temporary differences resulting from theinitial recognition of assets or liabilities due to a transaction other than a business combination, whichaffects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date,deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to applyto the period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses andtax credits to the extent that it is probable that taxable profit will be available in the future against whichthe deductible temporary differences, deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments insubsidiaries and associates, except where the Group is able to control the timing of reversal of thetemporary difference, and it is probable that the temporary difference will not reverse in theforeseeable future. When it is probable that the temporary differences arising from investments insubsidiaries and associates will be reversed in the foreseeable future and that the taxable profit will beavailable in the future against which the temporary differences can be utilised, the correspondingdeferred tax assets are recognised.
Deferred tax assets and liabilities that meet the following conditions at the same time are listed as thenet amount after offset:
? Deferred income tax assets and deferred income tax liabilities are related to the same tax payer
within the Group and the same taxation authority; and,? That tax entity within the Group has a legally enforceable right to offset current tax assets
against current tax liabilities.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(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 otherequity instruments as a consideration in return for services.
Equity-settled share-based payment The Group‘s stock optionstock option plan is the equity-settledshare-based payment in exchange of employees' services and is measured at the fair value of theequity instruments at grant date. The equity instruments are exercisable after services in vestingperiod 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 equityinstruments at grant date based on the best estimate of the number of exercisable equity instruments,and capital surplus is increased accordingly. The Group makes the best estimate of the number ofvesting equity instruments based on the latest obtained changes in the number of vested employees,whether the required performance conditions are met, and other follow-up information.If thesubsequent information indicates the number of exercisable equity instruments differs from theprevious estimate, an adjustment is made and, on the exercise date, the estimate is revised to equalthe number of actual vested equity instruments.
In the period at which performance conditions and term of service are met, the relevant cost andexpenses of equity-settled payment should be recognized, and capital surplus is increased accordingly.Before the exercise date, the accruing amounts of equity-settled payments on balance sheet datereflect the part of expired waiting period and optimal estimation for the number of the Company finalvested equity instruments.
If the non-market conditions and term of service are not met so that share-based payment fail toexercise, the costs and expenses on this portion should not be recognized. If the share-based payment agreement sets out the market conditions and term of non-vesting, as long asperformance conditions and term of service are met, it is should be regard as exercisable right, nomatter the market conditions 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 withthe unmodified terms. In addition, the increase of the fair value of the authorized equity instruments, orthe beneficial changes to the employees on the modification date, the increase of service areconfirmed.
If the equity-settled payment is cancelled, the cancellation date shall be deemed as an expeditedexercise, and the unconfirmed amount shall be confirmed immediately. If the employee or other partyis 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 equityinstrument is confirm to replace the old equity instrument which is canceled in the authorization date ofthe new equity instrument, the new equity instrument should be disposed by using the sameconditions and terms of the old equity instrument for modifications.
(23) Revenue recognition
The Group recognises revenue at the consideration that the Group is entitled to charge as expectedwhen the Group has fulfilled the performance obligations in the contract, that is, the customer obtainscontrol over relevant goods or services.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(23) Revenue recognition (Cont’d)
(a) Sales of goods
The Group mainly sells flat and engineering glass, products related to solar energy, and electronicglass and displays. For domestic sales, the Group delivers the products to a certain place specified inthe contract. When the buyer takes over the goods, the Group recognises revenue. For export sales,the Group recognises the revenue when it finished clearing goods for export and deliver the goods onboard the vessel, or when the goods are delivered to a certain place specified in the contract. Thecredit period granted by the Group to customers is determined based on the customer's credit riskcharacteristics, consistent with industry practices, and there is no major financing component. TheGroup’s obligation to transfer goods to customers for consideration received or receivable fromcustomers is listed as contract liabilities.
Revenue is presented as the net amount after deducting sales discounts and sales returns.
(b) Rendering of services
The Group provides external consulting, loading, unloading, transportation and processing laborservices, and recognizes revenue within a period of time based on the progress of the completed labor.The progress of the completed labor is determined according to the proportion of the cost incurred tothe estimated total cost. On the balance sheet date, the Group re-estimates the progress of completedlabor services so that it can reflect changes in contract performance.
When the Group recognizes revenue based on the performance progress of the completed laborservices, the portion for which the Group has obtained the unconditional right to receive payments isrecognized as accounts receivable, and the remaining portion is recognized as contract assets, andthe Company measures the loss reserve of accounts receivable and contract assets. according to theexpected credit loss; If the contract price received or receivable by the Group exceeds the completedprogress, the excess is recognized as contract liabilities. The Group presents the contract assets andcontract liabilities under the same contract as a net amount.
(24) Provisions
Business restructuring, provisions for product warranties, loss contracts etc. are recognised when theGroup has a present obligation, it is probable that an outflow of economic benefits will be required tosettle the obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the relatedpresent obligation. Factors surrounding a contingency, such as the risks, uncertainties and the timevalue of money, are taken into account as a whole in reaching the best estimate of a provision. Wherethe effect of the time value of money is material, the best estimate is determined by discounting therelated future cash outflows. The increase in the discounted amount of the provision arising frompassage of time is recognised as interest expense.
Book value of provision is reviewed at each balance sheet date and adjusted to reflect the current bestestimate.
The provisions expected to be paid within one year since the balance sheet date are classified ascurrent liabilities.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to theGroup at nil consideration, including tax refund and financial subsidies, etc.
A government grant is recognised when there is a reasonable assurance that the grants will bereceived and the Group will comply with all attached conditions. Monetary government grants aremeasured at the amounts received or receivable. Non-monetary government grant are measured atfair value, if the fair value cannot be reliably obtained, it is measured at nominal amount.
The government grants related to assets refer to government grant obtained by enterprises and usedfor purchase and construction of long-term assets or formation of long-term asset in other ways. Thegovernment grants related to income refer to grants other than those related to assets.
For government grants related to income, where the grant is a compensation for related expenses orlosses to be incurred by the Group in the subsequent periods, the grant is recognised as deferredincome, and included in profit or loss over the periods in which the related costs are recognised; wherethe grant is a compensation for related expenses or losses already incurred by the Group, the grant isrecognised immediately in profit or loss for the current period.The company use the same method ofpresentation for similar government grants.
The ordinary activitiy government grants should be counted into operating profits; the governmentgrants which not belong ordinary activities should be counted inton non-operationg income.
(26) Leases
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is afinance lease. An operating lease is a lease other than a finance lease.
Lease payments under an operating lease are recognised on a straight-line basis over the period ofthe lease, and are either capitalised as part of the cost of related assets, or charged as an expense forthe current period.
Lease income under an operating lease is recognised as revenue on a straight-line basis over theperiod of the lease.
(27) Assets classified as held for sale
A non-current asset or a disposal group is classified as held for sale when all of the followingconditions are satisfied: (1) the non-current asset or the disposal group is available for immediate salein its present condition subject to terms that are traditionally and customary for sales; (2) the Grouphas made a resolution and obtained appropriate approval for disposal of the non-current asset or thedisposal group, and the transfer is to be completed within one year.
Non-current assets (except for financial assets, investment properties at fair value and deferred taxassets) that meet the recognition criteria for held for sale are recognised at the amount equal to thelower of the fair value less costs to sell and book value. The difference between fair value less costs tosell and carrying amount, should be presented as impairment loss.
Such non-current assets and assets included in disposal groups as classified as held for sale areaccounted for as current assets; while liabilities included in disposal groups classified as held for saleare accounted for as current liabilities, and are presented separately in the balance sheet.
A discontinued operation is a component of the Group that either has been disposed of or is classifiedas held for sale, and is separately identifiable operationally and for financial reporting purposes, andsatisfies one of the following conditions: (1) represents a separate major line of business or
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(27) Assets classified as held for sale (Cont’d)
geographical area of operations; (2) is part of a single coordinated plan to dispose of a separate majorline of business or geographical area of operations; and (3) is a subsidiary acquired exclusively with aview to resale.
The discontinued operation profits on income statement presentation have included the profits andloss of operation and disposal.
(28) Safety production costs
According to relevant regulations of the Ministry of Finance and National Administration of Work Safety,a subsidiary of the Group which is engaged in producing and selling polysilicon appropriates safetyproduction 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 safetyfacilities. The safety production costs are charged to costs of related products or profit or loss whenappropriated, and safety production costs in equity account are credited correspondingly. When usingthe special reserve, if the expenditures are expenses in nature, the expenses incurred are offsetagainst the special reserve directly when incurred. If the expenditures are capital expenditures, whenprojects are completed and transferred to fixed assets, the special reserve should be offset against thecost of fixed assets, and a corresponding accumulated depreciation are recognised. The fixed assetsare no longer be depreciated in future.
(29) Segment information
The Group identifies operating segments based on the internal organisation structure, managementrequirements and internal reporting system, and discloses segment information of reportablesegments which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1) thecomponent is able to earn revenue and incur expenses from its ordinary activities; (2) whose operatingresults are regularly reviewed by the Group’s management to make decisions about resources to beallocated to the segment and to assess its performance, and (3) for which the information on financialposition, operating results and cash flows is available to the Group. If two or more operating segmentshave similar economic characteristics and satisfy certain conditions, they are aggregated into onesingle operating segment.
(30) Critical accounting estimates and judgements
The Group continually Estimates the critical accounting estimates and key assumptions applied basedon historical experience and other factors, including expectations of future events that are believed tobe reasonable.
The critical accounting estimates and key assumptions that have a significant risk of possibly causinga material adjustment to book values of assets and liabilities within the next accounting year areoutlined below:
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements(Cont’d)
(a) Income tax
The Group is subject to Income tax in numerous jurisdictions. There are some transactions and eventsfor which the ultimate tax determination is uncertain during the ordinary course of business. Significantjudgement is required from the Group in determining the provision for Income tax in each of thesejurisdictions. Where the final identified outcome of these tax matters is different from the initially-recorded amount, such difference will impact the income tax expenses and deferred income tax in theperiod in which such determination is finally made.
(b) Deferred income tax
Estimates on deferred tax assets are based on estimates on amount of taxable income and applicabletax rate for every year. Realisation of deferred income tax are subject to sufficient taxable income thatare possible to be obtained by the Group in the future. Change of the future tax rate as well as thereversed time of temporary difference might have effects on tax expense (income) and the balance of
deferred tax assets or liabilities. Those estimates may also cause significant adjustment on deferredtax.
(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 anyindications of impairment. Management determines whether the long-term assets impaired or not byevaluating and analysing following aspects: (1) whether the event affecting assets impairment occurs;
(2) whether the expected obtainable present value of future cash flows is lower than the asset’scarrying amount by continually using the assets or disposal; and (3) whether the assumptions used inexpected obtainable present value of future cash flows are appropriate.
Various assumptions, including the discount rate and growth rate applied in the method of presentvalue of future cash flow, are required in evaluating the recoverable amount of assets. If theseassumptions cannot be conformed, the recoverable amount should be modified, and the long-termassets 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 fixedassets that have similar properties and functions. When there are differences between actually usefullife and previously estimation, management will adjust estimation to useful life of fixed assets. Thefixed assets would be written off or written down when fixed assets been disposed or becameredundant. Thus, the estimated result based on existing experience may be different from the actualresult of the next accounting period, which may cause major adjustment to book value of fixed assetson balance sheet.
(e) Goodwill impairment
Goodwill impairment reviews are undertaken annually or more frequently if events or changes incircumstances indicate a potential impairment. For the purpose of impairment testing, goodwillacquired in a business combination is allocated to each of the cash-generating units (“CGUs”), orgroups of CGUs, and future cash flow from each CGU or CGUs is forcasted and discounted withappropriate discount rate.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Significant changes in accounting policies and accounting estimates
New income standards The Ministry of Finance promulgated the Accounting Standards for BusinessEnterprises No.14-Income (Revised) in 2017 (hereinafter referred to as the "New Income Standards").The new financial instrument standards, when implemented, will mainly bring the following influencesto the Company’s financial statements in 2020,that is as follows.
(a) Revenue
| The contents and reasons of the changes in accounting policies | The line items affected | The amounts affected | |
| 1 January 2020 | |||
| Consolidated | Company | ||
| Due to the implementation of the new revenue standard, the Group reclassified the advances from customers relevant to service provision to contract liabilities and reclassified the advances received from customers sales VAT tax relevant to service provision to other current liabilities. | Contract liabilities | 262,026,497 | - |
| Other current liabilities | 30,777,314 | - | |
| Advances from customers | (292,803,811) | - | |
The impact of the implementation of the new income standards on items related to the 2020 financialstatements compared to the original income standards is as follows:
| The contents and reasons of the changes in accounting policies | The line items affected | The amounts affected | |
| 31 December 2020 | |||
| Consolidated | Company | ||
| Due to the implementation of the new revenue standard, the Group reclassified the advances from customers relevant to service provision to contract liabilities and reclassified the advances received from customers sales VAT tax relevant to service provision to other current liabilities. | Contract liabilities | 296,776,624 | - |
| Other current liabilities | 34,286,292 | - | |
| Advances from customers | (331,062,916) | - | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Significant changes in accounting policies and accounting estimates(Cont’d)
The implementation of the above-mentioned revised standards has no impact on the equityattributable to shareholders of the parent company and the equity of minority shareholders in theconsolidated financial statements of the Group.
| The contents and reasons of the changes in accounting policies | The line items affected | The amounts affected | |
| 31 December 2020 | |||
| Consolidated | Company | ||
| Due to the implementation of the new revenue standard, the Due to the implementation of the New Income Standards, the Company reclassified the contract performance costs related to freight cost as cost | Cost of revenue | 134,209,048 | - |
| Selling expenses | (134,209,048) | - | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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3 Taxation
(1) The main categories and rates of taxes applicable to the Group are set out below:
| Category | Taxable basis | Tax rate |
| Enterprise income tax | Taxable income | 0% to 25% |
| Value-added tax (“VAT”) (a) | Taxable value-added amount (Tax payable is calculated using the taxable sales amount multiplied by the applicable tax rate less deductible VAT input of the current period) | 1% to 13% |
| City maintenance and construction tax | VAT paid | 1% to 7% |
| Educational surcharge | VAT paid | 3% to 5% |
Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported andthe refund rate is 0%-13%.
(2) Tax incentives
The main tax incentives the Group is entitled to are as follows:
Tianjin CSG Energy-Saving Glass Co., Ltd. (“Tianjin Energy Conservation”) passed review on ahigh and new tech enterprise in 2018 and obtained the Certificate of High and New Tech Enterprise,the period of validity is three years. It applies to 15% tax rate for three years since 2018.
Dongguan CSG Architectural Glass Co., Ltd. (“Dongguan CSG”) passed review on a high and newtech enterprise in 2019 and obtained the Certificate of High and New Tech Enterprise, the period ofvalidity is three years. It applies to 15% tax rate for three years since 2019.
Wujiang CSG East China Architectural Glass Co., Ltd. (“Wujiang CSG Engineering”) passed review ona high and new tech enterprise in 2020 and obtained the Certificate of High and New Tech Enterprise,the period of validity is three years. It applies to 15% tax rate for three years since 2020.
Dongguan CSG Solar Glass Co., Ltd. (“Dongguan CSG Solar”) passed review on a high and newtech enterprise in 2020 and obtained the Certificate of High and New Tech Enterprise, the period ofvalidity is three years. It applies to 15% tax rate for three years since 2020.
Yichang CSG Polysilicon Co., Ltd. (“Yichang CSG Polysilicon”) passed review on a high and new techenterprise in 2020 and obtained the Certificate of High and New Tech Enterprise, the period of validityis three years. It applies to 15% tax rate for three years since 2020.
Dongguan CSG PV-tech Co., Ltd. (“Dongguan CSG PV-tech”) passed review on a high and newtech enterprise in 2019 and obtained the Certificate of High and New Tech Enterprise, the period ofvalidity is three years. It applies to 15% tax rate for three years since 2019.
Hebei Shichuang Glass Co., Ltd. (“Hebei Shichuang”) passed review on a high and new techenterprise in 2019 and obtained the Certificate of High and New Tech Enterprise, the period of validityis three years. It applies to 15% tax rate for three years since 2019.
Wujiang CSG Glass Co., Ltd. (“Wujiang CSG”) passed review on a high and new tech enterprise in2020, and obtained the Certificate of High and New Tech Enterprise, and the period of validity wasthree years. It applies to 15% tax rate for three years since 2020.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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3 Taxation (Cont’d)
(2) Tax incentives(Cont’d)
Xianning CSG Glass Co Ltd. (“Xianning CSG”) passed review on a high and new tech enterprise in2020, and obtained the Certificate of High and New Tech Enterprise, and the period of validity wasthree years. It applies to 15% tax rate for three years since 2020.
Xianning CSG Energy-Saving Glass Co., Ltd. (“Xianning CSG Energy-Saving”) passed review on ahigh and new tech enterprise in 2018, and obtained the Certificate of High and New Tech Enterprise,and the period of validity was three years. It applies to 15% tax rate for three years since 2018.
Yichang CSG Photoelectric Glass Co., Ltd. (“Yichang CSG Photoelectric”) passed review on a highand new tech enterprise in 2018, and obtained the Certificate of High and New Tech Enterprise, andthe period of validity was three years. It applies to 15% tax rate for three years since 2018.
Yichang CSG Display Co., Ltd (“Yichang CSG Display”) passed review on a high and new techenterprisein 2018, and obtained the Certificate of High and New Tech Enterprise, and the period ofvalidity was three years. It applies to 15% tax rate for three years since 2018.
Qingyuan CSG New Energy-Saving Materials Co., Ltd. (“Qingyuan CSG Energy-Saving”) passedreview on a high and new tech enterprise in 2019, and obtained the Certificate of High and New TechEnterprise, and the period of validity was three years. It applies to 15% tax rate for three years since2019.
Hebei CSG Glass Co Ltd. (“Hebei CSG”) was recognised as a high and new tech enterprise in 2018,and obtained the Certificate of High and New Tech Enterprise, and the period of validity was threeyears. It applies to 15% tax rate for three years since 2018.
Shenzhen CSG Applied Technology Co Ltd. (“Shenzhen Technology”) was recognised as a high andnew tech enterprise in 2018, and obtained the Certificate of High and New Tech Enterprise, and theperiod of validity was three years. It applies to 15% tax rate for three years since 2018.
Xianning CSG Photoelectric Glass Co., Ltd. (“Xianning Photoelectric”) passed review on a high andnew tech enterprise in 2019 and obtained the Certificate of High and New Tech Enterprise, the periodof validity is three years. It applies to 15% tax rate for three years since 2019.
Sichuan CSG Energy Conservation Glass Co., Ltd. (“Sichuan CSG Energy Conservation”) obtainsenterprise income tax preferential treatment for Western Development, and temporarily calculatesenterprise income tax at a tax rate of 15% for current year.
Chengdu CSG Glass Co., Ltd. (“Chengdu CSG”) obtains enterprise income tax preferential treatmentfor Western Development, and temporarily calculates enterprise income tax at a tax rate of 15% forcurrent year.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 128 -
3 Taxation (Cont’d)
(2) Tax incentives(Cont’d)
Qingyuan CSG New Energy Co., Ltd. (“Qingyuan CSG New Energy”), Suzhou CSG PV Energy Co.,Ltd. (“Suzhou CSG PV Energy”), Jiangsu Wujiang CSG New Energy Co., Ltd. (“Wujiang CSG NewEnergy”), and Yichang CSG New Energy Co., Ltd. (“Yichang CSG New Energy”), Zhangzhou CSGKibing PV Energy Co., Ltd. (“Zhangzhou CSG”), Heyuan CSG Kibing PV Energy Co., Ltd. (“HeyuanCSG”), Shaoxing CSG Kibing PV Energy Co., Ltd. (“Shaoxing CSG”) Xianning CSG PV Energy Co.,Ltd.(“Xianning CSG PV Energy”) and Zhanjiang CSG New Energy Co., Ltd. (“Zhanjiang CSG PVEnergy””),are public infrastructure project specially supported by the state in accordance with theArticle 87 in Implementing Regulations of the Law of the People's Republic of China on EnterpriseIncome Tax, and can enjoy the tax preferential policy of “three-year exemptions and three-year halves”,that is, starting from the tax year when the first revenue from production and operation occurs, theenterprise income tax is exempted from the first to the third year, while half of the enterprise incometax is collected for the following three years.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 129 -
4 Notes to the consolidated financial statements
(1) Cash at bank and on hand
| 31 December 2020 | 31 December 2019 | ||
| Cash on hand | 2,725 | 4,268 | |
| Cash at bank | 1,463,954,484 | 1,781,830,762 | |
| Other cash balances | 661,831,694 | 205,145,388 | |
| 2,125,788,903 | 1,986,980,418 | ||
| Including: Total overseas deposits | 8,610,575 | 40,403,719 |
Other cash balances include margin deposits, amounting to RMB1,760,707 (31 December 2019:
RMB155,145,388), which is restricted cash.
(2) Notes receivable
| 31 December 2020 | 31 December 2019 | ||
| Trade acceptance notes | 207,966,892 | 297,023,380 | |
| 207,966,892 | 297,023,380 |
| (a) | As at 31 December 2020, notes receivable which have been endorsed or discounted by the Group but are not yet due are as follows: | |||
| Derecognised | Not derecognised | |||
| Trade acceptance notes | 94,174,824 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 130 -
4 Notes to the consolidated financial statements (Cont’d)
(3) Accounts receivable
| 31 December 2020 | 31 December 2019 | ||
| Accounts receivable | 714,849,669 | 678,240,286 | |
| Less: Provision for bad debts | (33,382,536) | (28,559,109) | |
| 681,467,133 | 649,681,177 |
(a) The ageing of accounts receivable is analysed as follows:
| 31 December 2020 | 31 December 2019 | ||
| Within 1 year | 613,693,950 | 618,151,739 | |
| 1 to 2 years | 51,071,700 | 38,737,774 | |
| 2 to 3 years | 30,876,459 | 13,140,899 | |
| Over 3 years | 19,207,560 | 8,209,874 | |
| 714,849,669 | 678,240,286 |
(b) Accounts receivable are analysed by category as follows:
| 31 December 2020 | 31 December 2019 | ||||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||||
| Amount | % of total balance | Provision for bad debts | % | Amount | % of total balance | Provision for bad debts | % | ||||
| Provision for bad debts by groupings | |||||||||||
| Portfolio 1 | 682,344,324 | 95% | (13,641,135) | 2% | 662,934,109 | 98% | (13,252,932) | 2% | |||
| Portfolio 2 | 223,200 | - | (4,464) | 2% | - | - | - | - | |||
| Provided for bad bebts individually | 32,282,145 | 5% | (19,736,937) | 61% | 15,306,177 | 2% | (15,306,177) | 100% | |||
| 714,849,669 | 100% | (33,382,536) | 5% | 678,240,286 | 100% | (28,559,109) | 4% | ||||
(c) For accounts receivable provided for bad debts by portfolio, the expected credit impairment loss for
the portfolio is as follows:
| 31 December 2020 | 31 December 2019 | ||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||
| Amount | Amount | % | Amount | Amount | % | ||||
| Portfolio 1 | 682,344,324 | (13,641,135) | 2% | 662,934,109 | (13,252,932) | 2% | |||
| Portfolio 2 | 223,200 | (4,464) | 2% | - | - | - | |||
| 682,567,524 | (13,645,599) | 2% | 662,934,109 | (13,252,932) | 2% | ||||
(d) As at 31 December 2020, the bad debts of receivables was RMB 32,282,145 (31 December 2019:
RMB15,306,177) that to be provided individually. It mainly represented the goods receivable due froma client of the part of subsidiary, due to business dispute or deterioration of customer operations, theprovision for bad debts was fully or partially accrued.
(e) Accounts receivables were written off amount of RMB 297,202 for this year, (31 December 2019:
Nil ).
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 131 -
4 Notes to the consolidated financial statements (Cont’d)
(3) Accounts receivable (Cont’d)
(f) As at 31 December 2020, Total balances for the five largest accounts receivable set out as below:
| Balance | Provision for bad debts | Percentage in total accounts receivable balance | |||
| Total balances for the five largest accounts receivable | 219,024,315 | 4,380,486 | 31% |
(4) Receivables Financing
| 31 December 2020 | 31 December 2019 | ||
| Bank acceptance notes | 382,527,782 | 258,296,826 | |
| 382,527,782 | 258,296,826 |
| (a) | (4) As at 31 December 2020, receivables financing which have been endorsed or discounted by the Group but are not yet due are as follows: | |||
| Derecognised | Not derecognised | |||
| Bank acceptance notes | 2,163,905,352 | |||
(5) Advances to suppliers
(a) The ageing of prepayment is analysed below:
| 31 December 2020 | 31 December 2019 | ||||||
| Amount | % of total balance | Amount | % of total balance | ||||
| Within 1 year | 84,647,719 | 99% | 76,048,960 | 97% | |||
| 1 to 2 years | 1,162,756 | 1% | 2,107,931 | 3% | |||
| 2 to 3 years | 118,166 | - | 39,136 | - | |||
| 85,928,641 | 100% | 78,196,027 | 100% | ||||
As at 31 December 2020, advances to suppliers over 1 year with a carrying amount of RMB1,280,922(31 December 2019: RMB 2,147,067) were mainly prepaid to supplier for materials, which were notfully settled since the materials had not been received.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 132 -
4 Notes to the consolidated financial statements (Cont’d)
(5) Advances to suppliers (Cont’d)
(b) As at 31 December 2020, the five largest prepayment are analysed as follows:
| Balance | Percentage in total advances to suppliers balance | ||
| Total balances for the five largest advances to suppliers | 43,679,706 | 51% |
(6) Other receivables
| 31 December 2020 | 31 December 2019 | ||
| Receivables from special fund for talent | 171,000,000 | 171,000,000 | |
| Refundable deposits | 6,723,194 | 11,767,626 | |
| Payments made on behalf of other parties | 18,672,346 | 15,337,999 | |
| Petty cash | 969,748 | 328,077 | |
| Advances to suppliers(i) | 10,366,164 | 11,710,142 | |
| Others | 9,615,428 | 8,486,056 | |
| 217,346,880 | 218,629,900 | ||
| Less: Provision for bad debts | (16,377,026) | (15,775,036) | |
| 200,969,854 | 202,854,864 |
(i) The subsidiaries of Yingde CBM Mining Co., Ltd. mainly prepaid to supplier for materials.This year, the
prepayments accounts are transferred to other receivables and the provision of the bad debts wasprovided individually in current year.
(a) The ageing of other receivables is analysed as follows:
| 31 December 2020 | 31 December 2019 | |||
| Within 1 year | 9,644,914 | 10,868,483 | ||
| 1 to 2 years | 5,528,931 | 6,159,195 | ||
| 2 to 3 years | 4,491,997 | 5,740,019 | ||
| 3 to 4 years | 2,154,911 | 957,121 | ||
| 4 to 5 years | 725,287 | 21,484,748 | ||
| Over 5 years | 194,800,840 | 173,420,334 | ||
| 217,346,880 | 218,629,900 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 133 -
4 Notes to the consolidated financial statements (Cont’d)
(6) Other receivables (Cont'd)
(b) Other receivables are analysed by category as follows:
| 31 December 2020 | 31 December 2019 | ||||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||||
| Amount | % of total balance | Provision for bad debts | % | Amount | % of total balance | Provision for bad debts | % | ||||
| Provision for bad debts by groupings | |||||||||||
| Portfolio 1 | 205,106,845 | 94% | (4,136,991) | 2% | 206,596,853 | 94% | (4,138,582) | 2% | |||
| Provided for bad bebts individually | 12,240,035 | 6% | (12,240,035) | 100% | 12,033,047 | 6% | (11,636,454) | 97% | |||
| 217,346,880 | 100% | (16,377,026) | 8% | 218,629,900 | 100% | (15,775,036) | 7% | ||||
(c) The reason for the bad debts was provided individually as the payment will not be recoverable due to
long aging time.
(d) For other receivables provided for bad debts by portfolio, the expected credit impairment loss for the
portfolio is as follows:
| 31 December 2020 | 31 December 2019 | ||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||
| Amount | Amount | % | Amount | Amount | % | ||||
| Portfolio 1 | 205,106,845 | (4,136,991) | 2% | 206,596,853 | (4,138,582) | 2% | |||
| 205,106,845 | (4,136,991) | 2% | 206,596,853 | (4,138,582) | 2% | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 134 -
4 Notes to the consolidated financial statements (Cont’d)
(6) Other receivables (Cont'd)
(e) Provision for bad debts
(f) As at 31 December 2020, the top 5 largest other receivables are analysed as bellow:
| Nature of business | Balance | Ageing | Percentage in total other receivables balance | Provision for bad debts | ||
| Company A | Independent third party | 171,000,000 | Over 5Years | 79% | 3,420,000 | |
| Governmental departmentB | Independent third party | 11,067,754 | Over 5Years | 5% | 221,355 | |
| Company C | Independent third party | 10,366,164 | Over 5Years | 5% | 10,366,164 | |
| Company D | Independent third party | 2,397,512 | 1 to 3years | 1% | 47,950 | |
| Company E | Independent third party | 1,800,000 | 3 to 4 years | 1% | 36,000 | |
| 196,631,430 | 91% | 14,091,469 |
| bad debts | Stage 1 | Stage 2 | Stage 3 | 31 December 2019 | ||||
| Expected credit losses in the following 12 months (grouping) | Lifetime expected credit losses (credit unimpaired) | Lifetime expected credit losses (credit impaired)） | Total | |||||
| 1 January 2020 | 4,138,582 | - | 11,636,454 | 15,775,036 | ||||
| Amounts in current year | - | - | - | - | ||||
| ——Transferred stage 2 | - | - | - | - | ||||
| ——Transferred stage 3 | - | - | - | - | ||||
| —— Reversed stage 2 | - | - | - | - | ||||
| —— Reversed stage 1 | - | - | - | - | ||||
| Increased in current year | 374,387 | - | 1,550,966) | 1,925,353 | ||||
| Reversed in current year | (375,978) | - | (947,385) | (1,323,363) | ||||
| Disposal in current year | - | - | - | - | ||||
| Write-off in current year | - | - | - | - | ||||
| Other movements | - | - | - | - | ||||
| 31 December 2020 | 4,136,991 | - | 12,240,035 | 16,377,026 | ||||
| 4,136,991 | 12,240,035 | 16,377,026 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 135 -
4 Notes to the consolidated financial statements (Cont’d)
(7) Inventories
(a) Inventories are summarised by category as follows:
| 31 December 2020 | 31 December 2019 | ||||||||||
| Carrying amount | Provision for decline in the value of inventories | Carrying amount | Carrying amount | Provision for decline in the value of inventories | Carrying amount | ||||||
| Raw materials | 274,659,097 | (1,756,185) | 272,902,912 | 227,091,252 | (1,930,091) | 225,161,161 | |||||
| Work in progress | 28,355,865 | - | 28,355,865 | 31,568,189 | - | 31,568,189 | |||||
| Finished goods | 479,482,759 | (9,369,218) | 470,113,541 | 521,700,720 | (3,873,252) | 517,827,468 | |||||
| Turnover materials | 44,603,984 | (819,984) | 43,784,000 | 38,315,093 | (550,221) | 37,764,872 | |||||
| 827,101,705 | (11,945,387) | 815,156,318 | 818,675,254 | (6,353,564) | 812,321,690 | ||||||
(b) Provision for decline in the value of inventories are analysed as follows:
| 31 December 2019 | Increase in current year | Reversal in current year | 31 December 2020 | ||||
| Raw materials | 1,930,091 | 270,925 | (444,831) | 1,756,185 | |||
| Finished goods | 3,873,252 | 9,354,435 | (3,858,469) | 9,369,218 | |||
| Turnover materials | 550,221 | 269,763 | - | 819,984 | |||
| 6,353,564 | 9,895,123 | (4,303,300) | 11,945,387 |
(c) 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 | ||
| Finished goods | The drop in product prices results in the difference as the net realizable value is lower than the book value | Sold | |
| Raw materials | The amount of book value less net realisable value due to sluggish or damaged raw materials | Used | |
| Turnover materials | The amount of book value less net realisable value due to sluggish or damaged raw materials | Used |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 136 -
4 Notes to the consolidated financial statements (Cont’d)
(8) Other current assets
| 31 December 2020 | 31 December 2019 | ||
| VAT to be offset | 110,350,299 | 110,370,231 | |
| Enterprise income tax prepaid | 17,508,242 | 18,012,235 | |
| VAT input to be recognised | 12,106,681 | 19,613,465 | |
| Entrusted loan | - | 300,000,000 | |
| Others | 66,322 | - | |
| 140,031,544 | 447,995,931 |
(9) Investment properties
| Buildings and Land use rights | ||
| 31 December 2019 | ||
| Increased in current year： | ||
| Transfer from fixed assets and intangible assets in the current year | 203,173,300 | |
| Fair value movements | 179,911,200 | |
| 31 December 2020 | 383,084,500 |
(i) On July 7, 2020, the ninth interim meeting of the board of directors of the company resolved to
consider and approve the "Proposal on Converting Part of Self-Use Properties to InvestmentInvestment Properties", and decided to change the use of certain self-use buildings and relatedland use rights to Lease out to obtain rental income.
On the conversion date, the portion of the fair value exceeding the book value is deducted fromthe deferred income tax liabilities due to taxation differences and included in othercomprehensive income.
In 2020, the impact of changes in the fair value of investment property on the company'scurrent profit and loss is RMB 179,911,200.
As of 31 December 2020, there was no investment property secured by company..
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 137 -
4 Notes to the consolidated financial statements (Cont’d)
(10) Fixed assets
| Buildings | Machinery and equipment | Moto rvehicles and others | Total | ||||
| Cost | |||||||
| 31 December 2019 | 3,900,630,113 | 11,813,659,817 | 222,517,407 | 15,936,807,337 | |||
| Increase in current year | |||||||
| Acquisition | 1,028,289 | 58,988,168 | 22,587,282 | 82,603,739 | |||
| Transfers from construction in progress | 224,835,657 | 1,536,894,370 | 6,767,152 | 1,768,497,179 | |||
| Decrease in current year | |||||||
| Disposal or retirement | - | (39,718,908) | (11,157,085) | (50,875,993) | |||
| Transfer to construction in progress | (149,539,330) | (1,350,729,847) | (637,414) | (1,500,906,591) | |||
| Others | (41,037,039) | (9,143,295) | (12,201) | (50,192,535) | |||
| 31 December 2020 | 3,935,917,690 | 12,009,950,305 | 240,065,141 | 16,185,933,136 | |||
| Accumulated depreciation | |||||||
| 31 December 2019 | 931,980,928 | 4,611,711,739 | 214,066,407 | 5,757,759,074 | |||
| Increase in current year | |||||||
| Provision | 118,425,705 | 726,157,137 | 18,825,740 | 863,408,582 | |||
| Decrease in current year | |||||||
| Disposal or retirement | - | (33,586,495) | (10,893,344) | (44,479,839) | |||
| Transfer to construction in progress | (22,615,651) | (322,137,730) | (345,585) | (345,098,966) | |||
| Others | (27,118,329) | (107,789) | (568) | (27,226,686) | |||
| 31 December 2020 | 1,000,672,653 | 4,982,036,862 | 221,652,650 | 6,204,362,165 | |||
| Provision for impairment loss | |||||||
| 31 December 2019 | 14,224,161 | 381,739,978 | 46,823 | 396,010,962 | |||
| Increase in current year | |||||||
| Provision | 20,742,526 | 407,360,427 | 30,020 | 428,132,973 | |||
| Others | - | 117,613,668 | - | 117,613,668 | |||
| Decrease in current year | |||||||
| Disposal or retirement | - | (2,378,007) | - | (2,378,007) | |||
| Transfer to construction in progress | - | (103,453,194) | - | (103,453,194) | |||
| 31 December 2020 | 34,966,687 | 800,882,872 | 76,843 | 835,926,402 | |||
| Book value | |||||||
| 31 December 2020 | 2,900,278,350 | 6,227,030,571 | 18,335,648 | 9,145,644,569 | |||
| 31 December 2019 | 2,954,425,024 | 6,820,208,100 | 8,404,177 | 9,783,037,301 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 138 -
4 Notes to the consolidated financial statements (Cont’d)
(10) Fixed assets (Cont'd)
(a) Fixed assets with pending certificates of ownership
| Carrying amount | Reasons for not yet obtaining certificates of title | |
| Buildings | 682,255,975 | Have submitted the required documents and are in the process of application, or the related land use right certificate pending |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 139 -
4 Notes to the consolidated financial statements (Cont’d)
(11) Construction in progress
| 31 December 2020 | 31 December 2019 | ||||||||||
| Carrying amount | Provision for impairment loss | Carrying amount | Carrying amount | Provision for impairment loss | Carrying amount | ||||||
| Yichang CSG polysilicon tech-innovation project | 1,535,667,571 | (594,037,334) | 941,630,237 | 1,532,811,638 | (375,097,200) | 1,157,714,438 | |||||
| Qingyuan CSG Phase I Technological Transformation Project | 413,852,963 | - | 413,852,963 | - | - | - | |||||
| Dongguan Photovoltaic Building B 450MWPERC battery technology upgrade project | 204,801,994 | - | 204,801,994 | - | - | - | |||||
| Dongguan Solar Energy Phase I and II Renewal Project | 51,472,490 | (12,749,513) | 38,722,977 | 78,970,995 | (40,248,018) | 38,722,977 | |||||
| Zhaoqing CSG High-end Energy-saving Glass Production Line Project | 47,026,508 | - | 47,026,508 | - | - | - | |||||
| Sapphire Project for LED | 32,420,412 | (32,420,412) | - | 32,420,412 | (32,420,412) | - | |||||
| Yichang Display Device Company Flat Panel Display Project | 44,013,628 | - | 44,013,628 | 366,268,866 | (14,160,474) | 352,108,392 | |||||
| Anhui Fengyang Solar Energy Equipment Manufacturing Base Project | 15,039,984 | - | 15,039,984 | - | - | - | |||||
| Dongguan solar energy processing production line project | 5,239,399 | - | 5,239,399 | ||||||||
| Wujiang Float Processing Production Line Project | 3,572,478 | - | 3,572,478 | - | - | - | |||||
| Zhaoqing CSG High-end Automobile Glass Production Line Project | 3,403,090 | - | 3,403,090 | - | - | - | |||||
| Anhui Fengyangnian Quartz Sand Construction Project | 1,775,552 | - | 1,775,552 | - | - | - | |||||
| Qingyuan CSG ultra-white electronic glass and ultra-white special glass production line project | - | - | - | 88,706,261 | - | 88,706,261 | |||||
| Dongguan Photovoltaic Building A PERC Battery Technology Upgrade Project | - | - | - | 67,981,191 | - | 67,981,191 | |||||
| Qingyuan Quartz Material Processing Production Line Project | - | - | - | 34,172,703 | - | 34,172,703 | |||||
| Wujiang float glass environmental protection renovation project | - | - | - | 10,281,838 | - | 10,281,838 | |||||
| Others | 174,301,801 | - | 174,301,801 | 152,858,218 | (405,983) | 152,452,235 | |||||
| 2,532,587,870 | (639,207,259) | 1,893,380,611 | 2,364,472,122 | (462,332,087) | 1,902,140,035 | ||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 140 -
4 Notes to the consolidated financial statements (Cont’d)
(11) Construction in progress (Cont'd)
(a) Changes in major construction projects
| Project name | Budget | 31 December 2019 | Increase in current year | Transfer to fixed assets in current year | Other decreases in current year | 31 December 2020 | Proportion between engineering input and budget (i) | Amount of borrowing costs capitalised | Including: Amount of borrowing costs capitalised in 2019 | Capitalisation rate for in current yea | Source of fund | ||||||||||
| Yichang CSG Polysilicon Technical Transformation Project | 49,520,000 | 1,532,811,638 | 2,855,933 | - | - | 1,535,667,571 | 98% | - | - | - | Internal fund and bank loan | ||||||||||
| Qingyuan CSG Phase I Technological Transformation Project | 217,690,000 | - | 426,308,753 | (242,276) | (12,213,514) | 413,852,963 | 3% | - | - | - | Internal fund and bank loan | ||||||||||
| Dongguan Photovoltaic Building B 450MWPERC battery technology upgrade project | 100,990,000 | - | 211,570,794 | - | (6,768,800) | 204,801,994 | - | - | - | - | Internal fund and bank loan | ||||||||||
| Dongguan Solar Energy Phase I and II Renewal Project | 396,410,000 | 78,970,995 | - | - | (27,498,505) | 51,472,490 | 80% | - | - | - | Internal fund | ||||||||||
| Zhaoqing CSG High-end Energy-saving Glass Production Line Project | 500,000,000 | - | 47,739,871 | (713,363) | - | 47,026,508 | 10% | 90,567 | 90,567 | 3.80% | Internal fund and bank loan | ||||||||||
| Sapphire Project for LED | 35,000,000 | 32,420,412 | - | - | 32,420,412 | 93% | 4,650,543 | - | - | Internal fund and bank loan | |||||||||||
| Yichang Display Device Company Flat Panel Display Project | 1,970,000,000 | 366,268,866 | 32,578,332 | (354,833,570) | - | 44,013,628 | 90% | 11,560,142 | - | - | Internal fund and bank loan | ||||||||||
| Anhui Fengyang Solar Energy Equipment Manufacturing Base Project | 3,739,020,000 | - | 15,039,984 | - | - | 15,039,984 | - | - | - | - | Non-public offering of shares and Internal fund and bank loan | ||||||||||
| Dongguan solar energy processing production line project | 76,140,000 | - | 5,239,399 | - | - | 5,239,399 | 7% | - | - | - | Internal fund and bank loan | ||||||||||
| Wujiang Float Processing Production Line Project | 158,850,000 | - | 3,572,478 | - | - | 3,572,478 | 2% | - | - | - | Internal fund and bank loan | ||||||||||
| Zhaoqing CSG High-end Automobile Glass Production Line Project | 609,830,000 | - | 3,403,090 | - | - | 3,403,090 | 1% | - | - | - | Internal fund and bank loan | ||||||||||
| Anhui Fengyangnian Quartz Sand Construction Project | 739,990,000 | - | 1,775,552 | - | - | 1,775,552 | - | - | - | - | Internal fund and bank loan | ||||||||||
| Qingyuan CSG ultra-white electronic glass and ultra-white special glass production line construction project | 785,000,000 | 88,706,261 | 528,298,501 | (617,004,762) | - | - | 79% | 11,066,250 | 8,889,552 | 5.02% | Internal fund and bank loan | ||||||||||
| Dongguan Photovoltaic Building A PERC Battery Technology Upgrade Project | 67,180,000 | 67,981,191 | - | (58,543,224) | (9,437,967) | - | 100% | 1,071,313 | 162,542 | 3.72% | Internal fund and bank loan | ||||||||||
| Qingyuan Quartz Material Processing Production Line Project | 36,478,048 | 34,172,703 | - | (31,773,011) | (2,399,692) | - | 98% | - | - | - | Internal fund | ||||||||||
| Wujiang float glass environmental protection renovation project | 50,300,000 | 10,281,838 | 2,009,207 | (12,291,045) | - | - | 61% | - | - | - | Internal fund | ||||||||||
| Yichang CSG Silicon Wafer Construction Project | 29,010,000 | - | 525,207,950 | (525,207,950) | - | - | 100% | - | - | - | Internal fund | ||||||||||
| Others | 1,131,630,461 | 152,858,218 | 195,517,691 | (167,887,978) | (6,186,130) | 174,301,801 | 295,421 | 20,020 | Internal fund and bank loan | ||||||||||||
| 10,693,038,509 | 2,364,472,122 | 2,001,117,535 | (1,768,497,179) | (64,504,608) | 2,532,587,870 | 28,734,236 | 9,162,681 |
(i) The proportion of project expenditure incurred to the budget is determined by the accumulative expenditures incurred divided by the total budget.
Some of the projects are transferred to property, plant, and equipment because the construction is completed.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 141 -
4 Notes to the consolidated financial statements (Cont’d)
(11) Construction in progress (Cont'd)
(b) Provision for impairment of construction in progress
| Project name | 31 December 2019 | provision increased in current year | provision from long-term assets trasfered in current year | Decrease in current year | 31 December 2020 | ||||
| Dongguan Solar Energy Phase I and II Renewal Project | 40,248,018 | - | - | (27,498,505) | 12,749,513 | ||||
| Flat Panel Display Project of Yichang Display Company | 14,160,474 | - | - | (14,160,474) | - | ||||
| Sapphire Project for LED | 32,420,412 | - | - | - | 32,420,412 | ||||
| Yichang CSG PolysiliconTechnological Transformation Project (i) | 375,097,200 | 218,940,134 | - | - | 594,037,334 | ||||
| Yichang CSG Silicon Wafer Construction Project | - | - | 103,453,194 | (103,453,194) | - | ||||
| Others | 405,983 | - | - | (405,983) | - | ||||
| 462,332,087 | 218,940,134 | 103,453,194 | (145,518,156) | 639,207,259 |
(i) Due to the fierce competition in the domestic polysilicon industry, by the‘section 8 of accountingstandards for business enterprises– impairments of assets’, the management of the companyidentified and ran impairment tests for some parts of related assets showing a sign of impairment,andthe provision for impairment was noted by company.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 142 -
4 Notes to the consolidated financial statements (Cont’d)
(12) Intangible assets and development expenditure (Cont'd)
| Land use rights | Patents and proprietary technologies | Exploitation rights | Others | Total | |
| Cost | |||||
| 31 December 2019 | 1,026,603,700 | 346,510,092 | 4,456,536 | 39,486,039 | 1,417,056,367 |
| Increased in current year | |||||
| Acquisition in current year | 87,344,000 | - | 115,829 | 2,442,298 | 89,902,127 |
| Transfers from development expenditure in current year | - | 65,885,948 | - | - | 65,885,948 |
| Decreased in current year | |||||
| Others | (9,433,931) | - | - | (57,265) | (9,491,196) |
| 31 December 2020 | 1,104,513,769 | 412,396,040 | 4,572,365 | 41,871,072 | 1,563,353,246 |
| Accumulated amortisation | |||||
| 31 December 2019 | 191,426,527 | 128,437,706 | 4,456,536 | 34,698,831 | 359,019,600 |
| Increased in current year | |||||
| Provision in current year | 22,635,053 | 32,857,408 | 5,815 | 2,804,908 | 58,303,184 |
| Decreased in current year | |||||
| Others | (6,841,165) | - | - | (57,108) | (6,898,273) |
| 31 December 2020 | 207,220,415 | 161,295,114 | 4,462,351 | 37,446,631 | 410,424,511 |
| Provision for impairment loss | |||||
| 31 December 2019 | - | 13,201,347 | - | 9,133 | 13,210,480 |
| 31 December 2020 | - | 13,201,347 | - | 9,133 | 13,210,480 |
| Carrying amount | |||||
| 31 December 2020 | 897,293,354 | 237,899,579 | 110,014 | 4,415,308 | 1,139,718,255 |
| 31 December 2019 | 835,177,173 | 204,871,039 | - | 4,778,075 | 1,044,826,287 |
As at 31 December 2020, ownership certificates of land use rights (“Land ownership Certificates”) forcertain land use rights of the Group with carrying amounts of approximately RMB 4,739,196 (cost: RMB6,586,712) had not yet been obtained by the Group (31 December 2019: carrying amount: RMB4,983,945, cost: RMB 6,586,712). The Company’s management are of the view that there is no legalrestriction for the Group to apply for and obtain the Land Ownership Certificates and has no adverseeffect on the Group’s business operation.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 143 -
4 Notes to the consolidated financial statements (Cont’d)
(12) Intangible assets and development expenditure (Cont'd)
Research expenditure is analysed below:
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | ||||||
| Recognised as expenses | Recognised as intangible assets | ||||||||
| Development costs | 85,240,356 | 29,798,999 | (65,885,948) | 49,153,407 | |||||
In 2020, the total amount of research and development expenditures of the Group was RMB434,641,497 (2019: RMB 440,884,641), including RMB 404,842,498 (2019: RMB 366,871,283)recorded in income statement for current period and the research and development expenditure withthe amount of RMB 65,885,948 recognised as intangible assets for the current period (2019:
63,322,259). As at 31 December 2020, the intangible assets arising from internal research anddevelopment accounted for 20.56% of total of intangible assets (31 December 2019: 18.03%).
(13) Goodwill
(a) Original Book value of goodwill
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | ||||
| Tianjin CSG Architectural Glass Co., Ltd. | 3,039,946 | - | - | 3,039,946 | |||
| Xianning CSG Photoelectric | 4,857,406 | - | - | 4,857,406 | |||
| Shenzhen CSG Display(i) | 389,494,804 | - | - | 389,494,804 | |||
| 397,392,156 | - | - | 397,392,156 |
(b) Impairment of goodwill
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | ||||
| Shenzhen CSG Display(i) | 82,294,400 | 81,722,063 | 164,016,463 | ||||
| 82,294,400 | 81,722,063 | 164,016,463 |
The calculation of the impairment used the higher conclusions of the two future measurement methodsof the present value of the expected future cash flow and the fair value minus the disposal expenses.The methods, assumptions, asset groups, etc. of the goodwill impairment test this year wasconsistented with the date of purchase and the previous year.
(i) Shenzhen CSG Display adopting the method of discounting future cashflow is with the following main
hypothesizes:
| 2020 | 2019 | ||
| income growth for the predicted period | -7%-21% | -1%-33% | |
| income growth for the stabilized period | 0% | 0% | |
| gross profit margin | 22%-27% | 20%-23% | |
| discount rate | 12% | 11% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 144 -
4 Notes to the consolidated financial statements (Cont’d)
(13) Goodwill (Cont'd)
Combining with the prediction of the future business and independent third party appraisalinstitution,the Company's management considered that the goodwill was impaired RMB 81,722,063as at 31 December 2020 (2019: RMB 61,622,400) .
(14) Deferred tax assets and liabilities
(a) Deferred tax assets before offsetting
| 31 December 2020 | 31 December 2019 | ||||||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | ||||
| Provision for asset impairments | 736,119,311 | 113,183,894 | 864,645,227 | 131,772,057 | |||
| Tax losses | 509,689,080 | 86,461,610 | 497,964,481 | 83,129,146 | |||
| Government grants | 175,322,807 | 27,297,200 | 182,452,278 | 27,367,842 | |||
| Accrued expenses | 7,184,597 | 1,077,690 | 30,032,597 | 4,504,890 | |||
| Depreciation of fixed assets | 18,804,540 | 2,822,699 | 19,790,300 | 2,968,545 | |||
| 1,447,120,335 | 230,843,093 | 1,594,884,883 | 249,742,480 | ||||
| Including: | |||||||||
| Expected to be reversed within one year (inclusive) | 11,504,204 | 18,423,315 | |||||||
| Expected to be reversed after one year | 219,338,889 | 231,319,165 | |||||||
| 230,843,093 | 249,742,480 | ||||||||
(b) Deferred tax liabilities before offsetting
| 31 December 2020 | 31 December 2019 | ||||||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | ||||
| Depreciation of fixed assets | 540,143,676 | 82,946,754 | 494,317,001 | 74,147,550 | |||
| Investment real estate differences between tax rules and accounting rules | 370,245,713 | 55,536,857 | - | - | |||
| 910,389,389 | 138,483,611 | 494,317,001 | 74,147,550 | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 145 -
4 Notes to the consolidated financial statements (Cont’d)
(14) Deferred tax assets and liabilities(Cont’d)
| Including: | ||||||||
| Expected to be reversed within one year (inclusive) | 7,100,568 | 13,617,606 | ||||||
| Expected to be reversed after one year | 131,383,043 | 60,529,944 | ||||||
| 138,483,611 | 74,147,550 | |||||||
(c) Deductible losses that are not recognised as deferred tax assets of the Group are analysed as follows:
| 31 December 2020 | 31 December 2019 | ||
| Deductible losses | 1,458,462,329 | 613,806,990 |
The deductible tax losses not recognised as deferred tax assets mainly represented the tax losses ofthe Company and some subsidiaries. Management was unable to expect that whether there weretaxable profit would be available in the future against which these deductible tax losses can be utilised,and accordingly, did not recognise the deferred tax assets.
(d) The tax losses for which no deferred tax assets were recognised will expire in the following years:
| 31 December 2020 | 31 December 2019 | ||
| 2020 | - | 94,430,197 | |
| 2021 | 111,625,585 | 111,625,585 | |
| 2022 | 83,303,539 | 83,303,539 | |
| 2023 | 146,238,837 | 146,238,837 | |
| 2024 | 178,208,832 | 178,208,832 | |
| 2025 | 939,085,536 | - | |
| 1,458,462,329 | 613,806,990 |
(e) The net balances of deferred tax assets and liabilities after offsetting are as follows:
| 31 December 2020 | 31 December 2019 | |||||||
| Net deferred tax assets or liabilities | Deductible/taxable temporary differences after offsetting | Net deferred tax assets or liabilities | Deductible/taxable temporary differences after offsetting | |||||
| Deferred tax assets | 194,979,414 | 1,214,859,410 | 205,792,587 | 1,301,885,596 | ||||
| Deferred tax liabilities | 102,619,932 | 678,128,464 | 30,197,657 | 201,317,714 | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 146 -
4 Notes to the consolidated financial statements (Cont’d)
(15) Other non-current assets
| 31 December 2020 | 31 December 2019 | ||
| Prepayment for equipment and project | 186,849,445 | 88,489,893 | |
| Prepayment for lease of land use rights | 6,510,000 | 31,910,000 | |
| 193,359,445 | 120,399,893 |
(16) Impairment of asset
| 31 December 2019 | Increase in current year | Other Increased in current year | Reversal in current year | Written off in current year | Other decreased in current year | 31 December 2020 | |
| Provision for bad debts | 44,334,145 | 17,652,957 | - | (11,930,338) | (297,202) | - | 49,759,562 |
| Including: Provision for bad debts of accounts receivable | 28,559,109 | 15,727,604 | - | (10,606,975) | (297,202) | - | 33,382,536 |
| Provision for bad debts of other receivables | 15,775,036 | 1,925,353 | - | (1,323,363) | - | - | 16,377,026 |
| Provision for decline in the value of inventories | 6,353,564 | 9,895,123 | - | (182,199) | (4,121,101) | - | 11,945,387 |
| Provision for impairment of fixed assets | 396,010,962 | 428,132,973 | 117,613,668 | - | (2,378,007) | (103,453,194) | 835,926,402 |
| Provision for impairment of construction in progress | 462,332,087 | 218,940,134 | 103,453,194 | - | (27,904,488) | (117,613,668) | 639,207,259 |
| Provision for impairment of intangible assets | 13,210,480 | - | - | - | - | - | 13,210,480 |
| Provision for impairment of goodwill | 82,294,400 | 81,722,063 | - | - | - | - | 164,016,463 |
| 1,004,535,638 | 756,343,250 | 221,066,862 | (12,112,537) | (34,700,798) | (221,066,862) | 1,714,065,553 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 147 -
4 Notes to the consolidated financial statements (Cont’d)
(17) Short-term borrowings
| 31 December 2020 | 31 December 2019 | ||
| Credit loan | 49,800,000 | 1,687,000,000 | |
| Guaranteed (i) | 298,095,571 | 543,969,137 | |
| Mortgage loan | 5,000,000 | 10,000,000 | |
| 352,895,571 | 2,240,969,137 |
(i) As at 31 December 2020, the Company provided its subsidiaries with guarantee for the short-
term borrowings of RMB 298,095,571 (31 December 2019: RMB 543,969,137).
As at 31 December 2020, the interest of short-term borrowings varied from 2.05% to 4.20% (31
December 2019: 2.95% to 4.79%).
(18) Notes payable
| 31 December 2020 | 31 December 2019 | ||
| Trade acceptance | 9,903,213 | - | |
| Bank acceptance notes | 134,947,979 | 232,063,968 | |
| 144,851,192 | 232,063,968 |
All notes payable are due within one year.
(19) Accounts payable
| 31 December 2020 | 31 December 2019 | ||
| Materials payable | 755,509,571 | 728,499,891 | |
| Equipment payable | 209,292,511 | 174,902,946 | |
| Construction expenses payable | 146,976,774 | 93,584,879 | |
| Freight payable | 70,011,499 | 68,149,272 | |
| Utilities payable | 49,441,605 | 28,835,685 | |
| Others | 6,601,091 | 6,559,106 | |
| 1,237,833,051 | 1,100,531,779 |
As at 31 December 2020, the amount of accounts payable over 1 year was approximatelyRMB120,702,169 (31 December 2019: RMB180,273,623), which mainly comprised payables forconstruction and equipment. As the construction work had not passed the final acceptance test yet, thebalance was not yet settled.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 148 -
4 Notes to the consolidated financial statements (Cont’d)
(20) Advances from customers
| 31 December 2020 | 31 December 2019 | ||
| Advances for goods from customers | - | 292,803,811 |
(21) Contract liabilities
| 31 December 2020 | 31 December 2019 | ||
| Advances for goods from customers | 296,776,624 | - |
(22) Employee benefits payable
| 31 December 2020 | 31 December 2019 | ||
| Short-term employee benefits payable (a) | 342,315,790 | 337,855,741 | |
| Defined contribution plans payable (b) | 461 | 10,505 | |
| Termination benefits(c) | 35,915 | - | |
| 342,352,166 | 337,866,246 |
(a) Short-term employee benefits
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | |||
| Wages and salaries, bonus, allowances and subsidies | 317,472,525 | 1,351,286,940 | (1,346,141,880) | 322,617,585 | ||
| Social security contributions | 5,447 | 36,721,237 | (36,721,396) | 5,288 | ||
| Including: Medical insurance | 4,834 | 33,913,592 | (33,913,469) | 4,957 | ||
| Work injury insurance | 234 | 287,029 | (287,263) | - | ||
| Maternity insurance | 379 | 2,520,616 | (2,520,664) | 331 | ||
| Housing funds | 2,156,229 | 34,930,142 | (36,068,186) | 1,018,185 | ||
| Labour union funds and employee education funds | 18,221,540 | 14,179,821 | (13,726,629) | 18,674,732 | ||
| 337,855,741 | 1,437,118,140 | (1,432,658,091) | 342,315,790 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 149 -
4 Notes to the consolidated financial statements (Cont’d)
(22) Employee benefits payable(Cont’d)
(b) Defined contribution plans
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | |||||
| Basic pensions | 10,401 | 34,790,897 | (34,800,854) | 444 | ||||
| Unemployment insurance | 104 | 1,461,269 | (1,461,356) | 17 | ||||
| 10,505 | 36,252,166 | (36,262,210) | 461 |
(c) Termination benefits
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | |||||
| Other dismissal welfare | - | 18,751,604 | (18,715,689) | 35,915 | ||||
| - | 18,751,604 | (18,715,689) | 35,915 |
(23) Taxes payable
| 31 December 2020 | 31 December 2019 | ||
| Enterprise income tax payable | 90,295,709 | 49,932,889 | |
| VAT payable | 82,055,265 | 45,587,584 | |
| Housing property tax payable | 3,937,112 | 4,270,528 | |
| Individual income tax payable | 3,600,603 | 5,451,521 | |
| City maintenance and construction tax payable | 6,414,982 | 3,629,966 | |
| Educational surcharge payable | 4,762,191 | 2,726,651 | |
| Environmental tax payable | 1,901,375 | 1,712,052 | |
| Others | 1,953,834 | 2,113,853 | |
| 194,921,071 | 115,425,044 |
(24) Other payables
| 31 December 2020 | 31 December 2019 | ||
| Interest payable | 132,133,902 | 73,251,086 | |
| Dividend payable | - | 2,985,563 | |
| Other payables | 155,199,090 | 275,138,126 | |
| 287,332,992 | 351,374,775 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 150 -
4 Notes to the consolidated financial statements (Cont’d)
(24) Other payables(Cont’d)
1、 Interest payable
| 1、 | 31 December 2020 | 31 December 2019 | |
| Medium term notes | 37,955,556 | 66,227,425 | |
| Interest of long-term borrowings with periodic payments of interest and return of principal at maturity | 1,590,247 | 474,136 | |
| short-term borrowings | 330,034 | 6,549,525 | |
| corporate bonds | 92,258,065 | - | |
| 132,133,902 | 73,251,086 |
2、 Dividend payable
| 31 December 2020 | 31 December 2019 | ||
| Restricted share dividend payable | - | 2,985,563 | |
| - | 2,985,563 |
3、 Other payables
| 31 December 2020 | 31 December 2019 | ||
| Guarantee deposits received from construction contractors | 77,932,889 | 75,417,942 | |
| Accrued cost of sales (i) | 38,943,663 | 43,270,188 | |
| Payable for contracted labour costs | 16,548,708 | 17,947,192 | |
| Temporary receipts for third parties | 10,298,957 | 12,276,662 | |
| Deposit for disabled | 4,680,725 | 4,735,246 | |
| Restricted share repurchase obligation | - | 118,066,397 | |
| Others | 6,794,148 | 3,424,499 | |
| 155,199,090 | 275,138,126 |
(i) It represented the payment made to external third parties arising from undertaking the rights of
debtor and creditor, comprising water and electricity, professional service fee and travellingexpenses etc.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 151 -
4 Notes to the consolidated financial statements (Cont’d)
(25) Current portion of non-current liabilities
| 31 December 2020 | 31 December 2019 | ||
| Current portion of long-term borrowings | |||
| - Guaranteed | 127,531,709 | 125,475,000 | |
| Medium term notes due within 1 year | 800,000,000 | 1,200,000,000 | |
| Current portion of finance lease | - | 386,981,928 | |
| 927,531,709 | 1,712,456,928 |
(26) Other current liabilities
| 31 December 2020 | 31 December 2019 | ||
| Output VAT to be transferred | 34,286,292 | - | |
| Other | 300,000 | 300,000 | |
| 34,586,292 | 300,000 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 152 -
4 Notes to the consolidated financial statements (Cont’d)
(27) Long-term borrowings
| 31 December 2020 | 31 December 2019 | ||
| Medium term notes | - | 800,000,000 | |
| Guaranteed | 153,253,983 | 190,225,000 | |
| Credit loan | 700,000,000 | 330,000,000 | |
| 853,253,983 | 1,320,225,000 |
(i) As at 31 December 2020, the interest of long-term borrowings varied from 3.40% to 4.60% (31
December 2019: 4.70% to 7.00%).
(28) Debentures payable
| 31 December 2020 | 31 December 2019 | ||
| Corporate bonds | 1,994,020,348 | - | |
| 1,994,020,348 | - |
| Debentures name | Par value | Date of issue | Term | Issue amount | 31 December 2019 | Issued in the current year | Interest accrued at par value | Amortisation of premium/ discount | Decreased in current year | 31 December 2020 |
| 20 CSG 01 | 100 | 2020-3-24 To 2020-3-25 | 3 years | 2,000,000,000 | - | 2,000,000,000 | 92,258,065 | (5,979,652) | - | 1,994,020,348 |
| 2,000,000,000 | - | 2,000,000,000 | 92,258,065 | (5,979,652) | - | 1,994,020,348 |
(i) In March 2020, after approved by the China Securities Regulatory Commission, the company
was approved to publicly issue 2020 corporate bonds (first tranche) to qualified investors, with aface value of RMB 100, an issuance amount of RMB 2 billion, and a period of 3 years (annualinterest payment, principal repayment at maturity), the coupon rate is 6%; the issuance date isMarch 24, 2020 to March 25, 2020, and the value date is March 25, 2020.
(29) Long-term account payable
| 31 December 2020 | 31 December 2019 | ||
| Finance lease payable | - | 87,240,529 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 153 -
4 Notes to the consolidated financial statements (Cont’d)
(30) Deferred income
| 31 December 2020 | 31 December 2019 | ||
| Government grants | 498,056,081 | 513,925,557 |
Government grants are analysed as follows:
| Government grants | 31 December 2019 | Increase in current year | Other decrease in current year | Non-operating income in current year | 31 December 2020 | Assets/Income related | |||||
| Tianjin Energy-saving Golden Sun Project (i) | 46,967,335 | - | - | (3,374,892) | 43,592,443 | Assets related | |||||
| Dongguan Engineering Golden Sun Engineering Project (ii) | 37,826,250 | - | - | (2,751,000) | 35,075,250 | Assets related | |||||
| Hebei CSG Golden Sun Engineering Project (iii) | 38,500,000 | - | - | (2,750,000) | 35,750,000 | Assets related | |||||
| Xianning CSG Golden Sun Project (iv) | 41,921,917 | - | - | (3,030,500) | 38,891,417 | Assets related | |||||
| Wujiang CSG Infrastructure Compensation (v) | 31,545,822 | - | - | (4,041,538) | 27,504,284 | Assets related | |||||
| Qingyuan Energy Saving Project (vi) | 15,849,167 | - | - | (1,672,551) | 14,176,616 | Assets related | |||||
| Yichang Polysilicon Project (vii) | 16,171,875 | - | - | (2,812,500) | 13,359,375 | Assets related | |||||
| Yichang CSG Silicon Wafer Auxiliary Project (viii) | 15,275,961 | 5,530,000 | - | (2,349,276) | 18,456,685 | Assets related | |||||
| Sichuan Energy-saving Glass Project (ix) | 7,167,420 | - | - | (1,654,020) | 5,513,400 | Assets related | |||||
| Group Coating Laboratory Project (x) | 3,758,760 | - | - | (1,356,960) | 2,401,800 | Assets related | |||||
| Yichang High Purity Silicon Material Project (xi) | 3,023,975 | - | - | (303,178) | 2,720,797 | Assets related | |||||
| Yichang Semiconductor Silicon Material Project (xii) | 2,866,666 | - | - | 2,866,666 | Assets related | ||||||
| Yichang Display Company Project (xiii) | 45,767,648 | - | - | (2,534,478) | 43,233,170 | Assets related | |||||
| Xianning Optoelectronics Project (xiv) | 7,280,000 | - | - | (520,000) | 6,760,000 | Assets related | |||||
| Shenzhen Medical Equipment Subsidy Project (xv) | - | 8,730,000 | - | (388,000) | 8,342,000 | Assets related | |||||
| Group Talent Fund Project (xvi) | 171,000,000 | - | - | 171,000,000 | Assets related | ||||||
| Others | 29,002,761 | 5,315,372 | - | (5,905,955 ) | 28,412,178 | Related assets/Income related | |||||
| 513,925,557 | 19,575,372 | - | (35,444,848) | 498,056,081 |
(i) The allowance was granted by Tianjin Municipal Government. The allowance was used for
establishing PV power station by Tianjin Energy Conservation Company. The facilities belongedto Tianjin Energy Conservation Company. The allowance will be credited to income statement in20 years, the useful life of the PV power statio
(ii) The allowance was granted by Dongguan Municipal Government. The allowance was used for
establishing PV power station by Dongguan CSG Architectural Glass Co., Ltd. The facilitiesbelonged to Dongguan CSG upon completion. The allowance will be credited to incomestatement 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 by Hebei CSG Glass Co., Ltd. ("Hebei CSG"). When the facilitieswere set up, they belonged to Hebei CSG. The allowance will be credited to income statement in20 years, the useful life of the PV power station.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 154 -
4 Notes to the consolidated financial statements (Cont’d)
(30) Deferred income (Cont’d)
(iv) The allowance was granted by Xianning Municipal Government. The allowance was used for
establishing PV power station by Xianning CSG Glass Co Ltd. The facilities belonged toXianning CSG upon completion. The allowance will be credited to income statement 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 income statement in 15 years, the shortest operating period as committed bythe Group.
(vi) The allowance was granted by Guangdong Province and which was a pilot project for strategic
emerging industry clusters development and was used to establish high performance ultra-thinelectronic glass production lines by Qingyuan CSG. The allowance will be credited to incomestatement in 10 years, the useful life of the production line.
(vii) The balance represented amounts granted to Yi Chang CSG polysilicon Materials Co., Ltd. by
Yichang City Dongshan Development Corporation under the provisions of the investmentcontract signed between the Group and the Municipal Government of Yi Chang. The proceedswere designed for the construction of electricity transformer and the pipelines. Yichangpolysilicon is entitled to the ownership of the facilities， which will be amortised by 16 yearsaccording to the useful life of the converting station.
(viii) It represented the government supporting fund obtained by Yichang polysilicon from the
acquiring of the assets and liabilities of Crucible project of Yichang Hejing Photoelectric CeramicCo., Ltd. The proceeds would be amortised and credited to income statement by 16 years afterrelated 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 to income statement in 15 years, in accordance with the minimumoperating period committed by the Group.
(x) The allowance was granted by Shenzhen City Development and Reform Commission for the
development of Group Coating Film experimental project. The grant will be amortised andcredited to income statement in the estimated useful life of the relevant fixed assets.
(xi) It represented the funds granted by Hubei local government for inport discount complement and
international corporation special subsidy. The grant will be amortised and credited to incomestatement by 12 to 15 years.
(xii) It represented the special subsidy of Yichang National Regional Strategic Emerging Industry
Development Pilot Project II, which is used to complement Yichang CSG PolysSilicon “Hubeisemiconductor silicon preparative technique project laboratory”. The grant will be amortised andcredited to income statement by 15 years.
(xiii) It represented the funds granted by Yichang Municipal Government for Yichang CSG Display
Company's flat project construction support funds and construction of coil coating three-lineproject. The grant will be amortised and credited to income statement by 15 years.
(xiv) It represented the funds granted by Xianning Government of the Project supporting fund for
photoconductive glass production line,which is used to pay for Xianning CSG Glass Co. Ltd.constructing the project of photoelectric photoelectric optical glass production line . After thecompletion of the production line, the ownership belongs to Xianning photoelectric. Theallowance will be credited to income statement in 8 years, the useful life of the production line.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 155 -
4 Notes to the consolidated financial statements (Cont’d)
(30) Deferred income (Cont’d)
(xv) The allowance was granted by Shenzhen Municipal Government. The allowance was used for
the production line of epidemic prevention materials for Shenzhen CSG Medical Technology Co.,Ltd. The facilities belonged to Shenzhen CSG Medical Technology Co., Ltd upon completion.The allowance will be credited to income statement with the useful life of the production line.
(xvi) The allowance was granted by Administrative Commission of Yichang High-tech Industrial
Development Zone. For senior management personnel, engineering technical personnel andsenior professional technical team who are working at Yichang or plane to introduction, RMB171million fund was set up, as a special fund for talent introduction and housing resettlement.
(31) Share capital
| Movement for the year ended 31 December 2020 | ||||||||||||
| 31 December 2019 | New issues during the year | Bonus issue | Capitalisation | Others | 31 December 2020 | |||||||
| RMB-denominated ordinary shares | 1,961,323,047 | - | - | - | - | 1,961,323,047 | ||||||
| Limited selling condition shares | 36,222,898 | - | - | - | (36,222,898) | - | ||||||
| Domestically listed foreign shares | 1,109,369,060 | - | - | - | - | 1,109,369,060 | ||||||
| 3,106,915,005 | - | - | - | (36,222,898) | 3,070,692,107 | |||||||
The par value of the RMB-denominated ordinary shares is RMB1, and that of domestically listed foreignshares is HKD1.
| Movement for the year ended 31 December 2019 | |||||||||||||
| 31 December 2018 | New issues during the year | Bonus issue | Capitalisation | Others | 31 December 2019 | ||||||||
| RMB-denominated ordinary shares | 1,779,466,998 | - | - | 177,946,699 | 3,909,350 | 1,961,323,047 | |||||||
| Limited selling condition shares | 75,292,875 | - | - | 3,764,855 | (42,834,832) | 36,222,898 | |||||||
| Domestically listed foreign shares | 1,008,517,328 | - | - | 100,851,732 | - | 1,109,369,060 | |||||||
| 2,863,277,201 | - | - | 282,563,286 | (38,925,482) | 3,106,915,005 | ||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 156 -
4 Notes to the consolidated financial statements (Cont’d)
(32) Capital surplus
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | ||||
| Share premium | 738,834,850 | - | (83,410,590) | 655,424,260 | |||
| Other capital surplus | (55,615,492) | - | (2,811,683) | (58,427,175) | |||
| Share of changes in equity other than comprehensive income and profit distribution of investees under the equity method | 757,420 | - | - | 757,420 | |||
| Share-based payment | 2,811,683 | - | (2,811,683) | - | |||
| Transfer of capital surplus recognised under the previous accounting system | (2,250,222) | - | - | (2,250,222) | |||
| Disposal of fractional shares | 1,316,208 | - | - | 1,316,208 | |||
| Purchase of minority interests | (87,197,562) | - | - | (87,197,562) | |||
| Shareholders interest-free loans | 28,946,981 | - | - | 28,946,981 | |||
| 683,219,358 | - | (86,222,273) | 596,997,085 |
| 31 December 2018 | Increase in current year | Decrease in current year | 31 December 2019 | ||||
| Share premium | 1,123,780,211 | 2,978,832 | (387,924,193) | 738,834,850 | |||
| Other capital surplus | (28,440,790) | 24,845,972 | (52,020,674) | (55,615,492) | |||
| Share of changes in equity other than comprehensive income and profit distribution of investees under the equity method | 757,420 | - | - | 757,420 | |||
| Share-based payment | 29,986,385 | 24,845,972 | (52,020,674) | 2,811,683 | |||
| Transfer of capital surplus recognised under the previous accounting system | (2,250,222) | - | - | (2,250,222) | |||
| Disposal of fractional shares | 1,316,208 | - | - | 1,316,208 | |||
| Purchase of minority interests | (87,197,562) | - | - | (87,197,562) | |||
| Shareholders interest-free loans | 28,946,981 | - | - | 28,946,981 | |||
| 1,095,339,421 | 27,824,804 | (439,944,867) | 683,219,358 |
Changes in Capital reserve this year are as follows：
After the company held the 2019 Annual General Meeting of Shareholders on May 21, 2020, the"Proposal on Repurchase and Cancellation of Certain Restricted Shares in the Restricted StockIncentive Plan" was reviewed and approved, and 14 non-compliant shares were repurchased andcancelled. All restricted stocks for which the original incentive object has been granted but not yet liftedthe restriction on sales total 909,936 shares. On June 16, 2020, the company has completed thecancellation procedures of the aforementioned restricted stocks.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 157 -
4 Notes to the consolidated financial statements (Cont’d)
(32) Capital surplus(Cont’d)
After the company held the 2019 Annual General Meeting of Shareholders on May 21, 2020, the"Proposal on Repurchase and Cancellation of Restricted Stocks That Did Not Meet the UnlockingConditions of the Third Unlocking Period" was reviewed and approved, and 451 shareholders werereviewed and agreed to repurchase and cancel. The restricted stocks for which the incentive objectsdid not meet the unlocking conditions of the third unlocking period totaled 35,312,962 shares. As ofJune 16, 2020, the company has completed the cancellation procedures of the aforementionedrestricted stocks.
(33) Treasury shares
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | ||||
| Obligations of restricted share buybacks | 118,066,397 | - | 118,066,397 | - | |||
| 118,066,397 | - | 118,066,397 | - |
Description of changes in treasury stocks: the Company repurchased and cancelled the restrictedshares this year to offset treasury shares.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 158 -
4 Notes to the consolidated financial statements (Cont’d)
(34) Other comprehensive income
| Other comprehensive income in Income Statement for the year ended 31 December 2020 | ||||||||||||||
| 31 December 2019 | Attributable to parent company after tax | 31 December 2020 | Actual amount before tax for current year | Less: Reclassification of previous other comprehensive income to profit or loss in current year | Less: Income tax expenses | Attributable to parent company after tax | Attributable to minority shareholders after tax | |||||||
| - | - | - | - | - | - | - | - | |||||||
| Other comprehensive income items which will be reclassified subsequently to profit or loss | - | - | - | - | - | - | - | |||||||
| Financial rewards for energy-saving technical retrofits | 2,550,000 | - | 2,550,000 | - | - | - | - | - | ||||||
| Difference on translation of foreign currency financial statements | 4,015,864 | (5,900,842) | (1,884,978) | (5,900,842) | - | - | (5,900,842) | - | ||||||
| Income generated when self-property and land use rights are converted into investment property | ---- | 161,151,797 | 161,151,797 | 189,590,349 | - | 28,438,552 | 161,151,797 | - | ||||||
| 6,565,864 | 155,250,955 | 161,816,819 | 183,689,507 | - | 28,438,552 | 155,250,955 | - | |||||||
| Other comprehensive income in Income Statement for the year ended 31 December 2019 | ||||||||||||||||
| 31 December 2018 | Attributable to parent company after tax | 31 December 2019 | Actual amount before tax for current year | Less: Reclassification of previous other comprehensive income to profit or loss in current year | Less: Income tax expenses | Attributable to parent company after tax | Attributable to minority shareholders after tax | |||||||||
| Other comprehensive income items which will be reclassified subsequently to profit or loss | ||||||||||||||||
| Financial rewards for energy-saving technical retrofits | 2,550,000 | - | 2,550,000 | - | - | - | - | - | - | |||||||
| Difference on translation of foreign currency financial statements | 2,530,234 | 1,485,630 | 4,015,864 | 1,485,630 | - | - | 1,485,630 | - | ||||||||
| 5,080,234 | 1,485,630 | 6,565,864 | 1,485,630 | - | - | 1,485,630 | - | |||||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 159 -
4 Notes to the consolidated financial statements (Cont’d)
(35) Special reserve
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | ||||
| Safety production costs | 11,102,921 | - | (833,919) | 10,269,002 |
The subsidiary Yichang CSG PolysSilicon is a high risk chemical production enterprise. Therefore, theCompany appropriated such reserve in accordance with relevant regulations.
(36) Surplus reserve
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | ||||
| Statutory surplus reserve | 818,398,718 | 90,697,136 | - | 909,095,854 | |||
| Discretionary surplus reserve | 127,852,568 | - | - | 127,852,568 | |||
| 946,251,286 | 90,697,136 | - | 1,036,948,422 |
| 31 December 2018 | Increase in current year | Decrease in current year | 31 December 2019 | ||||
| Statutory surplus reserve | 796,452,807 | 21,945,911 | - | 818,398,718 | |||
| Discretionary surplus reserve | 127,852,568 | - | - | 127,852,568 | |||
| 924,305,375 | 21,945,911 | - | 946,251,286 |
In accordance with the Company Law of the People’s Republic of China and the Company’s Articles ofAssociation, the Company should appropriate 10% of net profit for the year to the statutory surplusreserve, and the Company can cease appropriation when the statutory surplus reserve accumulated tomore than 50% of the registered capital. The statutory surplus reserve can be used to make up for theloss or increase the paid-in capital after approval from the appropriate authorities. The Companyaccrued statutory surplus reserve at the amount of RMB 90,697,136 based on 10% of the net profit, in2020 (2019: RMB 21,945,911 accrued at 10% of the net profit).
The Company appropriates for the discretionary surplus reserve after the shareholders’ meetingapproves the proposal from the Board of Directors. The discretionary surplus reserve can be used tomake up for the loss or increase the share capital after approval from the appropriate authorities. TheCompany did not appropriate to discretionary surplus reserve during the year.
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 160 -
4 Notes to the consolidated financial statements (Cont’d)
(37) Undistributed profits
| 2020 | 2019 | ||
| Undistributed profit at the beginning of year | 4,859,600,841 | 4,486,264,723 | |
| Add: Net profits attributable to shareholders of parent company | 779,325,592 | 536,430,818 | |
| Less: Appropriation for statutory surplus reserve | (90,697,136) | (21,945,911) | |
| Ordinary share dividends payable (a) | (211,962,885) | (141,148,789) | |
| Undistributed profits at end of year | 5,336,266,412 | 4,859,600,841 |
(a) Pursuant to the resolution of Board of Directors of the Company on 21 May 2020, the Company paid
cash dividends of RMB 0.7 (tax inclusive) for each 10 shares based on total shares of 3,070,692,107,with the total cash dividends distributed of RMB 214,948,447 (tax inclusive).
(38) Revenue and cost of sales
| 2020 | 2019 | ||
| Revenue from main operations | 10,586,819,348 | 10,390,235,115 | |
| Revenue from other operations | 84,434,097 | 81,792,984 | |
| 10,671,253,445 | 10,472,028,099 | ||
| 2020 | 2019 | ||
| Cost of sales from main operations | 7,441,135,985 | 7,738,447,136 | |
| Cost of sales from other operations | 3,329,746 | 4,682,478 | |
| 7,444,465,731 | 7,743,129,614 |
(a) Revenue and cost of sales from main operations
Revenue and cost of sales from main operations analysed by industry and product are set out below:
| 2020 | 2019 | ||||||
| Revenue | Cost | Revenue | Cost | ||||
| Glass industry | 8,648,968,925 | 5,978,411,008 | 7,907,268,375 | 5,771,311,137 | |||
| Electronic glass and display | 1,080,294,536 | 755,486,558 | 1,041,131,329 | 736,286,553 | |||
| Solar and other industries | 918,644,331 | 768,326,863 | 1,498,836,942 | 1,287,850,977 | |||
| Elimination | (61,088,444) | (61,088,444) | (57,001,531) | (57,001,531) | |||
| 10,586,819,348 | 7,441,135,985 | 10,390,235,115 | 7,738,447,136 | ||||
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 161 -
4 Notes to the consolidated financial statements (Cont’d)
(38) Revenue and cost of sales (Cont’d)
(b) Revenue and cost of sales from other operations
| 2020 | 2019 | ||||||
| Revenue | Cost | Revenue | Cost | ||||
| Sales of raw materials and Others | 84,434,097 | 3,329,746 | 81,792,984 | 4,682,478 | |||
| 84,434,097 | 3,329,746 | 81,792,984 | 4,682,478 | ||||
(39) Taxes and surtax
| 2020 | 2019 | ||
| City maintenance and construction tax | 35,628,490 | 31,635,208 | |
| Educational surcharge | 29,987,714 | 26,205,282 | |
| Housing property tax | 28,957,233 | 31,118,379 | |
| Land use rights | 12,958,802 | 13,478,338 | |
| Stamp tax | 5,074,506 | 4,994,475 | |
| Environmental tax | 7,731,103 | 8,176,508 | |
| Others | 1,560,674 | 205,578 | |
| 121,898,522 | 115,813,768 |
(40) Selling expenses
| 2020 | 2019 | ||
| Freight expenses | 12,684,512 | 166,179,716 | |
| Employee benefits | 151,981,631 | 154,777,915 | |
| Entertainment fees | 18,142,648 | 15,906,226 | |
| Business travel expenses | 7,092,008 | 12,222,218 | |
| Vehicle use fees | 7,664,729 | 8,061,636 | |
| Rental expenses | 6,846,194 | 7,050,606 | |
| Depreciation expenses | 908,207 | 906,236 | |
| Others | 28,599,009 | 24,164,682 | |
| 233,918,938 | 389,269,235 |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 162 -
4 Notes to the consolidated financial statements (Cont’d)
(41) Administrative expenses
| 2020 | 2019 | ||
| Employee benefits | 345,024,244 | 335,972,452 | |
| Depreciation expenses | 60,876,687 | 64,780,698 | |
| Amortisation of intangible assets | 58,303,184 | 55,705,919 | |
| General office expenses | 29,724,065 | 23,368,748 | |
| Labour union funds | 14,096,131 | 14,435,214 | |
| Entertainment fees | 13,021,278 | 12,872,934 | |
| Business travel expenses | 6,555,071 | 10,031,106 | |
| Utility fees | 6,571,509 | 7,528,252 | |
| Canteen costs | 7,475,271 | 7,514,315 | |
| Vehicle use fees | 5,515,675 | 5,630,014 | |
| Consulting advisers | 17,515,445 | 32,345,028 | |
| Shutdown loss | 43,071,647 | - | |
| Others | 59,226,354 | 32,405,970 | |
| 666,976,561 | 602,590,650 |
(42) Research and development expenses
| 2020 | 2019 | ||
| Research and development expenses | 404,842,498 | 366,871,283 | |
| 404,842,498 | 366,871,283 |
(43) Financial expenses
| 2020 | 2019 | ||
| Interest on borrowings | 282,470,740 | 328,728,246 | |
| Less: Capitalised interest | (9,162,681) | (9,136,496) | |
| Interest expenses | 273,308,059 | 319,591,750 | |
| Less: Interest income | (53,404,661) | (36,942,509) | |
| Exchange losses | (1,688,559) | (2,869,494) | |
| Others | 5,797,081 | 10,637,656 | |
| 224,011,920 | 290,417,403 |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- 163 -
4 Notes to the consolidated financial statements (Cont’d)
(44) Expenses by nature
The cost of sales, selling and distribution expenses, general and administrative expenses, Researchand development expenses in the income statement are listed as follows by nature:
| 2020 | 2019 | ||
| Changes in inventories of finished goods and work in progress | 45,430,285 | (219,047,868) | |
| Consumed raw materials and low value consumables, etc. | 4,061,391,717 | 4,432,549,735 | |
| Fuel fee | 1,281,713,451 | 1,389,885,293 | |
| Employee benefits | 1,424,069,878 | 1,413,140,209 | |
| Depreciation and amortisation expenses | 923,292,967 | 972,774,759 | |
| Utility fees | 541,569,991 | 627,935,953 | |
| Freight expenses | 154,114,713 | 174,194,886 | |
| General office expenses | 45,667,757 | 45,273,414 | |
| Canteen costs | 35,705,412 | 35,334,186 | |
| Business travel expenses | 16,682,603 | 26,251,183 | |
| Entertainment fees | 34,020,807 | 31,635,784 | |
| Vehicle use fee | 14,285,144 | 15,028,995 | |
| Rental expenses | 21,279,601 | 11,370,775 | |
| Others | 150,979,402 | 145,533,478 | |
| 8,750,203,728 | 9,101,860,782 |
(45) Gains arising from changes in fair value
| 2020 | 2019 | ||
| Investment real estate measured at fair value | 179,911,200 | - | |
| 179,911,200 | - |
(46) Investment income
| 2020 | 2019 | ||
| Income from structural deposits | 2,654,504 | - | |
| 2,654,504 | - |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 164 -
4 Notes to the consolidated financial statements (Cont’d)
(47) Other income
(48) Credit impairment losses
| 2020 | 2019 | ||
| Losses on bad debts of accounts receivable | 5,120,629 | 8,893,212 | |
| Losses on bad debts of other receivables | 601,990 | 11,220,821 | |
| 5,722,619 | 20,114,033 |
(49) Asset impairment losses
| 2020 | 2019 | ||
| Impairment loss of fixed assets | 428,132,973 | 280,503,012 | |
| Decline in the value of inventories | 9,712,924 | 4,834,569 | |
| Impairment loss in construction in progress | 218,940,134 | 116,364,704 | |
| Impairment loss in goodwill | 81,722,063 | 61,622,400 | |
| 738,508,094 | 463,324,685 |
(50) Asset disposal income
| 2020 | 2019 | ||
| Gains on disposal of non-current assets | (1,158,984) | (909,968) | |
| (1,158,984) | (909,968) |
| 2020 | 2019 | ||
| Government subsidy amortization | 35,444,848 | 121,319,478 | |
| Industry support funds | 4,063,000 | 20,938,172 | |
| Research grants | 9,531,120 | 5,641,262 | |
| Government incentive funds | 29,508,022 | 19,639,753 | |
| Others | 21,013,410 | 16,592,755 | |
| 99,560,400 | 184,131,420 |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 165 -
4 Notes to the consolidated financial statements (Cont’d)
(51) Non-operating income
| 2020 | 2019 | Amount of non-recurring gains and losses included in 2020 | |||
| Government grants (a) | 100,000 | - | 100,000 | ||
| Compensation income | 2,985,667 | 4,557,620 | 2,985,667 | ||
| Amounts unable to pay | 4,572,559 | 1,384,296 | 4,572,559 | ||
| Others | 6,711,613 | 1,885,918 | 6,711,613 | ||
| 14,369,839 | 7,827,834 | 14,369,839 |
(52) Non-operating expenses
| 2020 | 2019 | Amount of non-recurring gains and losses included in 2020 | |||
| Compensation | 1,507,494 | 4,126,950 | 1,507,494 | ||
| Donation | 17,321,288 | 1,659,000 | 17,321,288 | ||
| Others | 1,725,613 | 3,654,137 | 1,725,613 | ||
| 20,554,395 | 9,440,087 | 20,554,395 |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 166 -
4 Notes to the consolidated financial statements (Cont’d)
(53) Income tax expenses
| 2020 | 2019 | ||
| Current income tax | 238,941,249 | 159,871,302 | |
| Deferred income tax | 54,796,896 | (58,184,252) | |
| 293,738,145 | 101,687,050 |
The reconciliation from income tax calculated based on the applicable tax rates and total profitpresented in the consolidated income statement to the income tax expenses is listed below:
| 2020 | 2019 | ||
| Total profit | 1,105,691,126 | 662,106,627 | |
| Income tax expenses calculated at applicable tax rates by company | 181,218,682 | 94,958,274 | |
| Effect of changes in tax rates | - | 2,130,542 | |
| Costs, expenses and losses not deductible for tax purposes | 2,517,415 | 2,091,925 | |
| Deductible losses of unrecognised deferred income tax assets in the previous period | (2,772,095) | (2,495,678) | |
| Deductible losses for which no deferred tax asset was recognised in current period | 161,018,094 | 44,552,208 | |
| Effect of tax incentives | (42,340,548) | (37,141,013) | |
| Reconciliation of income tax for prior years in annual filing | (5,903,403) | (2,409,208) | |
| Income tax expenses | 293,738,145 | 101,687,050 |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 167 -
4 Notes to the consolidated financial statements (Cont’d)
(54) Earnings per share
The basic earnings per share is calculated by dividing the net profit attributable to ordinaryshareholders of the company by the weighted average number of ordinary shares outstanding.
The numerator of diluted earnings per share is determined based on the net profit attributable to thecommon shareholders of the company's common stock. The following factors are adjusted todetermine: (1) interest on dilutive potential ordinary shares that have been recognized as expenses inthe current period; (2) dilutive potential ordinary The income or expenses that will be generated whenthe shares are converted; (3) The above-mentioned adjustments related to income tax effects.
The denominator of the diluted earnings per share equals the sum of: (1) the weighted averagenumber of ordinary shares of the parent company in the underlying earnings per share; (2) ordinaryshares that are increased assuming the dilution of potential ordinary shares into common shares Theweighted average.
When calculating the weighted average of the number of ordinary shares increased from dilutedcommon stocks to ordinary shares, the diluted potential ordinary shares issued during the previousperiod are assumed to be converted at the beginning of the current period; diluted potential ordinaryshares of the current period are issued,assuming a conversion on the issue date.
The basic calculation of basic earnings per share and diluted earnings per share are as follows:
(a) Basic earnings per share:
| 2020 | 2019 | ||
| Consolidated net profit attributable to ordinary shareholders of parent company | 779,325,592 | 536,430,818 | |
| Weighted average number of outstanding ordinary | 3,070,692,107 | 3,070,692,107 | |
| Basic earnings per share | 0.25 | 0.17 |
(b) Diluted earnings per share:
Diluted earnings per share are calculated by dividing consolidated net profit attributable to ordinaryshareholders of the parent company adjusted based on the dilutive potential ordinary shares by theadjusted weighted average number of outstanding ordinary shares of the Company. For the yearended 31 December 2020, the Company had diluted earnings per shares of RMB 0.25 (2019: RMB
0.17 per share).
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- 168 -
4 Notes to the consolidated financial statements (Cont’d)
(55) Notes to the cash flow statement
(a) Cash generated by other operating activities
| 2020 | 2019 | ||
| Government grants | 83,690,924 | 96,231,197 | |
| Interest income | 53,404,661 | 36,942,509 | |
| Others | 40,668,625 | 25,288,419 | |
| 177,764,210 | 158,462,125 |
(b) Cash paid relating to other operating activities
| 2020 | 2019 | ||
| Freight expenses | 50,765,589 | 187,867,670 | |
| Canteen costs | 38,460,290 | 35,334,186 | |
| General office expenses | 39,088,171 | 37,580,121 | |
| Business travel expenses | 17,586,616 | 27,054,902 | |
| Entertainment fees | 31,779,755 | 28,986,055 | |
| Vehicle use fee | 12,831,298 | 15,028,995 | |
| Maintenance fee | 22,961,067 | 27,637,953 | |
| Rental expenses | 22,006,257 | 11,370,775 | |
| Insurance | 13,934,943 | 12,270,654 | |
| Fees | 5,797,081 | 10,637,656 | |
| Consulting advisers | 24,030,410 | 20,605,172 | |
| Others | 143,813,446 | 188,822,406 | |
| 423,054,923 | 603,196,545 |
(c) Cash generated by other investing activities
| 2020 | 2019 | ||
| Entrusted Loan | 300,000,000 | - | |
| Income from trial production of construction in progress | 124,382,895 | 33,207,228 | |
| Deposit | 10,794,429 | 3,442,232 | |
| 435,177,324 | 36,649,460 |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 169 -
4 Notes to the consolidated financial statements (Cont’d)
(55) Notes to the cash flow statement(Cont’d)
(d) Cash paid relating to other investing activities
| 2020 | 2019 | ||
| Trial production expenditure in construction | 118,741,948 | 55,177,375 | |
| 118,741,948 | 55,177,375 |
(e) Cash generated by other financing activities
| 2020 | 2019 | ||
| Income from finance lease | - | 200,000,000 | |
| Received deposit and security deposit | 153,698,226 | - | |
| 153,698,226 | 200,000,000 |
(f) Cash payments relating to other financing activities
| 2020 | 2019 | ||
| Repay financing leases | 478,319,392 | 1,024,419,924 | |
| Deposit | - | 150,493,884 | |
| Payment of loan, security and fee for bills | 3,460,879 | 11,591,508 | |
| Equity incentive fund | 122,445,171 | 144,286,387 | |
| 604,225,442 | 1,330,791,703 |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 170 -
4 Notes to the consolidated financial statements (Cont’d)
(56) Supplementary information to the cash flow statement
(a) Reconciliation from net profit to cash flows from operating activities
| 2020 | 2019 | ||
| Net profit | 811,952,981 | 560,419,577 | |
| Add: Provision for asset impairment | 738,508,094 | 463,324,685 | |
| Provision for credit impairment | 5,722,619 | 20,114,033 | |
| Depreciation of fixed assets | 863,408,582 | 915,355,376 | |
| Amortisation of intangible assets | 58,303,184 | 55,705,919 | |
| Net movements of safety production costs | - | 5,034,321 | |
| Amortisation of long-term prepaid expenses | 1,581,201 | 1,713,464 | |
| Employee compensation based on share | - | (24,195,870) | |
| Losses on disposal of fixed assets and intangible assets | 1,158,984 | 909,968 | |
| Financial expenses | 273,308,059 | 319,591,750 | |
| Gains arising from changes in fair value | (179,911,200) | - | |
| Investment income | (2,654,504) | - | |
| Decrease/(increase) in deferred tax assets | 10,813,173 | (66,263,069) | |
| Increase/(decrease) in deferred tax liabilities | 43,983,723 | 8,078,817 | |
| (Increase)/decrease in inventories | (8,426,451) | (216,530,491) | |
| Increase in operating receivables | (84,621,855) | 106,031,510 | |
| Increase in operating payables | 197,493,046 | 229,746,330 | |
| Net cash flows from operating activities | 2,730,619,636 | 2,379,036,320 |
(b) Net increase/(decrease) in cash
| 2020 | 2019 | ||
| Cash and cash equivalents at end of year | 2,124,028,196 | 1,831,835,030 | |
| Less: Cash and cash equivalents at beginning of year | (1,831,835,030) | (2,225,126,913) | |
| Net increase in cash and cash equivalents | 292,193,166 | (393,291,883) |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 171 -
4 Notes to the consolidated financial statements (Cont’d)
(56) Supplementary information to the cash flow statement(Cont’d)
(c) Cash and cash equivalents
| 31 December 2020 | 31 December 2019 | ||
| Cash | |||
| - Cash on hand | 2,725 | 4,268 | |
| - Bank deposits that can be readily drawn on demand | 1,463,954,484 | 1,781,830,762 | |
| - Other cash balances that can be readily drawn on demand | 660,070,987 | 50,000,000 | |
| Cash at end of year | 2,124,028,196 | 1,831,835,030 |
(57) Assets with restricted ownership or use rights
| 2020 | 2019 | Reason | ||
| Monetary assets | 1,760,707 | 155,145,388 | Restricted deposit flow | |
| Property,plant and equipment | 238,490,675 | 1,373,926,910 | Limited finance lease and Restricted mortage loan | |
| 240,251,382 | 1,529,072,298 |
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 172 -
4 Notes to the consolidated financial statements (Cont’d)
(58) Monetary items denominated in foreign currencies
| 31 December 2020 | |||||
| Balances denominated in foreign currencies | Exchange rates | Balances denominated in RMB | |||
| Cash at bank and on hand— | |||||
| - HKD | 7,126,662 | 0.8416 | 5,997,799 | ||
| - USD | 2,544,013 | 6.5249 | 16,599,430 | ||
| - JPY | 16,088,877 | 0.0632 | 1,016,817 | ||
| - AUD | 798 | 5.0163 | 4,003 | ||
| - EUR | 11,070 | 8.0250 | 88,837 | ||
| 23,706,886 | |||||
| Accounts receivable— | |||||
| - HKD | 1,655,084 | 0.8416 | 1,392,919 | ||
| - USD | 12,924,847 | 6.5249 | 84,333,333 | ||
| - EUR | 834,785 | 8.0250 | 6,699,153 | ||
| 92,425,405 | |||||
| Short-term borrowings— | |||||
| - HKD | 75,000,000 | 0.8416 | 63,120,000 | ||
| 63,120,000 | |||||
| Accounts payable -— | |||||
| - HKD | 4,596,965 | 0.8416 | 3,868,806 | ||
| - USD | 7,300,070 | 6.5249 | 47,632,226 | ||
| - EUR | 527,250 | 8.0250 | 4,231,184 | ||
| - JPY | 3,363,149 | 0.0632 | 212,551 | ||
| 55,944,767 | |||||
| Contract liabilities— | |||||
| - HKD | 8,232,713 | 0.8416 | 6,928,651 | ||
| - USD | 3,554,074 | 6.5249 | 23,189,977 | ||
| - EUR | 125 | 8.0250 | 1,003 | ||
| 30,119,631 | |||||
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- 173 -
5 The changes of consolidation scope
On 7 January 2020, the Group set up a Overseas subsidiary, CSG (Thailand) Co., Ltd.. and the Grouphas not invested . The Group owns 100% of its equity.
On 5 February 2020, the Group set up a subsidiary, Anhui CSG New Energy Material Technology Co.,Ltd.(Anhui Energy Company) and the Group has invested RMB 20,000,000 . The Group owns 100%of its equity.
On 8 February 2020, the Group set up a subsidiary, Anhui CSG Quartz Material Co., Ltd.(AnhuiQuartz Company) and the Group has invested RMB 3,000,000 . The Group owns 100% of its equity.
On 10 February 2020, the Group set up a subsidiary, Shenzhen CSG Medical Technology Co., Ltd.(Shenzhen CSG Medical Company)and the Group has invested RMB 20,000,000 . The Group owns100% of its equity.
On 31 August 2020, the Group set up a subsidiary, CSG (Suzhou) Corporate HeadquartersManagement Co., Ltd. and the Group has invested RMB 20,000,000 . The Group owns 100% of itsequity.
Notes to the financial statementsfor the year ended 31 December 2020(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- 174 -
6 Equity in other entities
(1) Interest in subsidiaries
(a) Structure of the enterprise group
As at 31 December 2020, information of the Company’s major subsidiaries is set out below:
| Major business location | Place of registration | Scope of business | Shareholding (%) | ||
| Direct | Indirect | ||||
| Chengdu CSG | Chengdu, PRC | Chengdu, PRC | Development, production and sales of special glass | 75% | 25% |
| Sichuan CSG Energy Conservation | Chengdu, PRC | Chengdu, PRC | Development, production and sales of special glass and processing of glass | 75% | 25% |
| Tianjin Energy Conservation | Tianjin, PRC | Tianjin, PRC | Development, production and sales of special glass | 75% | 25% |
| Dongguan CSG Engineering | Dongguan, PRC | Dongguan, PRC | Intensive processing of glass | 75% | 25% |
| Dongguan CSG Solar | Dongguan, PRC | Dongguan, PRC | Production and sales of solar glass | 75% | 25% |
| Dongguan CSG PV-tech | Dongguan, PRC | Dongguan, PRC | Production and sales of hi-tech green battery and components | 100% | - |
| Yichang CSG PolysSilicon | Yichang, PRC | Yichang, PRC | Production and sales of high-purity silicon materials | 75% | 25% |
| Wujiang CSG Engineering | Wujiang, PRC | Wujiang, PRC | Intensive processing of glass | 75% | 25% |
| Hebei CSG | Yongqing, PRC | Yongqing, PRC | Production and sales of special glass | 75% | 25% |
| Wujiang CSG | Wujiang, PRC | Wujiang, PRC | Production and sales of special glass | 100% | - |
| China Southern Glass (Hong Kong) Limited | Hong Kong, PRC | Hong Kong, PRC | Investment holding | 100% | - |
| Hebei Shichuang | Yongqing, PRC | Yongqing, PRC | Production and sales of ultra-thin electronic glass | - | 100% |
| Xianning CSG | Xianning, PRC | Xianning, PRC | Production and sales of special glass | 75% | 25% |
| Xianning CSG Energy-Saving | Xianning, PRC | Xianning, PRC | Intensive processing of glass | 75% | 25% |
| Qingyuan CSG Energy-Saving | Qingyuan, PRC | Qingyuan, PRC | Production and sales of ultra-thin electronic glass | 100% | - |
| Shenzhen CSG Financial Leasing Co., Ltd. | Shenzhen, PRC | Shenzhen, PRC | Finance leasing, etc. | 75% | 25% |
| Jiangyou CSG Mining Development Co. Ltd. | Jiangyou, PRC | Jiangyou, PRC | Production and sales of silica and its by-products | 100% | - |
| Shenzhen CSG PV Energy Co., Ltd. | Shenzhen, PRC | Shenzhen, PRC | Investment management of photovoltaic plant | 100% | - |
| Qingyuan CSG New Energy Co., Ltd. | Qingyuan, PRC | Qingyuan, PRC | Clean energy development, photovoltaic power generation | - | 100% |
| Suzhou CSG PV-tech Co., Ltd. | Wujiang, PRC | Wujiang, PRC | Clean energy development, photovoltaic power generation | - | 100% |
| Wujiang CSG New Energy Co., Ltd. | Wujiang, PRC | Wujiang, PRC | Clean energy development, photovoltaic power generation | - | 100% |
| Yichang CSG New Energy Co., Ltd | Yichang, PRC | Yichang, PRC | Clean energy development, photovoltaic power generation | - | 100% |
| Shenzhen CSG Display: | Shenzhen, PRC | Shenzhen, PRC | Production and sales of display component products | 60.80% | - |
| Xianning CSG Photoelectric | Xianning, PRC | Xianning, PRC | Photoelectric glass and high aluminium glass | - | 100% |
| Zhaoqing Energy Saving Company | Zhaoqing PRC | Zhaoping PRC | Production and sales of various special glasses | 100% | - |
| Zhaoqing Automobile Company | Zhaoqing PRC | Zhaoqing PRC | Production and sales of various special glasses | 100% | - |
| Anhui Energy Company | Fengyang, PRC | Fengyang, PRC | Production and sales of solar glass products | 100% | - |
| Anhui Quartz Company | Fengyang, PRC | Fengyang, PRC | Production and sales of solar glass products | 100% | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 175 -
6 Interest in subsidiaries (Cont'd)
(1) Interest in subsidiaries (Cont'd)
(b) Subsidiaries with significant minority interests
| Subsidiaries | Shareholding of minority shareholders | Profit or loss attributable to minority shareholders for the year ended 31 December 2020 | Dividends distributed to minority shareholders for the year ended 31 December 2020 | Minority interests as at 31 December 2020 |
| Shenzhen CSG Display | 39.2% | 31,669,296 | - | 372,634,677 |
(b) Main financial information of important non-wholly-owned subsidiaries
| 31 December 2020 | |||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | ||||
| Shenzhen CSG Display | 304,147,421 | 1,405,344,962 | 1,709,492,383 | 630,254,366 | 81,201,074 | 711,455,440 | |||
| 2020 | |||||||||
| Revenue | Net profit | Total comprehensive income | Cash flows from operating activities | ||||||
| Shenzhen CSG Display | 621,866,879 | 87,177,194 | 87,177,194 | 170,160,539 | |||||
(2) Equity in associates
| Name | Time of registration | Registered capital(Million) | Shareholding (%) | Relationship with the Group |
| Yichang Nanxing Automotive Electronics Co., Ltd. | 13 October 2020 | 90 | 30.4% | Associate |
| Yichang Rongsheng New Material Co., Ltd. | 19 October 2020 | 5 | 39% | Associate |
As of December 31, 2020, the Group has not actually invested capital to the above associates.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 176 -
7 Segment information
-The Group's business activities are classifcated by product and service as follows:
- Glass segment, engaged in production and sales of float glass and engineering glass and the silica for the production thereof, etc.- Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solar battery and applications, etc.- Solar and other segment divisions, responsible for the production and sales of polysilicon and solar cell module products, photovoltaic energy
development and other products, etc.
The reportable segments of the Group are the business units that provide different products or service. Different businesses require different technologies andmarketing strategies. The Group, therefore, separately manages the production and operation of each reportable segment and Estimates their operatingresults respectively, in order to make decisions about resources to be allocated to these 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 allocated based on the operations ofthe segment. Expenses indirectly attributable to each segment are allocated to the segments based on the proportion of each segment’s revenue.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 177 -
7 Segment information (Cont’d)
(a) Segment information as at and for the year ended 31 December 2020 is as follows:
| Flat glass | Electronic glass and displays | Solar and other industries | Unallocated | Elimination | Total | ||||||
| Revenue from external customers | 8,666,093,920 | 1,083,132,521 | 916,115,834 | 5,911,170 | - | 10,671,253,445 | |||||
| Inter-segment revenue | 43,677,341 | 4,229,293 | 72,667,092 | 212,060,390 | (332,634,116) | - | |||||
| Interest income | 2,140,733 | 1,471,264 | 402,262 | 49,390,402 | - | 53,404,661 | |||||
| Interest expenses | (30,646,424) | (12,125,558) | (15,354,096) | (215,274,796) | 92,815 | (273,308,059) | |||||
| Asset impairment losses | (7,746,072) | (1,038,135) | (648,001,824) | (81,722,063) | - | (738,508,094) | |||||
| Credit impairment loss | 31,741 | (229,992) | (3,965,108) | (1,559,260) | - | (5,722,619) | |||||
| Depreciation and amortisation expenses | (601,759,885) | (164,905,846) | (150,718,578) | (5,908,658) | - | (923,292,967) | |||||
| Total profit/(loss) | 1,711,049,125 | 185,625,578 | (475,933,924) | (315,049,653) | - | 1,105,691,126 | |||||
| Income tax (expenses)/income | (222,653,492) | (23,877,511) | (49,229,706) | 2,022,564 | - | (293,738,145) | |||||
| Net profit/(loss) | 1,488,395,633 | 161,748,067 | (525,163,630) | (313,027,089) | - | 811,952,981 | |||||
| Total assets | 8,618,862,132 | 3,784,793,003 | 3,227,533,456 | 2,251,726,307 | - | 17,882,914,898 | |||||
| Total liabilities | 2,075,265,799 | 688,502,626 | 326,834,407 | 4,176,428,180 | - | 7,267,031,012 | |||||
| Increase in non-current assets | 337,211,912 | 615,441,677 | 128,344,547 | 6,281,914 | - | 1,087,280,050 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 178 -
7 Segment information (Cont’d)
(b) Segment information as at and for the year ended 31 December 2019 is as follows:
| Flat glass | Electronic glass and displays | Solar and other industries | Unallocated | Elimination | Total | ||||||
| Revenue from external customers | 7,919,060,504 | 1,041,459,512 | 1,499,613,429 | 11,894,654 | - | 10,472,028,099 | |||||
| Inter-segment revenue | 60,720,111 | 2,748,558 | 42,593,191 | 70,311,058 | (176,372,918) | - | |||||
| Interest income | 2,298,783 | 1,462,028 | 366,887 | 32,814,811 | - | 36,942,509 | |||||
| Interest expenses | (106,131,665) | (25,138,973) | (34,842,227) | (153,625,419) | 146,534 | (319,591,750) | |||||
| Asset impairment losses | (599,105) | - | (401,103,180) | (61,622,400) | - | (463,324,685) | |||||
| Credit impairment loss | (14,142,940) | (131,168) | (5,891,379) | 51,454 | - | (20,114,033) | |||||
| Depreciation and amortisation expenses | (613,199,303) | (185,107,441) | (168,548,956) | (5,919,059) | - | (972,774,759) | |||||
| Total profit/(loss) | 1,075,860,225 | 237,606,588 | (396,687,471) | (254,672,715) | - | 662,106,627 | |||||
| Income tax (expenses)/income | (141,068,203) | (30,038,136) | 67,801,285 | 1,618,004 | - | (101,687,050) | |||||
| Net profit/(loss) | 934,792,022 | 207,568,452 | (328,886,186) | (253,054,711) | - | 560,419,577 | |||||
| Total assets | 8,101,022,462 | 3,293,542,774 | 3,999,003,979 | 2,807,666,744 | - | 18,201,235,959 | |||||
| Total liabilities | 2,190,661,316 | 757,717,011 | 597,803,728 | 4,789,198,376 | - | 8,335,380,431 | |||||
| Increase in non-current assets | 190,498,106 | 143,904,520 | 189,301,563 | 3,954,944 | - | 527,659,133 | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 179 -
7 Segment information (Cont’d)
The Group’s revenue from external customers domestically and in foreign countries or geographicalareas, and the total non-current assets other than financial assets and deferred tax assets locateddomestically and in foreign countries or geographical areas are as follows:
| Revenue from external customers | 2020 | 2019 | |
| Mainland | 9,538,506,225 | 9,123,825,213 | |
| Overseas | 1,132,747,220 | 1,348,202,886 | |
| 10,671,253,445 | 10,472,028,099 |
| Total non-current assets | 31 December 2020 | 31 December 2019 | |
| Mainland | 12,652,550,312 | 13,249,557,840 | |
| Hong Kong, PRC | 12,463,605 | 12,535,219 | |
| 12,665,013,917 | 13,262,093,059 |
No revenue from a single customer exceeded 10% or more of the Group’s revenue.
8 Related parties and related party transactions
(1) Information of the parent company
The Company regards no entity as the parent company.
(2) The subsidiaries
The general information and other related information of the subsidiaries are set out in Note 6(1).
(3) General information of the Group’s associate
The general information of the associates are set out in Note 6(2).
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 180 -
8 Related parties and related party transactions (Cont’d)
(4) Other related parties information
| Relationship with the Group | |
| Shenzhen Jushenghua Co.,Ltd. (“Jushenghua”) | Persons acting in concert with the first majority shareholder of the Group |
| Shenzhen Qianhai Ruinan Investment LLP | Controlled by the former key management personnel of the Croup |
| Xinjiang Qianhai United Property & Casualty Insurance | Related parties of the company's largest shareholder of taking concerted action |
| Suzhou Baoqi Logistics Co., Ltd. | Related parties of the company's largest shareholder of taking concerted action |
| Wuxi Baowan Department Store Co., Ltd. Nanjing Yanziji Store | Related parties of the company's largest shareholder of taking concerted action |
| Baoneng Department Store Retail Co., Ltd. | Related parties of the company's largest shareholder of taking concerted action |
| Guangdong Chubang Food Co., Ltd. | Directors of the company serve as directors of its parent company |
(5) Related party transactions
(a) Purchase and sales of goods, provision and receiving of labour
| Related parties | Related transaction | Transaction pricing policy | 2020 | 2019 | |
| Suzhou Baoqi Logistics Co., Ltd. | Receive service | Market price | 2,117,344 | - | |
| Wuxi Baowan Department Store Co., Ltd. Nanjing Yanziji Store | Purchase of goods | Market price | 2,866,100 | - | |
| Others | Purchase of goods | Market price | 330,568 | - | |
| 5,314,012 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 181 -
8 Related parties and related party transactions (Cont’d)
(5) Related party transactions(Cont’d)
Selling goods and providing services
| Related parties | Related transaction content | Transaction pricing policy | 2020 | 2019 | |
| Shenzhen Jushenghua Co., Ltd. | Sales of goods | Market price | 12,118,000 | - | |
| Guangdong Chubang Food Co., Ltd. | Sales of goods | Market price | 1,500,000 | - | |
| Baoneng Department Store Retail Co., Ltd. | Sales of goods | Market price | 899,940 | - | |
| Others | Sales of goods | Market price | 4,485,120 | - | |
| 19,003,060 | - |
Note: Other related parties will be listed together as they showed many companies and the amountsare scattered
(b) Purchase of insurance
| Related parties | Related party transactions | 2020 | 2019 | |
| Shenzhen Qianhai Ruinan Investment LLP | Buy life insurance for employees | 5,086,401 | 3,567,910 | |
| Xinjiang Qianhai United Property & Casualty Insurance | Buy car insurance for employees | 1,099,639 | 235,095 | |
| 6,186,040 | 3,803,005 |
(c) Leases
None
(d) Gains on equity transfer
None
(e) Acquisition of equity
None
(f) Advances paid on behalf of related parties
None
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 182 -
8 Related parties and related party transactions (Cont’d)
(5) Related party transactions(Cont’d)
(g) Remuneration of key management
| 2020 | 2019 | ||
| Remuneration | 23,628,100 | 21,940,800 |
(6) Accounts receivable from related parties
(a) Receivables
| Related parties | 31 December 2020 | 31 December 2019 | |||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
| Baoneng Department Store Retail Co., Ltd. | 192,000 | 3,840 | - | - | |
| Others | 31,200 | 624 | - | - | |
| 223,200 | 4,464 | - | - | ||
(b) payables
| Related parties | 2020 | 2019 | |
| Suzhou Baoqi Logistics Co., Ltd. | 2,617,344 | - | |
| 2,617,344 | - |
(7) Commitments in relation to related parties
The commitments in relation to related parties contracted for but not yet necessary to be recognisedon the balance sheet by the Group as at the balance sheet date are as follows:
| Related parties | Related party transactions | Restrictive terms on borrowings | 2020 | 2019 | |
| Shenzhen Jushenghua Co., Ltd. (“Jushenghua”) | Facility of interest-free loans provided for the Company | Nil | 2,000,000,000 | 2,000,000,000 |
On 22 November 2016, the Company received a letter from its shareholder, Jushenghua, stating thatto support the Group’s steady operation and development, Jushenghua, as the shareholder of theCompany, would like to offer interest-free borrowings with the total amount of RMB2 billion to theCompany or through related parties designated by it. For any borrowing drawn, its repayment date isnegotiated by the Company and Jushenghua upon withdrawal. When a borrowing is due, if anextension is needed, the Company can apply to the actual lender based on the Company’s operation;where the actual lender agrees with the extension application, the term of the borrowing is extendedaccordingly. The company did not borrow loan from above company in 2020.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 183 -
9 Share Payment
1. Overall situation of share payment
| The total number of various equity instruments that have repurchased in the current period | 36,222,898 shares |
| Total amount of various equity instruments that the company exercises during the current period | - |
| The total number of equity instruments granted by the company in the current period Restricted shares | - |
Note: On December 11, 2017, reviewed and approved by the Group's eighth session of the Board ofDirectors, the Group implemented the 2017 A Share Restricted Stock Incentive Plan. The incentivetargets for the restricted shares granted under this plan include company directors and seniormanagement personnel. A total of 454 core management teams, company technology members andmain employees. The first grant date of this restricted stock was December 11, 2017. The companygranted 97,511,654 restricted shares for the first time to 454 incentive targets. The initial grant pricewas 4.28RMB per share. Reserved restricted stock ending balance 17,046,869 shares, the grant pricehas not been determined. The shares granted of the first time has been registered and listed.
By the 2nd temporary meeting of shareholders held on 6 August 2018,the company decided torepurchase and cancel the still-restricted shares which have already been granted to and held by 15recipients no longer qualified for “incentive plan” due to either resignation or position adjustment3,319,057 shares were repurchased and cancelled, The company has finished above cancellations ofthe restricted shares by September 10 2018.
The Company held the 8th temporary meeting of Board member members on September 13, 2018 ,which reviewed and approved September 13, 2018 to be the shares granting date and 75 recipients tobe granted 9,826,580 restricted shares in total.
The Company held the 8th temporary meeting of Board member members on December 12, 2018 ,which reviewed and approved the releasing conditions on the first- time expiring trading restrictions ofthe initial part of the incentive plan on restricted shares from ordinary A during 2017. A total of 431recipients of the incentive plan were able to fullfil the conditions. The amount of 43,353,050 sharescould be released from restrictions.
On December 12, 2018, the company held the 8th meeting of the 8th board of directors, and themeeting of the 8th board of supervisors. The meetings approved the “Proposal concerning therepurchase and cancellation of some restricted shares from the ‘incentive plan’ of restrictedshares”, and the meetings approved to repurchase and cancel a total of 436,719 restricted shareswhich have already been granted to and held by 8 recipients who are unqualified for the “incentiveplan”. this was reviewed and approved by the third temporary meeting of shareholders on December28 2018. As of June 18, 2019,The cancellations of above restricted shares have been finished.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 184 -
9 Share Payment (Cont’d)
(1) Overall situation of share payment(Cont’d)
On April 16, 2019, the company held the 8th meeting of the 8th board of directors, and the 8th meetingof the 8th board of supervisors. The meetings approved the “Proposal concerning the repurchaseand cancellation of some restricted shares from the ‘incentive plan’ of restricted shares”, and the“Proposal concerning the repurchase and cancellation of restricted shares failing to meet the second-term unlocking condition”. The meetings approved to repurchase and cancel a total of 3,473,329restricted shares which have already been granted to and held by 14 recipients who are unqualified forthe “incentive plan”, and repurchase and cancel a total of 33,734,276 restricted shares failing tomeet the second-term unlocking condition from 483 “incentive” recipients. Independent directorsagreed with this and it was approved by the annual general meeting of shareholders on May 9 2019.By June 18 2019, the cancellations procedure of above restricted shares have been accomplished.
On September 16 2019, the Company held the 8th temporary meeting of Board members and the 8thtemporary meeting of Supervisors. The meetings reviewed and approved the “Proposal concerningthe repurchase and cancellation of some restricted shares from the ‘incentive plan’ of restrictedshares”. The meetings approved to repurchase and cancel a total of 1,281,158 restricted shareswhich have already been granted to and held by 18 recipients unqualified for the “incentive plan”,this was reviewed and approved by the 4th temporary meeting of shareholders on October 10 2019.The cancellations of above restricted shares have not been finished yet.
On September 16 2019,the Company held the 8th temporary meeting of Board member members andthe 8th temporary meeting of Supervisors , which reviewed and approved the releasing conditions onthe first-time expiring trading restrictions of the initial part of the incentive plan on restrictedshares from ordinary A in 2017 . A total of 71 recipients of the incentive plan were able to fulfilthe conditions. The amount of 3,909,350 shares could be released from restrictions,except for the 3reserved incentive recipients who have resigned and no longer meet the conditions for lifting salesrestrictions. The restricted shares was released and listed by company on September 25 2019.
After the company held the 2019 Annual General Meeting of Shareholders on May 21, 2020, the"Proposal on Repurchase and Cancellation of Certain Restricted Shares in the Restricted StockIncentive Plan" was reviewed and approved, and 14 non-compliant shares were repurchased andcancelled. All restricted stocks for which the original incentive object has been granted but not yetlifted the restriction on sales total 909,936 shares. On June 16, 2020, the company has completed thecancellation procedures of the aforementioned restricted stocks.
After the company held the 2019 Annual General Meeting of Shareholders on May 21, 2020, the"Proposal on Repurchase and Cancellation of Restricted Stocks That Did Not Meet the UnlockingConditions of the Third Unlocking Period" was reviewed and approved, and 451 shareholders werereviewed and agreed to repurchase and cancel. The restricted stocks for which the incentive objectsdid not meet the unlocking conditions of the third unlocking period totaled 35,312,962 shares. As ofJune 16, 2020, the company has completed the cancellation procedures of the aforementionedrestricted stocks.
This incentive plan is valid for 48 months from the date of grant of the restricted stock to the date ofunlocking of all restricted stocks or the completion of repurchase and cancellation. During theunlocking/exercise period, if the unlocking/exercise condition specified in the incentive plan is reached,the restricted stock granted is unlocked in three phases after 12 months from the grant date.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 185 -
9 Share Payment (Cont’d)
(1) Overall situation of share payment(Cont’d)
The unlock period is shown in the following table:
| 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 |
2. Equity-settled share payment
30%Method for Determining the Fair Value ofEquity Instruments on the Grant Date
| Method for Determining the Fair Value of Equity Instruments on the Grant Date | Black-Scholes Model |
| Determination of the best estimate of the number of vesting equity instruments | Based on the latest information on the change in the number of exercisable rights and the completion of performance indicators, the number of equity instruments that are expected to be exercised is revised. |
| Reasons for significant differences between current estimates and previous estimates | Not applicable |
| Cumulative amount of equity-settled share-based payment in capital reserves | 128,276,983 |
| Total equity confirmed by equity-settled share-based payment in this period | - |
According to the relevant provisions of Accounting Standards for Business Enterprises No. 11 - SharePayment and Enterprise Accounting Standard No. 22 - Recognition and Measurement of FinancialInstruments, the Group uses the Black-Scholes model (BS model) as a pricing model, deductingincentive objects. The fair value of the restricted stock will be used after the lock-in costs that arerequired to obtain the rational expected return from the sales restriction period are lifted in the future.The Group will, on each balance sheet date of the lock-in period, revise the number of restrictedstocks that are expected to be unlockable based on the newly obtained changes in the number ofunlockable persons and performance indicators, and follow the fair value of the restricted stock grantdate. The services obtained during the current period are included in the relevant costs or expensesand capital surplus.
The Group actually granted restricted stocks of 97,511,654 shares in 2017, and the total fair value ofthe equity instruments granted to 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 equity incentive plan will be confirmed in stagesaccording to the unlocking/exercise ratio during the implementation of the equity incentive plan, andwill be included in the "management fees and Construction in progress and capital surplus-othercapital surplus " of each period accordingly.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 186 -
9 Share Payment (Cont’d)
(2) Equity-settled share payment(Cont’d)
By the 2nd temporary meeting of shareholders held on 6th August 2018,the company decided torepurchase and cancel the still-restricted shares which have already been granted to and held by 15recipients no longer qualified for “incentive plan” due to either resignation or position adjustment3,319,057 shares were repurchased and cancelled, The company has finished above cancellations ofthe restricted shares by September 10 2018.
The Company held the 8th temporary meeting of Board member members on September 13, 2018 ,which reviewed and approved September 13, 2018 to be the shares granting date and 75 recipients tobe granted 9,826,580 restricted shares in total.
The Company held the 8th temporary meeting of Board member members on December 12, 2018 ,which reviewed and approved the releasing conditions on the first- time expiring trading restrictions ofthe initial part of the incentive plan on restricted shares from ordinary A during 2017. A total of 431recipients of the incentive plan were able to fullfil the conditions. The amount of 43,353,050 sharescould be released from restrictions. The restricted shares was released and listed by company onDecember 21 2018.
On December 12, 2018, the company held the 8th meeting of the 8th board of directors, and the 8thmeeting of the 8th board of supervisors. The meetings approved the “Proposal concerning therepurchase and cancellation of some restricted shares from the ‘incentive plan’ of restrictedshares”, and the meetings approved to repurchase and cancel a total of 436,719 restricted shareswhich have already been granted to and held by 8 recipients who are unqualified for the “incentiveplan”. this was reviewed and approved by the third temporary meeting of shareholders on December28 2018. As of June 18, 2019,The cancellations of above restricted shares have been finished.
In addition, according to the Group’s performance in 2018, the unlocking conditions for the first postlock-up period for the restricted shares incentive plan for 2017 and for the second post lock-up periodfor the restricted shares incentive plan for 2018 were not met. Therefore, by year end ,expenses forthe second post lock-up period for the ordinary A restricted shares was reduced by RMB 41,856,285.
On April 16, 2019, the company held the 8th meeting of the 8th board of directors, and the 8th meetingof the 8th board of supervisors. The meetings approved the “Proposal concerning the repurchaseand cancellation of some restricted shares from the ‘incentive plan’ of restricted shares”, and the“Proposal concerning the repurchase and cancellation of restricted shares failing to meet the second-term unlocking condition”. The meetings approved to repurchase and cancel a total of 3,473,329restricted shares which have already been granted to and held by 14 recipients who are unqualified forthe “incentive plan”, and repurchase and cancel a total of 33,734,276 restricted shares failing tomeet the second-term unlocking condition from 483 “incentive” recipients. Independent directorsagreed with this and it was approved by the annual general meeting of shareholders on May 9 2019.By June 18 2019, the cancellations procedure of above restricted shares have been accomplished.
On September 16 2019, the Company held the 8th temporary meeting of Board members and the 8thtemporary meeting of Supervisors. The meetings reviewed and approved the “Proposal concerningthe repurchase and cancellation of some restricted shares from the ‘incentive plan’ of restrictedshares”. The meetings approved to repurchase and cancel a total of 1,281,158 restricted shareswhich have already been granted to and held by 18 recipients unqualified for the “incentive plan”,this was reviewed and approved by the 4th temporary meeting of shareholders on October 10 2019.The cancellations of above restricted shares have not been finished yet.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 187 -
9 Share Payment (Cont’d)
(2) Equity-settled share payment(Cont’d)
On September 16 2019,the Company held the 8th temporary meeting of Board member members andthe 8th temporary meeting of Supervisors , which reviewed and approved the releasing conditions onthe first-time expiring trading restrictions of the initial part of the incentive plan on restrictedshares from ordinary A in 2017 . A total of 71 recipients of the incentive plan were able to fulfilthe conditions. The amount of 3,909,350 shares could be released from restrictions,except for the 3reserved incentive recipients who have resigned and no longer meet the conditions for lifting salesrestrictions. The restricted shares was released and listed by company on September 25 2019.
After the company held the 2019 Annual General Meeting of Shareholders on May 21, 2020, the"Proposal on Repurchase and Cancellation of Certain Restricted Shares in the Restricted StockIncentive Plan" was reviewed and approved, and 14 non-compliant shares were repurchased andcancelled. All restricted stocks for which the original incentive object has been granted but not yetlifted the restriction on sales total 909,936 shares. On June 16, 2020, the company has completed thecancellation procedures of the aforementioned restricted stocks.
After the company held the 2019 Annual General Meeting of Shareholders on May 21, 2020, the"Proposal on Repurchase and Cancellation of Restricted Stocks That Did Not Meet the UnlockingConditions of the Third Unlocking Period" was reviewed and approved, and 451 shareholders werereviewed and agreed to repurchase and cancel. The restricted stocks for which the incentive objectsdid not meet the unlocking conditions of the third unlocking period totaled 35,312,962 shares. As ofJune 16, 2020, the company has completed the cancellation procedures of the aforementionedrestricted stocks.
10 Contingencies
Nil.
11 Commitments
(1) Capital expenditure commitments
Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessaryto be recognized on the balance sheet are as follows:
| 31 December 2020 | 31 December 2019 | |||
| Buildings, machinery and equipment | 552,259,223 | 491,835,351 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 188 -
11 Commitments(Cont’d)
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts aresummarized as follows:
| 31 December 2020 | 31 December 2019 | ||
| Within 1 year | 7,813,728 | 2,457,100 | |
| 1 to 2 years | 541,288 | 1,412,642 | |
| 2 to 3 years | - | 652,804 | |
| Over 3 years | - | 60,000 | |
| 8,355,016 | 4,582,546 |
12 Events after the balance sheet date
(a) Statement of profit distribution after balance sheet date
| Amount | |
| Proposed distribution of cash dividends | 307,069,211 |
According to the resolution of the board of directors on April 13, 2021, the board of directors proposedthat the company distribute a cash dividend of RMB 307,069,211 to all shareholders. This proposal isapproving by the general meeting of shareholders. The cash dividend proposed after the balance sheetdate has not been confirmed in this financial statement as a liability.
13 Other significant events
(1) 171 million special funds for the introduction of talents was follow-up progress.
(a) Matter description
As at December 10, 2012, the People's Government of Yichang City and the Company signed theCooperation Agreement on Fine Glass and Ultrathin Electronic Glass Project ;The managementcommittee of Yichang High-tech Industrial Development Zone agreed to establish a RMB 171 milliontalent fund as a special fund subsidy for the introduction of talents and the placement of talentedpeople in 2014. The company of Yichang CSG PolysSilicon Co.Ltd. is responsible for formulating thehousing resettlement subsidy program and supervising the use of this special fund.The funds weresubsidized by the government to the company, but Yichang CSG PolysSilicon Co., Ltd. received thisamount and transferred it to Yichang Hongtai Real Estate Co., Ltd. in full amount without properapproval from the company's board of directors and other relevant authorities. ( Yichang Hongtai RealEstate Co.,Ltd. is a company jointly indirect controlled by part of the former natural executives of thecompany. The company has no equity relationship with the company ) .Yichang CSG PolysSilicon Co.,Ltd. received the above fund and transferred it to Yichang Hongtai Real Estate Co., Ltd. in full and alsohandled the accounting treatment according to the collecting and paying. In 2017, Prior periodaccounting error from above matters was corrected by company.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 189 -
13 Other significant events(Cont’d)
(1) 171 million special funds for the introduction of talents was follow-up progress. (Cont’d)
(b) Subsequent progress
It is be heard that the Shenzhen People's Procuratorate has filed a public prosecution with theShenzhen Intermediate People's Court for Zeng Nan and others' crimes of breach of trust to damagethe interests of listed companies .This case has been filed by the court of Shenzhen IntermediatePeople's Court and is currently being heard.
(c) Receivable talent fund from Yichang Hongtai Real Estate Co., Ltd.
| December 31, 2020 | December 31, 2019 | |||||||
| Book balance | Bad debt preparation | Book balance | Bad debt preparation | |||||
| Other receivables | Yichang Hongtai Real Estate Company | 171,000,000 | (3,420,000) | 171,000,000 | (3,420,000) | |||
14 Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily foreign exchange riskand interest rate risk), credit risk and liquidity risk. The Group's overall risk management programfocuses on the unpredictability of financial market and seeks to reduce potential adverse effects on theGroup'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 thetransactions are denominated in RMB. Some export business, however, is denominated in foreigncurrencies. In addition, the Group is exposed to foreign exchange risk arising from the recognizedassets and liabilities, and future transactions denominated in foreign currencies, primarily with respectto US dollars and Hong Kong dollar. The Group monitors the scale of foreign currency transactions,foreign currency assets and liabilities, and adjust settlement currency of export business, to furthestreduce the currency risk.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 190 -
14 Financial instrument and risk (Cont’d)
(1) Market risk (Cont'd)
On 31 December 2020, book values in RMB equivalent of the Group’s assets and liabilitiesdenominated in foreign currencies are summarized below:
| 31 December 2020 | |||||||
| USD | HKD | Others | Total | ||||
| Financial assets denominated in foreign currency - | |||||||
| Cash at bank and on hand | 16,599,430 | 5,997,799 | 1,109,657 | 23,706,886 | |||
| Receivables | 84,333,333 | 1,392,919 | 6,699,153 | 92,425,405 | |||
| 100,932,763 | 7,390,718 | 7,808,810 | 116,132,291 | ||||
| Financial liabilities denominated in foreign currency - | |||||||
| Short-term borrowings | - | 63,120,000 | - | 63,120,000 | |||
| Payables | 47,632,226 | 3,868,806 | 4,443,735 | 55,944,767 | |||
| 47,632,226 | 66,988,806 | 4,443,735 | 119,064,767 | ||||
| 31 December 2019 | |||||||
| USD | HKD | Others | Total | ||||
| Financial assets denominated in foreign currency - | |||||||
| Cash at bank and on hand | 41,907,573 | 3,907,829 | 354,589 | 46,169,991 | |||
| Receivables | 80,789,758 | 1,487,715 | 7,527,045 | 89,804,518 | |||
| 122,697,331 | 5,395,544 | 7,881,634 | 135,974,509 | ||||
| Financial liabilities denominated in foreign currency - | |||||||
| Short-term borrowings | 4,938,410 | 67,185,000 | - | 72,123,410 | |||
| Payables | 39,609,462 | 275 | 11,628,253 | 51,237,990 | |||
| 44,547,872 | 67,185,275 | 11,628,253 | 123,361,400 |
On 31 December 2020, if the currency had strengthened/weakened by 10% against the USD while allother variables had been held constant, the Group’s net profit for the year would have beenapproximately RMB 4,530,546 lower/higher (31 December 2019: approximately RMB 6,642,704lower/higher) for various financial assets and liabilities denominated in USD.
On 31 December 2020, if the currency had strengthened/weakened by 10% against the HKD while allother variables had been held constant, the Group’s net profit for the year would have beenapproximately RMB 5,065,837 higher/lower (31 December 2019: approximatelyRMB5,252,127higher/lower ) for various financial assets and liabilities denominated in HKD.
Other changes in exchange rate had no significant impact on the Group's operating activities.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 191 -
14 Financial instrument and risk (Cont’d)
(b) Foreign exchange risk
The Group's interest rate risk arises from long-term interest bearing debts including long-termborrowings and bonds payable. Financial liabilities issued at floating rates expose the Group to cashflow interest rate risk. Financial liabilities issued at fixed rates expose the Group to fair value interestrate risk. The Group determines the relative proportions of its fixed rate and floating rate contractsdepending on the prevailing market conditions. As at 31 December 2020, the Group’s long-terminterest-bearing debts at and fixed rates and floating rates are illustrated below:
| 31 December 2020 | 31 December 2019 | ||
| Debt at fixed rates | 2,105,274,331 | 951,975,000 | |
| Debt at floating rates | 742,000,000 | 368,250,000 | |
| 2,847,274,331 | 1,320,225,000 |
The Group continuously monitors the interest rate position of the Group. Increases in interest rates willincrease the cost of new borrowing and the interest expenses with respect to the Group’s outstandingfloating rate borrowings, and therefore could have a material adverse effect on the Group’s financialposition. The Group makes adjustments timely with reference to the latest market conditions, whichincludes increasing/decreasing long-term fixed rate debts at the anticipation of increasing/decreasinginterest rate.
(2) Credit risk
Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bank, notesreceivable, accounts receivable, other receivables.
The Group expects that there is no significant credit risk associated with cash at bank since they aremainly deposited at state-owned banks and other medium or large size listed banks. Managementdoes not expect that there will be any significant losses from non-performance by these counterparties.Furthermore, as the Group’s bank acceptance notes receivable are generally accepted by the state-owned banks and other large and medium listed banks, management believes the credit risk shouldbe limited.
In addition, the Group has policies to limit the credit exposure on accounts receivable, otherreceivables and trade acceptance notes receivable. The Group assesses the credit quality of and setscredit limits on its customers by taking into account their financial position, the availability of guaranteefrom third parties, their credit history and other factors such as current market conditions. The credithistory of the customers is regularly monitored by the Group. In respect of customers with a poor credithistory, the Group will use written payment reminders, or shorten or cancel credit periods, to ensurethe overall credit risk of the Group is limited to a controllable extent.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 192 -
14 Financial instrument and risk (Cont’d)
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’sfinance department in its headquarters. The Group’s finance department at its headquarters monitorsrolling forecasts of the Group's short-term and long-term liquidity requirements to ensure it hassufficient cash reserve, while maintaining sufficient headroom on its undrawn committed borrowingfacilities from major financial institutions so that the Group does not breach borrowing limits orcovenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements.
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 theexisting bank facilities;(c) The Group will closely monitoring the payment of construction expenditure in terms of paymenttime and amount.
The financial liabilities of the Group at the balance sheet date are analyzed by their maturity datebelow at their undiscounted contractual cash flows:
| 31 December 2020 | |||||||||
| Within 1 year | 1 to 2 years | 2 to 5years | Over 5 years | Total | |||||
| Short-term borrowings | 357,872,322 | - | - | - | 357,872,322 | ||||
| Notes payable | 144,851,192 | - | - | - | 144,851,192 | ||||
| Accounts payable | 1,237,833,051 | - | - | - | 1,237,833,051 | ||||
| Other payables | 287,332,992 | - | - | - | 287,332,992 | ||||
| Other current liabilities | 34,586,292 | - | - | - | 34,586,292 | ||||
| Non-current liabilities due within one year | 951,180,309 | - | - | - | 951,180,309 | ||||
| Long-term payables | 32,663,037 | 731,295,181 | 154,771,873 | - | 918,730,091 | ||||
| Bonds payable | 120,000,000 | 120,000,000 | 2,027,741,935 | - | 2,267,741,935 | ||||
| 3,166,319,195 | 851,295,181 | 2,182,513,808 | - | 6,200,128,184 | |||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 193 -
14 Financial instrument and risk (Cont’d)
(3) Liquidity risk (Cont’d)
31 December 2019
| Within 1 year | 1 to 2 years | 2 to 5years | Over 5 years | Total | |||||
| Short-term borrowings | 2,279,068,830 | - | - | - | 2,279,068,830 | ||||
| Notes payable | 232,063,968 | - | - | - | 232,063,968 | ||||
| Accounts payable | 1,100,531,779 | - | - | - | 1,100,531,779 | ||||
| Other payables | 351,374,775 | - | - | 351,374,775 | |||||
| Other current liabilities | 300,000 | - | - | - | 300,000 | ||||
| Current portion of non-Current liabilities | 1,749,763,512 | - | - | - | 1,749,763,512 | ||||
| Long-term payables | - | 87,240,529 | - | - | 87,240,529 | ||||
| Long-term borrowings | 81,253,313 | 1,338,406,582 | 19,752,667 | - | 1,439,412,562 | ||||
| 5,794,356,177 | 1,425,647,111 | 19,752,667 | - | 7,239,755,955 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 194 -
15 Fair value estimates
Based on the lowest level input that is significant to the fair value measurement in its entirety, the fairvalue hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset orliability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
(a) Assets continuously measured at fair value
By December 31, 2020, the Group’s using assets and liabilities measured at fair value are listed threelevels as followings:
| 31 December 2020 | |||||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Measured at fair value through other comprehensive income | |||||||
| -Receivables Financing | - | 382,527,782 | - | 382,527,782 | |||
| Investment property | - | 383,084,500 | - | 383,084,500 | |||
| - | 765,612,282 | - | 765,612,282 | ||||
(b) Assets and liability that not measured but disclosed at fair value
The group’s financial assets and financial liabilities measured at amortized cost mainly include:
accounts receivable, short-term borrowings, 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 notmeasured at fair value is a reasonable approximation of their fair value.
| 31 December 2020 | 31 December 2019 | ||||||
| Carrying amount | Fair value | Carrying amount | Fair value | ||||
| Financial liabilities | |||||||
| Medium term notes | 800,000,000 | 803,364,000 | 800,000,000 | 807,757,600 | |||
| Corporate bonds | 1,994,020,348 | 1,987,041,277 | - | - | |||
| 2,794,020,348 | 2,790,405,277 | 800,000,000 | 807,757,600 | ||||
The fair values of Corporate bonds and medium-term notes are the present value of the contractuallydetermined stream of future cash flows at the rate of interest applied at that time by the market toinstruments of comparable credit status and providing substantially the same cash flows on the sameterms, thereinto medium term notes belong to Level 2.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
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16 Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continue as a goingconcern in order to provide returns for shareholders and benefits for other stakeholders, and tomaintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paidto shareholders, refund capital to shareholders, issue new shares or sell assets to reduce debts.
The Group is not subject to external mandatory capital requirements, and monitors capital on the basisof gearing ratio.
As at 31 December 2020 and 31 December 2019, the Group's gearing ratio is as follows:
| 31 December 2020 | 31 December 2019 | ||
| Total liabilities | 7,267,031,012 | 8,335,380,431 | |
| Total assets | 17,882,914,898 | 18,201,235,959 | |
| Gearing ratio | 41% | 46% |
17 Notes to the Company’s financial statements
(1) Other receivables
| 31 December 2020 | 31 December 2019 | ||
| Dividend receivable | 249,087,257 | - | |
| Other receivables | 3,554,821,112 | 3,179,500,967 | |
| 3,803,908,369 | 3,179,500,967 |
1、 Dividend receivable
| 31 December 2020 | 31 December 2019 | ||
| Dividends receivable from subsidiaries | 249,087,257 | - | |
| 249,087,257 | - |
2、 Other receivables
| 31 December 2020 | 31 December 2019 | ||
| Receivables from related parties | 3,383,284,639 | 3,008,955,525 | |
| Others | 176,588,183 | 174,025,961 | |
| 3,559,872,822 | 3,182,981,486 | ||
| Less: Provision for bad debts | (5,051,710) | (3,480,519) | |
| 3,554,821,112 | 3,179,500,967 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 196 -
17 Notes to the Company’s financial statements (Cont’d)
1、 Other receivables (Cont'd)
(a) The ageing of other receivables is analysed as follows:
| 31 December 2020 | 31 December 2019 | ||
| Within 1 year | 3,384,862,561 | 3,010,311,816 | |
| Over 1year | 175,010,261 | 172,669,670 | |
| 3,559,872,822 | 3,182,981,486 |
(b) Other receivables are analysed by category as follows:
| 31 December 2020 | 31 December 2019 | |||||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | |||||||||
| Amount | % of total balance | Provision for bad debts | % | Amount | % of total balance | Provision for bad debts | % | |||||
| Provision for bad debts by groupings | ||||||||||||
| - Group 1 | 175,037,217 | 5% | (3,500,744) | 2% | 174,025,961 | 5% | (3,480,519) | 2% | ||||
| - Group 2 | 3,383,284,639 | 95% | - | - | 3,008,955,525 | 95% | - | - | ||||
| Provided for bad bebts individually | 1,550,966 | - | (1,550,966) | 100% | - | - | - | - | ||||
| 3,559,872,822 | 100% | (5,051,710) | - | 3,182,981,486 | 100% | (3,480,519) | - | |||||
(c) For other receivables provided for bad debts by portfolio, the expected credit impairment loss for the
portfolio is as follows:
| 31 December 2020 | 31 December 2019 | ||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||
| Amount | Amount | % | Amount | Amount | % | ||||
| Group 1 | 175,037,217 | (3,500,744) | 2% | 174,025,961 | (3,480,519) | 2% | |||
| Group 2 | 3,383,284,639 | - | - | 3,008,955,525 | - | - | |||
| 3,558,321,856 | (3,500,744) | - | 3,182,981,486 | (3,480,519) | - | ||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 197 -
17 Notes to the Company’s financial statements (Cont’d)
1、 Other receivables (Cont'd)
(d) Provision for bad debts
(e) As at 31 December 2020, the Group’s top five entities with the largest other receivables balances are
analysed as below:
| Relationship with the Group | Amount | Ageing | % of total balance | |
| Qingyuan Energy Saving Company | Subsidiary | 448,107,500 | Within 1 year | 13% |
| Dongguan Solar Energy Company | Subsidiary | 422,094,604 | Within 1 year | 12% |
| Zhaoqing Energy Saving Company | Subsidiary | 402,155,013 | Within 1 year | 11% |
| Wujiang CSG | Subsidiary | 366,879,876 | Within 1 year | 10% |
| Yichang Display Company | Subsidiary | 362,874,592 | Within 1 year | 10% |
| 2,002,111,585 | 56% |
(2) Long-term equity investments
| 31 December 2020 | 31 December 2019 | ||
| Subsidiaries (a) | 5,859,507,870 | 5,094,465,574 | |
| Less: Impairment provision for investments in subsidiaries (a) | (15,000,000) | (15,000,000) | |
| 5,844,507,870 | 5,079,465,574 |
| bad debts | Stage 1 | Stage 2 | Stage 3 | 31 December 2020 | ||||
| Expected credit losses in the following 12 months (grouping) | Lifetime expected credit losses (credit unimpaired) | Lifetime expected credit losses (credit impaired)） | Total | |||||
| 1 January 2020 | 3,480,519 | - | - | 3,480,519 | ||||
| Amounts in current year | - | - | - | - | ||||
| ——Transferred stage 2 | - | - | - | - | ||||
| ——Transferred stage 3 | - | - | - | - | ||||
| —— Reversed stage 2 | - | - | - | - | ||||
| —— Reversed stage 1 | - | - | - | - | ||||
| Increased in current year | 150,698 | - | 1,550,966 | 1,701,664 | ||||
| Reversed in current year | (130,473) | - | - | (130,473) | ||||
| Disposal in current year | - | - | - | - | ||||
| Write-off in current year | - | - | - | - | ||||
| Other movements | - | - | - | - | ||||
| 31 December 2020 | 3,500,744 | - | 1,550,966 | 5,051,710 | ||||
| 3,500,744 | - | 1,550,966 | 5,051,710 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 198 -
17 Notes to the Company’s financial statements (Cont’d)
(2) Long-term equity investments (Cont’d)
(a) Subsidiaries
| Movement in current year | |||||||||||
| Additional investment | |||||||||||
| 31 December 2019 | Decrease in investment | 31 December 2020 | Provision for impairment loss | Cash dividends declared in current year | |||||||
| Chengdu CSG | 151,397,763 | - | - | 151,397,763 | - | - | |||||
| Sichuan Energy Conservation Company | 119,256,949 | - | - | 119,256,949 | - | 53,482,298 | |||||
| Tianjin Energy Conservation Company | 247,833,327 | - | - | 247,833,327 | - | - | |||||
| Dongguan Engineering Company | 198,276,242 | - | - | 198,276,242 | - | - | |||||
| Dongguan Solar Energy Company | 355,120,247 | - | - | 355,120,247 | - | 82,942,502 | |||||
| Yichang Silicon Material Company | 640,856,170 | - | - | 640,856,170 | - | - | |||||
| Wujiang Engineering Company | 254,401,190 | - | - | 254,401,190 | - | 95,738,229 | |||||
| Hebei CSG | 266,189,705 | - | - | 266,189,705 | - | - | |||||
| CSG (Hong Kong) Co., Ltd. | 87,767,304 | - | - | 87,767,304 | - | 281,000,000 | |||||
| Wujiang CSG | 567,645,430 | - | - | 567,645,430 | - | 433,440,276 | |||||
| Hebei Windows Company (i) | 246,370,595 | - | (246,370,595) | - | - | 111,288,209 | |||||
| Jiangyou Sands Company | 102,415,096 | - | - | 102,415,096 | - | - | |||||
| Xianning Float Company | 181,116,277 | - | - | 181,116,277 | - | 37,988,203 | |||||
| Xianning Energy Saving Company | 165,452,035 | - | - | 165,452,035 | - | - | |||||
| Qingyuan Energy Saving Company | 303,273,105 | 582,000,000 | - | 885,273,105 | - | - | |||||
| Shenzhen CSG Financial Leasing Co., Ltd. | 133,500,000 | - | - | 133,500,000 | - | - | |||||
| Shenzhen CSG Photovoltaic Energy Co., Ltd. | 100,335,176 | - | - | 100,335,176 | - | - | |||||
| Shenzhen Display Company | 550,765,474 | - | - | 550,765,474 | - | - | |||||
| Xianning Optoelectronics Company (i) | 139,755,437 | - | (139,755,437) | - | - | 12,644,275 | |||||
| Zhaoqing Energy Saving Company | 12,801,000 | 116,900,000 | - | 129,701,000 | - | - | |||||
| Zhaoqing CSG Automotive Glass Co., Ltd. | 12,601,000 | 30,600,000 | - | 43,201,000 | - | - | |||||
| Dongguan CSG PV-tech | 3,443,855 | 378,668,328 | - | 382,112,183 | - | - | |||||
| Anhui Energy Company | - | 20,000,000 | - | 20,000,000 | - | - | |||||
| Anhui Quartz Company | - | 3,000,000 | - | 3,000,000 | - | - | |||||
| Shenzhen CSG Medical Company | - | 20,000,000 | - | 20,000,000 | - | - | |||||
| Others (ii) | 253,892,197 | - | - | 253,892,197 | (15,000,000) | - | |||||
| 5,094,465,574 | 1,151,168,328 | (386,126,032) | 5,859,507,870 | (15,000,000) | 1,108,523,992 | ||||||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 199 -
17 Notes to the Company’s financial statements (Cont’d)
(2) Long-term equity investments (Cont’d)
(a) Subsidiaries (Cont'd)
(i) During the year, the company traded its subsidiary Hebei Window Company and Xianning
Optoelectronics Company to its wholly-owned subsidiary Qingyuan Energy ConservationCompany, and Hebei Window Company and Xianning Optoelectronics Company were changedto Sun Company.
(ii) Subsidiaries for which impairment provision has been made are those that have basically
ceased operations in previous years. The company has made provision for impairment of long-term equity investments in these companies in previous years based on recoverable amounts.
(3) Long-term receivables
| 31 December 2020 | 31 December 2019 | ||
| medium term notes and long-term borrowings allocated to subsidiaries | - | 1,200,000,000 | |
| Less: Provisions for impairment | - | - | |
| - | 1,200,000,000 |
| 31 December 2019 | Movements in current year | 31 December 2020 | Provision for impairment loss | Reversals of provision for impairment loss in current year | |||||
| Chengdu CSG | 50,000,000 | (50,000,000) | - | - | |||||
| Sichuan CSG Energy Conservation | 20,000,000 | (20,000,000) | - | - | |||||
| Dongguan CSG PV-tech | 50,000,000 | (50,000,000) | - | - | |||||
| Yichang CSG Polysilicon | 350,000,000 | (350,000,000) | - | - | |||||
| Dongguan CSG Engineering | 75,000,000 | (75,000,000) | - | - | |||||
| Wujiang CSG | 210,000,000 | (210,000,000) | - | - | |||||
| Dongguan CSG Solar | 120,000,000 | (120,000,000) | - | - | |||||
| Wujiang CSG Engineering | 50,000,000 | (50,000,000) | - | - | |||||
| Qingyuan CSG Energy-Saving | 50,000,000 | (50,000,000) | - | - | |||||
| Xianning CSG Energy-Saving | 80,000,000 | (80,000,000) | - | - | |||||
| Xianning CSG | 75,000,000 | (75,000,000) | - | - | |||||
| Hebei CSG | 50,000,000 | (50,000,000) | - | - | |||||
| Hebei shichuang | 20,000,000 | (20,000,000) | - | - | |||||
| 1,200,000,000 | (1,200,000,000) | - | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2020(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
- 200 -
17 Notes to the Company’s financial statements (Cont’d)
(4) Other payables
| 31 December 2020 | 31 December 2019 | ||
| Interest payable | 131,513,019 | 41,186,139 | |
| Dividend payable | - | 2,985,563 | |
| Other payables | 870,622,683 | 1,598,984,750 | |
| 1,002,135,702 | 1,643,156,452 |
1、 Interest payable
| 31 December 2020 | 31 December 2019 | ||
| Interest payable for medium term notes | 37,955,556 | 38,604,028 | |
| Interest payable for short-term borrowings Interest payable for long-term borrowings Interest payable for corporate bonds | 53,256 1,246,142 92,258,065 | 2,582,111 - - | |
| 131,513,019 | 41,186,139 |
2、 Dividend payable
| 31 December 2020 | 31 December 2019 | ||
| Restricted share dividend payable | - | 2,985,563 | |
| - | 2,985,563 |
3、 Other payables
| 31 December 2020 | 31 December 2019 | ||
| Subsidiaries | 861,745,492 | 1,472,164,176 | |
| Share repurchase | - | 118,066,397 | |
| Others | 8,877,191 | 8,754,177 | |
| 870,622,683 | 1,598,984,750 |
(5) Investment income
| 2020 | 2019 | ||
| Investment income from long-term equity investment under cost method | 1,108,523,992 | 390,105,325 | |
| Income from structural deposits | 2,654,504 | - | |
| Proceeds from long-term equity transfer | 25,261,102 | - | |
| 1,136,439,598 | 390,105,325 |
There is no significant restriction on the remittance of investment income to the Company.
CSG Annual Report 2019
- 201 -
I Statement of non-recurring gains and losses
| 2020 | 2019 | ||
| Gains or losses on disposal of non-current assets | 1,158,984 | 909,968 | |
| Government grants recognised in profit or loss for current period | (99,660,400) | (184,131,420) | |
| Income from external entrusted loans | (5,546,384) | (11,894,654) | |
| Fair value movement of investment property | (179,911,200) | - | |
| Income from structural deposits | (2,654,504) | - | |
| Non-operating income and expenses other than aforesaid items | 6,284,556 | 1,612,253 | |
| (280,328,948) | (193,503,853) | ||
| Effect of income tax | 38,334,180 | 25,951,263 | |
| Effect of minority interests (after tax) | 2,645,633 | 5,507,988 | |
| Total non-recurring gains and losses | (239,349,135) | (162,044,602) |
(1) Basis for preparation of statement of non-recurring gains and losses
Under the requirements in Explanatory Announcement No. 1 on Information Disclosure by CompaniesOffering Securities to the Public – Non-recurring Profit or Loss [2008] from CSRC, non-recurring profitor loss refer to those arises from transactions and events that are not directly relevant to ordinaryactivities, or that are relevant to ordinary activities, but are extraordinary and not expected to recurfrequently that would have an influence on users of financial statements making economic decisionson the financial performance and profitability of an enterprise.
II Return on net assets and earnings per share
| Weighted average return on net assets | Earnings per share | |||||
| Basic earnings per share | Diluted earnings per share | |||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |
| Net profit attributable to ordinary shareholders of the Company | 7.91 | 5.77 | 0.25 | 0.17 | 0.25 | 0.17 |
| Net profit attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses | 5.48 | 4.03 | 0.18 | 0.12 | 0.18 | 0.12 |
CSG Annual Report 2019
Section XI. Documents Available for Reference
I. Text of the financial report carrying the signatures and seals of the legal representative, responsibleperson in charge of accounting and person in charge of financial institution;
II. Original of the Auditors’ Report carrying the seal of Asia Pacific (Group) CPAs (special generalpartnership) and the signatures and seals of the certified public accountants;
III. All texts of the Company’s documents and original public notices disclosed in the website and papersappointed by CSRC in the report period.
IV. The reports which published in the other stock market.
Board of Directors ofCSG Holding Co., Ltd.15 April 2021